Lords Sitting of 14 May 1992

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Bishop of Chester.): The LORD CHANCELLOR on the Woolsack.
Lord Stamp Lord Stamp— Sat first in Parliament after the death of his father.
Several Lords Several Lords— Took the Oath.

EC: Brussels Staff
3.4 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
What is the total staff of the EC in Brussels; and what is the total salary bill in the current year.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, the total number of statutory staff posts in the Commission is currently set at 13,975. The appropriations entered in the amended 1992 budget for salaries and allowances total 923.5 mecu (around £644 million). There are also statutory staff based in Brussels in the other Community institutions. The Council, including the Economic and Social Committee, has 2,725 staff, with a budget for salaries and allowances totalling 173 mecu (about £120 million). In addition, some of the 3,641 statutory posts in the European Parliament are based at Brussels.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that extremely interesting Answer. In the second half of this year, when Her Majesty's Government will be in the lead on the Commission, will action be taken to restrain growth both in expense and in numbers of staff in Brussels?
The Earl of Caithness; My Lords, yes, As usual we shall continue to look at the budget with very great care. Our primary task will be to adopt a budget in December which represents budget discipline and does not prejudice decisions on future finance.
Lord Mellish: My Lords, the Minister will be aware that the figures he has given are alarming. Are we getting value for money?
The Earl of Caithness: My Lords, we continue to look for value for money. The noble Lord will be aware that one of the great benefits of the Maastricht Treaty was that for the first time it has written down that there should be sound financial management in the Commission.
Baroness Elles: My Lords, is my noble friend aware that the members of staff of the European Community do an immense amount of work and that in the Commission in Brussels, which deals with about 370 million people, the number of staff employed is about the same as for Lambeth Borough Council?
The Earl of Caithness: My Lords, I believe that many in the House would not have known the information in the second part of my noble friend's question. It is very revealing. Yes, there are many people in the Commission who work extremely hard.
Lord Stoddart of Swindon: My Lords, am I correct in understanding that, in relation to the British Civil Service, it is the Government's promise to put many functions out to tender? During their presidency will the British Government propose the same arrangements for the civil service in Brussels and elsewhere?
The Earl of Caithness: My Lords, no, because it is the Commission in the first instance which has to decide that. The budget and the work that people will do in the Commission are then checked by the Council and the European Parliament.
Lord Mulley: My Lords, during our presidency will Ministers not confine their activities to restraining numbers? Will they also seek to restrain some of their activities?
The Earl of Caithness: My Lords, I can assure the noble Lord that we consider priorities and urge the Commission also to look at priorities, as does the Court of Auditors.
Lord Aldington: My Lords, do the numbers that my noble friend has given include interpreters and those responsible for translation? Having regard to a memorandum from the Foreign Office that has been published to the Select Committee, am I not right in thinking that two-thirds of the Commission staff are engaged in translation and interpretation? Therefore we can expect the total figures to be large and to increase as enlargement gets under way.
The Earl of Caithness: My Lords, I do not know the answer to my noble friend's question. I shall write to him on the subject.
Lord Bruce of Donington: My Lords, will the noble Earl give an undertaking that when Ministers examine the Commission's budget they will pay more personal attention to the details comprised within it? Will he take steps to ensure that the current practice of allowing the bulk of the Commission budget to go through on the nod on the advice of COREPER will stop, and that we take direct ministerial responsibility for our approval of the Commission's budget?
The Earl of Caithness: My Lords, as the noble Lord knows, the budget process is complicated. However, where we can take action we do. But the noble Lord has a good point about getting greater transparency within the Commission funds.
Baroness Young: My Lords, given that there will inevitably be civil servants in Brussels, and that the number needs to be restrained, are we doing all that we can to ensure that a correct proportion of those civil servants comes from Britain so that we can use our influence?
The Earl of Caithness: My Lords, yes, my noble friend is absolutely right. It is very important for this

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country and for the good functioning of the Community that we have good British civil servants in Brussels.
Lord Mackie of Benshie: My Lords, the noble Baroness, Lady Elles, made a good point when she stated that the number of staff was equivalent to the number running a large borough. Will the noble Earl tell us how the total number of staff compares with the number of civil servants in Scotland?
The Earl of Caithness: My Lords, no, that is a different question. However, if the noble Lord cares to put a question down I shall try to answer it.
Lord Mackie of Benshie: My Lords, it is not a different question.
The Earl of Caithness: My Lords, with respect, it is a different question. The Question on the Order Paper is about staff in the EC in Brussels, not Scotland.
Lord Renton: My Lords, will my noble friend say what proportion of civil servants in the EC are engaged on activities which are intended to direct the people of Europe to do things that they already do very well such as making sausages, cutting flowers and smoking smokies?
The Earl of Caithness: My Lords, it is difficult to give a precise answer to my noble friend's question. It is important that we continue to ensure that only those matters best done in Europe are undertaken in Europe and that the principles of subsidiarity now enshrined in the Maastricht Treaty are followed carefully.
Lord Peston: My Lords, I was not clear from the noble Earl's Answer whether he considered that the figures he gave regarding the number of people and the amount of money were a little or a lot. Despite the reference to Lambeth, the number of people and the amount of money sound enormous to me. Those of us who occasionally visit Brussels see a vast amount of people —many more than those in offices in Whitehall —who have incredible facilities compared with those in your Lordships' House. I do not speak as a Euro-sceptic. But if those people are working hard it is not obvious what they do.
The Earl of Caithness: My Lords, if the noble Lord cares to have a word with my noble friend Lady Elles, who has considerably more experience than I have of the work of the officials in Brussels, although I have seen quite a lot of it, it might help to solve his problem.
Lord Boyd-Carpenter: My Lords, does my noble friend appreciate that the comments of the noble Baroness, Lady Elles, comparing the EC staff with those of the Lambeth borough is a damaging association, and will he seek to protect the staff of the EC from imputations of that kind?
The Earl of Caithness: My Lords, I take careful note of my noble friend's remark.

TV Programmes During Election Campaign: Balance
3.12 p.m.
Lord Orr-Ewing Lord Orr-Ewing asked Her Majesty's Government:
Whether they are satisfied that during the general election campaign the television authorities honoured the terms of their charter and licences to provide entertainment as well as provide political and current affairs programmes.
Viscount Astor: Yes, my Lords. The balance of programmes and their content are the responsibility of the broadcasters and broadcasting authorities.
Lord Orr-Ewing: My Lords, I thank my noble friend for that short Answer. I congratulate him on appearing for the first time for the Department of National Heritage. We welcome that department, which is picking up the responsibility for broadcasting and its structure and, presumably, the regulatory authority. I wish to make two points—
Noble Lords: Question!
Lord Orr-Ewing: My Lords, I am sorry. Am I right that broadcasts which went on and on and on morning, noon and night with a mixture of news and current affairs bored many people stiff and were not at all in accordance with the charter? Secondly, was it not an error to have 47 different polls broadcast, again morning, noon and night, not only in this country but all over the world? They totally deceived us because they were utterly and completely inaccurate.
Viscount Astor: My Lords, viewers and listeners have a greater choice of news and entertainment channels than ever before and they can pick and choose among them. I must emphasise that programme content and scheduling is not a matter for the Government; it is a matter for the broadcasters and broadcasting authorities.
Lord Jenkins of Putney: My Lords, I too congratulate the noble Viscount on his appointment to office. I also congratulate him on the firmness of his Answer. Is it not the case that Members on all sides of the House will always wish to ensure that broadcasters are responsible through their own organisations and are not to be dictated to by government or by Parliament?
Viscount Astor: My Lords, I am grateful for the noble Lord's support. It is important that the Government set the criteria by which the broadcasting authorities operate and that they then get on with the job.
Baroness Birk: My Lords, I was delighted to hear the Minister's Answer. Can we have an assurance that the Government will not interfere with the independence of the broadcasting authorities in spite of the continual and relentless attacks by the noble Lord opposite? Incidentally, he had rehearsed today's Question by sending almost identical letters to the press during the week of the election. Is the Minister aware that each week during the election campaign

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BBC Television broadcast approximately 45 hours of election programmes and approximately 195 hours of non-election programmes? Is it also correct that ITV reported little disruption to the usual entertainment programme schedule? Is the noble Lord, Lord Orr-Ewing, aware that during an election—in particular during an important election which is fought mainly on television—people expect to hear and to see a lot and that that is what they want?
Viscount Astor: My Lords, the noble Baroness is right in saying that during the election coverage news and current affairs programmes on ITV increased by only 2 per cent. from 17 to 19 per cent. On Channel 4 they increased by 4 per cent. from 14 per cent. The BBC's coverage rose from 35 to 45 hours per week. Little of the BBC's regular output was displaced, nor was there displacement on other channels. However, my noble friend Lord Orr-Ewing has particular views on these matters.
Lord Orr-Ewing: My Lords, I thank the noble Baroness, Lady Birk, for giving us that useful information. However, is it not correct that prime time went because at 9 o'clock every evening time was given over to news and current affairs, which were muddled up incidentally?
Viscount Astor: My Lords, an important point of the election coverage was that it gave the British public an opportunity to hear what politicians were saying and to make up their minds, which they did correctly.

Training and Enterprise Councils
3.16 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What further action they are taking to improve the working of the Training and Enterprise Councils.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater): My Lords, the Government are continually working with TECs to improve their effectiveness across a wide range of areas. This work is being done both with individual TECs and through the group of 10 TEC chairmen.
Lord Dormand of Easington: My Lords, will the Minister confirm that the Government are not meeting their guarantee of providing a training place for all those under the age of 18? In that connection will he give the total budget for TECs last year and this year? In addition, what is being done about the complaint made as recently as yesterday in a letter written on behalf of all the chairmen of the 82 TECs to the Secretary of State saying that their work is being seriously hampered by bureaucracy?
Viscount Ullswater: My Lords, no, I will not confirm what the noble Lord stated. The YT guarantee is being fulfilled. The noble Lord asked about the budget. This year's £851 million budget for
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YT and credits is higher than previously published plans and more than was spent last year. That is on the understanding that there are fewer young people coming out of TECs and more going into further education.
Lord Mason of Barnsley: My Lords, is the Minister aware that the unemployment figures published today show an increase of 42,600 and that the total number is now more than 2,700,000, emphasising the increasing need for the TECs? Does the Minister dispute that the business leaders of the TECs have informed the department that the structure of the 82 TECs is on knife edge because of too much government interference and that the TECs will die unless there is a major reform? What is the answer to that charge and is not what the leaders of business have said true?
Viscount Ullswater: My Lords, of course I regret the further increase in unemployment. However, the TECs exist to deal with only a part of the range of facilities that the Government have available to help those who are unemployed. They deliver employment training and employment action, which they are doing extraordinarily well. I do not believe that the TECs are on a knife edge. The contracts are all but signed with every TEC and there is satisfaction in that.
Baroness Turner of Camden: My Lords, is the Minister aware that there has been strong criticism of the Government because there appears to be a lack of resources to provide for the investment in people scheme, which has the support of the CBI? What is being done to assist TECs in that direction?
Viscount Ullswater: My Lords, the important point is that the resources allocated to the TECs look after not only youth and employment training but the most important part, the block 3. That will assist the TECs to assess what is required in their locality and to provide money for them to develop the opportunities which exist for training, including investment in people, and they are doing so most successfully.
Baroness Seear: My Lords, is the noble Viscount able to say categorically that there will be no further cuts in the money available for training through the TECs? We are constantly hearing rumours, or even statements, that the amount of money is being reduced and there is a fear that it will be reduced even further.
Viscount Ullswater: My Lords, I think it would be wrong for any Minister to stand at the Dispatch Box and say that there will not be any further cuts or increases. Every government department must look at its spending on a year-by-year basis depending on what is required in the nature of training and the level of unemployment from year to year.
The Earl of Stockton: My Lords, is my noble friend aware that the 820 businessmen who represent the business sector on the boards of the training and enterprise councils have been, for the greater part, involved with the Government for an average of only 18 months? Could it be that this is their first brush

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with bureaucracy and that their view has been coloured somewhat by the complexities of dealing with various Whitehall departments?
Viscount Ullswater: My Lords, my noble friend Lord Stockton raises an extremely important point. I believe that 1,200 high-level businessmen are involved in the TEC movement. Having secured their services, it is only natural that they should look very closely at the contracts and negotiate very hard. If the negotiations only took five minutes, probably we should not have the right people.
Lord Stoddart of Swindon: My Lords, does the noble Viscount agree that it is essential that we get our education and training system right, bearing in mind that it is still inferior to that of our foreign competitors? Will he agree also that often the training offered to young people is not satisfactory to them in that they believe that they are being undervalued and, indeed, in many cases underpaid?
Viscount Ullswater: My Lords, I believe that the present success of the TECs is demonstrated by the strong local partnerships being developed between business, education and a wide range of other groups. I am thinking in particular of the education business partnerships and compacts. It is extremely important that business should be able to offer support for curriculum enhancement by providing resources and should also accept quality placements for pupils and teachers. It is very important that there should be that two-way traffic.
I have met many young people who have been extremely pleased with what they received from YT. I do not believe it right that the YT programme has the reputation which the noble Lord imports to it.
Lord Campbell of Alloway: My Lords, will the Minister explain the contribution made by the trade unions to the working of those councils?
Viscount Ullswater: My Lords, the councils are led by employers. It is on that basis that I believe that they are extraordinarily successful. I am sorry to say that when they were first announced, they were not well received by the trade unions.
Lord Dormand of Easington: My Lords, is the Minister aware that the "enterprise" part of the training and enterprise councils' work is almost non-existent? That is an extremely important part of the work. What are the Government doing to encourage greater results and greater activity in that part of the work?
Viscount Ullswater: My Lords, I am grateful to the noble Lord for giving me this opportunity to say how much I appreciate that enterprise is very important. Part of it is delivering government programmes; that is, ET and YT. However, as I said in an earlier answer, just as important is the block 3 money which helps to pay for business start-ups and management training for owner managers. That is extremely important and that is being done.
Indeed, in the noble Lord's area, the business
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advice centres have been set up across the county to help support local businesses, the objective being to create a single point of entry for access, advice, training and financial support. That is being done by the County Durham TEC.

HMS "Polar Circle": Future Name
3.24 p.m.
Lord Shackleton Lord Shackleton asked Her Majesty's Government:
Whether a decision has yet been taken about the future name of HMS "Polar Circle"
The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne): My Lords, the Royal Navy's new ice patrol ship will be renamed HMS "Endurance". HMS "Polar Circle", as she is at present called, will return to Portsmouth on 15th May, after a successful first deployment to the Antarctic. The change of name will take place before she commences her next deployment in the autumn. I hope that this decision will give much satisfaction to Members of this House who argued so eloquently before I was privileged to arrive here for retaining a name with distinguished associations with the South Atlantic. It gives me particular pleasure to think that the father of the noble Lord, Lord Shackleton, will be commemorated by naming the vessel HMS "Endurance", after the ship which he adorned so much in the past.
Lord Shackleton: My Lords, I express my appreciation of the actions of the Government, and express also my thanks to your Lordships because this is very much a triumph of the House of Lords which pressed hard on this matter. In particular, the previous Leader of the House and the present Government Chief Whip rallied very hard for this and this is a House of Lords occasion. I am very much appreciative of that I believe that all the former captains of HMS "Endurance" were in favour of this action. I believe that HMS "Polar Circle" is coming into Plymouth at the moment. If so, would it be possible in due course, when she is having her refit and new equipment, for her to come up the Thames? Some noble Lords have been on board the "Polar Circle"; but I am sure that other noble Lords would like to see that magnificent ship which has already done a fine job in the Antarctic.
Viscount Cranborne: My Lords, I am most grateful to the noble Lord for what he has said. It is a very good example of the respect with which government Ministers view the expressions of opinion voiced in your Lordships' House, and is further evidence that the Ministry of Defence listens carefully to what is said in your Lordships' House. I hope that that situation will continue. As regards the possibility of HMS "Endurance" paying a visit to London by sailing up the Thames, the noble Lord will be aware that she has a very busy programme this summer. However, I should like to keep the noble Lord's suggestion in mind, knowing what pleasure it would give not only to the noble Lord but also to me.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the very sensible decision which he has just announced is largely due to the determined action of the noble Lord, Lord Shackleton? Would he think it appropriate to congratulate the noble Lord on this extremely sensible and worthwhile achievement?
Viscount Cranborne: My Lords, I am grateful to the noble Lord, Lord Boyd-Carpenter, who, as so often before, has repaired an omission on my part. I certainly owe it to the noble Lord, Lord Shackleton, to congratulate him on his persistence and on his extraordinary knowledge of the subject. We are grateful to him.
Lord Chalfont: My Lords, will the Minister answer a question on the pleasant naval custom of having a lady sponsor for naval vessels? Is he aware that the lady sponsor of the old HMS "Endurance" has very close associations with that ship? Will he give an indication or an assurance that she will be invited to continue to be the sponsor of the new HMS "Endurance"?
Viscount Cranborne: My Lords, I am ashamed to say that I did not know that. I shall look into the matter at once and I shall write to the noble Lord—I hope sympathetically—in answer to his question.
Lord Williams of Elvel: My Lords, is the noble Viscount aware that I listened very carefully to his words about Ministers listening to what is said in your Lordships' House? Is he aware also that my noble friend Lord Shackleton conducted a campaign over several months on this subject supported from all sides of the House; for example, supported by the noble Lord, Lord Chalfont, the noble Lord, Lord Boyd-Carpenter and noble Lords on this Front Bench? I join with the noble Viscount in expressing my congratulations to my noble friend Lord Shackleton on the outcome.
Viscount Cranborne: My Lords, the noble Lord, Lord Williams, may feel that the wheels of government grind exceeding slow. However, my predecessor told the House as short a time ago as 23rd January that the decision would be taken before the "Polar Circle" returned to the United Kingdom. My announcement today meets that commitment.
Lord Morris: My Lords, while I welcome the clearly historical and indeed poetic sensibilities of Her Majesty's Government in renaming "Polar Circle", HMS "Endurance", such unstinted praise of government makes me extremely nervous. Can my noble friend say when the unseemly and totally counterproductive to the national interest interdepartmental wrangling over who bears the current account costs of HMS "Endurance" will finally end?
Viscount Cranborne: My Lords, it is perfectly clear that there is no interdepartmental wrangling on this subject. It is clear where the costs lie and a proportion of those costs, I regret to say in one sense, lies with the Ministry of Defence.
Lord Shackleton: My Lords, I appreciate the various remarks, including those of the noble Lord,
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Lord Chalfont. However, I should like to make clear that it was Peter Scott and I who started this campaign while he was alive. While I appreciate the suggestion that the family might also take part in the naming of the ship, the important point is to have the ship, and have it with a name that is also well known in the Antarctic.
Viscount Cranborne: My Lords, I am grateful to the noble Lord for his remarks. However, I should like the House to take careful note of what the noble Lord, Lord Chalfont, suggested.

Business
3.32 p.m.
Lord Hesketh: My Lords, after the debate on the EC Regional Development Policy and before the Unstarred Question on "New Age travellers", my noble friend Lord Strathclyde, with the leave of the House, will repeat a Statement that is to be made in another place on Charge Capping: England.

Sporting Events (Control of Alcohol etc.) (Amendment) Bill [H.L.]
Lord Dormand of Easington: My Lords, I beg to introduce a Bill to extend the maximum period for which an order under Section 3 of the Sporting Events (Control of Alcohol etc.) Act 1985 may remain in force. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time— (Lord Dormand of Easington.)
On Question, Bill read a first time, and to be printed.

London Docklands Railway (Lewisham, etc.) Bill
Read a second time, and committed to a Select Committee.

Business of the House
The Lord Privy Seal (Lord Wakeham): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with for the purpose of taking the Mauritius Republic Bill [H.L.] through all its remaining stages on 19th May and the Community Care (Residential Accommodation) Bill [H.L.] through all its remaining stages on 21st May. —(Lord Wakeham.)
On Question, Motion agreed to.

Business of the House
Lord Wakeham: My Lords, I beg to move the Second Motion standing in my name on the Order Paper.

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Moved, That the Motion in the name of the Lord McIntosh of Haringey set down for debate on Wednesday 20th May shall be limited to five hours. —(Lord Wakeham.)
On Question, Motion agreed to.

EC Regional Development Policy: ECC Report
3.35 p.m.
Lord Aldington Lord Aldington rose to move, That this House takes note of the report of the European Communities Committee on the EEC Regional Development Policy (4th Report, Session 1991–92, HL Paper 20).
The noble Lord said: My Lords, this is a full and lengthy report and I shall do my best not to keep your Lordships for too long. The report is based on evidence taken between 4th June and 22nd October last year. Our conclusions were reached before the Maastricht summit though there is no disharmony between what we say and what was then decided. The inquiry and our report arose from the Commission's fourth periodic report on regional development.
Before coming to the substance of the report I have some preface points. First, I should like to congratulate, as she was congratulated yesterday, my noble friend Lady Denton on her new appointment. We look forward to hearing her speech at the end of the debate. It is her second speech in two successive days—a good baptism if I may say so. Secondly, I wish to pay tribute once again to my colleagues on Sub-Committee A, whose knowledge and wisdom never surprises me but whose tolerance of, and helpfulness to, their chairman surprises him more every day. Thirdly, I should like to remind your Lordships that the House is much blessed with the qualities, skills and devotion of its Clerks. The report is another example of how much is owed to them.
The new technology in the Committee Office has added further to its effectiveness. I should add a special tribute to the new word processing equipment and the well trained operators whose product—most easy to read—goes straight to the Stationery Office and thence on to the printed pages, thus saving much time and money in the publishing process. Your Lordships will also notice that the report has broken new ground by including coloured maps and tables.
Our specialist adviser, Professor Mayes, is to be specially thanked for bringing into play not only his professional skills in economics but also a specific understanding of the European regional development scene. As usual, I am sure that the House will join the Committee in thanking all who gave evidence, particularly Commissioner Millan who came specially from Brussels for the purpose and the former Secretary of State, Mr. Peter Lilley.
I wish to say a word about the timing of the debate. I have indicated that our conclusions were reached before the turn of the year. In other circumstances it would have been right and expected that the House should debate our report, which was published on 21st January, in the latter part of March. We all know why
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that became impossible. However, we were fortunate to receive a reply from the Government within the agreed two months of publication. I am grateful to them for that and also for the substance of the reply. As your Lordships will know, it is rare for me to be the chairman of a committee responsible for a report to the House which commands the almost complete agreement of Her Majesty's Government.
The report seeks to tackle longish term issues and questions of principle which will still be relevant when enlargement of the Community produces different problems—for different they will be—facing the Commissioner in Brussels. I look forward to hearing your Lordships' comments. Part 3 of the report sets out the opinion of the Committee. Without in any way detracting from the importance of the rest of that opinion I shall confine myself to some points relating to the aims of Community policy, the roles of the Commission and related to that role the role of the member state governments and the regional authorities. I shall refer also to the procedures, administrative problems and the scope for increasing the effectiveness of Community help to the poorer regions including that provided through other Community policies.
The strengthening of the Community's economic and social cohesion is firmly entrenched in the treaty as one of the Community's principal tasks, with member states committed to conduct their economic policies in such a way as to attain that general object and the specific aim of reducing disparities between the various regions and the backwardness of less favoured regions. Regional disparities in incomes per head in the Community were, in 1990, at least twice those in the United States of America. In 1990 unemployment rates in the Community varied between an average of 2½ per cent. in the best 10 regions and 22 per cent. in the worst 10 regions, which were in Spain and southern Italy.
While in the earlier part of the 1980s the disparities had increased slightly, in the latter part there was some improvement. But in Greece the disparities widened. That does not mean that there was no improvement in absolute terms in the position of the poorest region; I am talking of relativity. Therefore it seemed to many that the doubling of the structural funds in 1989 was necessary and welcome. But of course that had not had time to be reflected in the figures before us. With the doubling of the funds there were changes in the Commission's policies, some of which were advocated in the Select Committee report to your Lordships of 1988.
Our report lays emphasis on the roles of member state governments as having the principal responsibility under the treaty for implementing the cohesion policies. It is their national income and economic policies which determine the ability of their regions to improve their creation of wealth in a fully competitive way. Trade within the single market regime, which will begin to be fully effective next year, is of course the Community's main wealth creator, but free trade with its disciplines makes the problems facing backward regions more difficult in the first place before its fruits mature. The shrinking and eventual abandonment of

