Lords Sitting of 21 October 1992

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chelmsford.

Lord Walker of Worcester
The Right Honourable Peter Edward Walker, MBE, having been created Baron Walker of Worcester, of Abbots Morton in the County of Hereford and Worcester, for life—Was, in his robes, introduced between the Lord Sandys and the Baroness Chalker of Wallasey.
Baroness Jay of Paddington
The Hon. Mrs. Margaret Ann Jay, having been created Baroness Jay of Paddington, of Paddington in the City of Westminster, for life—Was, in her robes, introduced between the Baroness Blackstone and the Lord Callaghan of Cardiff, and made the solemn Affirmation.

Pit Closures
2.58 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What discussions they are to have with British Coal concerning the further closure of pits.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): My Lords, the noble Lord may recall that in the Statement I made in the House on Monday I set out the steps now to be followed in relation to the pit closures announced by British Coal last week. British Coal will, of course, be fully involved in that process, in addition to the usual ongoing contacts between government and the corporation about this and other matters.
Lord Dormand of Easington: My Lords, in view of the Government's devastating defeat last night, may we have an assurance from the Minister that the views of this House will be conveyed fully to British Coal and the Prime Minister? Will the Minister and the Leader of the House stress not just the figures at the end of the debate but the fact that the Government's case for closing pits was demolished completely by the excellent speeches made in this Chamber by those who oppose the proposal, and that the House was speaking for the overwhelming majority of the people of this country?
Baroness Denton of Wakefield: My Lords, I am afraid that I must disagree with the noble Lord's summing up of yesterday, but I can assure him that the views of the House have been conveyed to the
748
appropriate quarter and I am sure they will be fully taken into account in the debate in another place today.
Lord Mason of Barnsley: My Lords, has any member of the Government recently had discussions with British Coal about its further plans to close another seven pits? Secondly, is it true that the Government have advised British Coal that no development work should be financed in any of the pits on the closure list?
Baroness Denton of Wakefield: My Lords, yesterday the noble Lord told me facts that were unknown to the department, such as the number of pits that would be left after the review. He is again drawing attention to facts of which I have no knowledge.
Lord Mason of Barnsley: My Lords, and the second question, that Her Majesty's Government have advised British Coal not to finance any development?
Baroness Denton of Wakefield: My Lords, I am sorry, but I referred to facts of which I have no knowledge.
Lord Taylor of Gryfe: My Lords, in view of the fact that between 4,900 and 7,000 jobs in British Rail's transport of coal are involved, will consultations take place with British Rail on the consequences of pit closures? In view of the projected privatisation of sectors of British Rail, including freight, have the Government measured the impact of the loss of 62 per cent. of the freight traffic involved in those closures? What impact will that have on prospects for the privatisation of that sector?
Baroness Denton of Wakefield: My Lords, I confirm the statement I made yesterday that the effect on rail freight will be fully taken into account in the review.
Lord Williams of Elvel: My Lords, does the Minister accept that last night the House passed, on a Division, a Motion to resolve certain matters—namely, that an independent inquiry should be set up? What do the Government think about the status of the House if they wholly disregard the opinion of the House as expressed on a Division?
Baroness Denton of Wakefield: My Lords, I assure the noble Lord, Lord Williams, that no one is ignoring the view of the House. The constitutional position of the House is clear. I am sorry that he thinks that last night's vote is not being taken into account.
Lord Williams of Elvel: My Lords, if I may press the Minister for a moment, does that mean that the Government will appoint an independent inquiry?
Baroness Denton of Wakefield: My Lords, as I said earlier, the debate and the resolution of the House last night will be taken fully into account in discussions in another place. I am afraid I have to confess to the noble Lord that I am not psychic.
Lord Williams of Elvel: My Lords, psychic or not, as a result of the Division last night, will the Government now undertake to accept an independent inquiry? We are a House of Parliament.
Baroness Denton of Wakefield: My Lords, I repeat, it will be given proper consideration.
Lord Stoddart of Swindon: My Lords, the Minister may not be psychic but she is certainly evasive. We are asking for an answer to a perfectly reasonable question. If the Government will not have an independent inquiry, will they say what they have to hide?
Baroness Denton of Wakefield: My Lords, I am sorry that people's memories seem a little short. As we said last night, there will be a full review of issues that will be brought to the House to be discussed. The Government have nothing to hide.
Lord Strabolgi: My Lords, is the noble Baroness aware that a merchant bank is advising the Government and also advising the gas interests over this affair? Does she not think there is a conflict of interest here?
Baroness Denton of Wakefield: My Lords, there are noble Lords in this House who understand the merchant banking system much better than I. However, I am quite certain that advisers advise and the Government take decisions.

Traffic Wardens: Pay
3.5 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether they will take action with the authorities concerned to prevent traffic wardens from receiving remuneration in proportion to the number of tickets issued for offences in public parking places.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, police traffic wardens are not paid according to the number of tickets they issue, nor is there any intention that they should be. Discussions are continuing as to how traffic parking attendants will be paid.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for that reply. I conclude that it is the parking attendants who have so far been affected. If the intention is payment by results, should not the higher remuneration, if any, be in inverse proportion to the number of tickets issued as the best result is good parking practice caused by the effectiveness of the work of the attendants and wardens?
The Earl of Caithness: My Lords, the best result would be to make all traffic wardens and parking attendants redundant through people parking properly in the first place.
Lord Grimond: My Lords, is the Minister aware that the whole House will be grateful to hear there is no question of paying traffic wardens according to the
750
number of people they succeed in arresting? Will the Minister give an undertaking that in no field of law and order is payment determined by the profit motive?
The Earl of Caithness: My Lords, as I said in my original reply, discussions are continuing as to exactly how parking attendants will be paid.
Lord Campbell of Alloway: My Lords, is my noble friend aware that what worries some of us is the people who clamp cars? Those are the people who are apparently paid by results. If that is so, it is a scandal and a disgrace. Moreover, if that is so, what do the Government propose to do about it?
The Earl of Caithness: My Lords, my noble friend will be aware just how effective wheel clamping has been in helping the speeding up of traffic in London and in proving a deterrent to illegal parking. As I have said, traffic wardens are not paid by results.
Lord Jenkins of Hillhead: My Lords, are the wheel dampers paid by results or not?
The Earl of Caithness: My Lords, so far as I know, a wheel damper is a traffic warden and therefore constitutes an arm of the police. As I understand the situation, such people are not paid by results. However, I shall check the position on that matter as it is rather wide of the Question on the Order Paper and I shall write to the noble Lord.
Lord Campbell of Alloway: My Lords, is my noble friend aware that he may be mistaken in the answer he has given, and that it is the understanding of many noble Lords that clampers are paid by results?
The Earl of Caithness: My Lords, it certainly would not be the first or indeed the last time that I am mistaken. However, as I have said, I shall look into the issue and write to the noble Lord.
Lord Stallard: My Lords, when the Minister considers this matter, will he take into account the private dampers, too? It is a well-known fact that those people receive bonuses. Does the Minister accept that this whole issue is becoming a farce, certainly in the eyes of the motoring public, when double yellow lines are being removed so that parking meters may be erected? If the yellow lines were essential in the first place to assist the flow of traffic, what is to be gained from removing them and putting in meters? The meters cause another line of obstructive traffic. This issue is quite clearly a means of gathering taxes and is recognised as such by the general public.
The Earl of Caithness: My Lords, the noble Lord's question goes wider than the Question on the Order Paper. I tried to be helpful earlier, but I shall not try to be helpful now.
Lord Monson: My Lords, does the noble Earl agree that if law enforcers—which traffic attendants will effectively be—are given financial incentives to penalise as many members of the general public as possible, it opens the way to every form of abuse?
The Earl of Caithness: My Lords, I read with great care the amendment to the Road Traffic Bill moved by the noble Lord in June 1991. That amendment was not accepted by the House. I understand the noble Lord's point of view; but, as I said, discussions are continuing.
Lord Mackie of Benshie: My Lords, I am delighted to hear that traffic wardens receive no remuneration for extra keenness. However, can the noble Earl assure the House that there is no form of quota comparison in the employment of wardens? In other words, do they have to operate to a certain standard in respect of the number of people they charge?
The Earl of Caithness: My Lords, I do not know the exact answer to that question, but I shall look into the matter.
Lord Clinton-Davis: My Lords, the Minister's briefing on the issue of the role of dampers and their remuneration leaves something to be desired. Will he give a clear undertaking to the House that he will examine very carefully what the noble Lord, Lord Campbell, had to say? Furthermore, more radically and more importantly, does he realise that the deficiencies of public transport in London are the real issues which have to be tackled when it comes to congestion? He himself has spoken about the need to speed up traffic in London.
The Earl of Caithness: My Lords, it is good to see the noble Lord back on his feet on transport matters. After yesterday, I thought that he had left the issue behind and found something else to do. With regard to the noble Lord's question, it is well wide of that on the Order Paper.