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most subsidies and state aid add to the initial difficulties for most of them. That problem affects Eastern Europe as well as the Community regions.
The role of the Commission is quite simply to support the achievement in member states of the agreed Community objectives. It gives that support through the structural funds and through special Community programmes of which RECHAR, STRIDE and others are examples. Quite rightly, there has to be full involvement of, and full co-operation with, authorities and administrations in the regions. Nevertheless it is the national governments which have the responsibility for economic policies within their countries and for deciding the priorities and political preferences. The totals of public expenditure are, as we surely well know, a vital element in the success of national economic policy. I stress that because of tendencies, not to be found in the Commission itself but in some regions, to expect the writ of Brussels to override national wills. There is nothing peculiar to Britain about that point. Neither is it wrong for the British or other governments to want to ensure that similarly sound economic policies are followed by other countries which receive Community funds. It was made clear to us by Commissioner Millan that he accepts the principal role of national governments.
Administrative responsibilities as between the regions and national governments differ significantly —I might say very significantly—among member states, and so does administrative competence, particularly in some of the regions. The Commission has to recognise that and I believe it does. The size of funds available to the Commission depends in part on the economic growth of the Community and in part on the other demands on the Community's resources, particularly the common agricultural policy which, in 1990, took 59 per cent. of the budget. Even by 1993, after the completion of the process of doubling the structural funds, only 25 per cent. of the Community budget will be used in the structural funds. That means that even then, 75 per cent. of the budget will be used for other purposes, not much of which helps cohesion, and some of which, particularly in the CAP, pulls in exactly the opposite direction. It is that factor which produces the extraordinary result illustrated in Table 3 of our report on page 32, where some member states with a higher than Community average of GDP per head received in 1989 more from the Community than they contributed. On the other hand, Spain, with a GDP per head well below the Community average, was apparently a net contributor.
I shall not describe to your Lordships the differing objectives established by the Community for the implementation of its policies. The United Kingdom is mainly concerned with Objective 2, which is for revitalising regions affected by serious industrial decline, and with Objective 5a, which is designed to develop rural areas. Objective 1, which is the most important and which takes the majority of the funds, is for regions where development is lagging. It is applied to Northern Ireland alone in the United Kingdom.
The report sets out the particular problems affecting the regions in the United Kingdom. Some of my colleagues may refer to them; I shall not. I believe that our peripheral regions, particularly the Highlands and Islands, should have more support from the Community and that it should alter its rules for that purpose. I believe the Commission will find that it has to when it is confronted with the northern states of EFTA joining the Community.
The regions told us of the difficulties facing them because of the burdensome procedures attending Commission grants. We have suggested some simpler procedures as advocated by the Secretary of State. I hope that the Commission will respond. Mr. Milian is well aware that his procedures need review. It is, however, wise to remember that the Commission will always have to ensure that the moneys it grants to member states are used for the purposes of the grant and for nothing else. The joint settling of programmes through the Community support frameworks and the monitoring of their progress should achieve that quite simply provided that there are sound financial control systems in place in each member state. I emphasis that proviso. That is an important principle for the United Kingdom which is both a recipient and a contributor.
There is one Commission rule, as many of your Lordships will know, which has caused trouble. In the past it has caused trouble not only in the United Kingdom. That is the additionality rule. Additionality in the regional development context means,
"that anything that the Commission does by way of financial assistance should be additional to what would be officially provided in the eligible areas concerned without that assistance".
That seems a sensible rule, particularly for a country like the United Kingdom which is a net contributor to Community funds. However, it would not be sensible if that rule were to be applied to individual programmes so that the recipient of the grant had to show that that programme would not have been carried out without the grant. Such a procedure would mean that Community-supported programmes were the least important in each member state's programmes. It should surely be satisfactory to show that the total regional development effort each year in each recipient country was larger by the amount of the expected grant than it would have been without it and that the grant from the Commission went to the programmes and areas for which approval had been given. That is what we suggested should be made transparent by Her Majesty's Government to the Commission. We were very pleased that, after that transparency had been achieved, the dispute between our Government and the Commission over RECHAR was settled.
I want to touch on the important question: how can the Community's assistance be more effective in reducing disparities and advancing cohesion? It is very difficult to measure the effectiveness of development programmes. The success of some can be seen quite soon. Parts of Britain have clearly gained from British regional development policy. But in the main regional development matures over a longish term. However,

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the Committee was able to see examples of successes in central Italy and Spain. We also learnt of what still remains to be done—a gigantic task in some places.
We advocated that the Commission should be flexible in the measures which it supports and should encourage the interchange between regions of good ideas. We were told of the value of innovation and training help and we advocated the use of know-how support for administrations as well as for businesses. The encouragement of joint action by the private and public sectors, which has proved so successful in parts of British regional policy, should be fostered. All this is clearly in the minds of the Commission and the British Government.
There was no doubt in our minds—there should be no doubt in anyone's mind—about the importance to development in the past and in the future of sound national economic policies and sound administration. Without them, Community resources will not have their full effect and may be wasted. Without them, private investment will not be attracted to those regions so that sound economic growth can proceed.
The demand for another substantial increase in the structural funds is understandable. There is so much to be done, but there is also a limit to the amount of money that can be effectively absorbed in the lagging regions and in regions of weak administration. We felt it right also to issue a reminder that the future wellbeing of the Community and its ability to secure cohesion depends on sustained growth in the more developed areas, and that that growth must not be jeopardised by forcing too large a transfer of resources from those areas to the weaker areas.
The discussions over what is known as the Delors II proposals will settle how large an increase there is to be in the Community's total resources, from which the structural funds will gain at least a part. But even without any change in the contribution limit—and it is that proposed change which has attracted so much controversy —there is no doubt that there will be an increase, partly from normal economic growth and partly from the new accessions, which are likely to be from net contributor countries. Further savings from a reformed CAP could lead to an even larger increase. We did not think it wise to recommend the extension of the scope of structural fund support to education generally or to anything else. That would weaken the effect, diffuse the available funds, and we think—or at least, I think—offend the principle of subsidiarity.
It was suggested to us that part or all of the Community's support could be given better by direct fiscal transfer rather than through the support of specified programmes. We did not so recommend. The present arrangements ensure that Community money can be spent only on programmes approved by the Community. Similar assurances need establishing for the new cohesion fund, which I welcome. It would not help the cohesion or the economic betterment of the Community's peoples if Community resources were to be used for purposes not approved by the Community.
It will be several years before the statistics give us evidence of the success or failure of present policies in terms of improving income per head and employment
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opportunities. It is right that the Community should not try to fix any level of disparity as a target for reductions from 75 per cent. to 80 per cent. of Community averages, and so on. What is wanted is a steady improvement in the wealth of backward regions, and in their competitiveness and output. In addition, as far as possible, the rate of growth should be faster in the backward areas than in the richer areas without slowing the rate of growth in those richer areas. To achieve that is a task of enormous size. The Community must do more to ensure that all its policies pull in the direction of cohesion—or, at worst, do not pull against it. That is another urgent reason for reviewing and reforming the CAP.
But the full purpose of cohesion includes a political purpose as well as an economic purpose. It depends also on the more psychological feeling in the lagging regions that the Community has both a purpose and a benefit for them. The grants from the structural funds encourage that feeling and the Commission is wise to tell the public of its involvement. It was a wise decision of Her Majesty's Government in 1972 to emphasise the value to the Community and its members of regional development policy. Like other member states, the United Kingdom will gain over the years by the greater prosperity and cohesion of all the regions in the Community, just as she has long sought to gain by improving conditions in all the regions of the United Kingdom.
The means used to achieve a reduction in the stark disparities between regions will evolve over the years. The Commission must be and, I think, will be flexible. It must not be bound by the particular funds or particular means that are now in use, promising as they are. I beg to move.
Moved, That this House takes note of the report of the European Communities Committee on the EEC Regional Development Policy (4th Report, Session 1991–92, HL Paper 20).—(Lord Aldington.)
3.55 p.m.
Lord Mason of Barnsley: My Lords, I should like to congratulate the noble Lord, Lord Aldington, and his Committee on this worthwhile and illuminating report that deals with the EC's regional development policy. Perhaps I may assure the noble Lord that it is not out of date. Indeed, it is very relevant to today. It conveys a picture of bureaucratic bungling and constant squabbling over the use of regional development funds. It reveals the different attitudes taken by the Department of Trade and Industry and the European Commission on definitions of EC terminology, and the unending frustrations of those local authorities and enterprises that have prepared projects, submitted them for European regional development funds or for European social funds, and which have waited interminably for the cash.
The report has certainly brought to the attention of major government departments, the Common Market Commission and local authorities the difficulties and frustrations of carrying out the five objectives of the use of structural funds. As a result of the ridiculous squabbles between the DTI and Commissioner Millan over the allocation of RECHAR monies destined for

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the coalfield communities, £121 million has still not been paid. The report also illustrates the degrees of obstinacy of both parties concerning not only the determination of RECHAR, but also the question of additionality—that is, moneys allocated to us by the Commission in addition to national regional funding.
All this has resulted in Common Market cash being bogged down in Brussels; projects earmarked for development in our most needy areas being held up —some are already out of date; in reassessments having to be made and in needless and endless extra work by planning and project departments. What a shambles—and at what extra cost! That squabbling must cease. Too many of our people, including thousands of the unemployed in our old traditional steel and coal areas, are suffering as a result. Their elected representatives, officers and members of bodies representing industry and commerce in those regions must be in deep despair.
Commissioner Millan said that there had been a difference of opinion between the Commission and the United Kingdom Government over the co-financing of local authority schemes for support for small and medium-sized enterprises. There is no doubt about that. On the RECHAR programme, he said:
"We do not have problems with other governments in the way we have had problems with the United Kingdom Government".
Even on the question of additionality, the noble Lord, Lord Aldington, will remember that the Committee stated:
"although the reform of the Structural Funds seems to have eased the difficulties over the principle of additionality in most Member States, in the United Kingdom these difficulties still persist."
The Committee's report continued:
"Whilst the difference between the Commission and the United Kingdom Government on this issue remains unresolved important programmes are delayed, applicants and enterprises involved are hindered and valuable time of officials at all levels of government and in the Commission is wasted."
Well, that is condemnation indeed and it requires an answer from the Minister at the conclusion of this debate.
Let me now draw the attention of the House to paragraph 82 of the Committee's report. It reveals that:
"The Association of British Chambers of Commerce (ABCC) said that from the business point of view … additionality referred to an investment programme aimed at supporting regional developments for which funds were not available through local or national public expenditure … They had received a number of examples from around the country where efforts being made to tackle acute economic, environmental and social problems were being held up by lack of funds, due to the continuing impasse on the additionality question. A notable example was the case of the bid from the South Yorkshire Chambers of Commerce"—
—which covers Barnsley, Doncaster, Rotherham and Sheffield—
"for RECHAR funding".
It was a Business Plan for Business Development Services 1991. Those areas had the support of the European Commission and with the release of the RECHAR funding could provide an immediate and positive injection into the regeneration of the business community in South Yorkshire. Without it, the process would be slow and far less effective.
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Of course, as noble Lords may be aware, nothing has happened. The plan for 1991, if it is finally financed, may be a plan for 1993 or 1994. After 18 months of wrangling between the DTI and Commissioner Millan, the then Secretary of State for Trade and Industry announced in another place on 17th February this year, conveniently a fortnight or so before the announcement of the general election, that he had come to an agreement with the commissioner and the RECHAR moneys of £121 million would now be released. He concluded his Statement by saying:
"The implementation of the RECHAR programmes can now proceed immediately".—[Official Report, Commons, 17/2/92; col. 22.]
Where is it? The coalfield communities have been waiting 21 months for their allocation of Community cash and already three months have elapsed since the programme was going to be implemented "immediately". One can readily recognise the frustrations that build up due to this vacillation and procrastination by the DTI. Therefore I ask in this regard for the Minister to state whether all the projects in the programme will be going ahead as planned when we get the money; or will they all have to be reassessed?
The interviews conducted by the committee reveal that the noble Lord, Lord Carr of Hadley, whom I am pleased to see in his place, questioned Mr. Corley of the DTI. The noble Lord said:
"What I still do not understand is this. Some years ago I was involved in trying to get more money out of Brussels for things like business initiatives, technical education, enterprise initiatives and so forth, and every time I got something, one thought, promised, my bitter experience was that we never actually got it because we never fulfilled our own requirements back here. I am thinking of the town of Barnsley … for which we got some promise from Brussels conditional upon British sources also being put in. Because the British sources were not put in we never got the money, and we had not when I finished with it. Had we put in our share of the additionality we would have got more money from Brussels. I simply do not understand".
Mr. Corley replied:
"I am pleased to say … on the question of Barnsley that they have actually got the money".
In sheer exasperation the noble Lord, Lord Carr, retorted:
"Good—it took years!"
He was referring to the start of the Barnsley Business and Innovation Centre, of which I am the chairman—unpaid of course. Due to high unemployment in our region and long-term unemployment, and seriously suffering from the virtual death of the traditional steel and coal industries, we qualify both for European Regional Development Fund support and European Social Fund support. As a consequence British Coal Enterprise, which is doing a remarkably good job in the run down coal areas, Barnsley Metropolitan Borough Council, and local banks and businesses banded together and decided to build a business and innovation centre—a specially built complex, housing incubator units, in which companies could develop and market high technology based products and innovative projects, and, having developed their high tech products, then move out into the region and establish production units—new technologies in a depressed area. Indeed a new technology culture is being born. There are nine such BICs in the United Kingdom, all of which should be

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encouraged. But we need more help from the DTI, and it is true of many small businesses too. The regional office is helpful, but the frustration always is at national level and especially in obtaining EC funds which we have been allocated. The report refers to these frustrations. Our experience shows that long delays in decision-making by bureaucrats in London and Brussels create enormous frustration.
Like other businesses, we are constantly presented with new systems from the Commission. ERDF15 becomes Community support framework. Then we have the integrated development plan (IDOP) followed by the eastern England plan. Then there is RESIDER followed by RECHAR—a non-stop series of schemes which are baffling to all those enterprises which for one reason or another are entitled to some of the financial benefits. The Commission does not fare well in this regard because it gives the impression of a bureaucratic shambles. One scheme has hardly started before another scheme is brought forward.
At home we spend time and effort trying to get our allocated EC funds—for example, trying to obtain our ERDF15 revenue support for the Barnsley Business and Innovation Centre. After months of frustration with the DTI I wrote to the noble Lord, Lord Young, then Secretary of State at the DTI, on 9th June 1988. I led a deputation to see him on 27th September 1988. Peter Corley of the DTI visited us on 18th October. A claim form was provided and cash was paid at the end of March 1989—but for one year's operations only when our agreement with the Commission was for three years. I had to start the operation all over again. I sent a letter to the new Secretary of State, Nicholas Ridley, on 22nd November 1989. I led a deputation again to the Secretary of State on 29th January 1990. He offered me two years' cash. An application form was received on 8th May 1990 and cash was paid in October 1990. All that time and effort and all those delays add up to a substantial and increasing loss to enterprises like the Barnsley Business and Innovation Centre. The lack of early revenue funding slowed the rate of client-seeking and selection. Subsequent delays in building funding resulted in there being no accommodation available for more than a year. Overall this must have cost us an unrecoverable £100,000 of rental income. How many times must this saga be repeated in our regions?
From personal experience and consultations with local authorities may I say that, although the DTI suggests that EC structural funds make only a minuscule contribution to regional spending, the sums from ERDF, ESF and IDOP help considerably with industrial estate extensions, road improvements, factory units and support for enterprises like the Barnsley BIC. The structural funds are under review yet again and the new regimes are likely to take effect from January 1994. I only hope that the DTI will bear in mind that Objective 2 of the structural funds—to revitalise regions affected by serious industrial decline —is of the utmost importance to the badly hit coal and steel communities of our country.
On the positive side, the local authorities in South Yorkshire and the business innovation centre have a
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good working relationship with the regional office in Leeds, especially where it advises the local authorities on developing and implementing programmes and likewise giving support to the Barnsley BIC's revenue schemes. It would appear that decisions for the local authorities generally are being speeded up. On the other hand, it is self-evident that the RECHAR and additionality arguments speak for themselves—they have been most depressing. Unfortunately, the Government give the impression that they are reluctant to embrace the spirit of the structural funds, and there is limited co-operation and discussion between the DTI nationally and local authorities. Consequently, they are excluded from having any influence on programmes.
Matters can be improved with better administration by the Commission, including simplifying the bureaucracy for planning and implementing programmes. Also, let the Government speedily allow EC funds to go to the regions where they are intended. I believe that a positive attitude is necessary by the DTI to effect a closer working partnership between the Commission and the Government and that they should not be jealous or envious of the EC's regional programmes.
Under this Government, the sad fact is that local authorities have only EC regional policy to fall back on when it comes to public sector regional regeneration. I believe that the Government sell their poorer regions short by their current policies. They ought to be changed. Perhaps the new president of the DTI will act accordingly.
4.11 p.m.
Lord Hooson: My Lords, like the noble Lord, Lord Mason of Barnsley, I should also like to congratulate the noble Lord, Lord Aldington, and his committee on their work and on their report. I largely agree with the opinion expressed in Part 3 of the report, but with two important reservations and one lesser. Clearly it was a very high-powered committee. I found the report to be a valuable and instructive contribution to the greater debate. Many of the questions asked by members of the committee, especially the reflections of wisdom and experience in them, were very illuminating, as were some, but not all, of the answers that they elicited. In particular, members of the committee did not have much success in trying to find out whether there is any degree of additionality provided for in the United Kingdom's utilisation of these European Commission funds, or, if there is any—which I doubt —it is a matter of degree.
As a fairly practised questioner in our courts for four decades, I was quite amazed at the skilful and delicate footwork—if I may use such a term—of the Treasury witnesses in dancing around the probing questions on the issue of additionality. That brings me to my major reservation on the opinion of the committee. I feel that members of the committee were excessively kind in dealing with the matter of additionality; that is, whether the Government actually fulfil their obligation to use those additional funds from the European Community to make an additional impact over and above what would

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normally be done in those parts of the country which alone are eligible for that form of assistance. Reference has already been made to the definition in the report at paragraph 74 of the word "additionality":
"Additionality means that anything that the Commission does by way of financial assistance should be additional to what would be officially provided in the eligible areas concerned without that assistance".
There is clearly a very important dispute as to whether the UK is fulfilling its obligation on additionality. It was actually spelt out by Commissioner Bruce Milian in his evidence in response to an invitation from the noble Lord, Lord Aldington. I refer especially to the questions and answers (489 to 495) at pages 90 to 92 of the report.
The committee's last word in its opinion at paragraph 135 on additionality ends with a pious hope which I think that I should quote:
"It seems to the Committee that the Government should redouble their efforts to satisfy the Commission by the transparency of their procedures that the additionality principle is being followed in the United Kingdom, that anticipated grants from the Commission were included in expenditure plans to add to what would have been spent in regional development without the grant, and grants approved by the Commission within the CSFs reach the agreed areas. The Committee hope that their Report will help towards a very early resolution of this dispute and they stress that there is a real urgency for this".
Clearly, the experience of the noble Lord, Lord Mason, illustrates the urgency of the point.
I do not believe that the United Kingdom is fulfilling its obligation. That is a belief that I know is shared by many others. I should like to set out some of my reasons for that belief. First, if one accepts that there is a general understanding that additionality applies, why go out of one's way, as the Government did here, to emphasise that there is no legal obligation? The comment of members of the committee on that in paragraph 135 was that they agreed that there was no legal obligation but noted,
"the acceptance by the Government that there is a general understanding that additionality applies to receipts from the Structural Funds"—
adding the qualifying words—
"which did not appear to them to be the case at the start of their enquiry".
It seems to me that the Government are saying, "Our first defence is that we have no legal obligation". When that defence fails, they will then say, "The transparency of procedures is a sufficient defence".
Returning again to the report, members of the committee also said in their opinion:
"In looking for a way out of the seeming impasse of this dispute, the Committee have been helped by the distinction made by the Treasury in their evidence (Q558) between the additionality issue and transparency procedures".
I am bound to say that I fail to follow the meaning of that sentence. I fail to see how it benefited the committee. Perhaps someone will be able to illuminate the point for me before the end of the debate.
It is instructive to remember that Commissioner Milian, who was Secretary of State for Scotland for many years, has considerable experience and knowledge of local government financial procedures in the country. It was suggested that that might be a difficulty. He plainly expressed his view at the end of his answer to question 496. He said that it was the
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transparency of our procedures that enabled him to say that he was not satisfied and in fact did not believe that additionality was being employed in this country.
We then come to the evidence as regards how the money is actually spent. Because I come from Wales, I refer in particular to the answers given by Miss Davies of the Welsh Office when she dealt with the priorities and so on. She gave examples which I know members of the committee probed. They were surprised. There was, for example, the question of the money spent on the railway signalling systems and the money spent on Manweb, the company that produces electricity in North Wales. There was also the probing by the committee of the sponsors to the effect that they were waiting for people to make suggestions. Altogether it did not appear to me that the evidence available—from Scotland, Northern Ireland or Wales, although I thought that the answers from Wales were the least satisfactory—showed that additionality was being applied here.
I turn now to my second serious reservation; namely, the effectiveness of the help that we are receiving. To a degree that hinges upon the question of additionality, but it is also a matter of priorities as regards how the money is spent. The committee set out its findings in paragraphs 117 to 119 at pages 34 to 35 of the report. In particular, paragraph 117 states:
"A complete judgment on effectiveness would need to include an estimate of what would have happened without any Community with arrangements to support cohesion-aimed programmes".
Oddly enough, by far the most effective support for rural areas in the EC, comes from the common agricultural policy. It has many critics and there is great scope for reforms in its methods of support. But I do not think that it has been fully appreciated, either on these Benches or any other Benches, what would happen if the common agricultural policy were scrapped. If the GATT negotiations were 100 per cent. successful and we had total free trade, one would have enormous agricultural, economic and social problems in many of the regions of the United Kingdom and total devastation in Europe. We should have millions of people looking for jobs in industry. I do not think that anybody has fully faced up to the implications of that.
In the area in which I live, in Mid-Wales, we have considerable help from the Common Market funds —I think there was £79 million in the latest plan. That is chicken-feed compared with the support that is given by the common agricultural policy. So when one talks of scrapping it one should face up to this point. One suddenly has great scope for reforming it but I simply point out the devastation that would occur.
We should not underestimate the value of the agricultural economy in supporting the infrastructure of social and economic life in areas such as my own, as well as in Spain and Denmark and Holland, which are net beneficiaries because of the common agricultural policy. Without it, their standards of living and earnings would be nothing like they are today. So we face a dilemma there.
The United Kingdom preference for infrastructure use of these funds seems to me to be wrong. It

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accentuates one's suspicion that the funds are used in fact in substitution for central funds and not additional to them.
Perhaps I may quote from paragraph 118 of the report:
"The Committee wish to point to the enterprise initiatives taken in the United Kingdom by the business community and other non-governmental bodies in partnership with local authorities and central government, which have enabled a relatively small injection of public money to produce a major stimulus to the small business sector as an important source of new jobs and local wealth creation. They were impressed with evidence that showed the value of regional support through innovation services in the central part of Italy, to help small businesses".
That statement is made in contrast with the emphasis by the Government in their various departments on the importance of using this money for infrastructure benefits.
Perhaps I may go back to my experience in Mid-Wales. When I first became a Member of Parliament for Montgomeryshire in 1962 our area was a net exporter of population. There was an acute drift of population away and the area was still suffering from this acute de-population which resulted in an age structure which was a great cause for concern. I shall not describe the self-help elements, but they came to my mind when I noted some of the questions asked by the noble Lords, Lord Carr and Lord Boardman, in particular. There was a progression from a voluntary Mid-Wales development association to the new town development corporation and eventually to the Development Board for Rural Wales.
The committee refers to the relatively modest help that sometimes can be given to private enterprise. This results in very beneficial development. I asked the former development officer of the Rural Development Board for Wales, Mr. Peter Garbett Edwards, who was by far its most effective officer ever, whether he could give me some examples; he gave me four. First, there was Presco in Newtown which makes portable buildings for export. It is very much a national company now. The company started with 20 employees and had regional help—this was before Common Market funds were available. It now employs at least 240. For our part of the world that is a considerable business. Next there was Control Techniques, which is now an international high-tech company in Newtown. The company started with an employment force of six and now employs over 100 in Mid-Wales and many others in many parts of the world. As I have said, it has become an international company. Then there was Laura Ashley, which started off 30 years ago with virtually a man and his wife coming to the area and receiving some support from regional grants.
Baroness Seear: My Lords, a wife and her man.
Lord Hooson: My noble friend Lady Seear corrects me and says "A wife and her man". I am not sure that I would entirely agree with that. Nevertheless, they started off 30 years ago and now it is an international company. I happen to be a director so I must declare an interest. The company employs between 600 and 1,000 in Mid-Wales as well as those it employs
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elsewhere. Then there was Durward at Llandrindod Wells—a national firm now for office filing equipment. It started with 15 employees and now employs over 300. All that was achieved in the early 1960s and early 1970s.
What has happened since that time is that, according to the evidence of the Development Board for Rural Wales, and I refer to paragraph 38 on page 19, it still has the lowest level of pay in the United Kingdom. So the disparity between our area and other parts of the United Kingdom is still as great as it was when those companies started.
I think that there is need for many more innovative ideas of the kind suggested by some of the probing questions asked by the committee. The Development Board for Rural Wales needs new ideas. It needs to develop some of its home industries, to encourage innovation, to bring about those technological changes to which the noble Lord, Lord Mason, referred and to have less concern with publicity-seeking prestigious schemes. We should go for the people who produce the growth and not so much the subsidiary factories of much larger factories elsewhere, which are the first to close in any recession.
I would challenge the effectiveness of the use of the money. A great deal of the blame for this lies in the Government's insistence that most of this money is used for infrastructure work such as for Manweb, for the railway signalling scheme and so on instead of encouraging local industries and people who come in to develop industries.
I should like to conclude with a reference to paragraphs 136 to 138—The Need for Partnership. I very much agree with the general sentiments expressed in particular in paragraph 136, where the committee points out the clear advantage that West Germany has, with its highly developed regional government, in ensuring that the funds that are available go to the regions for which they are intended and are additional to any other expenditure there. I would make this plea for England. At the least a well-focused regional administration is needed. For example, there is a reference by the committee to the Abruzzo region in Italy where this exists. I agree with the appreciation that the Scottish, Northern Ireland and Welsh Offices express in paragraph 138 and share the concern that England may have difficulty in reaping benefits because it does not have a regional administrative system.
Perhaps a member of the committee could enlighten me as to what the last sentence of paragraph 138 of its opinion means. It states:
"The Commission are associated with regional and local authorities in the CSFs and the Committee do not see the need for any discrimination by the Commission against United Kingdom regions, nor have they any evidence that there is any wish to discriminate, which would, indeed, be very wrong".
That is one of the most obscure sentences I have ever read. What does it mean? Against what evil is it aimed? What is the hidden meaning there? I do not know.
I shall conclude by expressing my appreciation to the committee for its work and diligence. I found reading the report and evidence rewarding. I should have thought that it has given food for thought to a