Family Planning: Rio Summit
3.12 p.m.
Viscount Craigavon Viscount Craigavon asked Her Majesty's Government:
What influence they were able to have at the Rio Summit in response to the worldwide demand for family planning.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, we and others were influential in ensuring that population featured significantly in the discussions at Rio and that Agenda 21—the Rio plan of action—emphasises the importance of helping developing countries to establish comprehensive population programmes. I hope that that will serve to encourage donor countries generally to do more in this critical area.
Viscount Craigavon: My Lords, I am grateful for that Answer. Does the noble Baroness accept that her individual efforts and her very forthright and plain words on the subject in Rio were very welcome and much appreciated? Can she say how the momentum of the Rio conference on population, such as it was, can be maintained? In particular, can she say how we might influence and encourage our European partners?
Baroness Chalker of Wallasey: My Lords, I am grateful to the noble Viscount for his kind remarks. I believe that we have made real progress since Rio. In New York member states and the UN Secretariat are currently agreeing the modalities for the establishment of the Special Development Commission. That commission will be responsible for getting on with the work, including the protection and promotion of human health. That will indeed help us, as will the resolution which I intend to put before the Development Council of the European Community in November.
Baroness Lockwood: My Lords, in view of the speculation about a possible cut in the overseas aid programme, which we hope the Minister will successfully resist, can she give an assurance that the funding for family planning through NGOs will continue? Secondly, and more particularly, can she say whether the funding for the International Planned Parenthood Federation has been increased by more than 200 per cent. in the last two years in the same way as the funding for the UN population fund?
Baroness Chalker of Wallasey: My Lords, I do not intend to seek to pre-empt the discussions currently taking place about budgetary and public expenditure matters. However, I can tell her that we shall play a forward role with the NGOs in helping women to have the opportunity to choose the size of their families and the spacing between their children. To that end we shall continue to help the IPPF and other organisations. That may not always be by the same amount, but it is a development priority.
Lord Bonham-Carter: My Lords, does the noble Baroness agree that the most effective assistance which we can give in relation to population control is to promote and increase support for the education of women?
Baroness Chalker of Wallasey: My Lords, I certainly agree that the education of women is absolutely fundamental to allowing them to have a choice. I hope that the noble Lord will forgive me if I say that I wish that we could get away from talk of population control and talk instead about family planning, because it is the right of every couple to decide when to have children and how many children to have.
Baroness Flather: My Lords, can my noble friend tell the House what is the position in countries where the establishment is actively working against allowing women access to family planning and how that problem is to be addressed? There are women who want access to family planning but are denied it.
Baroness Chalker of Wallasey: My Lords, my noble friend is absolutely right. There are still a few governments which will not willingly put their own resources into giving men and women the choice to plan their families. We seek to persuade them otherwise. At present we are doing quite well in persuading some of the less forward-looking countries to take on the whole idea of family planning policies.
Lord Judd: My Lords, does the noble Baroness not agree that one of the most grim realities which face us all is that every 2.4 seconds of every day somewhere in the world a child dies of poverty? Taking that challenge, together with the undertakings given by the Prime Minister at Rio, and taking into account the very real respect on all sides of this House for the commitment of the noble Baroness, will she stake her very considerable reputation categorically on the principle that, whatever the pressures on government, public expenditure cuts will not be at the price of the solemn pledges by this Government to increase the resources available for the fight against world poverty?
Baroness Chalker of Wallasey: My Lords, the noble Lord knows me very well. He knows full well that we shall maintain those programmes, concentrated as they are—75 per cent. of our bilateral expenditure—on the poorest. We shall do all we can to alleviate poverty. The noble Lord would not expect me, any more than I would have expected him a few years ago, to pre-empt the public expenditure round.
Lord Renton: My Lords, is my noble friend aware that the United Kingdom was the pioneer of family planning programmes and that we shall have more women of childbearing age in this country in 1994 than we have ever had before? Can she give an undertaking that, as a good example to other countries, we shall maintain to the full our own family planning programmes?
Baroness Chalker of Wallasey: My Lords, I can tell my noble friend that I certainly intend to seek to do that.
Baroness Robson of Kiddington: My Lords, what progress is being made on the British initiative arising from the Earth Summit to call a global forum of NGOs in 1993? Some of us are not as sanguine about the final communiqué on the question of family planning and population which came out of Rio. Can the noble Baroness therefore assure us that the global forum will have in the forefront of its terms of reference the question of population and family planning and that NGOs working in that field will be invited to the forum?
Baroness Chalker of Wallasey: My Lords, I am delighted to assure the noble Baroness that the consultation note on this proposed forum has already been prepared. It will shortly be circulated both within the United Kingdom and abroad. We expect a planning meeting to take place very shortly with the main groups outside government, including the non-governmental organisations. The groups will include those on environment, development and population along with representatives of the private sector and the local authority representatives who can make the difference that I know your Lordships' House seeks.
Lord Rea: My Lords, following my noble friend's question, can the Minister assure the House that any government aid to population activities does not take place at the expense of aid for general economic and
754
social development, including the educational matters mentioned by the noble Lord, Lord Bonham-Carter, and also maternal and child health? Does she agree that it has been shown both in this country and the countries of the South that this form of development is the surest guarantee of a long-term fall in population growth?
Baroness Chalker of Wallasey: My Lords, I have no hesitation in saying that population planning, family health and mother and child health are all part of our social and economic assistance to developing countries and that education will always continue to play a very major role in all that.
Lord St. John of Bletso: My Lords, will the Minister say what preparations the Government are making for the 1994 World Population Conference, which I understand will be held in Egypt?
Baroness Chalker of Wallasey: My Lords, we have already had some preparatory meetings. The UN has recently proposed that all countries undertake their own national preparations and I shall work with the results of those preparations to formulate what should be done for the 1994 conference.

Housing: South-East England
3.23 p.m.
The Earl of Carnarvon The Earl of Carnarvon asked Her Majesty's Government:
What measures they are taking to increase housing opportunities for those households in South-East England who are unable to buy or rent at current market prices.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): My Lords, we have substantially increased resources for the Housing Corporation for low-cost social housing; £925 million has been allocated to schemes for approval this year in London and the South East to provide 20,500 new homes.
In addition, we are about to introduce a statutory rent-to-mortgage scheme. We have introduced a rent-a-room scheme to encourage householders to take in lodgers, and we are making £25 million available to local authorities over three years to bring flats over shops back into residential use.
The Earl of Carnarvon: My Lords, I thank the Minister for his reply. Is he aware that across the political parties throughout the South East, the London boroughs, the shire counties and the districts all want to provide more affordable housing? What is the Government's attitude to funding housing for rent without an option to buy?
Lord Strathclyde: My Lords, it is up to local authorities to decide how to carry out their planning functions and how to encourage more affordable housing for low income households. Of particular concern is their ability to ensure that there is an adequate supply of affordable housing; for example,

755
to help young people set up home. In providing new housing we accept that there must be a mix of house types and sizes to cater for a range of housing needs.
Lord Stoddart of Swindon: My Lords, can the Minister tell the House whether it would harm the Government's new economic policy to provide more low cost housing and therefore help to revive the building industry and the building materials industry?
Lord Strathclyde: My Lords, it is part of our economic policy to make sure that we have long-term sustainable growth. I believe that that is currently being done by Her Majesty's Government.
Lord Mackie of Benshie: My Lords, will the Minister answer the latter part of the noble Earl's supplementary question, which was about the attitude of the Government towards the building of houses for low-cost renting when the present legislation enables tenants to buy their houses and thereby reduce the stock? That is the question that was asked.
Lord Strathclyde: My Lords, there is a logical problem in what the noble Lord has just said. The housing stock is not reduced if a tenant buys his house.
Lord Bruce of Donington: My Lords, may I take it from the noble Lord's reply to the original Question that the Government are now prepared, as part of an alleged capital investment programme the details of which have yet to be revealed, to release to local authorities the money that has been received from the sale of local authority housing so that local authorities throughout the country can now begin a large-scale programme of house construction? In the event of some local authorities having no available remaining receipts from council house sales will the Minister ensure that they are suitably funded so that at long last there will be a proper housing programme throughout the United Kingdom.
Lord Strathclyde: My Lords, the noble Lord clearly understands that it is not possible to allow local authorities to spend their receipts because some local authorities would do considerably better than others. That is why the money is remitted to the central Exchequer which decides, through the SSAs and on the basis of need, what each local authority area should receive.
Baroness Hamwee: My Lords, does the Minister agree that the acquisition by local authorities of properties on short lease is a useful resource, particularly at a time when property owners may not be able to sell because prices are not what they were a few years ago? Will he confirm that it would be helpful to use short lease properties for families who otherwise would be homeless? Does he further agree that to move those families from one property to another is distressing to them and a cost to the poll tax payer? If he does so agree, will he instigate an amendment of the capital finance regulations which preclude local authorities from leasing individual properties for more than three years so that they have to continually find new properties just to stand still?
Lord Strathclyde: My Lords, I shall not take up the kind suggestion of the noble Baroness to amend the legislation. We feel that increasingly the way to help people on low incomes is through the means of the Housing Corporation. In my original Answer I explained how much extra finance we are allocating to the Housing Corporation.
Lord McIntosh of Haringey: My Lords, is it not the case that for a number of years the Government have claimed that an increase in the private rented sector was one of the major answers to the problems raised in the noble Earl's Question? Will he tell the House what success that policy has had in terms of numbers of units becoming available since 1988? Would he care to explain to the House why the Government's social funds specifically disallow payments for deposit or advance rent? Does he agree that such payments are a severe deterrent to those most in need to find private rented accommodation?
Lord Strathclyde: My Lords, the noble Lord is quite correct to say that one of our major planks is to increase the private rented sector. That has not been as successful as we had hoped and the supply has not increased. However, evidence from a recent survey shows that the decline in the private rented sector has stabilised. As I explained in my original Answer, we have introduced a number of schemes which we believe will encourage it. The problem is not one of social funds and extra help for tenants; it is to make sure that the supply is there for the tenants to find.

Business
3.29 p.m.
Lord Hesketh: My Lords, with the leave of the House, I should like to say a word about the two debates standing in the names of the noble Lords, Lord Clifford of Chudleigh and Lord Chalfont. As the mover is allowed 15 minutes, and the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate, in the case of the short debate in the name of the noble Lord, Lord Clifford of Chudleigh, this means that all other speeches should be limited to a maximum of 10 minutes and in that of the noble Lord, Lord Chalfont, eight minutes. If any noble Lord were to speak at greater length, he would be doing so at the expense of subsequent speakers in that debate.
On the ground that it has been several Wednesdays since we have had a debate on a Wednesday, I take this opportunity to remind noble Lords that on the digital indicators on the three sides of your Lordships' House when 10 minutes is indicated the eleventh has commenced.

European Economic Area Bill [H.L.]
Baroness Denton of Wakefield: My Lords, I beg to introduce a Bill to make provision in relation to the European Economic Area established under the agreement signed at Oporto on 2nd May 1992. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Baroness Denton of Wakefield.)
On Question, Bill read a first time, and to be printed.

The Water Industry
3.31 p.m.
Lord Clifford of Chudleigh Lord Clifford of Chudleigh rose to call attention to the responsibility of Her Majesty's Government for ensuring full representation of the consumer's interest in the operation of the water industry; and to move for Papers.
The noble Lord said: My Lords, let me first declare an interest in the private water company, South West Water plc, by holding shares on behalf of my elder son who is seven years old. They are doing very nicely, thank you very much indeed—but at what cost?
In February this year this House debated with some vigour the method and handling of privatising the 10 national water authorities. Another 22 are private but not all of them are to do with sewage disposal. Some of the issues raised in the debate today may have been discussed in February, but since then more facts and details have come to light which will require a fuller answer and greater explanation.
We are aware of the authorities and bodies which are responsible for monitoring the water that we consume and for the way in which it is disposed of. Ofwat, the Office of Water Services, is responsible for ensuring that the water industry in England and Wales provides consumers with good quality water efficiently and at a fair price. Ofwat was set up and financed by Her Majesty's Government using taxpayers' money. Every asset controlled by the Government is in reality owned by the taxpayer or Her Majesty the Queen. A sum of £7.52 million of taxpayers' money has been allocated to Ofwat in this financial year.
The National Rivers Authority is another monitoring body financed by the abstraction finance fees and set up by Her Majesty's Government to ensure maintenance and improvement of the quality of water for all those who use it. It also receives 29 per cent. of its income from a government grant, again taxpayers' money—water consumers' money. The Drinking Water Inspectorate and the maritime district councils are other authorities which monitor, the latter being financed out of local tax money—soon to be the council tax. It is responsible for armouring coastlines among other aspects, as is the Ministry of Agriculture, Fisheries and Food, which this year has contributed £64 million towards flood defence, coastal defence and arterial drainage. That again involves taxpayers' money.
The West of England has the longest and most frequently battered and eroded coastline in England and Wales. What a shambles has been made of that coastal protection. Stone has been imported from Sweden. Certain rock-laden barges have sunk before they have reached the coastline which is to be armoured. Within 10 miles of certain of the coasts in Devon there are English limestone boulders in
758
abundance. There is employment for Englishmen. If boulders are not used why not use dolos? They are double anchored reinforced concrete blocks of varying weight. They are already in use in the Scottish nuclear power station and at Llandudlas in Wales. They have been used effectively in Australia, Sweden, Saudi Arabia and many other countries. Their construction and positioning would create employment and coastal protection in England.
What responsibility lies on the shoulders of the privatised companies? The private water companies must provide clean, healthy consumable water for everyone living in or visiting England and Wales. They must also be considerate and sensitive to the extra requirements for many of the disabled people in this country before even threatening disconnection for failure to pay.
Her Majesty's Government are well aware that the European Commission had every intention of instituting many legal obligations on member countries which related to the treatment and protection of the environment both onshore and offshore. It is rumoured that Her Majesty's Government were well aware of that as far back as 1985. They were also aware that they would have to budget up to £28 billion in order to comply with that law.
Let us look at the costs. They do not involve just the amount paid, the expenditure on an item. They involve the suffering experienced to obtain an end. For example, South West Water plc may have paid the Exchequer £216 million in 1989 to purchase the water authority which it took over. Let us look at the cost, the financial suffering for the taxpayer, the water consumer. First, there was a grant, a green dowry, of £266 million from the Government. It was taxpayers' money. We must remember that money is the central reality of government policy. But good management, not just monetarism, is what wins governments taxpayers' applause. Secondly, there was a write-off of a £130 million debt inherited from the nationalised water authority. That was taxpayers' money. In effect the taxpayer paid that plc £180 million to avoid the inevitable embarrassment to the Government of being unable to implement the European Commission's policy and obligations by 1999. It should not be forgotten also that South West Water plc benefited handsomely to the sum of £293 million when the company shares were floated.
But the suffering, the cost, does not stop there. Throughout the country the plcs decide their own standing charges. Those may range from a ridiculously high annual payment of £61 for water and £65 for sewerage per household in Dwy Cymru plc to £22 for water and £28 for sewerage in the Thames Valley Utilities plc. It is felt by the monitoring authorities that those standing charges generally should be lowered.
Ofwat regulates the K factor which was instituted and imposed in 1990. It will not be reviewed until 1995. But everything in that K factor is linked to inflation, which is falling. Look at the action taken by Ofwat last week when, with effect from 1st October, Ofwat placed an interim determination notice on the