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much wider audience. In relation to our country, I challenge the manner of dealing with those funds. The funds are supposed to remove disparities between poorer and richer regions. The eligible regions—the poorer regions—have just cause for complaint, as has the European Commission, against the way we use those funds in this country.
4.31 p.m.
Lord Thurlow: My Lords, before turning to some of the points that have been raised, perhaps I may express my appreciation for having been able to participate in the inquiry and pay the warmest possible tribute to our chairman, who works with incredible diligence and skill. I endorse his tribute to our Clerks.
It was natural for noble Lords who preceded me to emphasise the issue of additionality. If I had been in the position of the noble Lord, Lord Mason of Barnsley, surveying through the years the dreary arguments over RECHAR and the failure of the money to come through, I am sure that my feelings would have been equally strong. As I came to the inquiry with a completely unfurnished mind, I found the labyrinthine maze of the procedures for the administration of the regional policies which have grown up over many years to be bewildering.
To return to additionality, I hope and believe—I think partly as a result of the committee's recommendations—that we have now emerged into a new era in which we can forget the dreary wrangles of the past. I believe that we are in sight of a smooth passage over additionality in the future. The noble Lord, Lord Hooson, referred to the term of art "transparency". I shall not try to explain the complicated metaphysics that lie behind some of the terms. Transparency is a key matter. I believe that we shall now have transparency; that the moneys that have been held up are about to be paid; and that we shall not have a repetition of that kind of unedifying inability of competing bureaucracies to agree.
One of the difficulties from the United Kingdom angle in coming to grips with what the regional policies and structure funds amount to is the paradox that some of the countries—ours in particular—are both donors and recipients. In the past that has given some of our loyal officials ammunition to take the line, "Well, when all is said and done, we are not talking about money from Brussels; it is British money that goes to Brussels which is recycled back again under approved procedures". To simple-minded former officials like myself there is a certain Alice in Wonderland look about that.
In reply to a question I put, one of the extremely able officials who came to enlighten us said that if we were starting from scratch we would not have wished to have set up administrative arrangements of the kind that have grown up over the years. But we are not in that position. We have never been in that position. As the noble Lord, Lord Cockfield, constantly reminds us, we were late to join the club; we accepted the acquis; and we accepted the rules and practices that
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the Commission had developed over the years. We do not regard them all as ideal, but we go along with them and do our best to improve and refine them.
Lord Bruce of Donington: My Lords, I am most grateful to the noble Lord for giving way. Is he aware that the rules about the regional development fund and the whole question of regional development policy were established after we entered the Community? They were not established before.
Lord Thurlow: My Lords, I stand corrected by the noble Lord, who has great experience as a result of his previous membership of the European Parliament and otherwise. Nevertheless, the Commission's practices and general administrative patterns were to some extent set in stone before we arrived upon the scene. We are determined to continue to do our best to help our fellow member states to continue to improve the arrangements.
The noble Lord, Lord Aldington, referred to a number of our recommendations which are directed to those objects. I should like to mention one or two more because we sought to submit a report that was constructive, and not negative, in tone. One of our important recommendations—I am sure this will please the noble Lords, Lord Hooson and Lord Mason —is that the Commission's role in the structural funds should be limited as far as possible in the future to Community-wide co-ordination; to monitoring; to evaluating; and to financial control.
Under the principles of subsidiarity which we hope will now be observed increasingly, it is unnecessary for the Commission to involve itself in the detail of matters which local authorities, regional authorities and Whitehall have gone over and over and in many ways to duplicate that work. We look forward to a simplification there.
Again, we believe that there is scope for streamlining the administration when relatively small sums of money are involved. Relatively small sums in a local area may often relate to something that is important and significant. Nevertheless, in the view of our report there is scope for streamlining in the lower tiers of magnitude.
We considered that the processes of approving programmes could be changed. There are possibilities for making these processes much less burdensome to all those who have been involved in the past. We have recommended that through Community funds planning assistance, under a know-how scheme, should in future be given to strengthen the administrative capacity of some of the weaker regions. In our own overseas aid practices over the years, we have always attached the utmost importance to technical assistance, know-how and the transmission of skills. This is an area where our committee considered that the administration of regional policies could be improved and refined.
There is another possibility for improving matters, which noble Lords who have already spoken will welcome. We recommended that there should be more consultation in the processes of working out planning and approval. There should be more consultation with

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non-governmental bodies like the CBI, the TUC and many others which have a real interest in regional proposals and have contributions to make.
The noble Lord, Lord Hooson, thought that the weight of Brussels support under the regional development policies should be attached to infrastructure. Our committee warmly endorses that and it has always been the view of Her Majesty's Government. The noble Lord, Lord Hooson, thought that perhaps there was a conflict between that and the obvious need to do everything we can to promote and facilitate innovative schemes, such as those he mentioned. They interested me very much and they have been important and helpful in central Italy, as well as in many parts of this country. A comparatively new form of governmental assistance is the facilitation or the providing of facilities for small businesses to work together more easily and draw on more centralised technologies. However, this is not so much in conflict with the main emphasis on infrastructure rather than support projects as a matter for reasonable flexibility.
No one wants the arrangements of the Commission to be inflexible and rigid, but, that being said, our Committee strongly endorsed the view that Her Majesty's Government have always held that the most rewarding field for Community support schemes is in the area of infrastructure. We have all learnt how easy it is for official funds to be sucked into specious and, on the face of it, attractive projects for helping lame ducks or giving a boost to promising industrial enterprises. But experience in this country and elsewhere suggests that this is not the best way of deploying limited government funds.
While we endorsed the general aims of the regional development policies and also the choice of areas, in our view they had no implication for accepting any particular targets for the scale of reduction of disparities between the richer and the poorer nor for the amounts of funds that have to be put, in total, into commissioned programmes. We have to be pragmatic. No amount of money within conceivable sight could ever do more than make a marginal difference to disparities in any of the recipient countries.
That does not, of course, apply in relation to regions which benefit enormously from comparatively small sums. Generally speaking, the regional development policy of the European Community is not the main means by which the disparities will be reduced. The main means is by following sound economic and financial policies in each of the countries and by the freeing up of markets. Within the Community itself, we hope and believe that over the years the single market will do far more than anything else to enable the weaker countries, the lagging countries, to rise.
I wish to mention in passing the important point which the noble Lord, Lord Aldington, made in his introduction. It was that the effect of the common agricultural policy at present distorts the whole process of cohesion. He quoted the absurdity of the case of the Netherlands and Denmark as net recipients. This is an indirect effect of the past and
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somehow it must be corrected. I have no doubt that Her Majesty's Government will battle hard to have it put right.
Two days ago, upstairs in a committee room, M. Attali expounded his vision for the ultimate enlargement of the Community to stretch, not in General de Gaulle's vision from the Atlantic to the Urals, but from Wales to Vladivostok. This opens up a wide perspective, and it will be many years and there will have to be many developments before anyone can see whether that vision will be realised. We hope and believe that the Community will be enlarged to incorporate three EFTA members and then perhaps the rest of EFTA. Then, in 10 or more years' time, the Baltic States will wish to join. The Eastern Europeans will be knocking at the door, and no doubt the successor countries of what was Yugoslavia will also be knocking at the door. Therefore the problem of the structural funds and the regional development policies is of growing importance. It is all the more important that the principles and the practice of administration should be got right.
We are building a foundation for an edifice which is likely to include more and more weak economies. Therefore we have to get the matter right. We must avoid the temptation of putting money into schemes that may not last. In general I hope that your Lordships will endorse the committee's view and approve the report.
4.51 p.m.
Lord Carr of Hadley: My Lords, as a member of the sub-committee which conducted this inquiry I wish to reinforce the tributes already paid to the work of our chairman, the noble Lord, Lord Aldington, and to the work of our Clerk. The whole House needs to be grateful to those of our colleagues who are prepared to take on the extremely arduous task of chairing inquiries of this kind. I am delighted to be a member of such a committee of inquiry and I feel highly privileged to be part of that committee. However, I am not sure that to be chairman of such a committee is anything other than a sentence of hard labour. However, our chairman has produced good results.
There can be no doubt that a growing feeling of cohesion among the member states of the Community and among their populations is extremely important. There has to be developed an increasing feeling of belonging and a feeling that member countries and their populations will become enriched by being members of the Community. I agree strongly therefore with the first sentence of the second paragraph of the committee's conclusions, that is paragraph 108. I agree that the task of the Community is to strengthen cohesion. I endorse particularly warmly the final sentence of that paragraph which states:
"Cohesion for the future depends in our view on the understanding by all the peoples of the EC that steps are being taken within the Community and will continue to be taken to reduce the disparities between regions and to improve the prosperity of the less developed, whilst time is given for macro-economic policies to work".

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That is an objective that we must never forget and never neglect if the Community is to flourish and to have a long and vital life and if it is not to deteriorate as the years go by.
While a regional development policy is certainly not the only means by which cohesion can be encouraged it is the most obvious and visible symbol of the Community's commitment to the objective which I have just described. Here in Britain we have a long experience of regional development policy over more than half a century. We know how difficult it is to make such a policy successful. I suggest that for many decades we have had many more disappointments than successes. We have found that vast capital expenditure projects tend to produce relatively few genuinely new jobs.
We have found that subsidising satellite factories at great cost in places where the companies or industries concerned would prefer not to have gone has limited and shortlived results. Such satellite factories tend to be the first to close when a recession is threatened. However, —this I believe is most important and good news—in this current deep and long recession there has been clear evidence that the old depressed areas of Britain have stood up better than many others which have hitherto been thought to be resistant to such problems. Perhaps that shows that over the 50 or 60 years we have worked at this problem we have learnt from experience. I think that we have done so and that by trial and error we have found out a lot about what works and what does not work.
We have also learnt that even the best regional development policies are slow working and that to go for quick results is usually self defeating. I wish to dwell for a few moments on the matter of applying these lessons throughout the Community. In my career I have had considerable personal involvement in regional policy problems. I have had two spells as a Minister at the Department of Employment. I was chairman of the CBI's special programmes unit for some three or four years and I was chairman of Business in the Community for three years. As the noble Lord, Lord Mason, reminded me, I was the UK representative on the board of an organisation called the European Business Network whose main object in life—although not its sole object—was to help to establish in difficult regions in all the countries throughout the Community organisations known as business initiative centres or BICs. We certainly had our share of frustrations in trying to make that policy successful in this country. That was notably the case in Barnsley although it was not the only place where we suffered frustrations in implementing the policy. However, something happens in the end and it is a case of better late than never.
On the basis of that personal experience I wish to pick out and slightly elaborate upon a few points from the report which I believe to be particularly important. First I wish to quote from paragraph 116 on page 34 of the report. The paragraph concludes:
"If the objective of furthering cohesion within the European Community is to be achieved, however, it is essential that the large sums of money made available to the poorest regions by the European Community should be well spent".
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I am sure we can all say "hear, hear" to that. I wish to consider some of the conditions that must be laid down for ensuring that the money is well spent. While I do not wish to belittle the need for detailed auditing control, I believe the essence of good spending is to get the strategy and the policy right. If the strategy and the policy are wrong, however much one counts up every penny of the money that is spent one will not achieve results that reflect value for money. Therefore we need to look at the basic objective of this matter. That basic objective is well defined in the penultimate sentence of paragraph 119 of the committee's report on page 35 which states:
"In the end the effectiveness of regional development will be proven by the extent to which regions now unattractive to private investment are made attractive to those whose activities lead to real economic growth".
That, I believe, is the key objective. We shall only spend funds well if the primary—not the sole—purpose of the spending is to try to bring about that objective. That is not to say that public initiative and public services are not important, but that is the prime basis on which one can make a region, or a small locality within a region, self-generating and self-supporting providing not only a good economic standard of life for the people of the region but also a satisfying quality of life. That, I believe, is the test which we must apply. That objective must govern all our policies. It is fundamental.
Within that context I should like to draw attention to what, from my experience, I have come to believe to be the two essential conditions for success. The first is strong—and I emphasise "strong"—decentralisation of detailed policy making and the management of programmes. All our experience here in Britain has shown that success on the ground depends on building from the bottom up and not from the top down. It is not sufficient or helpful to go to a community, large or small, with money and outside experts to do good or to impose good on local people or communities. They do not like it; they do not appreciate it; and they do not understand what it is that one is trying to do.
What one has to do is to go in in a humbler spirit to help local people to help themselves, to find out what local people want and what they do not want, what they regard as important to their lives and what they regard as less important. One has to give local leaders the help they need to give leadership in their communities. That is the prime secret of making development, whether in inner cities or larger development areas, successful. If we forget that we shall waste a lot of money. Money will not be well spent.
The habit of decentralisation is vital, although it is a habit which does not come easily to the European Commission in Brussels or, equally, to the mandarins and Ministers who inhabit Whitehall. Perhaps I may include myself in the last category, having been a Minister and no doubt having been much more resistant then to decentralisation, although perhaps I did not realise it at the time, than I am now. We have to bite the bullet and stop believing that detailed control is the way to achieve good economy. There has

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to be a measure of it, but it must be strongly criticised: it is the central method, policy and strategy which is the source of good, effective spending of money.
If we are to do that in our communities we have to assist the setting up of local partnerships with central government or agencies of central government. As stated in the report, it is very important that there should be strong local administration. It does not have to be, though some might wish it could be, local or regional government as strong as that in Germany, but strong, local administration is important. I am unrepentant in believing that if we had development agencies in our regions in England as we have in Scotland and in Wales we should spend our money more effectively and also use more effectively such extra help as we manage to draw from the Community in Brussels.
Therefore, there has to be partnership between central government, local government in each area, local business leaders, local professional people and locally active charitable organisations. They must all be brought in. It is not just a matter for public bodies, local government and central government. All those people have to be brought into local partnership.
In support of that point I should like to say how much I approve of the views expressed in paragraph 118 on page 35 of the committee's report, which have already been referred to. The report states:
"The Committee wish to point to the enterprise initiatives taken in the United Kingdom by the business community and other non-governmental bodies in partnership with local authorities and central government, which have enabled a relatively small injection of public money to produce a major stimulus to the small business sector as an important source of new jobs and local wealth creation".
I believe that to be profoundly true.
That movement has been going through a rough time during the recession of the past two years, but there is no doubt that that type of partnership enterprise produced a great new burst of growth in small and medium business activity in this country. It both increased the birth rate and reduced the infant mortality rate of new small businesses. That will become apparent and, when the recession fades, a new source of strength for this country. It needs to be copied throughout Europe. When we give help, whether it is to eastern Germany or the eastern states, that lesson which we have learnt ourselves should be kept very much in mind.
Decentralisation is my main theme and I wish to stress one more aspect. Just as it must apply within member states it must also apply between the European Commission and member states. I was glad to hear my noble friend Lord Aldington stress in his opening remarks that the prime responsibility for regional development rests with the governments of the member states and that the role of the Commission is to support and enable but not to take over responsibility for the programmes. That underlines the importance stressed in the report of simplifying and reducing drastically the bureaucracy involved in present regional development procedures, both in developing and supervising policy. If that applies to
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bureaucracy in Brussels it applies just as much to bureaucracy here in Britain, both at central and local level.
Something else needs to be said. I come to the unpopular subject of additionality. If the Commission is to be a supporter and enabler rather than the manager of regional development programmes which it helps to finance then member governments must accept reasonable responsibility for additionality. What do I mean by that? Above all, I mean transparency, which I was pleased to hear my noble friend Lord Aldington stress. I believe that most of the problem in this country, which I hope has now been largely cleared up—and perhaps this report has helped to clear it up—has related not to what was actually done so much as the total lack of transparency about what was being done.
Additionality has to be regarded in a somewhat wider sense. My noble friend Lord Aldington also pointed out that European structural funds do not cover fields such as education and training. He pointed out that the report states that they should not, and I fully agree with him. Yet there will never be good regional development unless greater attention is paid to education and training. That has to be accepted as the responsibility of the government in each member country.
I believe that it is perfectly reasonable for the Commission to say, "If you are expecting us to give aid in that region we, the Commission, must be satisfied that you, the member government, are playing your part to the best of your ability in providing those elements of infrastructure such as education and training without which the development programmes we are going to support with EC money have no chance of flourishing." If we could achieve that type of general relationship in place of the present nit-picking relationship over additionality between member governments and the Commission we should make a great deal more progress.
My second central condition, about which I shall speak very briefly, is the need for concentration on infrastructure development. Here I must take issue with some of what I understood the noble Lord, Lord Hooson, to say. It may be that I did not understand him fully. I believe that it must have clear priority over support for specific industrial projects, which should take very much second place. I am concerned that some of the committee's evidence seemed to suggest that the Commission in Brussels had a growing interest in supporting industrial projects and that that was beginning to overtake its previous prime interest in infrastructure. If that is so, I hope that the Government will sit heavily on it to reverse that interest. It must put infrastructure first. We must never forget that the prime objective is to help regions to become capable of self-governing growth. They will never do that unless their infrastructure is adequate. But infrastructure must be interpreted widely. It must include not only essential and vital aspects such as road and rail communications, telecommunications and so forth, but also a proper provision of education,

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training, housing and social services. Those are factors which make an area one in which people wish to invest in many ways.
As the noble Lord, Lord Aldington, pointed out, those factors are not covered by sectoral funds and must therefore be covered by governments of member states—if the government is a member state. I believe that the Commission is entitled to inquire in general —not in bureaucratic detail—whether governments of member states are accepting their responsibilities adequately in those respects before they commit EC funds to help in those regions.
The other essential component of infrastructure is a small, vigorous, medium-sized business activity. That requires the partnerships to which I have already referred: local enterprise agencies, business initiative centres, business and science parks and so on. We must concentrate on those two essential requirements. The objective must ultimately be to make each region self-generating, a place where people wish to come. Essential conditions are decentralisation—building from the bottom up and not from the top down—and the concentration of all the help possible on building up a complete infrastructure. That is supported by what is happening in parts of other countries. Spain has been referred to.
Paragraph 44 on page 20 of the report states:
"Professor Stuart Holland of the European University Institute in Florence outlined successful Italian examples of financial networking and pooled involvement in professional training, research and technological experimentation which had brought about a striking increase in the economic growth of the regions concerned … He believed that these kinds of services for small and medium sized firms needed to be regional and local. He recommended that the Commission should give guidelines to make it possible for the policies to be considered consistently throughout the Community".
My final word therefore is this. Let us realise what has been working well. Let us continue to concentrate on that. Let us use our influence to ensure that similar approaches are adopted throughout the Community; and then we shall indeed play our full part in the Community in this field.
5.14 p.m.
Lord Desai: My Lords, first, I join other noble Lords in congratulating the noble Lord, Lord Aldington, on an excellent report and the opportunity that it gives us to discuss regional development in the EC.
Unlike some noble Lords, I am not against the EC. Nor do I consider that its bureaucracy is large. However, the sums of money involved are not negligible. We are talking about approximately £40 billion to £45 billion given to regional funds according to the figures in the report. UK aid to the third world is about 0.3 per cent. of our GDP, which would total about £2 billion. Those are large sums of money. While I am aware that there is much poverty in Portugal, Spain, Greece and parts of the United Kingdom, we are referring to relative underdevelopment rather than absolute underdevelopment. Therefore we must be very careful that the money is spent properly and carefully and not
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frittered away. It is not that I do not believe that the money should be spent. But we must be careful that we spend it properly.
I do not speak as a member of the committee or as someone with a regional interest. Islington does not qualify as a region under the European definition and therefore it cannot hope to receive more money. Nor does the parish of St. Clement Danes. Therefore, I argue more as an outsider and as an economist.
If the noble Lord, Lord Harris of High Cross, had been present, he would have said what rubbish this regional development fund is. All one needs to do is to establish a free market, free mobility in labour and capital and, hey presto, things will happen. It is a belief that somehow free mobility of labour and capital and a free market would accomplish what we wish to accomplish: a reduction of inequality. Historically that is not the way things happen. It is not that movements in labour and capital reduce inequalities in equal proportion. Very often inequalities persist and we have a growing divergence whereby the prosperous regions become more prosperous and the poor regions poorer.
Left to itself, a free market—to which I have only mild objections—does not accomplish that objective by itself. We have to have an enabling policy. I believe that some regional policy which counters the tendency of the market towards equilibrium is clearly necessary. However, we have to ask ourselves about the criteria on which regions are designated as needing aid and the criteria by which we judge that the policy has been effective. My point is not related specifically to the Select Committee report but more to the policy followed by the Commission: that the criteria of relative per capita income and relative unemployment are rather crude. It is not that they are wrong; they are crude. They result in a somewhat absurd idea that an entire nation qualifies under Objective 1 as a backward region. That surely cannot be true. Even in a poor region—in Portugal, Greece or wherever—there are prosperous pockets and prosperous people and poor people. If we indiscriminately designate a large region as poor we may be at risk of giving money where it does not necessarily have the best effect.
The Commission ought to consider whether it has sharp enough criteria in Objectives 1 and 2 for designating regions as needing funds. Objective 2 is more sharply defined. Are the criteria good enough for designating regions as needing aid under these funds?
I cite two reasons. First, in the current debate on development there is a greater awareness of the fact that per capita income is not a good indicator of development or under-development. It is not a good indicator either of the quality of life or of what we wish development to achieve. The United Nations development programme—I referred to the human development report in the debate in this Chamber yesterday—has moved away from mere reliance on per capita income to include a broader category of social objectives such as longevity and literacy. However, that is for a much broader range of countries.
Perhaps the time has come to have a more mixed bag of indicators going beyond per capita income and

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including other qualities. For example, as regards Scotland the report discusses the insularity from which the region suffers. It discusses the fact that it is peripheral and sparsely populated. They are important criteria and per capita income may not capture the fact that a region needs a loan not because it has low per capita income or high unemployment but because it happens to be isolated, peripheral or insular.
I urge the Commission through our debate on the report to think about a broader set of criteria for designating regions. I believe that per capita income is a crude criterion and needs to be combined with others. If that were done there would be a better and sharper formulation of policies.
That leads me to the connected problems of the criteria of effectiveness. It is clear that regional backwardness is a long-standing problem and cannot be quickly corrected. We know from Italy that the problem can last for a century or more. The evidence from my friend Professor Stuart Holland, referred to by the noble Lord, Lord Carr, relates to the prosperity of a relatively prosperous region of northern Italy. It is there in Modena that these lovely things have happened, and I welcome that. However, by and large, it is a backward region of a relatively more developed part of Italy, the north, which is being developed rather than the backward south. It is clear therefore that not only can backwardness persist for a long time but that prosperous regions benefit from aid rather than backward regions.
Given that fact, we must ask ourselves what we can do. Literature on development policies shows that for a long time we believed that speeding up per capita income growth was the answer to everything. After about 40 years of making mistakes we know a little better. For example, we know that per capita income growth is difficult to speed up. We know that speeding it up without regard to environmental and other consequences may not be right. We also know that rather than looking at immediate criteria such as industrial development we might look at deeper criteria such as education, training, research and development and so on.
I recognise that a structural fund cannot deal with that. However, the effectiveness of the policy of giving structural funds to the regions may not be only in whether it speeds up per capita income growth but in other criteria. For example, it may be that in a sparsely populated region such as the Highlands and Islands the correct policy is not to develop it so that it will be flooded with tourists and environmentally destroyed but to keep as it is, perhaps making the citizen feel less isolated. Certainly it should not be rushed into development by some technocratic idea. We must find better notions and concepts of what development consists of other than merely per capita income. Equalising per capita income, which is a crude measure, may not necessarily be a good criteria at which to aim.
Two or three other questions arise. The first is the simplification of procedures. There is a conflict. On the one hand we should like less bureaucracy and
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fewer tiers of decision-making but on the other hand we should like lots of participation, making sure that money is not wasted. There lies the conflict. If one wishes to ensure that money is not wasted one needs a great deal of monitoring and examination to ensure that the scheme is good, that the money is spent as it should be and that it does good. All that means a great deal of work.
There are three tiers: local regions, state governments and the EC. The question is: is one of those tiers redundant? Some noble Lords have suggested that it would be right to pass the money from the Commission to the national government and let them deal with the problem. I can see the logic of that argument, but there is another argument which will not be popular. It is to cut out the national government tier and to let the money go directly from the Commission to the regions. That would be difficult because of the co-financing problem. If there is co-financing, someone—it happens to be the national government—must fork out the remaining part of the grant, which in some cases is 25 per cent.
One way of doing that would be to say that, if a region wins a competition for the allocation of structural funds for a scheme, the national government concerned should see that as a prima facie case it is a good scheme to give co-financing to, whatever the other rules are. If it were the case that once a region had won the competition it would reasonably automatically be granted the co-financing part of the deal, one layer of bureaucracy would be cut out. It would also simplify the horrible problem of additionality.
I know that the two problems are separate, but a point about additionality is the suspicion that somehow schemes may be put forward which could win Commission support but which would not otherwise pass the approval of the UK Government. Therefore the UK Government may be argued into spending money where they do not necessarily want to spend it.
That arises from a philosophy which pertained for a large part of the past 13 years—I hope that it will no longer exist—of regarding anything which the Commission did with great suspicion and anything which local government did with even greater suspicion. We should regard additionality as having a multiplier effect. The fact that people have obtained the money from somewhere else should be thought to be a good reason for not withdrawing the money but adding to it. I hope that a change of regime at the Department of Trade and Industry means that the new Secretary of State will look again at the problem and that additionality will be less of a struggle.
I believe that the report indicates that at the Commission level rather than at the national level there is a need to think in a fairly serious and sophisticated way about the kind of criteria which are used to allocate funds to the regions, to evaluate what the funds do and to know whether we have been successful. The objective of equalising per capita income in all regions is foolish beyond measure. What we can do is not so much to arrest growing inequality but to say that people who live in different regions,