759
water companies. That should result in a 2 per cent. reduction in the consumer cost since it reflects a 15 per cent. reduction in the construction costs that the water companies had expected this year. Will the Government, through the Department of the Environment, support Ofwat's director who still has four dissenting authorities to bring into line with his direction?
In August South West Water plc received a £30 million loan from the European Investment Bank to help it with its obligations. The interest charged will be paid for by the consumer. The K factor will not change from 11.5 for South West Water until 1995. It is then hoped that Ofwat will take into account such capital loans and accordingly adjust the K factor rate to the benefit of the consumer. Quite apart from obtaining loans on a long-term repayment basis, the water plc should consider making rights issues to the existing shareholders to raise money required for capital expenditure. Another step which the Government could take to ease the burden on the consumer would be to accelerate the tax relief on the capital expenditure of the water companies.
When one considers that the water plcs are a monopoly organisation—a point which was admitted by the chairman of South West Water plc—the capital return is far too high in relation to the low-risk industry in which they operate. What an excellent investment was made by the consumer-supported purchasers of the nationalised water authorities. There was guaranteed capital value growth; no competition over sewerage; ever rising share values; the value of the public limited company increasing without question; and in 1999, once the 10-year restoration/renovation period is over, the companies can be sold at a sinfully large profit. Is the Minister happy about that, especially considering the fact that the consumer paid for the companies in the first place?
Perhaps the greatest attention should be paid to the cost to our health of complying with the European as well as the Westminster standards for potable water. I shall read out the names of 10 different chemicals which the water authorities can add to the water and I beg your Lordships to consider the effect that they can have on one's system. The chemicals include five flocculents, which cause chemical precipitants in lumps or masses. There are the PH or acidic adjusters with chlorine and chlorous introduced to destroy forms of bacteria. Sulphur dioxide is another chemical added which simply adjusts the two chlorines. Our stomach fluids contain natural antibodies which the chlorine is killing. Furthermore, medical studies carried out in the United States show that chlorine is a prime contributor to rectal and bladder cancer. That relates to chlorine in swimming-pools, showers, bath water and drinking water.
Homoeopaths argue that smaller herbal doses are as effective and less harmful than chemical cures. The frequent doses of chlorine which we suffer in our bodies—that is quite apart from the aluminium which is flocculent and which contributes to Alzheimer's disease, as does acid rain—need to be looked at.
What happened at Camelford in Cornwall? A delivery driver accidentally tipped aluminium floc-culent into a tank, the contents of which were distributed directly to the consumer. Was that a shock to the system? If the chemical had been chlorine the amount would have been classified as an overdose. How many accidents and overdoses do we not hear about? Perhaps the major benefit from chemicals is the introduction of fluoride, otherwise we should all be toothless. Doubtless the Minister used his influence to select Strathclyde as the first target for the biggest fluoridisation company in the United Kingdom.
On a slightly lighter note perhaps we should consider that 75 per cent. of our body structure is water. When a friend of mine, who is an alcoholic, visited his doctor he was told, "You must remember, you are just a fingertip away from drowning yourself when you go to the pub"!
Is the National Health Service budget of £27 billion net, apart from private medicine costs, geared to allow for the effects of chemicals in our potable water for drinking or our bathing water? An inquiry into the medium and long-term effect of those chemicals should be instigated by the Government for the sake of the consumer.
We have an alternative; that is bottled water. Companies producing that must comply with EC Regulation No.777 but no chemicals are added. Highland Spring from Scotland is low in salts and minerals and is often used in the treatment of kidney ailments. That is a natural benefit. When looking at the consumption of bottled water throughout Europe, one sees that France, Germany and Italy are major consumers. I wonder why. Demand in the United Kingdom is increasing rapidly. That is the only form of competition to the private water companies but it has obviously been affected by the recession and the consumers' caution as regards spending. Bottled water allows nature's in-built filtration system to provide the cleanliness and the distinction in taste depending on the type and depth of the aquifer.
As has been noted, the majority of consumers pay costs based on the rateable value of their house, but an increasing number of meters are being used to monitor the use of water. Surely it is fairer to all parties for meters to be in operation throughout the country. Approximately 25 per cent. of water is wasted through leakages. If one has a meter one pays only for the water which passes through and not a contribution towards the amount of water lost in the crumbling infrastructure of our water supply pipes.
In this high-tech world homo sapiens is so wasteful. I recently visited Canada, which has the same problem. Despite the fact that Canada has an over-abundance of water it is desperate to see the introduction of metering. It gives the consumer a choice; that is, how much is used casually and how much is obliged to be used.
There exists a regional customers' service committee to hear complaints and pass them to the relevant departments or authorities. Would it not be considered wise to establish a water consumer representation council working in collaboration with the regional bodies and hand-in-hand with Ofwat?

761
The people, the consumers, everyone at Westminster and the taxpayers require their voices to be heard. Let us see H20 remaining as a chemical formula and not the water companies' motto and acronym, "Happy2 Overcharge". My Lords, I beg to move for Papers.
3.48 p.m.
Lord Crickhowell: My Lords, the House will be grateful to the noble Lord, Lord Clifford of Chudleigh, for giving us an opportunity to debate this subject. I do not propose to speak on behalf of the authority of which I am chairman but as someone who, as a former MP and Secretary of State for Wales with direct responsibility for water and now chairman of the NRA, has had a particularly close involvement with the industry for more than 20 years.
I recall the moment when the water authorities took over the responsibility from local government. I remember that in my constituency and elsewhere in Wales people were horrified to discover how many sewage treatment works disappeared for ever under brambles and nettles with no records kept of them.
I am somewhat embarrassed to admit that as the Secretary of State along with the then Secretary of State for the Environment, who now has responsibility for industry, we intervened in the affairs of the water authorities by calling in a prominent accountant to crawl over them and to suggest reductions in their pricing and capital investments. Not many consumers felt very closely involved in that decision-making process during those years and under those structures.
Against that background I listened with a certain amount of surprise to the lines of criticism which the noble Lord pursued, and with some disappointment that he missed the opportunity to address what seems to me, at any rate, the central issue. He talked a great deal about costs and charges but little about the way in which we should arrive at the balance between costs and benefits.
I remind the House of what has happened over recent years. The Water Act privatised the water supply and water sewage treatment functions of the former water authorities, freeing them from the shackles of the Treasury and interfering Ministers like me and allowing them access to the markets. It set in hand a massive and unprecedented round of environmental improvements. It created the NRA and Ofwat which, with the drinking water inspectorate, performs a wide range of regulatory duties, not just of an environmental nature but concerning other vital consumer interests.
The NRA and Ofwat receive immensely valuable help and advice and are greatly influenced at regional level by their network of advisory committees which represent consumers and a wide range of interest groups.
Since the passing of the Water Act the Environmental Protection Act has added hugely to the protective arrangements for the environment—surely a central consumer interest. Soon we are to have an environmental agency wisely incorporating all the functions of the NRA. All that represents some of the
762
most important and beneficial environmental legislation ever passed by a British Government. They have set in motion the largest investment programme for the improvement of water quality and water environment that has ever been undertaken.
By means of privatisation, financial arrangements have been created which make all that possible. Is it even faintly conceivable that without privatisation that programme could be continued in the present grey economic conditions? Of course not. The programme would have been slashed immediately, as it was by all previous governments during similar cycles. Indeed, expenditure on that scale would never have been contemplated. All that seems to me to be of great benefit to the consumer.
When we turn to the mechanisms for directly protecting their more specific and immediate interests, can it really be argued that the old water authorities and the incestuous arrangements within government, within which poacher and gamekeeper cohabited, provided such protection? The answer must be that it did not. The NRA has an extremely effective system of advisory committees and regional advisory boards. It consults widely. There is vigorous and open discussion about the development of policy, with all the issues on the table and not as a cosy discussion inside government departments.
There are ultimate decisions which are quite properly taken by the Government about standards after that public debate. There are also appeal mechanisms in place; for example, the NRA is answerable for its flood defence functions to the local ombudsman and for its other duties to the parliamentary ombudsman.
For its part, Ofwat seems to me to have been fairly vigorous and outspoken in protecting consumer interests, even to the extent that it has sometimes led to tension with its fellow regulator. It has exposed and brought out into the open the debate about costs and benefits, and that debate will be taken further as the NRA and the Government develop the new system of statutory water quality objectives. It has not only dealt with the great strategic issues of the obscure complexities involved in the setting of K but, judging at least from a news release which was issued on 22nd September, it is going about the practical business of raising the standards which the water authorities must achieve. As the noble Lord has already pointed out, it is placing pressure on the public companies about the prices which they charge.
The director-general has also been applying some fairly effective pressures on those costs, about which the noble Lord spoke. I have repeatedly talked about openness. I cannot emphasise strongly enough the extraordinary contrast between the existing situation and the old arrangements which led to decisions of fundamental importance about quality standards, environmental protection, levels of pollution and availability of water, together with the timing and scale of programmes and their pricing consequences, being taken in little huddles in what were probably, in those days, smoke filled rooms with almost no public awareness of what the decisions were and what the consequences might be.