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although their measured incomes may be unequal, should find sufficient reason to stay voluntarily in that region because their quality of life has compensations. Some kind of broader concept of quality of life rather than per capita income might he the way to achieve the goals of regional development and cohesion.
5.29 p.m.
Lord Boardman: My Lords, I join with other noble Lords in congratulating my noble friend Lord Aldington on his chairmanship of the committee. As always, he displayed the lucidity and kindness to members of the committee and witnesses which we are accustomed to receiving from him.
I join also with a number of other noble Lords in agreeing that the concept, the policy for support in the way it is designed, is right in its need to strengthen cohesion. I accept that means the transfer of some resources from the richer countries to the poorer ones. I accept too that almost inevitably transfers of cash to spend to one person from someone else leads to certain abuses and the money is not spent as it would be if it were their own money. That is perhaps particularly true when that someone else happens to be what in most people's eyes is a rather remote but also rather rich body such as the Community. I am sorry to say that there has been some evidence of such abuses within the Community.
A number of points arise from the report, but one to which I think all noble Lords who have spoken have referred is the question of additionality. That is something which has created massive confusion. The noble Lord, Lord Mason of Barnsley, referred to that in connection with RECHAR, and other references have been made to it. It creates a fairly impossible situation. You must endeavour to show that there would not have been the expenditure if it had been your own money and yet when it is someone else's money, that expenditure is essential. I put it rather more crudely than did my noble friend Lord Aldington; but I think it is complete nonsense. It was put not inappropriately by one of the witnesses from the Department of Transport. In part of his reply (at page 143) he said:
"The projects which are put forward for ERDF funding are very worthwhile. I think that means automatically they are going to be pretty near the top of any list of priorities. So, I think it is hard to argue that a project would have been unlikely to have gone ahead had it not qualified for ERDF funding".
I then put a question to him as regards whether or not that conflicts with the additionality point, and he conceded immediately that it did. He went on to say that if we applied additionality as it is sometimes construed, there would be almost limitless expenditure.
Of course, it is very strangely interpreted. We have the example given by the noble Lord, Lord Mason, of RECHAR. On the other hand, I recall a case in Italy where a subsidiary company in a development area was asked to explain how it obtained Community funds. It said that it put in all its capital budgets for some time ahead to its head office in Rome. The head office sorted out the ones it thought would get through the Community and in that way the subsidiary
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company received its funds from the Community. That conflicts very much with my understanding of the Community's interpretation of additionality.
I move from that to another point of anxiety; that is, the potential conflict between member states and regions. There is some pressure coming from various quarters that the regions should be able to carry out negotiations directly with the Commission, by-passing the member states. Both my noble friends Lord Aldington and Lord Carr quite rightly said that that should not happen. Member states are responsible for the economic and social policies of their regions and for the economic growth of those regions. We must take great care to avoid duplicating or eroding the responsibilities of member states for their regions, which are perhaps the less fortunate parts of a particular state.
The most worrying part of the procedure—and it comes out in the report—is the evidence of bureaucracy which we had from many witnesses, including witnesses from Scotland, Wales and Northern Ireland. They gave as an example the increase in the number of committees. One witness said that what had been dealt with by one committee is now dealt with by six. What had been dealt with locally now involved constant travel between Brussels and wherever it may be in order that he could try to get some understanding and agreement on how the money was to be spent.
As regards the selection of projects, the gist of the evidence was that the projects were worthwhile but not necessarily the projects which the various officials or witnesses would have chosen had it been their money and their decision as to how that money should be spent. I do not blame people for making applications for funds if they believe that they can obtain them. But there were some farcical examples. For example, Community funds were provided, after all the procedures had been undertaken in committees and so on, for erecting public lavatories in the car parks in Cardiff. I wonder how far bureaucracy can be stretched in order for that to be achieved. I am sure that a notice was attached saying, "This facility is erected for the convenience of the public by the generosity of the European Community". However, I believe that is fairly ridiculous.
If one ignores the obligations which I accept—and I am sure noble Lords accept—that we have a duty to help the poorer nations, from the point of view of the UK alone, we should be better off spending our own money as we think best for the regions in this country which need it most. We do not need six committees to assess those. We do not have to spend twice the amount of money that we spend now. As table 3, (on page 32) shows, to which my noble friend Lord Aldington referred, nearly a quarter of the total contributions to the Community—some 10 billion ecu —is unattributable to any member-state. Presumably, it is largely used for "running the shop". However, we get back only half of everything that we contribute. Therefore, when we spend £100 from Community funds, we have already contributed £200 into the Community to get back the £100. That rather smacks of entering into some of the dangers created by the

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CAP. I hope that we can avoid going down that road because I read that in 1993 the Community will spend 25 per cent. of its budget on the structural fund, which is a substantial slice of money.
Again, as my noble friend Lord Aldington pointed out, if one follows the route of the CAP, we shall have the state of affairs in which rich countries like Denmark and the Netherlands receive more from the Community than they contribute. That cannot be right. If we accept the concept, as I do, that we have a duty as one of the richer nations to help some of the poorer nations, we should not pour more money into the richer nations.
I resent—and perhaps that is not too strong a word to use —the way in which the Community insists on putting up notices where they have funded particular projects. Where a bridge has been built with Community funds, one finds a notice saying, "This bridge was erected with European Community funds". I do not believe that is right or really very honest. It should go on to say, "This and another similar bridge in Europe has been built at the cost of the British taxpayer". That would be an honest statement of fact. It seems that the picture has been distorted. Somehow it gives a picture of the EC as a charity so that when people in this country see one of those bridges they say, "How charitable and kind the EC is to us". However, that is just not so. As I say, for every £2 we pay to the Community, we receive back £1 for support to the regions of this country.
As other noble Lords have said—and I shall try to condense my arguments on this—we must try to simplify the procedures. The aim which we accepted —and I certainly accept—was to secure greater cohesion among the member states of Europe.
We must ensure that the Community adequately accounts for its expenditure—a point to which the noble Lord, Lord Desai, made reference. Monitoring is important, yet somehow we must achieve an effective form of monitoring without having a massive bureaucracy chasing round and counting every penny spent. It is not an easy balance to obtain. However, if we are to give respectability to the projects which are put forward and the people paying for them, we must somehow see that they are reasonably monitored and the money not wasted.
I question some of the moves in what has been referred to as the Jacques Delors Mark II, which are moves towards expansion of funds, of the role and of the scope operated by the Community, bringing in such matters as hospitals and schools. By expanding development or structural funds in that way, we are completely eroding the responsibility of member states for the provision of those things which are essentially their burden and their responsibility. I hope that we will do that. We must aim for contributing to and achieving greater cohesion among the members of the European Community. But we must do so by avoiding and resisting any bureaucracy which follows from that.
5.41 p.m.
Lord Bruce of Donington: My Lords, I too thank the noble Lord, Lord Aldington, and his committee for the report that they produced, particularly as I have been what may be called a participating spectator, possibly not always a welcome one, to the activities undertaken. At any rate, I certainly agree that the staff of the committee—the secretariat, its legal adviser and all those associated with the production of the report—are to be congratulated.
I was somewhat surprised to the point almost of glowing pleasure to find that I agreed with a good deal of what the noble Lord, Lord Boardman, had to say. One of the difficulties in public life, and if I may say so I have been an active participant for over half a century, is to determine for oneself the difference between illusion and actuality. It seemed to me today that the noble Lord was, albeit somewhat slowly and reluctantly, coming down in favour of the actualities. I refer to the illusions, for example, about the status of the European Commission, the aura that surrounds its every utterance, nay even the saintliness of some of its members which has been the characteristic of public comment for so long. Indeed, if one ever ventures to penetrate the veil of the halo—the Holy Grail that is the European Commission—then one is regarded as somewhat of an eccentric at the most generous and at worst a rotten anti-European. The veils are beginning to drop. The noble Lord today did the House and himself a service by at last being able to appreciate the real power and significance of the Brussels bureaucracy.
The regional development policy put forward by the Commission soon after Britain's accession in 1972, partly as a result of the pressure that successive British governments exercised and particularly in the renegotiation that took place in Dublin in 1974, added a powerful impetus to the whole establishment of the redistributed apparatus that lay behind the general concept of European regional development policy. As my noble friend Lord Desai pointed out, with good effect I thought, it is the essence of the operation of free market forces over any specific area of the earth that the rich get richer and the poor get poorer. That applies not only internally within our nation where, despite a considerable number of economic miracles, we still see a growing division between rich and poor, but it applies also in Europe and particularly in the European Community. Incidentally, it applies in the world as a whole because the richer nations of the world are getting richer and the poorer nations are still getting poorer.
It was therefore quite natural that there should be some move within the European Economic Community to correct a process that it really did not like to admit to itself. For example, although the operation of free market forces was and still is regarded as the last word in enlightened economics, both this country and every other country in the EC were careful to exempt the agricultural community from the benefits of the free market system. They were conscious of the fact that the free market system produced the inequalities to which I referred. As noble Lords will gather from the report, large sums of

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money have been diverted to those kinds of purposes through the regional development fund and other types of structural fund. But it is necessary to bear in mind that, despite that process, which has been going on since 1974—nearly 20 years—the disparities are still growing between the richer areas of the Community and the poorer areas.
The Commission knows that well. It has been advised but has a queer way of stifling discussion on those matters. First, there was a report produced by MacDougall which the Commission never released for debate in the European Parliament. That pointed out those problems. Secondly, there was the Maldague Report produced by my friend Stuart Holland—a friend also of my noble friend Lord Desai—which showed how the operation of the multinationals in Europe produced regional disparities. The Commission declined to have that discussed by the European Parliament. Indeed, most of the reports commissioned by it, unless they agree with the views of the Commission, are rarely discussed in the European Parliament. I speak with some experience. For some two years I was president of the European Parliament's Regional and Transport Committee. Believe me, I know how the system works.
We should surely at last bear in mind and let it sink in—however sentimental we may feel about it—that the European Commission is not composed of extraordinary people who have some kind of supernatural powers. They are just ordinary people, some with experience in political life and some with none. Their political experience and expertise does not always qualify them for the positions which they occupy. Yet unless one agrees with everything that the Commission puts forward one is reckoned to be anti-European and one is below the salt. One does not belong to the really organised intelligentsia in politics. One is some kind of eccentric.
We all know perfectly well what happens as regards the European development and other structural funds. The noble Lord, Lord Boardman, put it very well indeed. I have a quotation marked but since he has spoken with authority I would not even dream of producing one in support of him. He knows quite well that the money that is put into regional projects, for example, in various parts of the United Kingdom, accompanied always by a notice: "this project has been financed by the European Community", is a lot of nonsense. First, the money goes from the British taxpayer to the Community and then, wearing a Community label and in order to enhance the reputation of the Commission, purports to be provided by the Community. Of course that is a lot of nonsense.
There was a time when the only fund in the Community budget out of which Britain derived a profit—she actually got out more than she put in which was most remarkable because that does not apply to anything else—was the regional funds. Since the enlargement of the structural funds, which again was reported on by the committee headed by the noble Lord, Lord Aldington, and which was referred to in such glowing terms by the report itself, Britain now
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gets less and loses. She puts into the structural funds —the noble Lord has quite correctly cited the figure of £300 million—more than she gets out.
Therefore, let us have no more nonsense about this wonderful organisation, the Commission, composed of appointed civil servants, not democratically elected by anybody, and their staff. They are not the source of any benefits received by the United Kingdom; they are merely a bureaucratic channel, which there must be, through which these things are conveyed. One cannot have a Community organising itself to follow certain common principles without having a bureaucracy to administer it. That is quite proper. However, in addition to performing those functions, which are quite legitimate and proper and which I support, all bureaucracies eventually begin to seek ever-increasing powers for themselves. That is exactly what Her Majesty's present Government are beginning to realise.
Even now there is audacity, against current fashionable opinion, in assertions that the member states really do have a role to play. It is now no longer not respectable to say that a British Government are quite capable of governing their own people. To have said such a thing five years ago and to have excluded the European Commission, would have been regarded as heresy. Possibly people have been listening to me for quite a time now and they may know differently.
As the noble Lord knows perfectly well a number of projects are quite admirable and very necessary, particularly in areas where the traditional industries have declined or where industries, by the operation of unrestricted, free market forces, have suddenly produced distressed conditions in certain localities. It is very right and proper for aid to be directed to those places and for projects to be developed. It is also right for governments themselves, in conjunction with local authorities, private interests and charities, to persist in that process in the hope not only of regeneration but of at least averting further distress. All that is quite right.
However, in selecting a project, one should not have to go through the tortuous machinery of deciding what one wants locally, involving the local inhabitants and businesses, local authorities and charitable organisations, and then to have to send the damned thing to Brussels to a bureaucracy for further approval. It does not make sense. The committee has not said so in so many words but it has hovered on the edge of being slightly supportive of the assertion that I have so far made.
Local authorities work up their projects in conjunction with chambers of commerce, trade unions, charitable associations and other organisations. They apply, after approval from the Ministry, to Brussels. Then there are the weighty deliberations by people who probably have not had any experience of local government at all. I have in mind Mr. Bangemann who is a very good friend of mine. He has no experience of local authorities. When I saw him last his principal anxiety was to inquire why it took him six months to get a Jaguar car. They do not understand the problems involved in the same way as we do. Why should the matter be referred to Brussels and then

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brought back here in a process which has been so well described by my noble friend Lord Mason? Such a procedure passes all imagination.
We now have to ensure that these processes do not take place. While it may be necessary on a global European basis for the Commission, subject to the Council of Ministers, to lay down guidelines, this massive, but trivial intervention producing delays at local stages is nothing more than a sop to bureaucracy and should be stopped.
There are other aspects to the matter as well. One has to bear in mind that, according to the Government, this year the United Kingdom is a net contributor to Community funds, after all receipts and abatements, to the tune of £2.5 billion. That is British taxpayers' money. It is incumbent on us and on our Government, now at the heart of Europe, to pay some attention to where the money is going. Nothing is more obscene than the provision of public money not only from the United Kingdom, but from Germany and the other member states as well, by way of regional and other aid, to Italy. I quote Italy deliberately because, as the Commission well knows, the Italian Government has not yet established the position where it can actually verify to the Commission or the Court of Auditors, that the money provided out of Community funds has in fact been spent for the purposes for which it was given. We all know that the Italian Government cannot handle the Mafia or, indeed, the other corrupt institutions in Italy which are busily sucking at the teats of the money that is provided by the rest of the Community.
Those are the reasons that we have to take a rather closer look at the regional development policies. Our prime objective must always be—not only in the United Kingdom but, because we are active members of the Community, throughout Europe also—to see that the worst effects of the operation of free market forces are halted or at any rate alleviated. However, we must also see that some of the new network methods, which were referred to by my noble friend Lord Desai on the advice of Professor Stuart Holland, are given far more critical examination than hitherto. If we can do those things and, above all, if we can exert our own democracy at local and national level and successfully fight the growth of this octopus-like bureaucracy, which is ever seeking more power to itself, then we shall not only have done our nation good, but a favour to Europe itself.
6.1 p.m.
Lord Thomson of Monifieth: My Lords, I apologise to the House for the fact that, although I made arrangements a few days ago to speak in this debate, owing to an accident my name was omitted from the typewritten list of noble Lords wishing to participate.
I join all noble Lords who have spoken in thanking the noble Lord, Lord Aldington, and the members of Sub-committee A for their excellent report on European regional development policy. It is in the great tradition of the reports of the Select Committee of this House on the European Communities in
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creating, through constructive criticism, an informed climate of opinion about EC developments, especially as they affect the United Kingdom.
The report is of particular interest to me because it shows how much the Community's regional development strategy has expanded since the days when Britain joined the community 20 years ago when I found myself the EC commissioner charged with setting up the first regional development fund. I apologise to the noble Lord, Lord Bruce of Donington, for reminding him of that murky chapter in my past. I generally enjoy the noble Lord's polemics about the European Community and totally agree with him on one aspect—that is, that all the members of the European Commission and its senior officials are ordinary, fallible mortals and sinners like the rest of us and are not the superior people he seems to think we are.
Although I recognise the sincerity of the convictions of the noble Lord, Lord Bruce of Donington, about British membership of the Community, I remain a little puzzled that he and I, who belong to the left of centre tradition of British politics, and that he, who believes in the redistribution of resources to help the disadvantaged within the nation state, should apparently feel so strongly opposed to that in principle when applied at the European Community level, given that we are members of that Community.
The enlargement of the Community and the accession of Portugal, Greece and Spain, with their severe problems of underdevelopment, added a totally new dimension to the problems of regional development. That was reflected in the major reform of the structural funds in 1988, in the doubling of the resources available to them and, perhaps most important of all, in the commitment to co-ordinate the work of the three funds in a single coherent strategy, although I am sure that there is still a long way to go in that respect.
Despite that widening of the Community's regional responsibilities, the regional fund in particular remains important for many regional and industrial interests in this country, as has been made plain by a number of noble Lords today. As the report records, the United Kingdom is the biggest beneficiary from Objective 2 assistance, with almost 40 per cent. of the Community's grant under that objective. I do not deny for a moment the point that was made by the noble Lord, Lord Boardman, and by the noble Lord, Lord Bruce of Donington, that, setting that grant against our contribution, one could make a different calculation. Commissioner Bruce Milian was right in his evidence to the committee that if Her Majesty's Government wish to deal with that, they should do so in the overall context of our budgetary contributions in terms of the Fontainebleau agreement, and not by undermining or seeking to destroy the Community's regional policy.
The fact that that aspect of the regional development fund is so important to regional authorities and industrial interests in many parts of the United Kingdom makes it more depressing that the argument with Whitehall about additionality is

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still dragging on, and has been so thoroughly aired in this debate. The then Secretary of State for Trade and Industry is reported at paragraph 82 of the report as thinking that the United Kingdom's dispute with the Commission over additionality was "metaphysical" rather than administrative. If I may say so, that is a typical mandarin's approach to the matter. Bodies such as the Association of British Chambers of Commerce, the Association of District Councils or the Welsh Regional Development Board take a more down to earth view of the matter. They know additional resources when they see them and, alas, even more so when they do not see them.
The Government appear to take refuge in the view that this question only began in 1988 with the Article 9 regulation relating to the doubling of the structural funds. In its evidence, the Treasury denied that there had been any objection to additionality before 1988. That is simply not true, except perhaps in the most narrow legalistic sense. As the first regional development commissioner, I can testify personally that the obligation to additionality was made clear by the Commission to all member governments from the very day that the regional development fund was set up in 1974. It was the subject of lively but, I must concede, inconclusive arguments between the Commission, Whitehall and our regions from the moment that the regional development fund began.
Of course, there are practical administrative difficulties about defining how far Community contributions are genuinely additional to national assistance, which varies from year to year as national budgets vary, but I must confess that I find it demeaning that the Committee should find:
"The evidence … received suggests that the United Kingdom is the only Member State which has problems in satisfying the Commission that it is fulfilling the additionality requirement."
I hope that the Government will genuinely seize on the tactful escape route that your Committee, in its wisdom, has offered the Government in paragraph 135 of its report.
Lord Bruce of Donington: My Lords, is the noble Lord aware that the Commission itself was responsible for bringing forward the proposal for the amendment of the regional development regulations in 1988 and for the drafting of Article 9? Is he also aware that the British Government—and I am sorry to have to support their attitude on this—were quite right in their interpretation of Article 9, which placed on them no obligation for additionality at all because, under the new structural funds, they were not receiving any more than they had been previously?
Lord Thomson of Monifieth: My Lords, I am, of course, aware of what the noble Lord has said about the origins of Article 9 and the Commission. There is a dispute with the Commission about the legality of this. As I have said, in its report the committee tactfully decided to concede the legality, but to argue that the Government should move on from that point. My noble friend Lord Hooson felt that your Lordships' committee had been a little too kind to the Government on that point. The report notes the Government's acceptance that there is a general
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understanding that additionality applies to receipts from the structural funds, which did not appear to the committee to be the case at the start of its inquiry. I await with interest what the Minister has to tell us in defining the Government's attitude. I hope that the committee is right in its views. If the report has achieved nothing else than this apparent change of attitude by the Government it will have been a worthwhile report. It is to be hoped that the Government will now follow the committee's advice and re-double their efforts to satisfy the Commission by the transparency of their procedures that the additionality principle is being followed in the United Kingdom just as other member states of the Community are trying to follow it.
This takes me on to the inevitable discussion about too much Brussels bureaucracy. The alliteration is irresistible to journalists and politicians alike. The familiar example in this case is the approval by Brussels of lavatories in Welsh car parks and that kind of thing. From a close reading of the evidence of the then Secretary of State I rather suspect that perhaps the bureaucracy that led to the detail of lavatories in Welsh car parks causing so much heavy weather may have lain as much in Whitehall as in Brussels. The inherent trouble about the European Commission is not that it is a bloated bureaucracy—some rather modest figures were given to us at Question Time this afternoon—but that it is a Byzantine bureaucracy. That is the difficulty about the bureaucracy at Brussels.
There is also a real problem of how much financial supervision is necessary. One has to bear in mind that the most vociferous of critics of the bureaucracy of Brussels—I look towards the noble Lord, Lord Boardman, in his remarks —are sometimes the same people who complain about financial laxness and fraud. As is so often the case in these matters, one must try to get the balance right. Commissioner Millan was reassuring when he said that neither the Court of Auditors nor anyone else had serious evidence of fraudulent use of regional development fund resources. The wisest conclusion on the issue of bureaucracy was probably that of the DTI, which said that everyone thought that this bureaucracy should be reduced, and it was being reduced.
By "this bureaucracy" I assume it means the bureaucracy in Whitehall as well as the bureaucracy in Brussels. It is a constant and endless battle. That is all one can say about it. One had immense sympathy with the characteristically powerful and devastating speech of the noble Lord, Lord Mason, who described how in Barnsley he was ground between the upper and nether millstones of the bureaucracy in Brussels and the bureaucracy in the DTI.
Turning to wider Community issues, I think that the committee strikes a wise balance between the importance of Community regional policy and its limitations. On direct fiscal transfers, tempting though it is to someone like me who looks back to the MacDougall report, the committee is absolutely right to come down against this concept, certainly at this time. Regional policy, however successful, will not eliminate regional disparities, but it can mitigate them

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and make them more tolerable. The need to do this becomes more urgent and more necessary because of the single market and the prospect of economic and monetary union.
What is vital, as the report emphasises, is to ensure that other Community policies do not work against the effect of the structural funds and lead to transfers of funds in the opposite direction to the richer regions and states. The common agricultural policy, the heart of so many of the problems of financing the Community, is a case in point. It has been a massive anti-regional policy during most of its life. As paragraph 139 of the report remarks, it has benefited the richer states more than the poorer.
The task of the structural funds is to benefit the poorer regions and states, not the richer, and through that to strengthen Community cohesion. Unlike the noble Lords, Lord Boardman and Lord Bruce, I get great satisfaction now as I travel around the Community—these days as a tourist and a superannuated Eurocrat—in seeing the blue notice-boards and plaques from John O'Groats to Sicily which announce useful developments which have been assisted by the regional development fund. For millions of people in the less prosperous regions, who might otherwise feel deeply alienated from the concept of a rich and powerful single market Community, the structural funds are the acceptable and humane face of the Community. That is their real importance.
6.15 p.m.
Lord Williams of Elvel: My Lords, I join other noble Lords in congratulating the noble Lord, Lord Aldington, and his committee on an excellent and, if I may say so, extremely long report. It has been rather difficult to read and has taken up a good deal of your Lordships' time. But it has been an extremely worthwhile operation, as the noble Lord, Lord Aldington, said in his lucid introduction. It brings to the forefront of our debate several important points. I shall try not to detain your Lordships too long because we have had a long debate already and I want to give the noble Baroness proper time to reply for the Government.
First, I wish to make two rather general points before making some specific ones. My first general point is about the aim of regional policy. It is a slightly philosophical point. What is the whole object of regional policy? Here we have first of all to ask ourselves what would be the effect if we had no regional policy. Secondly, we have to ask ourselves what are our obligations. Our obligations, as the introduction to the report makes clear, are under Article 130a of the treaty which was introduced by the Single European Act. Perhaps I may remind your Lordships of that article. It states:
"In particular the Community shall aim at reducing disparities between the various regions and the backwardness of the least-favoured regions".
Whatever one may think of the philosophy behind that, our treaty obligations seem to be absolutely clear. There is also—my noble friend Lord Bruce of Donington was right about this—historically a process whereby if everything is left to market forces,
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as sure as eggs is eggs the rich will get richer and the poor will get poorer. This has happened nationally and is happening internationally. The object of regional policy has to be to apply some corrective measures to that. That is the philosophy. We have an obligation under the treaty and we have a genuine philosophical requirement.
We then have to ask ourselves what is the end result of regional policy. The noble Lord, Lord Carr of Hadley, quite rightly, pointed out that in the recent recession, out of which we hope we are coming, it was in fact those parts of our country which had benefited from 40 or 50 years of regional policy that did better than the South-East which had not. I join the noble Lord, Lord Carr of Hadley, in believing that organisations such as Scottish Enterprise and the Welsh Development Agency—I am sorry that the noble Lord, Lord Hooson, was rather hard on the Development Board for Rural Wales because I happen to think that it still does a rather good job —have contributed to mitigating the hardship that market forces, left to themselves, would have imposed on those communities. Regional policy has clear aims and it is clearly important.
I thought I detected in the report—I come again to something said by the noble Lord, Lord Carr—a slight difference of opinion between paragraph 119, which the noble Lord, Lord Carr, said was the ultimate objective of Community regional policy, and paragraph 131. Paragraph 119 says:
"the effectiveness of regional development will be proven by the extent to which regions now unattractive to private investment are be made attractive to those whose activities lead to real economic growth".
Paragraph 131 says:
"The Committee agree with the Commission that policies designed to strengthen economic and social cohesion in the Community can only be lasting if 'environmental considerations are taken into account and seen as an essential part of economic and social development'".
All of us know—because the European Commissioner for the Environment said so only yesterday—that environmental considerations can be expensive and can be at the expense of economic growth and the conditions that attract it. We also know that unrestricted private economic growth can be environmentally damaging. Therefore, there seems to me to be a slight discrepancy between those two passages in the report. When the noble Lord, Lord Aldington, responds, I hope that he will be able to clarify my mind on that point.
Thirdly, I agree with remarks made by my noble friend Lord Bruce of Donington about the necessity for efficiency in the management of whatever regional policy funds—that is, Community or national—that there may be. It is inexcusable to have the situation so graphically described by my noble friend Lord Mason of Barnsley. That really must be an area upon which the Government, the Commission and, indeed, all of us must concentrate. As in all areas of Government, I think that efficiency must be the watchword. I very much hope the noble Baroness will confirm that that will be a major objective of government policy when we take up the presidency of the Community.
I turn now to deal with the specific points. I believe that the word "additionality" has been sufficiently

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mentioned. I have nothing to add to what was said, except to say that when a Secretary of State comes before a committee and says,
"We do try to operate it in a way which is conforming with the underlying moral principles of additionality and we think we have gone a long way to achieving that",
I get rather suspicious that he is really trying to say, "We are not doing it at all but, roughly, we think that we are moving in the right direction". I believe that the Government must now come forward and say what they are doing. Whether the transparency of procedures—or whatever it may be that the committee recommends—is the right way forward, they must come clean and say what they are doing.
The whole question of economic and monetary union and regional policy to which the committee drew attention is one which fascinates me. I believe that the Maastricht convergence criteria, which are basically financial criteria rather than a criterion of convergence in the real economy, are a mistake. We ought to have had criteria for convergence which relate to the real economy, unemployment and various other matters rather than just the rate of inflation and all the things that are in the Maastricht agreement.
My noble friend Lord Desai put forward some very interesting questions about how we should measure the results of regional policy and how we should then measure convergence so that we can get a proper economic monetary union, if that is what we want. It is not simply a question of drifting into a common currency on the basis of the inflation rate. I believe that my noble friend raised the whole question of how regional policy could be evaluated in such a way as to bring us towards an economic and monetary union without serious disadvantage and dislocation. If we cannot reach a solution to my noble friend's question, I very much fear—and this would disappoint me enormously—that economic and monetary union, if and when it comes, will bring dislocation, unemployment, inefficiency and inefficient distribution of resources. That is something that we must guard against. I do not think that the Maastricht convergence criteria guard against it.
I turn next to the common agricultural policy. Yes, certainly, it has been counter regional policy. It has been a sort of social welfare programme in its own right. It generates opportunities for absolutely massive fraud—indeed, many of the benefits go to the traders rather than to the farmers—and it distorts agricultural production and consumption patterns. In almost every way it has now turned into something of a mess. I trust that the reform which we hope will be undertaken will start to eliminate those problems. But, living not far from the noble Lord, Lord Hooson, I have a certain sympathy with what he said about farmers in marginal areas. If we try to do without any support system for farmers in marginal areas, such as Mid-Wales, the whole agricultural economy, and hence the whole rural economy, will break down. Therefore, let us be enthusiastic about reform of the common agricultural policy, but let us not think that market forces and agriculture can and should prevail in their entirety: there must be some kind of support system. We found that out during the Second World War and afterwards.
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My next point is partnership. I very much agree with what the report said in paragraphs 136 to 138. I also agree with what noble Lords have said on the subject. When the noble Lord, Lord Carr of Hadley, talked about decentralisation, I thought that I was hearing an echo of the speech about decentralisation of the Department of Trade and Industry that I made yesterday from this Dispatch Box. I absolutely agree. I shall not say it again. I believe that the Department of Trade and Industry must decentralise itself. Once that happens and decisions are made in the regions themselves—that is, not treating the regions as branch economies—we shall begin to have a healthy regional policy. But, as the report says, and as other noble Lords said, there must be partnership with those people who know about the region or locality itself; for example, local government, trade unions in the area and chambers of commerce. That must happen if there is to be an effective policy.
I believe that what I have said is really all that I wanted to say on the specific points. However, I must return to the issue raised by my noble friend Lord Bruce of Donington which is of fundamental importance. Regional policies must be efficiently organised if they are to mean anything. Regional policies are necessary because of the natural action of market forces in diverting resources to the rich from the poor. Regional policies from the Community—that is, provided that they are sufficiently organised —are necessary if there is to be real convergence of the economies of the present Community, let alone of the enlarged Community which may appear within the next few years. In my view, they will also be vital during the restructuring period which will take place as the single market is completed. Without a strong regional policy, the costs of decline in some regions will significantly delay the benefits of harmonisation. I shall cite but one example: the possible potential problem of large-scale migration, with all the social and economic costs that that entails, which could easily occur if there are large and widening regional disparities within the Community.
In the future the Community that was bound together in the past by the common agricultural policy should be bound together by effective policies for balanced growth and reduction in unemployment. Those are the two priorities. The United Kingdom has a great opportunity. The election is over and we are about to take up the presidency of the Community. We have a tremendous opportunity to set such a programme on the road. That is the right way forward. If the Government take that road they will have our full and enthusiastic support.
6.29 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): My Lords, the debate augurs well for my tenure of office in the Department of Trade and Industry—a tenure which I hope will please the noble Lord, Lord Williams, by its length. The quality of the speeches in the debate has matched the quality of the report produced by the committee. The report was of course extremely well researched, with well balanced

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opinions, and is, as my noble friend Lord Aldington said, in many ways in agreement with government thinking. The chairman and the members of the committee are to be highly congratulated.
I am conscious that I have become closely involved in European regional policy at a momentous time, with the current negotiations on the Delors II package, to be followed immediately by review of the structural funds regulations. I am also conscious that in this area, although exceedingly well briefed, I have an enormous amount to learn. A Select Committee report of your Lordships is no bad place to start; and I thank my noble friend for his words of welcome to a fascinating job.
As well as responding to the points raised in the debate, I shall also talk about the Government's objectives in negotiating the future of the structural funds, an issue which my right honourable friend the Minister for Industry is discussing with his EC counterparts in Lisbon tomorrow. I am sure we wish him well. If I speak at a little length I hope noble Lords will forgive me. It is important and I am among experts.
First, let me say a word or two on cohesion and the role of the structural funds. The Community confirmed its commitment to the principle of cohesion at Maastricht, and the United Kingdom accepts the need to review Community structural policies aimed at improving economic and social cohesion. But the treaty makes it clear, as many noble Lords have confirmed, that the pursuit of sound economic policies by member states is the principal means by which greater cohesion within the Community can be achieved. The role of the structural funds is to provide an important but nevertheless secondary means of support.
The present doubling of structural funds in real terms represents an investment by the Community in the economies of recipient member states comparable with the aid provided under the Marshall Plan for post-war reconstruction. As the noble Lord, Lord Desai, said, the figures we are talking about are not negligible. So we are entitled, as is every other member state, to ask whether they are being put to good use. We in the UK are the second largest net contributor to the Community budget, of which the structural funds now take over a quarter. Even more, we are entitled to demand a proper evaluation of spending so far, in view of the huge increase, almost a further doubling, proposed as part of the Delors II package. The noble Lord, Lord Thomson, drew attention to the fact that sometimes at the moment the best that can be said is that no evidence of fraud can be seen.
We have been extremely disappointed with the Commission's long delayed mid-term review, or "assessment and outlook" as it now calls it. The Commission simply has not demonstrated adequately the impact of spending from the structural funds to date. We agree with the committee that existing policy instruments should be evaluated before the Community agrees to any further increase in structural funds.
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That is not to say that the expenditure of the funds in the United Kingdom has not been of value. The committee itself acknowledged the success of the Sheffield Meadowhall Roads project. I agree with noble Lords about the important role that infrastructure plays in such regional growth. I am sorry to disagree with the noble Lord, Lord Hooson, on this subject.
Probably the most significant ERDF project in the United Kingdom will be the construction of a gas pipeline from Scotland to Northern Ireland costing an estimated £170 million, with an ERDF grant of 35 per cent. In view of Northern Ireland's lack of indigenous energy sources and its distance from the larger energy networks of Great Britain and mainland Europe, this project will clearly have a substantial economic impact on the area.
On a more modest scale is a project to improve Caerphilly town centre which received 50 per cent. ERDF support. I believe that it covered streetscape improvements in a project designed to improve the poor image of the town centre and to improve the attractiveness of the area as a location for investment and to generate tourism. But I regret that I cannot assure my noble friend Lord Boardman that it did not also include toilets.
The Barnsley Business Innovation Centre, with which the noble Lord, Lord Mason, to its great benefit, is so closely associated, is an example of a different type of project. As the noble Lord can tell your Lordships better than I, the centre seeks out entrepreneurs or small technologically based companies who need business advice. The centre also provides incubator units for new enterprises. I understand that the occupancy rates have been high. Some 50 new jobs have been created. In addition to the grants from the European Social Fund, ERDF support of over £1 million has been provided. It is that type of activity for the help of small businesses which as small firms Minister I hope I will be able to encourage elsewhere. I hope also that I shall be able to count on the help of the noble Lord in support of that. I also thank the noble Lord for the compliment he paid to the regional office of the department.
The ERDF has played a strong role in securing the upgrading of ferries for the islands of Scotland, providing some £6 million of grants over the past two years and making a considerable contribution to easing the geographical problems. I note the noble Lord's pleas for greater support for periphery areas in the United Kingdom.
As the noble Lord, Lord Mason, said, on 17th February—and he drew attention to the closeness of the date to the election, but I would be supportive of my right honourable friend in hoping that he was trying to resolve the matter as quickly as possible—new arrangements within the UK public expenditure system for ensuring that the additionality of ERDF is fully transparent were announced. With effect from the financial year 1993–94 full public expenditure cover will automatically be made available for all forecast receipts and be transparently identified in departmental expenditure programmes, as has been requested. I hope that the frustrations of the noble

497
Lord, Lord Mason, will be less in future years and that other noble Lords who have raised this matter will be more satisfied.
It may be the moment to comment on the many remarks we have heard on the issue of additionality. Until I read your Lordships' report I had not quite realised the metaphysical nature of some of these issues. I have a feeling that with additionality it is a question of "Now you see it, now you don't". The Department of Transport was quoted as to the difficulty of identifying how one defined a project. I shall quote Mr. Lilley, who said to the committee:
"So you are simultaneously required to argue to the Community that you need to do these things and you need the money, but you do not need to do them so very much that you would have done them left to your own devices".
It is a difficult role and I think that the Department of Transport staff were perhaps clearer on that issue.
I also thank the noble Lord for coming to the defence of the Government in drawing attention to the fact that, although the committee's report states that we were very much out of line, Commissioner Millan said in his own statement that he was still involved in discussions with virtually all member states on additionality. He said that it was a difficulty they faced in every single member state.
But I hear a request for a clear view from the Government's position now. We have not changed our view of the legal obligation on us as to additionality. But the changes being introduced will ensure that it can be shown that local authorities in respect of the ERDF grants will acquire the spending power to use them.
I return now to the question of the RECHAR grants with which the noble Lord, Lord Mason, is concerned. I hope that noble Lords will understand that when these changes were agreed it was too late for them to be fully implemented into the financial year which began last month. However, for the intervening period there will be a special transitional arrangement for ERDF grants under the RECHAR programmes to ensure that commensurate public expenditure cover is available to the relevant spending authorities for that element of their expenditure financed by the ERDF. We are looking forward to announcing arrangements very soon and I understand your Lordships' impatience. But I hope we shall never be expected not to fight to protect our large investment in the Community. I find no relevance in the statement that we were the only country to contest or to question in these areas. I am sure that the noble Lord, Lord Bruce of Donington, would agree that being alone in such a situation is not necessarily being wrong.
The total current value of the RECHAR programmes as approved is approximately £124 million. However, the Government have asked the Commission for increased funding under RECHAR to take account of job losses which have occurred in the industry since the original programmes were submitted in July 1990. If successful, that additional claim could amount to some £19.5 million. We look forward to hearing from the Commission on that matter.
The noble Lord, Lord Mason, asked whether projects would have to be reassessed. That is not a
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government matter. The projects have to go to the programme committee which has not yet met. It is, however, possible that projects will have to be updated. Those asking may well have to look again at what they want compared to what they requested in mid-1990. I confirm that "very soon" means very soon. He also claimed that local authorities were excluded from having any input. They are represented on programme committees where projects are decided and have every opportunity to comment on programme priorities.
I shall now deal with the issue of administration, an 'issue raised by many noble Lords. Much has been said and written, not least in the committee's own report, about administrative problems related to the implementation of the reformed funds. That is right in my view, bearing in mind that a key objective of the reform was to reduce bureaucracy, while the experience in the United Kingdom and in other member states has been the reverse. The committee supported the proposals of the previous Secretary of State for Trade and Industry for administrative simplification. I can report genuine progress and hope that tomorrow in Lisbon the Commission's commitment to real simplification will be strengthened. In particular, we are looking for a firm commitment to reduce the number of stages involved in deciding structural funds assistance from three stages to two (or even one, if miracles were possible).
Another essential measure will be for the Commission's role to be more clearly defined as Community wide co-ordination, exercising broad aspects of financial control but without direct involvement in programme detail or project selection, as the noble Lord, Lord Thurlow, requested. To the extent that the Commission has a role in member states its involvement should be differentiated according to the importance of the Community's contribution. Obviously there is more interest in ensuring effective monitoring of huge Objective 1 programmes than small Objective 2 programmes, but of course we would not, indeed, could not, countenance any relaxation in financial control.
Community initiatives have been roundly criticised, not least by your Lordships, for adding layers of bureaucracy to an already overloaded system because the Commission has launched too many initiatives, mostly consisting of measures which could and should be financed by general structural funds programmes. The Commission agrees there have been too many initiatives, 12 so far at a cost of 3.8 billion ecu, but that has not stopped it proceeding with a 13th, RETEX, at a cost of 500 million ecu which the Commission does not have. The Community initiatives budget should not be quadrupled, as proposed by the Commission; instead the budget should be cut.
In the next review of the funds there should be very few initiatives, and such initiatives should be confined to programmes of trans-national interest which can only be effected by community investment. Detailed proposals for initiatives should be submitted by the Commission to a management committee, not an advisory committee, for approval. A small reserve could be held back to be used, if necessary, for

499
initiatives to deal with unforeseen problems. But that should not include particular sectors of industry, such as those to be addressed by RETEX. I am sure we are all used to working with contingency funds. No one's crystal ball is perfect.
It is not the job of the funds to address problems of a sectoral nature; it is to help, as has been said time and time again this afternoon, weak regions, whatever the cause of their problems. Member states should address their own sectoral problems, with the Community's help as appropriate, from general structural funds programmes and subject to the Community's competition policy. Similarly, we agree with my noble friend Lord Aldington that it is not for the Community to subsidise the costs of sectors of industry to train and educate their own employees. As my noble friend Lord Carr says, they should be tasked to concentrate upon education and training, but the cost should not be subsidised.
Of course administrative simplification goes hand in hand with subsidiarity, that crucially important principle which we must protect and strengthen. The German Government have made a proposal in the area of the structural funds which we and several other member states support. It is that in future, subject to minimal criteria and ceilings to be determined by the Council, member states should themselves determine which areas should be eligible for support under Objectives 2 and 5b. If I have heard your Lordships correctly, I believe that you support that proposal. Not only would that be in line with subsidiarity; it will enable greater coherence with the maps of areas eligible for state aids and will allow member states themselves to respond flexibly to new sectoral problems as they arise.
I shall comment briefly upon some of the issues raised. My noble friend Lord Aldington and the report comment upon the enormous disparity within the European Community. We should of course be constantly aware of the changes in those disparities which will be brought about by the joining of the EFTA countries and the Eastern European impact. There has been a great deal of comment about the distortion caused by the CAP. I heard the Welsh plea and the support for it given by the noble Lord, Lord Williams. We must be aware of the needs of rural areas. Concentration on urban areas has been fashionable, although rural areas have equal needs. When looking to resolve some of the problems of rural areas we should perhaps look outside agriculture. The message has been well heard.
I heard my noble friend Lord Aldington say that the growth of the economically developed countries is a key factor. The noble Lord, Lord Mason, perhaps credits the DTI with more influence in Europe than I fear we have. It was interesting to hear the noble Lord, Lord Hooson, say that we had great influence on the Treasury. I assure your Lordships that we shall attempt to look after the matters that have been discussed.
The noble Lord, Lord Thurlow, brought common sense and a positive approach into the discussion about what can be achieved despite bureaucracy. That
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is something with which we have to live, but his is an attitude that I shall follow. I confirm that it is not considered that advice should come exclusively from government bodies, neither central nor local, but that others such as the CBI, enterprise agencies and so forth have much to contribute to the discussions on how to help small firms. I assure your Lordships that I shall use every source I can to ensure that the partnerships mentioned by my noble friend Lord Carr thrive.
Again, as my noble friend Lord Carr of Hadley said, the older depressed areas have weathered the problems better in recent years. There is some message to be found in how deep roots go. It reinforces my noble friend's argument that things which are bottom up have a strength. People rarely pull up what they have planted. It is important that projects are carried out under a national policy.
Before one can start the individual regions growing, it is important that the national strategy in which we plan activities is right. My noble friend Lord Carr must be pleased to register the formation of a new urban agency under the chairmanship of Sir Peter Walker. It will give a focus which we have seen in Wales and Scotland. Earlier this week I spent a day in Wales and I suspect that I should be a better advocate today of the work of the Welsh Office and the Welsh Development Agency than perhaps the noble Lord, Lord Hooson. Those bodies have made many achievements in attracting economic growth to the area.
The noble Lord, Lord Desai, put forward interesting comments and concepts. I suspect that he and I come from the two extremes of the great educational establishment, the London School of Economics. He concentrates on what should be done and I tend to veer towards what can be done. But I was delighted to hear, in his recognition that competition for resources had a role to play, perhaps an endorsement of our city challenge scheme. I hope so. As he rightly says, keeping people in their own region must be desirable.
My noble friend Lord Boardman drew keen attention to the operation of additionality by other nations and the fact that we must not erode the responsibility of national states. He also mentioned that it is an expensive shop to run, a concept with which the noble Lord, Lord Bruce, found no difficulty in agreeing. I was pleased, as other noble Lords must have been, to witness that moment of agreement between the noble Lord, Lord Bruce, and my noble friend Lord Boardman.
The noble Lord, Lord Bruce, drew attention soundly to the fact that government money is the citizens' money which we are trusted to spend. The Community does not possess money; it is money from some countries' taxpayers. All of us in government, be it national or European, would do well to remember that.
The noble Lord, Lord Williams, identified the tightrope that must be walked between industry and environmental needs. I draw attention to my maiden speech in which I said that it was no good having green

501
banks and blue skies if everyone sitting there is unemployed. The tightrope is difficult but it must be walked.
I conclude by summarising our key objectives for the forthcoming review. First, as net contributors to the EC budget, we wish to ensure that the total size of the funds, including the new cohesion fund, is no larger than necessary. The increase sought by the Commission is not justified.
Secondly, we wish to ensure that Northern Ireland remains eligible under Objective 1, and England, Scotland and Wales receive their fair shares under other objectives. Thirdly, we shall wish to ensure that spending is put to good effect with arrangements for evaluation which are in accordance with the principle of sound financial management. We wish to ensure that member states pursue sound macro-economic policies, with respect for the principle of subsidiarity.
Fourthly, we will insist on simplifying administrative procedures, particularly outside Objective 1 regions, but without detriment to, and wherever possible with benefit to, financial control and value for money.
In past years, as a less privileged member of the Community, I have always been aware of the excellent reports from your Lordships' Select Committees and of how they provided a learned view based on extensive and thorough research that few could equal. Today, I am pleased to have had the responsibility and privilege of responding on behalf of the Government to a report in exactly that mould. The noble Lord, Lord Aldington, and the members of his committee are to be thanked for their hard work and congratulated on the results of their industry.
I was criticised when I suggested in the debate on the report by my noble friend Lord Caldecote that it should be turned into a popular bestseller. I was then told where the copyright lay. However, I continue to believe that the more people read your Lordships' reports, the more intelligent the public debate will become.
6.55 p.m.
Lord Aldington: My Lords, this brings us to the end of what has been to me an interesting debate which has taught me some new points and emphasised others. First, I wish to thank my noble friend Lady Denton for her comments and for the trouble she took in her speech to deal with the points in the report and to enlighten us with interesting information about the Government's policy on these matters. She also dealt with new projects which they have in mind. As I expected, she dealt with the additionality points which had troubled some of my colleagues and Members of the House who may not have seen the departmental statement in February in such detail as it was explained by the noble Baroness.
I also wish to thank all noble Lords who have been good enough to enter into the debate, particularly my noble friends Lord Carr and Lord Boardman, who helped me so much on the committee. I also thank the noble Lord, Lord Thurlow, who was rightly congratulated by the Minister for his commonsense approach. Those three noble Lords show the strength
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of committees like ours in your Lordships' House and the wide experience and different attitudes which they bring.
I enjoyed hearing my noble friend Lord Carr whose predilections and preferences I have generally shared throughout my political work with him. I also enjoy being pulled up sharply from time to time by my noble friend Lord Boardman. He does it extremely well, but always with the same aim as both the committee and I have. The same is true of the noble Lord, Lord Thurlow. I was grateful to the noble Lord, Lord Mason, for giving us his experience in Barnsley. It confirmed what we found and what we said because we supported his frustration.
The noble Lord, Lord Hooson, began by telling us what a good cross-examiner he had learned to be and what bad cross-examiners members of the subcommittee had proved to be. I admit that I have not carried out as much cross-examination as the noble Lord but I have done what few of your Lordships have done. I have been in the witness box for five days and have been subjected to cross-examination. I know precisely the kind of points the noble Lord was making about what paragraphs 135 and 138 mean. When counsel was cross-examining me and he had a really bad point on which he wished to trip me up, he said, "I don't understand what the words mean." The noble Lord, Lord Hooson, quoted from paragraphs 135 and 138 but it is absolutely clear what the words mean. The truth is that the noble Lord, Lord Hooson, does not really agree with them.
The noble Lord, Lord Williams of Elvel, said that paragraphs 119 and 131 were not quite consistent. They were indeed wholly consistent and complementary. In her reference to the environment, my noble friend Lady Denton enlightened the noble Lord. He knew perfectly well what was meant.
I welcomed the attendance of the noble Lord, Lord Bruce, at the committee. He has much knowledge and sharpness of expression. However, in my humble opinion, he suffers from "Commissionophobia" in a serious way. Although out of our nine meetings the noble Lord attended seven and greatly helped us, I regret that he did not come to the meeting to challenge the commissioner himself with his strong views. I wish he would do that rather than constantly dig at the Commission without putting the points straight to the commissioner responsible. Having launched my little barb at the noble Lord, Lord Bruce, who has been an adversary as well as a partner in political discussions for many years, I conclude by thanking once again all noble Lords who have taken part in the debate. I hope that the House will take note of this useful report.
On Question, Motion agreed to.

Charge-Capping: England
7 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): My Lords, it may now be convenient for me to repeat

503
a Statement made by my right honourable friend the Secretary of State for the Environment in another place. The Statement is as follows:
"With permission, Madam Speaker, I should like to make a Statement about local government finance and community charge capping in England. Local authorities have now set their budgets and charges for 1992/93. The vast majority of budgets are at sensible levels reflecting what charge payers and the country can afford.
"Over 400 authorities have budgeted within or very close to the limits implied by the provisional capping criteria announced last autumn by my right honourable friend the Member for Henley. This outcome clearly demonstrates that my right honourable friend was more than justified in his belief that authorities would find his provisional criteria manageable.
"In overall terms the total of local authority budgets is about 1 per cent. over the amount for which we made provision in our settlement, and the average headline charge is £282, with the average amount of charge actually met by charge payers being under £200. This result is in no small part a tribute to the good sense and responsibility of local government.
"I have carefully considered authorities' budgets. In the light of these budgets and all other relevant considerations I have now decided my capping principles—that is the criteria in accordance with which I must designate authorities for capping. The principles I have today adopted give effect, with one modification, to the provisional criteria announced last autumn. This modification is that I have included a de minimis proviso. This will avoid designation in cases where the reduction which could be secured by capping would be less than £1.50 per adult.
"I have decided that this de minimis principle will be appropriate this year having regard to a number of considerations. These considerations include the provisional criteria, the budgets which all authorities have in the event set bearing in mind that in the great majority of cases they reflect what charge payers and the country can afford, and the scale of reductions in budgets and the costs of rebilling and associated expenses which, but for this principle, would be required. It should not be assumed that in any future year we would judge such a de minimis principle to be appropriate. On the basis of these

Community charge capping 1992–93 Table of designated authorities and proposed caps

Column 1

Column 2

Column 3

Column 4

Column 5

Column 6

Column 7

Authority

1992–93 budget

Proposed cap for 1992–93

Proposed reduction

Proposed cap change on 1991–92 budget

Original average community charges for 1992–93

Community charge reduction implied by proposed cap

(£ million)

(£ million)

(£ million)

(Per cent.)

(Per cent.)

(£)

(£)

Absolute Excessiveness

Basildon

27·01

20·15

6·86

25·4

-8·8

361

58

Langbaurgh

18·50

16·50

2·00

10·8

5·8

376

18

Middlesbrough

21·60

20·20

1·40

6·5

0·0

353

14

principles, 10 authorities are to be designated. These are Basildon, Cheltenham, Gloucester, Gloucestershire, Greenwich, Hillingdon, Lambeth, Langbaurgh, Middlesbrough and Warwickshire.
"For each of these 10 authorities I am also proposing caps —that is the levels to which we propose authorities should reduce their budgets. I have made available in the Vote Office, and shall be printing in the Official Report, a table setting out my principles and showing for each designated authority the cap that I am proposing and the budget reductions implied by it. In each case I am satisfied on the basis of all the information currently available to me that my proposals are reasonable and appropriate in all the circumstances of the individual authorities concerned, and that the reductions I am proposing are achievable this year. The reductions in charge range from £58 for Basildon to £3 for Gloucester.
"Authorities now have 28 days in which to tell me whether they accept the amount proposed. They can also challenge my proposal, suggesting an alternative figure together with reasons for it. In such circumstances it is open to me to set the final cap at a higher, lower or, indeed, the same level as the one I originally proposed. If an authority does not accept my proposed cap I have to set the final cap by order, a draft of which must be approved by the House.
"Within 21 days of the final caps having been set the authorities must set new lower budgets reflecting their caps which feed through to lower charges. How long the process takes depends in part on how authorities respond to my proposals, but I expect that by the end of June or early July all authorities will have set new budgets leading to reduced charges.
"We and local government generally can rightly find satisfaction in the sensible and prudent way the vast majority of authorities have budgeted. But a few authorities are still failing to act responsibly. Parliament has given me powers which enable me both to secure as necessary the expenditure restraint by local authorities needed to meet our wider economic goals, and to protect all charge payers against excessive budgeting. My decisions today reinforce our strategy of expenditure control and will benefit about 1.8 million charge payers."
My Lords, that concludes the text of the Statement.
Following is the reffered to:

Column 1

Column 2

Column 3

Column 4

Column 5

Column 6

Column 7

Authority

1992–93 budget

Proposed cap for 1992–93

Proposed reduction

Proposed cap change on 1991–92 budget

Original average community charges for 1992–93

Community charge reduction implied by proposed cap

(£ million)

(£ million)

(£ million)

(Per cent.)

(Per cent.)