763
In the present developing situation, the highly desirable and urgent requirements of the European Commission, the British Government and the NRA, urged on by the environmental campaigners, must be costed, prioritised and publicly debated because they can be achieved only if the means are found to pay for them.
To me, that is the central issue which, so far, has not been referred to although it is of such enormous importance for the consumer. The Government, the regulators and many informed organisations are now devoting much time and effort to try to find fair and acceptable ways of establishing what is the proper balance between cost and benefit, between what Greenpeace might demand on the one hand and what the water customer is prepared to pay on the other. We are trying to find ways not just to measure the costs of implementing schemes for environmental improvement but also to measure the value of the environment itself and the cost of the damage done to it.
Recently the director-general drew attention to some of those issues and suggested that the decision should perhaps lie with the water company's customers. However, that is not satisfactory. There are much wider interests entitled to take a view of the matter. Much work is being done on the evaluation of environmental benefits but we are still far from the promised land. In their recent White Paper the Government have come out strongly in favour of a greater use of economic instruments and incentive charges. Sadly, the noble Lord did not touch on those issues and the important and interesting observations made about them in that recent White Paper. However successful the measures may be, I feel confident that there will still be a need for a regulatory regime. The market will be imperfect and, to quote the White Paper, there will have to be a safety net to maintain basic environmental standards.
Those are important questions which need debate and examination. The water quality objectives statutorily set will be a major step forward in determining costs, standards and benefits by open presentation of the arguments. The ultimate decisions will be taken by the Secretary of State and will have to be defended in Parliament. That is the right place for the balance between cost and benefit to be ultimately decided.
The system established by the Water Act, which is already in operation with its three regulators openly stating their position, has moved us already a long way down that road. I hope that the House will contribute significantly to the debate which is taking place about the way in which we carry forward that process with the introduction of water quality objectives.
3.58 p.m.
Lord Cocks of Hartcliffe: My Lords, I too am grateful to the noble Lord, Lord Clifford of Chudleigh, for giving us the opportunity to debate this subject. The noble Lord mentioned some shares. I have some shares in Wessex Water. I understand that that company has recently bought the largest
764
manufacturer of meters in this country. Therefore, if I get through this speech, noble Lords will understand that far from promoting my own interests, I am actually speaking against them.
The privatisation programme has led to the setting up of regulatory bodies which are actually much more important than we realised. In fact, I came across a paper from the pressure group, the Consortium for Fair Electricity Regulation, dated 6th August 1992 and complaining about the long-term contracts placed by the regional electricity companies with the combined cycle gas turbine generating stations. It states that the former Select Committee on Energy tried to tackle the problem by asking the director general to look again at the urgent need to enforce the RECs' licence condition 5 on economic purchasing. It goes on to say,
"Currently Professor Littlechild is not planning to do this until he reviews price control in 1994/5, by which time irrevocable decisions on power station and pit closures may have been taken".
That is fairly germane to what has been happening recently.
I mentioned the regulators in a speech which I made on 30th July in your Lordships' House. I said that there must be a culture developing among them. They are only human and there must be competitive elements and stresses between them. I drew to your Lordships attention the outbreak of "polyphotitis"—the frequency with which photographs of the director general appear in the annual reports, the worst example being the Ofgas Report of 1988, when no fewer than 13 separate photographs of the director general appeared. I asked whether the condition was contagious and suggested that it was, because in the Ofwat first report of 1989 there were seven photographs of the Director General of Water Services and in 1991 there were only three. Possibly the disease is either being cured or is in remission.
I concluded by asking who regulates the regulators. It seems to me that possibly the present Director General of Water Services may have an ambition to impose metering on the people of this country and that this may be his epitaph.
Ofwat recently conducted a consultation exercise. There is a need for a new charging system. The Water Act of 1989 prohibits companies from using the rateable value-based charging methods after March of the year 2000. An enormous amount of paper has been produced relating to that question and I cannot imagine anyone reading it all unless they intend to write a thesis on the matter. For example, The Social Impact of Water Metering, jointly produced by Ofwat and the DoE, comes in three parts. The first report and tables cost £5 each; the hardship report costs £10. In all they consist of 408 pages and weigh 31b 10oz. It must be a great consolation to a young couple wondering whether they can pay the bill to think that they can always look at the hardship report provided they can fork out the £10 required to buy it. The information pack produced by Ofwat consists of a huge volume of material. It weighs just over 2.51b—not the kind of thing one puts in one's pocket for light reading.

765
The results of the consultation were summarised by the director general in the annual report of 1991, which stated,
"Consultation plays an important part in our work".
It said that the views were sought of both the public and representative bodies as well as the industry. It continued,
"In the light of these responses I published, in December, a strategy for companies to adopt, starting now and progressing towards the late 1990s".
That is summarised in the leaflet, which I am happy to inform your Lordships is free. Setting out his strategy he states,
"In the long term, metering is the only satisfactory way of achieving payments which are well related to the amount of water used … metering should be targeted, and should spread progressively".
That is the ambition and the conclusion reached as a result of the consultation exercise.
Let us examine the consultation exercise. The main part consisted of a survey among domestic customers. At Ofwat's request,28 companies agreed to include with the water bills leaflets and questionnaires in regard to alternative methods of paying for water. They made the point that respondents to the large-scale survey were a self-selecting sample and it was always expected that customers with the strongest views or those who considered themselves likely to gain from a specific option were the most likely to respond.
More than 18 million customers were given the opportunity to exercise their opinions. Almost 290,000 responses were received, representing a response rate of 1.6 per cent. It was said that that response was higher than anticipated when compared with other surveys in which, as in this case, prepaid envelopes were not supplied. It seems to me that to base a strategy on a response rate of 1.6 per cent. is a little dubious to say the least.
What was the leaflet that was issued? I possess a copy of it and, as your Lordships can see, I am one of the 98.4 per cent. of non-responders. It outlines why a change is needed and gives three alternative ways of charging. Anybody who produces a questionnaire of this kind, where different options are given, knows that a virtual science has grown up in the preparation of the questionnaires to ensure that they are totally objective; that they are in no way pointing people towards the answers which the enquirers wish to receive. There are actually people in universities and other departments who specialise in such preparation.
What does this questionnaire consist of? The first alternative given is flat rate charges or a licence fee. It goes on to say,
"The company charges each household the same amount irrespective of its size. If your water usage is very small it may be worthwhile opting for a meter".
To me, that is a clear steer to people to choose the second option of metering. That must devalue the whole exercise. I cannot see how any objective result can be obtained from the questionnaire when that steer is given.
There are other points I find strange about the leaflet. When it talks about metering, one of the advantages it quotes is,
766
"you know that neighbours who use more water will pay more".
That does not seem to me to be a neighbourly thought. It reminds me of a phrase we used in the Navy from time to time, "Pull up the ladder, Jack, I'm inboard". When it discusses banding or "stepped charges", one of the reasons why this is said to be unsatisfactory is that,
"economical users subsidise lavish users".
The word "lavish" is pejorative. It means that economical users will subsidise large users. Someone with a large family or with health problems in the family may use large amounts of water. In those circumstances I would not say that the word "lavish" is suitable.
Despite the unsatisfactory nature of the questionnaire, the director general based his whole strategy on it. The largest trial area selected, the Isle of Wight, consists of fewer households with children than anywhere else in the United Kingdom. If we go to universal metering it will bear hardest on those who can least afford it—people with large families, disabled people and people with dirty jobs. The National Consumer Council gave an example of a single parent with four young children who moved to Bradford to a housing estate with water meters. The first year's water bill amounted to £348 compared with a water rate of £60 at her previous home.
If we really care about the problems of society, then we should be thinking of the people with medical problems such as users of home dialysis machines and people with incontinence problems. We must think extremely carefully before we adopt a system which will bear down most severely on those in our society who are the least able to stand the consequences.
4.10 p.m.
Lady Kinloss: My Lords, my noble friend Lord Clifford of Chudleigh, has explained very fully the many problems which are of concern to consumers with regard to the water industry. This is very timely because there are currently many justifiable complaints which have been carefully reported to the National Association of Citizens Advice Bureaux, by local citizens advice bureaux.
For many people on low incomes there is no specific benefit rebate to help pay for water, but increases in income support, which are to be welcomed, have not adequately reflected the steep rise in domestic water bills. Although now the price of water is included in the calculations for the up-rating of income support, the shortfall for the years up to 1991 was not made good, thus causing difficulties for low-pay families.
The CAB report, which focuses on evidence submitted to the central office of the service between April 1991 and April 1992, showed a sizeable problem with water debts. In certain areas such as the West Midlands, Yorkshire and Humberside, water problems represented dramatically larger proportions of the areas' total debt count than the average. Many pensioners, disabled people, and families on low incomes with young children, face great problems because of the increased charges. Therefore Ofwat's production of guidelines on debt and disconnection

767
are to be warmly welcomed. That was in April 1992. They are, I understand, having an overall review of debt and disconnection later in the year.
There are still serious problems with water charges being submitted to the central office of the CAB which also has grave reservations about the introduction of metered water supplies in trial areas. Their evidence shows that for many households, especially in large households on low incomes and many disabled people, water metering proves extremely costly. A CAB in the Isle of Wight in a meter-trial area, reports a household of two adults with seven children whose bill was £660 for 1991–92. It was an increase of about £540, following the installation of a meter. They are in receipt of family credit. They could not meet the charge and they received a summons from Southern Water.
A CAB in north London reports a pensioner couple, both aged 86, living on income support. They are faced with a £30 increase on their 1991–92 water bill. They have not got enough to meet the increase. There are some cases where there is a need for companies to accept affordable payments, such as weekly or fortnightly payments, which would help.
There are also the serious problems of disconnections. For example, in Tyne and Wear a CAB reports that a client with two small children whose husband had left her three weeks previously, had her water supply disconnected. Sunderland and South Shields Water Company refused to accept weekly payments and would not negotiate at all. A CAB in the West Midlands reports that the South Staffordshire Water Company disconnected the water supply of a consumer with a severely disabled child. The company required a reconnection fee of £94, which the consumer could not afford.
In the case of disabled people, I understand that some need to use a great deal of water; for example, among others, paraplegics and tetraplegics, especially in cases of incontinence. I refer also to the sufferers of multiple sclerosis. I am told that they need extra water for hygienic and health reasons, apart from feeling comfortable. If for any reason one of these consumers is cut off, he or she is unable to go out somewhere to acquire water. They are certainly unable to use a standpipe if that alternative should be suggested. Water metering will also increase their bills.
A CAB in the West Midlands reports a disabled woman on invalidity benefit who, since her meter had been installed, finds her water charges have been quadrupled. In those parts of the country where supply and disposal are dealt with by separate companies, there is a good deal of confusion among consumers, many of whom do not realise that they will receive two separate bills. In Kent a CAB reports a case of a 72 year-old consumer who was confused by the two bills. The consumer paid one only and was summonsed for non-payment of £41 plus £31 costs.
In those areas where there are two different companies it would seem essential that bills should be easily understood and perhaps an explanation should be enclosed with the bill in order to explain that that particular bill is only for supply and that another will follow for disposal. The Consumers' Association
768
would suggest a national consumer body for the water industry such as that which currently exists for the gas industry. If it could not be agreed that a national consumer body for water should be set up as an independent body, perhaps there could he a body set up with a semi-independent status within Ofwat with the needs of vulnerable consumers kept in mind.
At the present moment only gas consumers have such a body in the Gas Consumers' Council. Could not that example be followed elsewhere in the telecommunications and electricity industries as well as in the water supply industry? For myself, I cannot see, since water is a basic necessity of life, how its supply can be based on ability to pay. There is no alternative to water in order to drink, to wash or for sanitation. It appears to me that the effect of the increase in the cost of water to the consumer has been ill-thought-out and that the matter requires the urgent attention of the Government.
My noble friend Lord Clifford of Chudleigh has already mentioned bottled water. Perhaps when the Minister replies to the debate he can tell the House whether it is true that the quality of water from taps has to be to a higher quality than that which is bought in a bottle. I should also like to ask him whether the Government can ensure that the needs of vulnerable people are met, especially with regard to the payment of their bills, and advice given to any who are in danger of being disconnected.
4.16 p.m.
Viscount Caldecote: My Lords, I believe that this is a timely debate. We are grateful to the noble Lord, Lord Clifford, for initiating it. I would like to raise three issues, two of which have already been the subject of supplementary questions at Question Time. There is no doubt that the water companies have a complete monopoly. There is no alternative supplier or alternative product so it is very much in the public interest to ensure that that monopoly position is not abused in any way.
I would like to draw attention to two areas where I believe problems do exist. They have both been mentioned briefly by the noble Lord, Lord Clifford, but I would like to expand a little on them. The water companies have an obligation to make capital investments mainly to meet future demand and to satisfy the environmental requirements. Too often, when price increases are made and often criticised, the water companies justify those price increases by saying that they have to be made in order to provide the funds for capital expenditure.
That is a very happy and unduly cosy position for a company which many of us who have worked in competitive industry would very much liked to have had. If we needed funds for capital investment how nice it would have been just to put up prices in a non-competitive situation. Of course, that is not possible in normal business and nor is it in the consumers' interest. It certainly was not the practice either in the old statutory water companies. There the value of retained profits was restricted by law. In my experience as a director many years ago of such a