(£)

(£)

Excessive Increase

Cheltenham

10·84

9·91

0·93

8·6

6·6

330

12

Gloucester

10·34

10·15

0·19

1·9

10·3

310

3

Gloucestershire

327·80

317·91

9·89

3·0

6·5

279–347

25

Greenwich

228·81

220·04

8·77

3·8

3·3

287

56

Hillingdon

167·14

166·27

0·87

0·5

10·3

295

5

Lambeth

333·20

328·79

4·41

1·3

5·7

449

23

Warwickshire

299·76

292·99

6·77

2·3

6·5

290–353

19

Notes:
A. Designation is on the basis of the following criteria:
1. any increase of more than 6½ per cent. over the previous year's budget is an excessive increase if it gives rise to a budget over SSA;
2. any increase of more than 4½ per cent. over the previous year's budget is an excessive increase if it gives rise to a budget of over 5 per cent. above SSA;
3. any increase of more than 2½ per cent. over the previous year's budget is an excessive increase if it gives rise to a budget of over 10 per cent. above SSA;
4. any budget more than 12½ per cent. above SSA is excessive save that an authority will not be designated if:

(a) its budget is 30 per cent. or less above SSA and is a cash freeze or reduction on its 1991–92 budget

(b) its budget is 60 per cent. or less above SSA and at least 5 per cent. below its 1991–92 budget

(c) its budget is at least 10 per cent. below its 1991–92 budget

5. if the excess in an authority's budget over the above criteria is less than the equivalent of £.1·50 per adult that authority is not designated.
That criteria for inner London boroughs are the same as for other classes of authority save that for the purposes of comparison the amount of inner London education grant is deducted from budgets.
B. Column 1 of the table lists those authorities designated since their budgets are excessive (criterion 4 above) or represent an excessive increase over the previous year (criteria 1 to 3 above).
C. Column 2 shows 1992–93 budgets set by the designated authorities.
D. Column 3 shows the proposed caps for 1992–93.
E. Column 4 sets out the reductions in budgets implied by the proposed caps both in terms of cash and percentage.
F. Column 5 shows the percentage change from the 1991–92 budget to the proposed cap.
G. Column 6 lists the original average community charge or charges in the area of each designated authority for 1992–93.
H. Column 7 shows the reductions in community charges implied by each proposed cap.
7.5 p.m.
Baroness Hollis of Heigham: My Lords, we first thank the Minister for repeating the Statement made in another place. The Statement designates some 10 local authorities for capping by virtue either of the increases on their budget over last year's spend or by the increase in their spend over their standard spending assessments, or some combination of both.
I have some questions for the Minister. As regards the budget spend, does the Minister accept that local authorities face additional government prescribed responsibilities without adequate additional government resources to pay for them? I refer for example to the responsibilities involved in the Education Reform Act, the Children Act, the new code of guidance on homelessness or the preparations for community care. Does not the Minister accept that a revenue support grant increase of less than 5 per cent. over last year, given local authority wage increases, will not even allow local authority budgets to stand still in real terms, let alone meet these additional responsibilities?
I now turn to the other part of the nutcracker squeeze on local authorities, the standard spending assessment, which assumes standard spending to meet a deemed level of provision. Does the Minister accept the view of the Audit Commission and all the local authority associations, including the Conservative-led ones, that the structure of SSA is now held to be
506
neither fair nor reasonable when Surrey is given more to spend per child on primary education than Wigan or when Brent is given more to spend on snow clearance than Cumbria? As regards two items, capital debt and population, does the Minister think it fair and reasonable that an authority should be compensated if it is attractive enough to attract tourists because it happens to be Westminster, or because it has a race course or is by the seaside while the deprivation that a district authority's population may have in terms of unemployment and homelessness is completely ignored? That system privileges Westminster and penalises Consett.
Does not the Minister understand that capping based on such SSAs is deeply resented as unfair? The Minister referred to Cheltenham and the city of Gloucester. Is it not the case that boundary changes this year have not been fully taken into account by the DoE and therefore this calculation is almost certainly flawed? The Conservative led Association of District Councils certainly argues that that is the case.
Basildon has an SSA of £12.1 million. Is it not the case that by law Basildon is required to meet its debt charges of £8.5 million and has to meet £3.8 million on poll tax and therefore the Government prescribed SSA is lower than its statutory responsibilities? That is the case before we even consider services.

507
Is it not the case also that the SSA equivalent for Middlesbrough in 1989–90 of £17 million is still the same three years later while the average SSA for district councils has doubled in that period? As regards the Conservative-run Hillingdon, does not the Minister accept that this Conservative authority claims it has overspent entirely to meet the needs of refugees as required by the new code of guidance on homelessness? Does not the Minister accept that it is unfair that that is not taken into account?
Is it not also the case that Langbaurgh has cut its spending each year and every year in the past five years but its SSAs are so low that even though it has two and a half times as many children taking free school meals and one and a half times the level of unemployment of other areas nonetheless it is at the bottom of the Audit Commission's family for SSA? Is that not unfair? The Minister will say—as he said in the Statement—that such authorities can appeal. Almost every one of the authorities needs to appeal as I would argue that almost every one of the calculations is flawed.
Given the late announcement of the Government's timetable and the timetable for appeal, is it not the case that, should authorities appeal, it will be August or September before they can send out their revised bills? Will that not mean that it will be that much harder to collect the outstanding poll tax? Is it not unreasonable to be seeking to close down the rates, collecting poll tax and sending out new bills while simultaneously trying to prepare for the new council tax? Would it not be simpler this year to set the process of capping aside in order to move, in consultation with local authorities, into the new regime of council tax in good faith and with good grace?
Looking beyond the financial argument, I should like to ask the Minister whether he accepts the democratic argument. It is clear that SSAs are widely discredited. On the democratic side, we are not opposed to capping as such but concerned with who does the capping—the electorate or the Secretary of State. Does the Minister not accept that we have just had not only a general election but local elections in which local people expressed their views? Is it not the case that the Secretary of State proposes to set aside the verdict of 1.8 million people as to the appropriate level of local expenditure and substitute the verdict of just one man, himself?
Does the Minister not agree that that sits ill with a government claiming the principle of subsidiarity when it comes to the European Community but denying the same democratic mandate to democratically elected local government?
Finally, some time ago a Minister for local government said that the people of an area certainly will be able to vote for a relatively high spending authority if they so choose. That was Mr. Michael Howard, speaking in April 1988. Does the Minister still share that view, and if so why is he bringing this Statement forward?
Baroness Hamwee: My Lords, I too should like to thank the Minister for bringing the Statement to the
508
House and reading it nicely for, like the noble Baroness, I find that there is little in its content which I can welcome.
There were two comments in the Statement which struck me forcibly. One was that it was the belief of the Secretary of State that authorities will find the criteria manageable. One cannot assume that because almost all authorities have met those criteria they necessarily find them manageable. They have met them, but in many cases they have done so with enormous difficulty, facing increasing responsibilities in areas where, by statute, new responsibilities are placed at their door. Those are responsibilities which they would happily undertake as the local authority, knowing local needs, but which they find it difficult to undertake since they lack the resources to do so properly. That applies in areas such as the Children Act, the Environmental Protection Act, community care and so on. In addition, local authority costs are rising above the rate of inflation as a result of wage settlements. Local authorities do not find what they have to do within their constrained budgets manageable.
The final sentence of the Statement indicates that the strategy will benefit about 1.8 million charge payers. The people who are not referred to in the Statement are the recipients of council services. How do they view the results of local authority capping?
I hold no political brief for many of the authorities which are included in today's Statement. However, it is noticeable that they are councils from across the political spectrum. Indeed, in most cases the budgets set by those authorities have had all-party support within the authorities.
There are of course anomalies. The criteria for capping are such that no doubt soon it will be a suitable subject for senior academic research to trace the way the criteria have changed over the years and try to understand the mentality which has led to those changes in criteria. It has to be said that there are many in the local authority world who see no other way of approaching the matter than working out the answer that is wanted and then finding a way of achieving it. There are anomalies. A Conservative authority which is just outside the London boundary has a budget which is much further above the SSA than those of many of its neighbours, largely because of Conservative overspending on civic offices in the recent past. Presumably because its budget is close to last year's budget the authority has not fallen within this net.
It was no surprise to me to hear on the radio in the cab which I took to get here for this Statement that all the London boroughs have announced that they will appeal. The energy that will have to go into those appeals would have been better directed elsewhere.
I shall make one final comment. It strikes me that the sum involved is not merely taken off the amount to be paid by poll tax payers, in many cases it represents a substantial proportion of each authority's total budget. To find means of reducing one's budget by 25 per cent. will cause terrible upset—and, as I said, that particular authority is not one for which I hold a

509
brief. The same applies where authorities have to reduce their budgets by 11 per cent., 6 per cent. or 9 per cent.
We on these Benches do not support excessive overspending by some authorities but we do not support this method of tackling that overspending. It is a matter for the electors of those authorities. The ballot box is the way to control expenditure.
Lord Strathclyde: My Lords, I am very grateful to both noble Baronesses for the way in which they put their cases forward.
Perhaps I may respond first to aspects of the speech of the noble Baroness, Lady Hollis. She asked me dozens of questions, many interrogative. I know that she does not expect me to answer every single one of them. Perhaps I can answer them in general.
The main point that I should like to make is that my right honourable friend the Secretary of State studied all the relevant considerations. His proposals are reasonable and appropriate and we believe that they are achievable. Both noble Baronesses mentioned the prospect of appeal. Any authority can appeal within the next 28 days. Authorities can come forward with their own facts, figures and reasons for making their decisions. That information will be considered carefully by my right honourable friend. The noble Baroness, Lady Hollis, was concerned that the appeal process would take a long time. We desire the process to be completed in all cases by the end of June or at the latest early July. We do not see any reason for the process to take longer.
Both noble Baronesses touched on the principle of capping versus the ballot box. I have a problem with the arguments they put forward. We believe that capping is necessary, for two main reasons: first, to protect the overall financial position of the economy as a whole and overall public expenditure; secondly, to protect the charge payer who, in many parts of the country is paying far more than we consider appropriate. It is also a matter of principle.
The noble Baroness will know that I spent a considerable part of the general election campaign in Scotland, where her party and the Liberal Party were proposing a Scottish parliament. That Scottish parliament would have been capped. There appears to be one principle for the Scottish parliament and an entirely different principle for the Scottish local authorities. I do not think that the noble Baroness will have an answer to that conundrum.
The noble Baroness also referred to boundary changes in Gloucester and Cheltenham. I understand that there can be some argument as to whether the right amount of money was taken into account. But I understand that the department's calculation took full account of all boundary changes.
We were told by the noble Baroness, Lady Hollis, that the SSA system is widely discredited. But it is based on detailed research evidence and extensive discussions with local authority representatives. They have been reconsidered annually since their introduction. No one pretends that the SSA that is given to individual authorities will be the figure that they like most. But in generality I believe that it is a system that is successful and essentially supported by most people.
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We had the argument that services which people had voted for would be cut. However, time and again with capping there are dire predictions which in the event have not been borne out. As I have already said, we believe that the caps are reasonable, appropriate and achievable in all the circumstances of the authorities concerned.
I do not pretend for one moment that I have answered all the questions. However, I hope that the noble Baronesses believe that I have covered sufficiently the generality of the subject.
7.22 p.m.
Lord Boyd-Carpenter: My Lords, I am sure that the House is much indebted to my noble friend for repeating this very important Statement. I am sure the House feels that with a matter of such importance it is right that this House should share with another place the receipt of the information as to those important Government decisions.
Is my noble friend aware that some of us believe that in view of the very large amounts of public expenditure involved in local government work it is essential that the Government—who have the ultimate responsibility for the management of the economy—should be able to limit and control. Expenditure of that amount is significant in the management of the British economy. Unless central Government—which have responsibility for the management of that economy—can control and limit it, they are in a poor position to manage the British economy.
I for one am very glad that the Government have been prepared to take the action which my noble friend has announced—an action which involves a good deal of courage. In a way it would be easier and more pleasant to let the whole thing go. It is very much to the Government's credit that they have not taken that line but have decided quite firmly to cap those 10 authorities.
The other importance of capping is this. The capping affects 10 authorities. I do not know, none of your Lordships knows, whether on appeal any of the 10 will be able to justify the amounts that they proposed to spend. However, the fact that they have been capped, and that it has been known that the Government have the power to cap, undoubtedly has had a very salutary effect on a great many other local authorities who, in order to avoid capping, have exercised greater restraint in the expansion of their expenditure than they otherwise would. The benefit to the national economy of the Government's action is not therefore confined to the 10 authorities affected, but goes very widely over the whole scale of local government expenditure because of the knowledge that every local authority has that if it acts in a way which involves excessive expenditure it too could be capped.
Therefore I welcome not only the action of my noble friend in repeating the Statement, but the courage and resolution which the Government have shown in doing what the noble Lord has told us that they have done.
Lord Strathclyde: My Lords, I am very grateful to my noble friend Lord Boyd-Carpenter for the points that he has made. He is absolutely right. Local authorities spend a substantial proportion of national wealth—some £60 billion a year. It would be irresponsible of any government not to consider that position when making their decisions on whether or not to cap. That is why we have been brought to this decision.
The second point that my noble friend made was that only 10 authorities have been designated for capping. Last autumn when we laid out the provisional criteria for capping, we said that the criteria would be tough but manageable, and that local authorities could not be exempt from the need for expenditure restraint. The vast majority of local authorities was responsible. Those authorities realised that they had to fit their spending within the overall criteria. That demonstrates that we were right to have capped in the past so that local authorities realised what was at stake. This year it is 10 authorities. In the future it is to be hoped that we shall see a shrinking number of authorities which have to be capped.
Lord Desai: My Lords, this is much ado about nothing. A lot of macho politics is being played in the DoE. In the Autumn Statement, the Government stated that they were going to have a PSBR of £10.5 billion for 1991–92. They ended up with £14 billion. This is a Government who have spent over 35 per cent. more than they originally estimated. They make a fuss about less than £40 million compared with the billions of pounds that the Minister said authorities are spending. We are talking about fractions of fractions.
I welcome the de minimis clause relating to £1.50. It is an interesting sum; I do not know who thought of it. Let us consider 5 per cent. as a limit; that if a local authority were 5 per cent. above expenditure, perhaps one could forgive it. I assume that six out of 10 authorities are being cut by less than 5 per cent. Is it worth making all this fuss about the fact that Hillingdon is being reduced by 0.5 per cent? That will take £5 off the poll tax. Is that worth our time, their time and the poll tax payers' time?
It has been made quite clear that this fuss is based on two fallacies. First, that overspending by local authorities is inflationary. Even on a monetarist doctrine, that is not true because local authorities do not print money. Secondly, local authorities are subject to democratic control. So long as their voters approve, who cares if the local authorities do or do not overspend money?
This procedure is order to obtain political mileage. The election is over and we should stop playing these silly games. I believe that it is a lot of fuss about nothing. I am sorry that we have to go through this procedure. I do not believe that any one will thank the Minister for the position, but I thank him for repeating the Statement to us.
Lord Strathclyde: My Lords, that was an entertaining speech from the noble Lord, Lord Desai. I enjoyed being called politically macho. The noble Lord did not agree with my noble friend Lord Boyd-Carpenter. However, my noble friend's speech
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deserves re-reading tomorrow. I suspect that the noble Lord, Lord Desai, and this side of the House essentially disagree on the issue. We do not believe that it is about fractions of fractions. We believe that important principles are at stake, substantial sums of money, and a valuable discipline for local authorities and central Government.

"New Age Travellers"
7.30 p.m.
Lord Stanley of Alderley Lord Stanley of Alderley rose to ask Her Majesty's Government what steps they are taking to tackle the problems caused to the public and the police and other authorities by "New Age travellers", and whether they will review their guidelines to chief constables on the operation of Section 39 of the Public Order Act 1986.
The noble Lord said: My Lords, I must begin by putting on record my gratitude to all noble Lords who are to speak this evening. In particular I thank my noble friend on the Front Bench and other Ministers from other departments for all the time and trouble that they have taken to address this problem during the past year. I am also grateful for the numerous letters which I have received from my noble friend explaining the problems. As a result, I more than realise that this is a difficult social matter. If some of my remarks appear to be unnecessarily critical of police and Government inaction,my reason is that it is often necessary to appear to be thoughtless and indeed ruthless to solve a problem. In an article in Tuesday's Times Janet Daly explained the dilemma better than I can.
The Government stated in their manifesto:
"Illegal camping by gypsies or other travellers can affect the lives of whole communities. We believe that this problem must be tackled".
This evening I and other noble Lords are asking my noble friend how the Government intend to tackle this problem. For while accepting that it is a difficult problem, I have to remind your Lordships that we are paying the police more in real terms than ever before, and if you pay large sums of money you expect results.
The Home Office produced guidelines to chief constables last year as to how they should deal with the problem of mass trespass. Welcome though they were, they were out of date when they appeared and they have not solved the problem—far from it. "New Age travellers", commonly nicknamed hippies or even NATS, have caused the law-abiding public much anguish each succeeding year. I therefore ask my noble friend to consider taking the following course of action. Will the government set up a meeting of interested parties consisting, among others, of police, local authorities, social services, land-owners and farmers to produce a comprehensive new guide? Powys County Council has just produced a very helpful report that could well be made the basis of the way forward. As every noble Lord here knows, there is absolutely no consistency of action in dealing with "New Age travellers". The new guideline should, among other things, explain the difference between

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"New Age travellers", Romany gypsies and other itinerants and the different methods needed in dealing with each group.
In passing, I should state that the Caravan Sites Act 1968, which acknowledges and explains this problem, makes clear that the provision of designated sites would not solve the problem of "New Age travellers". And far as "New Age travellers" are concerned, the new guidelines should suggest that police constables should be encouraged to use their powers under Section 39 of the Public Order Act 1986 as a first resort. That is provided, of course, that the very stringent rules as laid down in the Act are applicable because, as your Lordships will know, Section 39 is drawn in such a way as to make sure that it cannot catch the innocent bird watcher, rambler or indeed the ordinary trespasser.
The use of Section 39 would, however, allow the police to arrest ring leaders who are often known to them. It would also allow the police to break up these convoys as they travel to their rendezvous so avoiding the dreadful problem of trying to remove thousands of trespassers off a site. Moreover, the use of Section 39 would enable the police to keep the convoy of "New Age travellers" from going to the next-door owner. The use of a court order which police seem to favour, would not prevent this happening, however well drafted it was. In addition, obtaining a court order is expensive and time consuming. Often the damage is done or the problem escalates before the people can be moved. That is a matter often misunderstood by police officers and reinforces the need for new guidelines.
However, we cannot all be perfect all the time and I fear that Section 39 is not. How could it be, bearing in mind that I had the doubtful privilege, with NFU guidance, of moving the original amendment that eventually got onto the statute book as Section 39. I ask my noble friend to consider eventually some minor amendments to that section. First, the police are doubtful whether Section 39 gives them the power to move vehicles off the land, whereas a court order does. As far as the "New Age traveller" is concerned, in hardship terms it makes no difference to him, her or their dog whether they are removed from their vehicles or site under Section 39, or a court order. Often police officers do not appreciate that. I suggest Section 39 might be altered to give it that power.
Secondly, Section 39 does not give the police power to remove travellers off green lanes. My noble friend may say the Road Traffic Acts do. With the greatest respect they do not and, if they do, it will take a metaphorical year and a day to enforce those Acts by which time much damage is done. That matter really requires attention. It would also be helpful if Section 39 were amended to stop more "New Age travellers" arriving on the land after a Section 39 order has been given.
I hope that other noble Lords will explain in detail most of the points that I have made and indeed others that I have missed. I conclude by repeating the plea, accepted in the Conservative manifesto, that the present situation is intolerable—I repeat, intolerable. I have no wish whatever to try to stop people living a
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hippy life. I am sure that like me, many noble Lords have hippies in their family. Thank God, this country is free and they should be allowed to continue that type of life if they so wish. (There is no hippie in my immediate family—it is a cousin.) But anyone who has visited a "New Age travellers'" site will see practically every law in the country being broken; the traffic laws, the environment laws, the health laws and the drinks and drugs laws. Worse still, the public see the police turning a blind eye to it. That leads to the public losing confidence in our police force, which concerns me very greatly. I am sure noble Lords will agree that, despite the criticism, we still have the most responsible police force in the world. But, unless they do take action to solve this problem, law-abiding citizens will start taking the law into their own hands. Indeed they have already done so in certain cases and that, I am sure, must make my noble friend and noble Lords shudder, for it leads to anarchy.
7.39 p.m.
The Viscount of Falkland: My Lords, we are grateful to the noble Lord, Lord Stanley of Alderley, for giving us the chance to discuss the issue of "New Age travellers". I keep my fingers crossed because, although there have been some strange members of my family, there have been no hippies, but there is still time. Obviously we shall be well-prepared after this debate.
One is filled with wonder by the fact that civil servants or whoever decides the names that we shall give to certain groups of people can find names with such an optimistic ring. "New Age travellers" sounds like a clean-living rock group rather than disguising the real problem which lies behind the name.
I suggest that the problem is quite simply that there are more and more people, mostly young and often homeless, who are taking to the highways and byways with others and camping out for various periods of time in whatever place they fancy for whatever purposes happen to cross their minds. That is often connected with music and inevitably with drugs and often only in the summer months.
That is where we face a problem with the name given to them of "New Age travellers". There are many groups included in that and the noble Lord mentioned a few of them. The one that comes most readily to mind is the term "gypsy". Of course, there have been itinerant people in Europe and in this country for hundreds of years. Until 200 years ago, actors were itinerant people. They were persecuted and driven from place to place in exactly the same way as tinkers and others. They were people of the road and sometimes one thinks they were probably the better for it.
Even the name "gypsy" is misleading having sprung originally from a mistaken belief that Romanies—for that is what a true gypsy is—had migrated from Egypt. They had not. Some had come via North Africa. However, perhaps because of their dark and swarthy appearance they were thought to be Egyptian and thus given the name "gypsies". They have survived the risk of banishment and persecution for a

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number of years. The Nazis methodically exterminated 400,000 of them. In Central Europe, communist regimes ruthlessly tried to force them into a settled way of life. Through all that has developed a culture and a tribal and family structure which has recognisable characteristics which bears absolutely no relation to the other groups which we shall discuss this evening.
I believe that that is important because the gypsy is genuinely nomadic; that is, he or she moves and migrates with a purpose in mind which has evolved with their culture, although obviously with increasing difficulty. It must be true to say that the greatest threat to the gypsy life has not been persecution in recent times but the advancing complexities of modern life and the difficulties of a life and occupations which they may follow on the move. Urbanisation and the motor car has made the wandering life increasingly difficult. It is perhaps surprising that there are still about 40,000 Romany gypsies in Great Britain.
Of course, they are up against the difficulty of competing now for a diminishing area of suitable camping space with other groups which become rivals for that space and are sometimes known as hippies, as the noble Lord said, or itinerant caravan dwellers, which is another euphemism for them. Those new arrivals have no apparent social structure or pattern of aim in their wanderings other than perhaps to go to rock concerts or to go to a particular event. They are generally composed—and this is important—of a single male majority whereas the gypsy tribal groups are composed of families with children.
Therefore, I submit that to group all those under one name such as "New Age travellers", although it may have a certain charm, is unrealistic and unhelpful to those who must deal with the problems which arise. As the noble Lord said, the people who must deal with them are the police, local authorities and the public who fall foul of them.
Under the Caravan Sites Act, which has been mentioned, well-meaning local authorities have tried to provide sites for many of these people but they do not want sites because more often than not, they hold permanent sites in exactly the same low esteem as some urban dwellers hold high-rise blocks. Furthermore, I am informed that in Telford recently one site had to close because of complaints by a combination of local people and gypsies that hippies were frequently in various states of undress and uncontrollably under the influence of drink and drugs.
We all know the problems faced by farmers and landowners, which have been admirably described by the noble Lord, and the problems for such places as Stonehenge, Glastonbury and so on. We all deplore lawlessness and destructive behaviour wherever it takes place, but unfortunately all that seems to be more of a feature in our society now than I can remember in my lifetime. Perhaps eventually it will swing the other way. I hope it does before my children decide to become hippies.
There even seems to be a certain bravura by offenders. I spoke to some police officers in Kent and was told that in parts of Kent some caravan dwellers
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—I stress not gypsies —engaged mostly in the theft of motor vehicles, having dumped the remains of stripped carcasses of cars in pits and then decorated trees in the vicinity with the car number plates in rather the same way as North American Indian warriors used to do with the scalps of their enemies.
The problem is serious and is growing. Ultimately it may result in the possibility of a Select Committee to discuss the whole area of this trend. Meanwhile, it is quite clear that the problem exists and Section 39 of the Public Order Act has clearly proved to be ineffective.
I look forward to hearing what the noble Earl has to say in answering the debate. He has no easy task. However, I hope that he will at least say that the gypsy community should not be allowed to carry the stigma where it is not appropriate and to carry on as a convenient scapegoat for the misdeeds of others. One must say that the gypsy community has taken great steps to make sure that it is not associated with many of the excesses taking place on private and public land as described by the noble Lord. There is a problem. I hope that the noble Earl will give encouragement so that we can think that at least what we are discussing this evening will be better understood in future.
7.47 p.m.
Viscount Tenby: My Lords, first, I express my warm thanks to the noble Lord, Lord Stanley of Alderley, for asking this Unstarred Question and for stating the position so forcefully at the beginning of the debate. As a sprig of a political family which has unhappily not always seen eye to eye with that of the noble Lord in the past, it is a considerable pleasure to stand, as it were, side by side with him this evening on what I hope will be the first of many occasions.
I hope that noble Lords will forgive me if I concentrate mainly upon one incident of which I have some knowledge as a magistrate member of the Hampshire police authority although I stress that the views expressed are solely my own and do not represent necessarily the views of that authority.
In extenuation of that parochialism, the events that I shall describe—as briefly as possible—serve as an example of much that is wrong with the present system of interlocking laws and highlight the inability of authority to protect adequately, at certain times of the year, those who live in, and those who use, the country.
We have heard all sorts of explanations as to what are "New Age travellers". However, I assure your Lordships that they are not traditional travelling folk but hippies or "New Age travellers". In June 1991 a convoy of "New Age travellers", some 100-strong, was expelled from an army camp at Barton Stacey where it had been trespassing. The convoy then reached Stockbridge Down which is in the ownership of the National Trust where Section 39 of the Public Order Act was again invoked. The convoy once more moved on, this time to a place called Rat's Lodge at Longstock in the Test Valley. There the farmland is bisected by a green lane, designated under the Wildlife and Countryside Act as a byway open to all traffic, or BOAT as it is more familiarly known.

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Apart from the fact that the position of the encampment in a long straggling line made policing difficult, there were other complications such as the topography of the place and the fact that Hampshire has some 3,000 miles of green lanes, sheep droves and the like. The boundaries where track ends and private land begins are often unclear and lost in the mists of antiquity. That is a fact not lost upon the travellers who are invariably well versed in legal loopholes and in their exploitation.
Accordingly the police, in what was a difficult and confused situation, were trying to establish whether the travellers were on private land—in which case Section 39 of the Public Order Act could be invoked —or were on a highway, in which case application had to be made to the courts for a conviction under Section 137 of the Highways Act. That was a process which, despite speeded up procedures, was likely to take several days. By moving a few feet backwards, a few feet sideways or a few feet forwards, the convoy could keep the sport going on indefinitely.
An added complication was that the police were aware that the county council had in the recent past applied to the courts for possession of land in a neighbouring village and the travellers had, in turn, applied for a judicial review—a review which, so far as I am aware, is still pending. In the circumstances they rightly took the view that they could not proceed any further. The upshot was that the convoy, now swollen in numbers to 1,000 or 2,000, stayed on the site for some days. The aftermath—wrecked crops, rubbish, human debris if I may put it as delicately as I can —may be imagined. Nor should one ignore the considerable expense involved for the district and county councils and therefore the charge payers, the police and the affected farmer.
As a result of that and other excursions into the county by smaller groups—I have recent reports of disquiet from the Winchester area—people are understandably saying, "Why cannot government and the authorities get their act together to prevent the physical and mental damage which such behaviour causes, and preferably before the 'season' which starts around the time of the summer solstice?"
I would suggest that one of the main obstacles to solving the problem lies in the inability of government to distinguish between traditional travelling folk, gypsies, and the "New Age travellers", hippies. The guidelines to which the noble Lord, Lord Stanley, referred, issued to police forces in May 1991, on the implementation of Section 39 of the Public Order Act, are no help in that respect. In fact, the two groups are like oil and water and just do not mix. Joint occupation of a designated site would lead to trouble with a capital "T". Accordingly, whether or not a county has achieved designated status under the Caravan Sites Act, though important in the context of the control of traditional travelling people, is totally irrelevant in this specific case.
I understand the difficulties there may be in law in making this necessary distinction but the groups and their cultures are intrinsically different and it should not be beyond the wit of man to devise a formula which would withstand the assault of the most
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professional of legal critics. Some immediate relief—and believe me, "immediate" is the operative word —might be obtained by making arrangements for such convoys and the so called "free festivals" which invariably accompany them to occupy, for a stated period, only suitable sites where they could enjoy their celebrations. For example, there must be a number of unoccupied military sites, particularly in the south of England, appropriate for that purpose.
However, I must add that whether or not the traveller would use those sites is another matter. Although it would be desirable for any police presence and interference with the proceedings to be kept to a minimum—commensurate, of course, with the maintenance of law and order—the travellers will be only too aware that such supervision is bound to be more effective on such sites compared to the unpredictable sites chosen in secrecy and often at short notice by the travellers themselves. Be that as it may, I respectfully suggest that that is an option well worth examining.
At the end of the day, despite the genuine conflict of opinion as to the efficacy of the laws which cover or, as some—myself included—would say, fail to cover this growing problem, it will not go away. Indeed, the one thing upon which we can surely all agree this evening is that it is only going to get worse and the summer solstice fast approaches.
Despite advice to the contrary I still believe that in the long term the quick and clean solution to the problems I have outlined lies in the amendment of Section 39 of the Public Order Act to include green lanes and sheep droves within its provisions. I am not persuaded that to do so would, as has been said, in some way weaken an Act the primary purpose of which is to protect private property. It is almost as though it has been claimed that the beautiful and awesome symmetry constructed by lawyers and ministerial advisers alike would be fatally flawed in consequence—rather like Mozart putting a couple of substandard bars in the Magic Flute.
In a tolerant and democratic society such as ours and living as we do in an overcrowded country, we must always keep in the front of our minds the simple fact that one man's freedom may be another man's misery. Consequently, getting it right is all about balance. I believe, and I suspect many in this House believe also, that the balance has tipped too far in one direction in order to accommodate those who would force their idea of freedom at the expense of those whose only desire is to live peacefully in their own homes and in a countryside whose best features are preserved for the benefit of others.
I ask the Minister this. Can we tonight carry a message of hope to those people that the Government will attack the problem with goodwill and expediency? Instead of relying on advisers' talk of the notional efficiency of existing laws, will the Government consult the people—police, solicitors, councillors, and farmers—who have to deal with the problems in the front line? For, as Cicero said many hundreds of years ago,
"The good of the people is the chief law".
7.57 p.m.
The Earl of Radnor: My Lords, along with the noble Viscount and other noble Lords I express my gratitude to my noble friend Lord Stanley of Alderley for introducing this difficult Question now. It is a propitious time to debate this issue and question the Government upon it. As has already been said, the matter is mentioned in the Conservative manifesto. More important still, it is a growing problem.
In the countryside lawlessness has increased immeasurably over the past few years. I feel fairly certain that there is a strong connection between the so-called "New Age travellers" and that lawlessness. That has already been mentioned too. Like other noble Lords, I believe that "New Age travellers" is a complete misnomer. It builds a rather glamorous picture in people's minds which is totally undeserved. There is no harm in saying that the kind of people that I have generally encountered are abusive, aggressive and totally unhygienic. On the whole they live above or beyond the law. I should add that there is only one section of their community for whom I sometimes feel sorry and that is the young children being brought up in such circumstances and probably thereby projecting the present difficulty far into the future.
About 1986 I had to play a part in moving on about 80 caravans from a green lane. There was difficulty in those days and we had to take out an injunction against every single person who was there. They had been there for about two years. In those days too it was difficult to get the highways authority to co-operate. There were two owners involved in the land adjoining the green lane. I shall not even try to describe the filth that was left behind or the upset that there was. There was a great deal of upset. It was a much used green lane and a very pretty one, but there was no question of walking down it or of riding a horse or a bicycle along it.
Although there is a lawless problem here which may have to be put right eventually by providing yet more static sites, the first thing to be done is to apply the law as it stands and then to amend it where it is seen to be deficient. Here one must go back to the 1986 Act and say that on the whole Section 39 is deficient. I have tremendous admiration for the police. They have an extraordinarily difficult job to do here, particularly as regards the massive groups which now settle. As concerns the earlier part of that section, action by the police should probably be mandatory; in other words, when the due procedures have been accomplished by the owner, which is quite a performance in itself, the senior officer, as mentioned, should be obliged to move them on.
Whether they are moved on or whether it is practical to do so, I do not know, but I feel that that provision should be written into the law now. It would also help a great deal, if, as regards subsection 5(b) of that section, the law concerning trespass on land were extended to highways, which would cover green lanes. Both those measures should be carried out. It may be very difficult to accomplish on the ground, but they should be put into effect so that some kind of will is shown to put this wrong right.
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I have every sympathy with the police forces. It is also very upsetting for the general public. Occasionally people are had up for misdemeanours on the road such as having bare tyres or something else of that kind. But one sees these absolutely amazing convoys travelling—they are not always static—on roads with nothing being done about them at all. I have passed quite large numbers of these vehicles and I imagine that every single one of them is probably breaking the law in some way or another. I do not believe that it is very good in our society that, just because there are so many travellers and they are so aggressive, they should be allowed to get away with that kind of thing.
One often hears that the little laws are very hard to apply. There is seldom a witness to see, for example, a Coca Cola bottle being thrown away. A great many people get away completely with minor littering. But here, with these "New Age travellers", we are talking about massive littering and a huge amount of mess of every kind. Again, I say that it is very hard on the rest of the population who try to obey the law to see this kind of thing ignored.
I have not given as much thought as the noble Viscount to what should be done in the future. If we are at a point in history where a great number of people wish to travel or live in vehicles outside, it is obviously a massive problem and consultations with many bodies will have to take place before it can be decided what should be done. But right now we should try to apply the law as it is without—following the noble Viscount—muddling the question with the Romany folk. The Romany folk do not get on at all well with the hippies. The Romany folk have wandered for ages and they have been put, not always happily, on permanent sites—which was a sensible operation—so that they were not endlessly moved on. However, they are a different kind of people altogether. I chat to one or two of them. My farm is riddled with green lanes. They keep their caravans impeccable inside. They take great pride and they are houseproud. I would not want them to be trawled in the net that we are now talking about. However, I would also like the law to be kept.
8.6 p.m.
Baroness Macleod of Borve: My Lords, I also thank my noble friend Lord Stanley for bringing this matter to our notice this evening. I believe that he has done so because of his knowledge and anxiety but also because, as he has told us, the subject was mentioned in the Conservative Party manifesto. We were told that we were to discuss this particular worry, as we are doing tonight. It has been brought up at a particularly good time.
However, we all know that "New Age travellers", however badly they are labelled, are a fairly new breed. It is a pity that they are associated with youth, drugs and general squalor. One always hopes that in time they and their children will grow out of it. The question is opportune because it is the beginning of the season for travellers of all sorts who roam the country, principally in the Home Counties and on the South

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coast. Some cause trouble, some are welcome, but few are properly catered for. Indeed "New Age travellers" are not catered for at all.
I live in one of the Home Counties, Buckinghamshire, where there are 10 designated sites for 127 pitches, none of them for "New Age travellers". One is in a lay-by and is near my home. It has seven pitches and it allows two vehicles in each, but there are usually at least 20 vehicles there which means probably 40 adults and perhaps 60 children. There are two water pipes only. There were toilets. Unfortunately, these were made of wood and were used for firewood on the very first night. Since then the adjacent wood has been the toilet for the past two years for up to 60 people. The rent is £16.50 per week which, surprisingly, is often paid. It is also surprising that some of them pay the poll tax, but few of the children go to school.
There are, however, in the same county an estimated five groups of many caravans usually travelling in convoy. Again, these are not "New Age travellers". One of these convoys, consisting of 57 caravans, arrived near my home in the spring of last year. They occupied a private field from Sunday night until Tuesday night when, at last, the police told them to move on. Under the 1986 Act, they were trespassing and should have been dealt with much more speedily. None of the vehicles had rear numberplates and therefore should not have been allowed on the roads. The owner of the field, which is near his home, was so frustrated and disconcerted by what had happened late at night that he hired some men to guard his house, wife and family. However, to put the field back to use for sheep, he also had to hire a team to pick up the broken glass, tins and the indescribable dirt of all sorts. That cost him just over £2,000.
I know that the problems vary with the different district and county councils and with the police authorities involved, but I feel that more effort should be made to enforce the law. With the opening of the Channel Tunnel, we are likely to be asked to receive more caravanners of all sorts from the Continent. I doubt whether we shall be able to accommodate them simply by designating a few lay-bys. Now is the time for the police and all local authorities to prepare for their reception.
The noble Viscount, Lord Tenby, suggested that there should be larger sites which, obviously, could accommodate more caravans. I entirely agree. I hope and suggest that larger sites should be made available in the Home Counties. I know that some people will say that they will not want to be close to caravans in fairly large numbers, but surely properly organised facilities and authorities would be better than the desecration of the environment. Like other noble Lords, I look forward to hearing the Minister's response.
8.12 p.m.
Lord Congleton: My Lords, I join other noble Lords who have spoken in expressing thanks to the noble Lord, Lord Stanley of Alderley, for raising this matter and for having contrived his Unstarred
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Question and this debate. I admire him for his persistence and determination in pursuing this issue. I pay my own small tribute to him now.
In the main, these matters are disagreeable and sordid. I speak with some experience. I have now lived in south Wiltshire for 32 years where I operate a farming enterprise. I own the land. A byway, which is open to all traffic, cuts through part of the farmland. In general, the farms are criss-crossed with a pattern of footpaths, bridleways and so on. For most of the time we are very pleased to see them being used by pedestrians, ramblers, hikers and horsemen and horsewomen.
I note that three or four noble Lords who are present have farming interests and it would be possible to present this debate as being wholly of interest to farmers and landowners on the one hand and to "New Age travellers" on the other. However, we know that that is not the case. We have heard the tales and stories. We read our newspapers and we watch the television. I am not certain that it is necessary for me to say this, but I suggest that if anyone thinks that this debate is some sort of rant, drummed up by landowners and farmers, that person should talk to the people of Liskeard in Cornwall, of Glastonbury in Somerset, of Amesbury in Wiltshire, of Stockbridge in Hampshire or of Hungerford in Berkshire, or go to the place where the most recent trouble occurred, Lechlade, in Gloucestershire, where whole communities are being intimidated—I do not think that that is too strong a word—by the presence of uninvited "New Age travellers".
We try to be generous in our thoughts about these things—it is a tradition in this country—and I have tried. However, two years ago, there arrived on the byway open to all traffic which bisects the top end of one of my farms a small convoy of about eight or 10 vehicles of "New Age travellers". I was slightly perplexed because that had not happened before. My neighbour and I were uncertain about what action to take and telephoned the police, the county council, solicitors and so forth. We tried to persuade the travellers to move, but they did not wish to do so and did not. I do not know what action the police or the gypsy liaison officer took, but in a fortnight—or was it three weeks or four weeks?—the travellers moved away, but not before my neighbour had been knocked to the ground. I do not know the precise circumstances so I cannot give your Lordships the details. However, my neighbour was intimidated. He was about to struggle to his feet and retaliate when he found that a female "New Age traveller" was standing over him, jumping about and brandishing a weapon of some sort while using foul language. One tries to think generously about people, but when that sort of thing happens, it is rather difficult. Anyway, off the travellers went. I am grateful to the police authority for whatever they did to move those people on and to the solicitors who advised us.
My neighbour and I then took stock of the situation because we did not want it to recur. We did not take out an injunction because, as the noble Lord, Lord Stanley, said, civil procedures are cumbersome, take time and can be very expensive. I am told that a

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fee of £1,000 might be involved. There is also the problem of naming the alleged malefactor or transgressor. When bringing an injunction against somebody, it is difficult to get the right name, but the name must be on the injunction. Anyway, we did not do that. We decided to take defensive action within the law, but before we had time to do so, the travellers were back again. The same procedures were entered into—and away they went.
This time we did take action. I put up a fence where previously there had not been one. It was my property —private property—and I was perfectly entitled to do it. My neighbour used the space that had been occupied by the "New Age travellers"—quite a large area—for a respectable agricultural purpose, the deposition of farmyard manure. The space to which I refer is a lay-by that abuts the public metal road at one point and the byway that is open to all traffic at another. It is private property.
What we did was within the law because we had decided that we would not take illegal action. I have heard horror stories from some of my friends in the area and from neighbours who have been engaged in fisticuffs and worse with these people because they would not move on. Fearing that delay would ensue, those friends and neighbours have taken action by hitching up their tractors to the trailers, lorries, char-a-bancs and so forth, and have removed the travellers. However, that is outside the law and should not be encouraged. Indeed, I do not think that Parliament would look very kindly on that.
But what are we to do? Various suggestions have been made. As an initial step, I very much like the suggestion of the noble Lord, Lord Stanley, which is that the noble Earl, Lord Ferrers, who is to respond to the debate should initiate a meeting of interested parties and put certain proposals before them. I have a list of such proposals with me, most of which have been mentioned. Injunctions have already been mentioned but, as I have said, I do not think that issuing an injunction is a good suggestion because injunctions are too slow.
Bringing Section 39 of the Public Order Act 1986 up to date in various ways has been suggested by all those to whom I have spoken in the last few days, including the police authority in south Wiltshire, the representatives of both the National Farmers Union and the Country Landowners' Association; Salisbury District Council, and most particularly by Mr. Alan Willis, who is a solicitor practising in Salisbury who advises police authorities throughout the country and who is an expert on the law of trespass. He has suggested that Section 143 of the Highways Act 1980 could well be amended. I put this forward as a suggestion. I am not saying that it should be amended because I am not a lawyer and I do not understand the technicalities and the differences between civil law and criminal law. He has suggested that Section 143 could be amended to enable vehicles on the highway to be towed away after 24 hours' notice has been served, and not, as at present, after 28 days. I have the draft amendment before me. I think it is incorporated in the
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Powys County Council's report to which the noble Lord, Lord Stanley of Alderley, referred. I support that suggestion.
We have had the difficulties explained of defining who is a "New Age traveller" and who is a gypsy. I think I know but to put it into words in a statute would defeat me. One has to meet them and then one knows. That is borne out by what a number of noble Lords have said.
The Caravan Sites Act 1968 is an old friend of mine. In 1969 or 1970 I was chairman of the Salisbury Rural District Council shortly after the Act reached the statute book. We had trouble with gypsies in those days because they were coming across the border from Dorset. We thought that that was a pretty unfriendly thing for Dorset to do to us. Dorset had taken the trouble at a very early stage to get itself designated. We set about doing just that. I am happy and proud to be able to announce to your Lordships that it was under my chairmanship that the first permanent site was put in place in south Wiltshire. That was in 1969 or 1970—I cannot remember the exact date. Since that time Wiltshire has become a designated county. So far as concerns the gypsy problem, it is now much less of a problem. I am not in touch with local authorities as much as I used to be, but I am sure that it is much less of a problem on account of the designation procedures that were followed and fulfilled. I would say to any county, 22 or 23 years after the passage of that Act, that it ought to look at the situation and get itself designated in respect of that Act.
Mention has been made of the public health hazard that these large encampments, illegally set up, must cause. It goes without saying that the sanitation angle must give rise to anxiety. The people who were parked on my patch of land used my fields as their latrine and so on. One can go into that in some depth. It seems to me that it has not been brought out in all the discussion and conversations that I have taken part in that there is a grave public health hazard. I hope that that can be addressed by the committee, if it is set up, and at meetings with interested parties.
There is a great deal more I could say but I shall not pursue everything. When I was framing my thoughts for this debate I thought that I had better ask the Government what would happen if none of the suggestions put forward today was implemented. I came to two fairly solid conclusions. The noble Viscount, Lord Tenby, has mentioned one; that is, the situation will get worse. There will be more outbreaks of fisticuffs and so on throughout the country. The "New Age travellers" will not go away. They will increase in numbers and will continue to act out their strange and incongruous lifestyles, which they are perfectly entitled to do so long as they do not impinge on the enjoyment of life of others.
The second conclusion is a rather strange one. There is much talk these days about greater public access to the countryside. I have illustrated the point already by saying what I did and what my neighbour did to stop up the lay-by. If we are to encourage people to use the countryside for recreational and leisure purposes, how can we expect them to do so in the face of the kind of activities that these "New Age

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travellers" are indulging in? Will it encourage landowners and farmers in general to open their gates, their fields, their woods and so on to the general public as we are being encouraged to do? The amenity societies are fully behind efforts to increase public awareness and to get the public into the countryside for leisure purposes. I suggest that the activities of the "New Age travellers" act as a deterrent to those who wish to use the countryside in the way I have tried to describe.
I was asked by the local branch of the Council for the Protection of Rural England to look into what was described as the illegal stopping up of a byway open to all traffic and into one other case which occurred not so very far away. I investigated very thoroughly. I discovered that we had acted perfectly within the law. The other case was also legally respectable. I wrote my report and recommended that no action need be taken to follow this up and that complaints could be dealt with. I received a letter of thanks for my endeavours from the chairman of the local branch of the CPRE. The final paragraph reads:
"I have every sympathy with your views about the Travellers, having in the past had an 'Invasion' at Lopcombe Corner and, more recently, at Pitton".
Pitton was a disgraceful episode which lasted for four months. However, I shall not go into it now.
"The resultant destruction of rural life in all its aspects has to be experienced to be believed".
I could not have expressed it better myself.
8.27 p.m.
Lord Tryon: My Lords, I wonder whether the House will allow me to intervene briefly. I warned several speakers that I might do so. Perhaps I may say quickly in my defence that I put down my name to speak but I had to take it off the list because I was not sure at what time I would get here.
It is no great surprise that the House has had three farmers from the south of Wiltshire speaking in the debate—nearly half of those who have spoken so far. Like the others I speak not out of self-interest in this matter. In that part of the world we have probably had more close contact with the "New Age travellers," or whatever one wants to call them, than other parts. To borrow a phrase from the nuclear industry, I think south Wiltshire is ground zero for hippy activity thanks to Stonehenge and the attempts they make quite frequently to get there.
I should like to add a couple of points which I do not think have been raised by giving some of my experiences of dealing with "New Age travellers" or, if I may use the even worse name by which they used to be known, the peace convoy, which was the hard core of the hippy movement. A few years ago the peace convoy, so called, some 600 to 800 strong, took up their winter quarters in a wood on a piece of land close to me. It was land of which I was a trustee for a neighbour. We spent six months trying to get them out through the normal legal procedures. That was before the passing of the Act which made it slightly easier. During that time I got to know those people quite well in that I even attempted once or twice to negotiate with them over the fence. They were almost invariably pretty threatening. The negotiations never got
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anywhere because they used to take the view that land did not belong to anyone. Therefore, the conversation did not get very far.
But, to give your Lordships some idea of the problems that such people can cause, I should point out that, while those people were occupying that piece of land, they virtually stopped the working of Salisbury racecourse and the working of Salisbury Golf Club. The golfers were too frightened to go out to that part of the golf course because they were threatened and abused every time they did so. Moreover, unmentionable things were done on the greens and in the golf holes which again made it very unpleasant for the golfers. The racecourse authorities could not run races because, apart from the 600 or 700 hippies, there were probably 100 wild dogs of various sorts that hung about the encampment which meant that people were frightened to race the horses. That made life very difficult for the estate because the racecourse authority and the golf club were only tenants. They said, "We must get rid of these people", because they could not have the peaceful enjoyment of the land.
What could we do about it? Well, eventually, the people moved on. However, during the time of their occupancy I had a number of discussions with the police in an attempt to get into the minds of those people. I wanted to ascertain who they were so that I might know who to serve writs on. The police told me on a number of occasions that it was almost impossible to obtain names. They were arresting people quite frequently from the encampment for stealing things and causing nuisances of various sorts and it often took them a week or two to establish the identity of the person involved. Such people would give silly names; for example, Mickey Mouse, Donald Duck and so on. They often did not appear to be on anyone's list. A number of them did not draw the dole. They seemed to be a strange class of people who could disappear off public records.
Because such people appeared to have money to buy things in the shops from time to time, I asked the police where it came from. The police acted as if I had asked a silly question. They said, "They get all their money from drug dealing". I must confess they were the real hard core of what I think are called "New Age travellers". Their method of operating was to go to pop festivals where they would set up shop in the middle of proceedings, gathering other hippies and travellers around them.
No one has spoken up for these people tonight. I do not know whether any succeeding speaker will do so. I think that the problems they cause in a community have been well covered. However, I should like to draw attention to an additional factor. During the time that such people were encamped near us, there were severe worries about the influence that they were having on impressionable young people living in the area. There was certainly an upsurge in the amount of drugs found in the district at that time. That consideration must also be taken into account.
My experience with such people on my own farm involved many of the matters which have already been mentioned. However, it goes further. I have suffered

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wanton vandalism; for example, I have had garages and two cars burnt, woods have been absolutely wrecked and trees and small saplings cut down. People have been arrested for those offences. Orders have been issued to make restitution; but I do not think I have ever seen a penny of it. Such people, if they are the really bad sort, are a complete menace when they come into an area. I therefore fully support the calls for the law to be strengthened.
8.34 p.m.
Lord Hooson: My Lords, as I listened to the debate I thought of the words of G K Chesterton that men who run in packs tend to behave like wolves. That has been true of many facets of history, whether at football matches, in the French Revolution, recently in Los Angeles or Coventry or, indeed, as described by noble Lords in the House this evening. You can have perfectly well behaved individuals who individually do not behave in an anti-social way. Yet when they are en masse—especially when their feelings are accentuated sometimes by drink or drugs, or both—they behave in a totally unacceptable way.
It seems to me that the noble Lord, Lord Stanley of Alderley, has done a great service to the House. He has raised a problem which is important to the community. I think that it deserves the urgent attention of the Government with a view to finding a swift and effective solution. That will not be easy. My noble friend Lord Falkland raised the question, with which I have great sympathy, of the difference between gypsies and "New Age travellers"—a phrase which, I am sorry to say, was not known to me before today.
The law cannot distinguish between groups of people. If the law is amended that will apply to everyone. We must bear that factor in mind. It seems to me that the kind of incidents that the noble Lord, Lord Stanley, has in mind are similar to those which happened in North Wales last year. For example, at Bala and Llanbister in Powys about 3,000 people with hundreds of vehicles behaved in a totally unacceptable way. They broke all kinds of laws, they trespassed and left an awful mess behind them—indeed, it was a happening similar to others that we have heard about in other parts of the country.
Following that, it is quite obvious that some remedy is required. The county council of Powys where I live has set up a working party. The interested parties were invited to attend. I have not yet seen the report but I know that many remedies were considered, including the following.
The first remedy was injunctions. But the difficulty with injunctions is that you have to name the person involved; in other words, the person has to be identified. Although the courts have the power to award a group injunction, it is a very difficult process. Therefore, in most circumstances it is clearly not an effectual remedy. Possession orders can also be obtained, but they take a long time. Moreover, very often the travellers that the noble Lord, Lord Stanley, has in mind go on to common land. Sometimes they do so genuinely thinking that they are allowed to do
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so, but often they know the true legal position perfectly well. They claim to have a right to do so and thereby ignore the rights of commoners who are greatly affected by such occupancy. One of the problems with possession orders is that commoners —that is, the owners of common rights—cannot obtain them.
There are also other problems involved; for example, under the Highways Act. The remedy under Section 143 of that Act cannot be obtained for at least 24 hours. A delay of 24 hours can make things very difficult when you have had a virtual invasion of thousands of people on your land and when all kinds of nuisances have been performed. It has also been suggested that Section 39 of the Public Order Act should be amended. But some police forces act immediately under that section, whereas others think that they have total discretion and decide not to do so.
Whatever the result of the working party of Powys and its recommendations, I suggest to the Government, through the medium of the noble Earl, Lord Ferrers, that they take that report and consider it. It is necessary to consider all the factors involved in a broader context. However desirable it is to distinguish between the true gypsy, the Romany, and the hippy traveller, if the law is changed it will, in practice, apply to all of them indiscriminately. Similarly, the law will apply to other groups of people. When one changes the law one has to pay regard of the fact that very often the law can be used for a totally different purpose than that for which it was originally intended. Therefore, it is obvious that the Government will have carefully to consider the recommendations of the Powys working party and they must do so in a broader context. They must bring forward their own remedies. What I am certain of is this. We will see a repetition of this during the coming year.
The noble Baroness, Lady Macleod, put forward constructive proposals for large campsites for travellers of this kind. The great problem is that everybody wants large campsites but they do not want them anywhere near them. That would be my reaction. One of the problems is that, if you have large campsites, you keep people there en masse but they might be better behaved if they were split up. But those are matters to be considered.
All I am saying from these Benches is that we think that there is a real problem here which requires urgent consideration with a view to producing practical remedies that can be swiftly put into effect.
8.40 p.m.
Baroness Mallalieu: My Lords, may I from these Benches also echo the thanks to the noble Lord, Lord Stanley of Alderley, for raising this Question and providing the House with an opportunity to consider a problem which is troubling increasing numbers of rural communities, our local authorities, police forces and private individuals, many of whom are dreading the approach of summer and the now annual summer travelling invasions. But I hope that when the noble Earl comes to respond on behalf of the Government this will not simply prove to have been an exercise in

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a discussion about illegal trespass and criminal damage and how to stop them, because that would be a lost opportunity.
There are further ramifications of this problem which are the underlying causes rather than the symptoms, of which noble Lords have spoken this evening. This Question raises issues which are far more complex than simply the law of trespass and they need to be urgently addressed. We need to look, for example, at what are the rights of an individual in 1992 to choose a nomadic way of life which differs from the norm; what are the obligations which he still owes to the community if he chooses to take that course; and what are the obligations and the duties of the community through the local authorities towards him. We must also consider the position of those who do not choose to travel but have little or no choice and do so because of their age—as children taken by their parents—or because society has failed them and left them with little alternative. We must, in short, look not only at the question which most noble Lords have addressed of what steps the Government can and should take to protect law-abiding citizens and their property from attack by others but we should also be looking at what are the needs and the rights of a new nomadic group.
Nothing that I say from these Benches is intended to endorse law-breaking. The illegal trespass and criminal damage which have taken place during the summer months in the past few years, primarily in the South, the West and in Wales, and on a smaller scale up and down the country, including my own area of Buckinghamshire during this past winter, are indefensible. There will be nobody—the question was asked by the noble Lord, Lord Tryon—who will speak up in this House to defend that conduct.
The sympathies of all sides of this House must properly lie with those farmers and those local communities who have been invaded—and there is no other appropriate word for it—by groups of travellers, sometimes in large numbers, who have seen their gates and their fences broken down, seen buses and caravans pour onto their land, seen crops damaged, livestock released or killed or injured by their dogs, who have suffered nuisance and sometimes real intimidation and even violence, as we have heard, and then afterwards been left to clear away the litter and the debris. The frustration and the anger that they feel at the seeming inability or unwillingness of the authorities or the law to help them, and at the expense that they cannot hope to recover if they try to act themselves, are shared by all of us who have seen at first hand or read about the effects of such acts of trespass.
But this is not a debate about whether such illegal acts are defensible or excusable, because plainly they are not. But it is, I hope, as a result of the response of the noble Earl, going to be a debate which in part is about the best and most effective way to protect those on the receiving end. That requires not just an examination of the surface problems and how to deal with them but also a look at the underlying causes.
History has shown that, since 1987 when Section 39 of the Public Order Act came into force, and contrary
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to the views of the Government expressed at that time, that section provided no solution to this problem. Indeed, the numbers have increased and the problems have multiplied. It is our view on these Benches that to deal with illegal trespass simply by speedier and more draconian powers of eviction, and to do no more, simply pushes the problem onto someone else's land and escalates it. That is what experience has shown since that 1986 legislation which came into force in 1987. Given that history there is no reason to suppose that tonight's call for further tightening up of the legislation would be any more effective.
The introduction of that section—which was opposed from these Benches by my noble friend Lord Mishcon and by the Law Society on the basis that existing remedies, properly used, could do the job—has in fact not borne fruit in the sense that the Government put forward this section as the cure for these difficulties and it has proved not to be the cure. Indeed, the numbers of those travelling in this way and trespassing illegally have been increasing year by year. To enact legislation or to direct the police to evict such trespassers with greater efficiency or speed, without properly examining the causes of the offending or looking at the kind of people who are doing it and why they are doing it, or attempting to find a solution to those causes, simply pushes the travellers on to commit further offences elsewhere and in growing numbers.
The kind of measures that have been suggested by a number of noble Lords this evening, although they provide a quick remedy for the farmer who sees the invasion coming into his field, simply provides a headache for his neighbour down the road when he effectively evicts them from his land. So if a proper solution is to be found it is necessary to look at who these people are and why they are resorting to trespass and what the authorities can and should be doing about it.
This country has always had a nomadic population and not just an ethnic gypsy one, as at least one noble Lord has reminded us. Some people have chosen that way of life; some people have no choice. People who choose, in the words of the songs of the 1960s, not to settle for suburbia and a little plot of land, include itinerant workers—they have always done so—and also those who have rejected the traditional home and community ties. There has also always been a section of the population which has been rejected and has fallen through the net, which has not consciously chosen that way of life but has fallen into it.
I hope that all noble Lords will be in agreement that those who choose to live a nomadic lifestyle in the 1990s in this country are still fully entitled to do so. I hope that the noble Earl will make that clear in his reply. It is not something that has always been made plain by those on his side of the House.
It is right of course that those people are entitled to the same civil rights and liberties as the rest of us. We look to the Government to bear that in mind and not to lose sight of that fact. However, in saying that it is their responsibility too to fulfil their obligations to other members of the community.

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It is a responsibility that applies not only to those who are ethnic minorities with a tradition of a nomadic lifestyle like the gypsies, but also, surely, equally to those who have chosen such a lifestyle. Their civil liberties must be equally safeguarded so that they are not subject to persecution or deprivation of their rights as citizens because they have made that choice.
The two groups—those who choose to live as nomads, and those who, by circumstances, are forced to do so—have always existed. Currently, as I understand it—I shall be pleased to hear from the Minister what figures the Home Office has in that respect—it seems that that travelling community is mushrooming. The current movement of "New Age travellers" seems to have begun in the late 1970s, but it gathered momentum during the 1980s and numbers appear to be increasing annually.
All of us in the House—there are increasing numbers of us —who were the children of the 1960s, can find a romantic rapport with "travelling and living on the land" and "with no direction, home, just like a rolling stone." It was a way of life and philosophy which had an appeal and which is still appealing to many, linked, as in the 1970s and 1980s, with the growth of free summer festivals. People did it because it was fun and it was cheap. But the slow rise in unemployment and the increase in homelessness, especially among the young, and the introduction of the poll tax in the mid-1980s, have swelled the numbers of those who live permanently on the road, often with young families, whom—I stress—we must not forget. The pressure of numbers, along with the absence of provision of sites, led to illegal trespass which today has become a nightmare in the summer months.
I should be grateful to have the Minister's assistance on the figures. As I understand it, the gypsy population in this country has shown virtually no increase for some years, whereas the "New Age travellers" are increasing rapidly and now number, although estimates appear to vary, between 8,000 and 10,000. What is especially alarming is that it appears that the number is being swelled by a high proportion of children coming out of care with nowhere to go —the single young men to whom reference has been made by your Lordships. I ask the Minister whether he is aware of the research done recently in that respect by the London Gypsy Traveller Unit which has identified that as a growing problem.
In addition, many of the "New Age travellers" are homeless 16 to 18 year-olds who were deprived of their rights to benefit under the previous Conservative administration. Many of them made no conscious decision to become travellers, but the previous Government's policies have, in effect, put them on the road with others in a similar position. The authorities have hitherto effectively made no provision for that substantial group in terms of sites. As a group, such people do not exist so far as the authorities are concerned, save when they are interested in trying to move them on.
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Will the Government examine the law and, if necessary, introduce changes to make it clear to local authorities, currently often worried and confused about their obligations, that their duty to provide official sites under the Caravan Sites Act 1968 is not confined merely to ethnic groups but extends to all travellers? It cannot logically be right, as some noble Lords have appeared to suggest during the debate, that only those who are born to a nomadic lifestyle are entitled to make use of official sites, or, as the noble Earl, Lord Radnor, appeared to suggest, only those who are clean and keep their caravans well cared for may have the use of them.
Unless there is access to official sites for people such as these, the effect of eviction in many cases can be only to drive the travellers to other areas and further trespass elsewhere. We are in effect condemning them, like Dickens' roadsweeper, to be told constantly to move on without offering them anywhere legal to go. It may be right, as the noble Viscount, Lord Falkland, said, that they may not wish to use the sites, but unless sites they can legally use are available it cannot be right—I hope the Minister will reply to this point—merely to move on people for whom there is nowhere to which they can legally have recourse.
Of course local authorities will have even greater difficulty in identifying suitable sites in their areas if they have to cater for that population as well. I make it clear that I stand correctly accused of being a NIMBY myself because, like the noble Baroness, Lady Macleod, I live in Buckinghamshire and am engaged in opposition to a potential site in an area of outstanding natural beauty which is in my back yard. However, I accept that where there is a need the local authority must identify sites, possibly even in the teeth of entirely understandable opposition from local communities. I endorse the suggestion made by the noble Viscount, Lord Tenby, that where particular problems arise —for example, where festivals are held —it cannot be beyond the wit of local authorities to provide, albeit temporarily, places where those people can go during their stay in the area, because as soon as that is done the police can properly issue a direction to leave at once under the present guidelines to Section 39 of the Act. That clearly is paramount.
In the light of the way in which the Question has been framed, will the Minister give some assurance that the guidelines, which require the police, as a matter of primary importance, to consider alternative places for those people to go, will reinforce the fact that that is one of the prime considerations before they give people a direction to leave under Section 39?
In summary, we on this side of the House believe that the proper way forward is to examine the reasons why so many youngsters are on the road in the first place. If it be right—a review of government policy in this area is long overdue—that the benefit position of 16 to 18 year-olds, which has proved to be disastrous for youngsters in urban areas, is part of the reason for the increase in the travelling population; and if it be right that people are leaving care without proper provision in the community so that they fall back into travelling in that way, without consciously choosing that way of life, should not the Government, as a

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matter of urgency, review their policy in those areas? If they do not do so we are in danger of creating a permanent underclass of young people with no community ties and no respect for the law.
Is it not also right that local authorities should be given clear guidance now by the Government that the sites that they must find include provision for such people? Unless there is some alternative, it cannot be right, in justice or humanity, to order people to vacate land and therefore drive them to commit further offences elsewhere.
Above all I ask the Minister to restate—as I believe all noble Lords have done—that those who choose to travel, while they are entitled to do so, have obligations, especially to the rural community in which they choose to live, which includes a duty to respect the lives and property of others, and to respect the law. In return, I hope that the Government will acknowledge that their manifesto commitment to ensure that all sections of the community enjoy freedom, and their expression of concern for all sections of society, applies equally to those who may be unpopular, those who have no spokesman, and those who may, on occasions, break the law indefensibly. Unless the manifesto commitment to take care of all sections of our community applies also to that unpopular minority, the commitment will prove to have been hollow and selective.
9 p.m.
The Minister of State, Home Office (Earl Ferrers): My Lords, the House will be grateful to my noble friend Lord Stanley of Alderley for initiating the debate this evening. It is a subject which raises important and sensitive issues. Your Lordships have provided some sparkling and personal examples of the problems which are presented by the subject matter of the debate.
I was particularly interested to hear the speech of the noble Baroness, Lady Mallalieu. In a typically thought-provoking and humanitarian speech, she tried to look behind the problem to see what causes it. She was right to do so. She was quite right in her concluding remarks that people have the right to lead a nomadic existence if they wish, but they also have the duty to respect the views of the people on whose property they place themselves. Trespass is always a matter which gives rise to strong feelings. A person's property is his property and the involuntary invasion of or trespass on it by others quite understandably and quite rightly incurs the wrath and indignation of the owner. So also does the collective squatting of people on an area of land, irrespective of who is the owner. I agree with my noble friend Lady Macleod that we must have sympathy for those whose land is invaded and despoiled by travellers.
I start by having acute sympathy with my noble friend Lord Stanley in what he said and what has been said by other noble Lords. I have to tell my noble friend that the Government have looked hard at the question of trespass on land and I myself have taken a personal interest in it. Unfortunately, there are no
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easy answers. There are several different and often conflicting considerations which have to be brought together when we approach the problem.
I do not believe, though, that the present position is in any way satisfactory. I can tell my noble friend that we intend to try to tackle the dreadful problem which is caused by illegal camping.
In opening the debate, my noble friend demonstrated a remarkable knowledge of "New Age travellers", or "NATs" as they are somewhat derogatorily called —a knowledge which may be considered unusual in one of his maturity. But then he said that he had hippies in his family and perhaps that gave him cause to have such knowledge. He went on to suggest that your Lordships probably also had hippies in your families. I thought that was a fairly broadly encompassing point of view. Most of us have some pretty curious antecedents but not all of them were hippies.
The noble Viscount, Lord Falkland, said that he had none in his family, but he arrives in your Lordships' House on a motorcycle, so in the most generous of terms he might be described as a "New Age traveller". There are many groups known by various names who follow an itinerant way of life. Apart from the "New Age travellers", there are Romanies, gypsies, didicois, Irish tinkers and hippies, to name but a few. I agree with the noble Viscount, Lord Falkland, that gypsies should not carry the stigma of the behaviour of others. Some of these groups find it convenient to park their caravans permanently. Some travel seasonally to seek employment. Some seem simply to appear, rather like bluebottles in the spring, when the sun comes out.
Whoever they are and whatever their philosophies of life may be—if they have any—there can be no excuse whatever for causing the distress which some do. I suggest that it is quite unacceptable for anyone to assume that he or she can pursue a style of life which happens to be convenient to him or her without any regard to the rights of others and the effects which they have upon others.
The noble Baroness, Lady Mallalieu, said that there are problems behind this, that people have a right to a nomadic life if that is what they want and the Government must look into it. That is perfectly true, but people must live within the law and the law must be adjusted from time to time to take into account both the needs of the people whose lives are changing and also the needs of the people whom such travellers affect.
There is something bizarre and in some ways intimidating in seeing in this country an almost Wild West-like wagon train of often decrepit vehicles, progressing with inflexible determination through the countryside, intent on invading some peaceable country town which has done nothing to invite such a visitation.
This cavalcade might be pursuing the undoubted rights of its individuals to travel, but it entirely neglects the effect which the pursuit of those rights has on the lives and property of others who involuntarily become caught up in the activities of the cavalcade.

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It is a classic example of what may be perfectly acceptable, when performed by an individual, becoming unacceptable when performed by a collective. The noble Lord, Lord Hooson, quoted from G.K. Chesterton and said that when people hunt in packs they behave like wolves. This can be a typical example of what the noble Lord had in mind.
The civil and criminal law relating to trespass applies equally to everyone and it is intolerable for anyone to try to put himself or herself beyond the reach of the law. This is particularly the case when they try to do that by the advantage of mass numbers.
So how does the law seek to deal with the problem? The noble Baroness, Lady Mallalieu, referred to the Caravan Sites Act 1968 which places a duty on local authorities to provide adequate official sites for gypsies who are residing in, or who are resorting to, their area. For these purposes, gypsies are defined as,
"persons of nomadic habit of life, whatever their race or origin".
Once a local authority has provided sufficient sites, the local authority can be designated under the 1968 Act by the Secretary of State for the Environment. The fact of designation gives the local authorities access to special criminal law powers which act quicker. Once designated a local authority can apply through a magistrates' court for permission to move gypsies off any unauthorised site which is in its area, whether the site is owned privately or by a local authority.
My noble friend Lord Stanley said that there should be a different approach for dealing with "New Age travellers" as opposed to that for gypsies. The noble Viscount, Lord Tenby, said the problem was that Her Majesty's Government did not differentiate between "New Age travellers" and gypsies. The noble Lord, Lord Congleton, said the same. However, the courts have given clear indications that the name "gypsy" means a person who is leading a nomadic life, who has no, or no fixed, employment and who has no fixed abode. The effect of this view is that gypsy status may therefore be acquired by a person who does not belong to any long-standing tradition of travelling, in other words by the "New Age travellers".
I agree that there is a difference between those who are of a naturally nomadic culture and those who are sometimes quite well off but who elect to go travelling and, in so doing, cause acute disquiet to others in whose area they settle. But the law does not differentiate between them. The 1968 Act provides a test which is based not on a person's culture or on his origin but on his way of life. Your Lordships could suggest that the test be changed, but the trouble is that this could well still give rise to more difficulties, albeit of a different nature. There is nothing particularly meritorious in swapping one set of problems for another set which may be equally intractable. This is not an easy problem to solve.
Despite the provision of a 100 per cent. Exchequer grant for official sites for gypsies, the sad fact is that the provision of sites is not keeping pace with the growth in the number of gypsy caravans in England and Wales. So, far from the problem getting easier, it
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is actually getting worse. I agree with the noble Viscount, Lord Tenby, that the problem will not go away. If we are not careful, I believe it will get worse. The noble Baroness, Lady Mallalieu, asked whether I had any figures to indicate the extent of the problem and whether it was getting worse. The figures I have indicate that there are some 12,500 gypsy caravans in England and Wales. Contrary to what the noble Baroness thought, that figure is 30 per cent. higher than the figure in 1981. Over 4,000 are on unauthorised sites. That is only 12 per cent. fewer than in 1981, despite the fact that there has been a 67 per cent. increase since then in the number of caravans stationed on authorised sites.
It is an unfortunate fact that 22 years after the implementation of the 1968 Act only 38 per cent. of district councils in England have been designated and only one district council has been designated in Wales. The noble Baroness, Lady Mallalieu, asked whether all travellers could go to those sites. All travellers can go to those sites. They do not have to be the traditional, nomadic gypsies. They may go to the sites if they are travellers.
There is the added difficulty that often these "New Age travellers" do not wish to occupy authorised sites. They want to be able to roam unchecked across the countryside at their own volition and then settle like some great bumble bee on whatever flower happens to take their fancy. That is a lovely but totally selfish view which disregards entirely the rights of others and sometimes even the law. But the fact is that these people are people. I agree with the noble Baroness, Lady Mallalieu, that they have to go somewhere. One cannot just hoover them out of where they are without putting them somewhere else.
My noble friend Lady Macleod of Borve said the police, local authorities and others should now work together on this matter. I have no doubt they will. I recognise the problems and the deficiencies which exist under the Caravan Sites Act for dealing with these problems. The Act is not perfect and we are currently undertaking a thorough review of it.
The noble Viscount, Lord Tenby, asked whether we could send out a message of hope to those who are affected by this problem. He asked Her Majesty's Government not to rest upon the niceties of the present law. I believe the noble Viscount wanted the Government to consult solicitors, councillors, farmers and others on this matter. I believe we can give a message of hope. The Government intend to look at this matter afresh. There is a real problem here.
The noble Lord, Lord Hooson, asked whether we would study the Powys report. We have just received it and we intend to study it. There is a real problem, and as a result a consultation paper will be issued by the Department of the Environment as soon as is practicable. The whole issue can then be debated and there will be an opportunity for all interested parties to put their views in writing and to talk to Ministers.
My noble friend Lord Stanley and the noble Lord, Lord Congleton, said that they would like a conference. I see the merit of that, but I fear that that might be somewhat too cumbersome a procedure and, if we are to have all parties represented, it might not

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be too harmonious either. However, I am sure that my right honourable friend the Secretary of State for the Environment will consider the idea most carefully.
Although it may not be the answer to the philosophy which lies behind the actions of those who wish to deposit themselves where they will, there is no doubt that the failure to provide sufficient official sites for gypsies leaves a widespread problem of illegal encampments.
So, what happens if one seeks to evict gypsies—or "New Age travellers" or any other form of itinerants —who are camped illegally? The first effect may be to make them statutorily homeless, perhaps placing a burden on the local community to house and to feed them.
It has been suggested that simple trespass might be made a criminal offence. That, initially, seems attractive but it would have many disadvantages. I do not think that, as my noble friend Lord Stanley, said, anyone would wish to see the full rigour of the law descend upon those who had innocently strayed on to private land in order, for example, to go bird watching or to ramble down a quiet country path —activities in which some of your Lordships might indulge from time to time, with total rectitude.
Apart from anything else, a change in the law of that nature would require a massive diversion of police effort. That would result in their having to neglect other work—such as investigating burglaries or apprehending robbers—which your Lordships might consider should have a higher priority.
If trespass were to be made criminal, what would one do with the miscreants? Arrest them? What would one do with the caravans or the vehicles? Impound them? That might seem a virile thing to do; but it would bring a whole cascade of problems in its wake. Who would do the impounding? The local authorities or the police? Where would they put the impounded vehicles? In the Town Hall; in the municipal swimming baths; or would they clutter up the police station yard? What happens, when one has arrested the head of the household, to the wife and children? Are they arrested too; or is the wife left with the children screaming their heads off in the vehicle in the police yard; or are they taken into care?
It may be that we would have to do something of that nature. Those are some of the questions which will have to be addressed if we go down that route. Meanwhile, one has to see what remedies are available to landowners and occupiers who suffer these terrible visitations.
If the local authority does not have designation powers two courses are available. The first lies within the civil law. The vast majority of cases of trespass are resolved, as they should be, either informally or through the civil courts. As I have explained, trespass on land is essentially a civil matter. It is not a criminal offence. Landowners should therefore in most cases look to the civil courts for their remedy. I agree, though, that it is not an immediate process and it also personalises the confrontation between the offender and the landlord.
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However, the civil procedures have been expedited. Both the High Court and the county court now have special procedures which can help landowners and occupiers to get relief more quickly.
The second remedy lies with Section 39 of the Public Order Act, about which your Lordships have spoken, usually with very little approbation. Where aggravating factors are involved in the trespass, rather than just a small group of peaceful trespassers simply declining to leave the land, the criminal law has a limited role to play.
Clause 39 was introduced during the passage of the Public Order Bill in response to the mass invasions of land in and around Stonehenge area during the summer of 1986. Section 39 gives the police a discretionary power, not a duty. It is a power, which the police may use where, in their view, the situation demands it.
My noble friend Lord Stanley said that the police are seen to stand by and do nothing or that the action taken varies between police forces. All I can tell him is that it is a difficult problem for the police. Each situation has to be considered individually. That is why we have given guidance.
The noble Viscount, Lord Tenby, referred to Hampshire. I am not fully aware of the details, but the example which he quoted seemed to show how Section 39 worked. It worked well. The travellers were moved on twice. The problem, which was the one to which the noble Baroness directed our attention, arose because they had nowhere to go to. That creates its own problem.
Section 39 is triggered only under certain specific circumstances. Two or more people have to enter land with an intent to reside there, and the owner or occupier of the land must ask them to leave. If they do not leave, Section 39 can be brought into operation if any one of three things happens as well: if any of the trespassers is threatening or offensive; or if any of the trespassers causes damage; or if the trespassers between them bring 12 or more vehicles onto the land. It is an offence for a trespasser not to leave the land after a direction has been given to him or if, having left the land, he returns as a trespasser within three months.
Section 39 is not a substitute for normal civil procedures. It provides though a limited criminal sanction to deal with aggravated trespass.
My noble friend Lord Radnor and others referred to the problem of green lanes. Some said that the scope of Section 39 should be extended to cover highways, Green lanes are effectively highways, although "green lanes" is not a legal term. The primary purpose of the section is to restore to the occupier the use of his land. It therefore seeks to protect the property rights of particular individuals. Highways were specifically excluded from the scope of Section 39 as inappropriate to this legislation. The way to correct the improper use of a highway is through highway law which is perfectly adequate for the purpose.
The Home Office has issued guidance to the police on the application of Section 39 and a leaflet has been

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published setting out, for the benefit of landowners and members of the public, in plain English, the main provisions of the law on trespass on land.
My right honourable friend the Secretary of State for the Environment has also said that he will continue to maintain the pressure on local authorities to meet their statutory duty to provide adequate numbers of sites for gypsies. That will please the noble Baroness, Lady Mallalieu.
It has been suggested that Section 39 should be extended to give the police power to impound caravans. As I said, we may have to do that. I have already referred to the difficulties which will accrue if we go down that route. We must remember that we are not talking about just the odd vehicle, but sometimes tens or even possibly hundreds of them. I have even heard of one case where 780 caravans collectively descended upon a place.
It is though rare, once a direction to leave has been issued, for it to be disobeyed. However unattractive these caravans may be, we must remember that to the owners they are their homes and they will not wish to lose them. Indeed, even more trouble might be caused by impounding their vehicles, as those itinerant people would obviously feel aggrieved by the taking of their homes. Far from maintaining public order impounding might actually endanger it yet further.
My noble friend Lord Stanley has said that he would wish for adjustments to be made to Section 39 and, in his question, he asks for the guidance to chief constables on the operation of Section 39 to be reviewed.
Home Office guidance to the police has been issued which aims to provide a clear understanding of the matters which the police can be expected to take into account when deciding whether to give a direction to trespassers to leave land. Those criteria include—the first was referred to by the noble Baroness, Lady Mallalieu—the consequences of giving a direction to leave. There might, for example, be further trespass nearby because of the lack of official sites. There is no
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virtue in removing a problem from one back yard merely—as the noble Baroness said—to shift it into a neighbour's back yard.
Secondly, the consequences of not giving a direction to leave have to be taken into account. For example, further damage or threatening behaviour or disorder might occur. The public order consequences of their actions have to be taken into account by the police. Thirdly, the personal circumstances of the trespassers have to be taken into account. There might, for example, be those whose wellbeing could be affected by an immediate move. There have been complaints in the past about pregnant women and sick people being peremptorily removed.
But the guidance is only guidance. The decision whether to issue a direction to leave the land must remain an operational matter for the police. The senior officer at the scene will take his decision in the light of all the circumstances in each particular case.
I can tell my noble friend Lord Stanley that I am quite happy to look at the guidance in view of what your Lordships have said this evening. But I am bound to point out that it was only introduced in May of last year, and it really should be given time to bed in. However, I am quite happy for it to be looked at in the light of such experience as we have had and in the light of your Lordships' views, but I would just caution your Lordships not to underestimate the difficulties. Nor do I, in turn, underestimate for one minute the difficulties, the friction and the offence which arise from the unlawful occupation of land. The present position is not satisfactory and we are looking to see whether and how we can improve it further.
I do not expect that my reply will have satisfied the avaricious hunger for change of my noble friend Lord Stanley. However, I hope that at least I have demonstrated to your Lordships that the Government are conscious of and sympathetic to a distressing but nevertheless sensitive issue.

Mersey Docks and Harbour Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at twenty-five minutes past nine o'clock.