769
statutory water company, that restriction never caused any difficulty in raising new capital for well-conceived capital projects.
Perhaps I may ask my noble friend who is to reply whether the Government will ensure that Ofwat makes it compulsory for such capital expenditure as is required to be provided by raising new capital and not by increasing the costs of water to the consumer.
There is an abuse of the monopoly position of water companies in the field of contracting. Several noble Lords have referred to water meters and the value of installing them. My own experience in that connection is not a very happy one. I asked my local water company for an estimate of the cost of putting in a water meter. They told me that the minimum cost would be £200 and that in addition there would be a survey fee—which I call a fee for an estimate—of £25. That would enable them to give me a firm price which would not be less than £200. I said that I thought that this was rather a high price for installing one simple water meter in one pipe in my garden. They replied that they were allowed to require the work to be done by themselves, and that that was their charge.
I pressed the point and said that I should like to get an estimate from my local plumber to do the work to see whether he could do it cheaper, as I was sure he could have done. They said that they would not allow that. That seems to me to be an abuse of a monopoly position and not in the customer's interest and not in the interests of getting a bigger use of water meters. Again, may I ask my noble friend who is to reply whether he will ensure that customers have the right to obtain competitive tenders in such cases and for the work to be done to the specification of the water company concerned by the contractor chosen by the consumer.
Lastly, I should like to raise a point that I raised with my noble friend during Question Time earlier in the year. It is in the consumer's interest to have fully adequate supplies of water at all times and not to be rationed even in a drought. There is a general shortage of water in the southern part of the country and ample supplies in northern parts of the country, particularly, as I mentioned at Question Time, at the Kielder Dam in Northumberland. Can the Government assure us that the studies being made into the possibility of having a trunk water supply main from the north to the south of England are being actively pursued? I hope the Minister can also give us assurances on the other two points that I have raised—as I believe he can—and that the Government are taking steps to ensure that the monopoly position of the water companies will not be abused in the future.
4.22 p.m.
Lord Allen of Abbeydale: My Lords, in the few minutes at my disposal, I propose to limit myself to one point that was touched on at the end of the speech by my noble friend Lord Clifford of Chudleigh in initiating this debate. As I have been listening to the interesting discussion—and I am grateful to my noble friend for having raised these issues—I could not help thinking of the debates that we had at the end of the
770
last Parliament on what is now the Competition and Service (Utilities) Act 1992. That Act concerned the powers of the regulators of the four privatised public services. It stood out a mile that in only one of the four was there anything like adequate representation of consumers.
As my noble friend Lady Kinloss has already explained the industry concerned is the gas industry, where the Gas Consumers Council alone has the staff, the resources, and the independence to make something like an effective contribution at national level to issues affecting consumers. The Bill was perhaps not the appropriate place for trying to extend that example elsewhere, and indeed we were pressed for time and had to be content with provisions strengthening the role of the regulators, with one or two additional provisions, and notably that which put an obligation on the regulators to conduct market research into the standards that consumers are looking for.
There are certainly arguments for doing still more about the powers of the regulators and possibly making them subject to some additional kind of accountability. But all that would not solve the basic problem that underlies much of what we have been discussing in this debate: that the regulator is not there just to protect the consumers. His job, as I understand it, is to strike this balance between their interests on the one hand and the interests of the industry and its shareholders on the other. Water, as it happens, is just about the most complete of the natural monopolies, and the case for a more effective consumer representation seems to me a powerful one.
I would be the last to decry the work done by the regional customer service committees set up by Ofwat and to which reference has already been made. They identify the anxieties of consumers, look into complaints and advise Ofwat on consumer interests. But they have limited resources, and the plain fact is that they do not add up to a national voice that might influence national decisions on difficult and complicated issues such as pricing formulae and procedures for disconnection.
I do not altogether go along with the rather idealistic picture that the noble Lord, Lord Crickhowell, painted in such attractive and eloquent terms. I would concede that the position is different now from what it was when I used to deal with water problems in what was then the Ministry of Housing and Local Government. But it seems to me that the need for something more is self evident. I have no intention of going over ground that has already been well covered, but it bears repetition that prices for water and sewerage have been soaring at an alarming rate well above inflation, and that this is something that hits those on low incomes especially hard.
Like my noble friend Lady Kinloss, I have been told that problems with water bills—at any rate, in some parts of the country—are increasing faster than pretty well any other type of debt, and it looks as though social security payments have not been able to keep up with the increases. Then there has been a disturbing rise in the number of disconnections. I am told that there were over 21,000 in a recent period of

771
12 months, and that this is a much larger number than in the previous 12 months. It is worth remembering that disconnection means that one cannot flush the lavatory, one cannot wash the baby's clothes and one cannot even boil a kettle.
Then there is talk of metering. I have some sympathy with those who have already spoken and have expressed some doubt about the merits of metering on a large scale. It can be argued that in general consumers in this country do not waste water. We are near the bottom of the table in Europe for the use of water per head of population. I cannot help thinking that the millions of pounds that would have to be spent on meters might be better used to repair the leaks in the mains which, as has been pointed out, account for waste on such a massive scale. There are a number of quite conflicting considerations that make this a difficult issue.
This is not an exhaustive list by any means of the problems which concern consumers; but I hope that it will perhaps serve as enough to bring out the point that there are a good many issues in this vital service where the voice of the consumer ought to be heard at the national level through an independent body with adequate resources. Since this already happens with gas, it cannot be easily dismissed as a far-fetched fantasy. I hope that the Minister will not try to write it off lightly. It is something that matters to a lot of our fellow citizens.
4.30 p.m.
Lord Hardinge of Penshurst: My Lords, I join in thanking the noble Lord, Lord Clifford, for giving us the opportunity to debate this important subject. I feel diffident in speaking at all considering that many speakers today are or have been in various ways experts in the working of national boards and privatised utilities. The comments that I have to offer spring from a little knowledge—and we know to what that can lead—so I shall be as brief as possible.
My justification for intervening is partly that I was one of only nine of my noble friends on this side of the House who voted against the Government and in favour of the amendment of my noble friend Lord Nugent when the privatisation Bill was before the House. That amendment recommended privatisation by a route which would have removed the profit/dividend motivation completely and would also have required that all the proceeds of the privatisation should go to the new water companies for the capital investment that everyone knew was needed.
Another reason is in some degree parochial in that the area of the south where I live—the Eastbourne, Bexhill, Hastings area—is not heavily represented in your Lordships' House, and sometimes I feel I should speak up for it. By the same token, I must declare an interest, since my water supply at home comes from the Eastbourne Water Company monopoly.
I have had lengthy correspondence with Eastbourne Water and Ofwat, although Dr. Byatt did not see fit to reply personally to me. Answers came, at intervals so great as to be impolite, from a body called
772
the Consumer Affairs Division of Ofwat. This appears to be the sort of stockade that is set up to prevent anyone from pestering the boss.
Others more experienced than I have already referred to the historic absurdity of the water rates being based on the old rating system, so I am going to concentrate on the cost of Eastbourne water. First, must briefly explain the set-up in our area. At present there is a company called South-East Water which does not seem to do much at present although I understand its time of power lies in the future. South-East Water owns Eastbourne Water, Mid-Sussex Water and West Kent Water. Incidentally, those companies are water-only companies—that is, they do not provide sewerage facilities. In our case those come from Southern Water. What is more, South-East Water is owned by the French company Saur, who thereby own the whole lot.
My sources have repeatedly stressed the point that there is no reason to believe that those French-owned companies, or other French-owned companies in other parts of the country, have behaved with any greater insouciance in increasing prices than the general run of British-owned pies. I must emphasise that point.
I come now to the figures. On 31st May this year the Sunday Times published an investigation into water charges which was concerned in particular with the gigantic personal gains accruing to the chairmen of the 10 largest plcs. In one case, the increase in three years amounted to 290 per cent. In the case of charges, the worst was Anglian with an increase of 46 per cent. But that is nothing compared with Eastbourne Water which contrived rises of 100 per cent. in the same period. There are people who cannot pay that. The noble Lady, Lady Kinloss, developed that vital point most admirably and passionately.
On 18th June 1991 the Daily Telegraph made the following comment:
"His"—
that is referring to Byatt—
"report shows, for instance, that Eastbourne's citizens pay more for their water than any other in Britain (having also suffered almost the highest increases) but that the cheapest water is merely a few miles along the coast in West Hampshire".
I can add that even closer Southern Water charges for water supply in Hastings are about half those in Bexhill, the two towns being five miles apart.
I come now to the heart of the matter in the form of a letter from the Sunday Times Insight team with whom I had correspondence following the investigation I referred to earlier. This knocks out all the gobbledygook provided by Ofwat consumer affairs division and speaks in plain, lucid words as follows:
"During Insight's investigation into the bonuses being paid to water executives we did indeed take a close look at the former statutory companies like Eastbourne Water.
As you thought, many of the smaller companies have increased prices to an even greater degree than the 10 former water authorities. Furthermore, many of their executives have large shareholdings in their companies which have been extremely lucrative thanks to generous dividends paid from high profits largely resulting from increased charges".
Of course I had permission for that quote from the Sunday Times.I repeat it:

773
"extremely lucrative thanks to generous dividends paid from high profits largely resulting from increased charges".
That sounds to me like the plain truth, and I should be especially grateful if my noble friend the Minister would comment on those interesting allegations when he replies to the debate.
4.37 p.m.
Lord Ezra: My Lords, although this is a short debate, we have nevertheless ranged very widely. It has been introduced with considerable skill by the noble Lord, Lord Clifford of Chudleigh, and those who have followed have either had direct experience of the water industry or have very clear views on the subject.
We are going through a changing period in the great history of the water industry in Britain. Privatisation was introduced not very long ago. Therefore, it is not unreasonable that a number of issues which have been touched on today should have arisen. Because the nature of the water industry is basically monopolistic strong regulatory bodies have had to be established—notably the NRA, under the distinguished leadership of the noble Lord, Lord Crickhowell, whom we were glad to hear today, and the Office of Water Services.
I should like to mention some of the main difficulties that have arisen. Before that I wish to emphasise what I believe most of us feel: that is, that the water industry of Britain is a great industry with enormous technical skill. As one who has taken a considerable interest in its affairs, and who has visited water treatment plants, sewage plants and research centres, I feel that it is about as advanced an industry as we have in Britain. We must recognise that fact in order to get the balance right, and then consider the shortcomings which have emerged under the changing conditions.
The issue of prices has come in for much comment. The noble Lady, Lady Kinloss, and the noble Lords, Lord Allen and Lord Hardinge, referred to that. There is not the slightest doubt that, of the prices that one pays for the services of the utilities, it is water prices which have gone up fastest. Undoubtedly, a very large measure of investment has to be made to compensate for lack of investment in the past, and there are new environmental standards to be met. Nonetheless, the prices do seem excessive, and they are causing considerable hardship.
Reference has been made to the CAB report which has drawn attention to the fact that water bill problems are increasing faster than any other single type of debt. So one must consider not only why the charges should be rising so fast but also whether there are adequate social security provisions to safeguard those who are least able to afford them but who must have the use of water, as must everybody.
Ofwat is to be congratulated on the debate which it stimulated among consumers about some kind of trade-off between quality and price. It drew the basic issue out into the open: do we want large sums to be spent on continually improving the quality of water, or do we feel that price is more important and that we
774
can make do with a lower quality of water? The unfortunate point about domestic water in particular is that we have to have the same quality whatever use we make of it. It would be very much better if we could have a very high grade tap water for drinking—eau potable, as they say in France—and a lower grade water for the other more menial domestic tasks which I shall not go into. That would be a sensible arrangement if it were commercially and financially possible. I do not know what the problems would be in doing that but it seems to me that we waste much good quality water.
There is also the question of disconnections, which seem to have risen at an alarming rate—a rise in 1991–92 of 177 per cent. over the previous year. That is very disturbing. It is a matter of grave social concern that so many more households should be deprived of such a basic element as water—or indeed gas or electricity in other cases—because of simple inability to pay. There may be among those who are disconnected people who just refuse to pay, but I am sure we all hope that great care is taken about disconnections. It is a disturbing development.
The question of water metering, to which several noble Lords have referred, is a controversial one. Here again we have the impact of the fact that water is a natural resource which we all have to use and that metering has a different impact on the type of user. In the small household in a highly rated area, metering is a great advantage. If one uses relatively less water and pays more for it on a rateable value basis, then one goes for a meter and one gains. But, in the large household with a low rateable value, metering introduces an considerable burden. If metering is to be introduced I believe that it will have to take account of that issue.
In addition to that we have the question raised by the noble Viscount, Lord Caldecote, on the possible abuse of monopoly. This is a natural monopoly and we have to be very watchful all the time that monopolies are not abused. I was horrified to hear his story about the meter. In this day and age when we are meant to be going for an open market I should have thought that he should have been free to have anyone install the meter so long as it was of an authorised type and did the job. That the local water company should have had a total monopoly and been able to fix any price it liked and prevent him from going outside is entirely wrong. I hope that the Minister will comment on that situation. I am sure that that was not intended in framing the legislation.
Finally, we come to the form of consumer representation. It has been pointed out that, in the case of the water, the consumer representation is an integral part of the regulatory authority, as distinct from what happens in the gas industry, where the consumer body is completely different. This is a point to which a number of noble Lords have referred.
I am interested in consumer bodies, having served on a number in my time. The annual report of Ofwat for 1991 starts with an important phrase from the director general. He says that he has
"sought to increase the power and influence of consumers".

775
He puts that right at the beginning of the report. The second chapter, which is entitled Protecting the Consumer, demonstrates quite an impressive story. There is no doubt that the consumer protection business is taken seriously. In addition I have looked at one of the individual CSC reports—Thames—which is also an impressive document. The chairman, Mr. Philip Chappell, is someone with whom I have dealt in my time and who may be known to other noble Lords. It is a report which recognises the responsibility the body has to safeguard the consumer interest.
There is no doubt that a good deal is being done to safeguard the consumer within the organisation of Ofwat. But the point of principle still remains. Should it be there? Should there not be a totally independent body? The need for an independent body is supported by the fact that the consumer watchdog or consumer representation body—whatever it may be called—not only has watch over the interests of the consumer vis-á-vis the companies but also vis-á-vis the regulatory bodies. It ought to be in an independent position. Even though so much is being done within Ofwat to safeguard the consumer interest, this question of principle needs to be looked at seriously.
4.46 p.m.
Lord McIntosh of Haringey: My Lords, I echo the gratitude expressed by a number of noble Lords to the noble Lord, Lord Clifford of Chudleigh, for introducing this important subject of debate. Unlike many noble Lords I have no particular experience in the water or sewerage industry but I had the task of speaking from this Dispatch Box on both the Water Bill and the Environmental Protection Bill. Some of the debates—not all of them, by any means—are engraved on my heart. Those who took part in the debates at two or three o'clock in the morning will not readily forget the experience and may even have learnt one or two things from them.
The issue of consumer protection in the water industry and in the other utilities is not one which arises for the first time with privatisation, but it certainly is one which achieves prominence and a sense of urgency when the monopolies become private monopolies as opposed to public monopolies. Even the noble Lord, Lord Crickhowell, who certainly did not emerge as a critic of the existing system, admitted that the market for water will be imperfect. The noble Viscount, Lord Caldecote, from the same Benches, also referred to the monopoly position of the water companies and to the possibilities for abuse. It must be accepted that, although these will always be monopolies, despite was was said by the Government when the Water Bill was being put forward, nevertheless the obligation to have some formal structure for protecting consumers is very much greater when those monopolies have their obligation not to the public interest but to their shareholders.
When we look at the water industry we have to ask ourselves the question: what do consumers actually want? They want quality of water, although the noble Lord, Lord Ezra, made a very good point about whether they want a single quality. Both Ofwat and
776
the Water Services Association have published discussion documents on the issue of whether consumers of water really want the very high standards of elimination of impurities which are being imposed by the European Community. That debate will continue. Consumers want a full range of services to be available at all times of the day and night, including in rural areas. Those can be generally accepted to have been maintained under privatisation.
Consumers want social policies to be right; in other words, in particular, they want to see an avoidance of the very painful experience of disconnection to which a number of noble Lords referred. We must remember that, when there is disconnection, it is not free of charge. The pain that is suffered is not paid for only by the people who are deprived of water. In the end, it becomes a public charge in the sense that something has to be done by the publicly-funded social services. The rising tide of disconnection in water is certainly a matter of concern. It is a matter which plainly concerns the Office of Water Services.
But, above all, what consumers of water want is protection from excessive prices. That is where the introduction of privatisation has really made a difference. In his opening speech, the noble Lord, Lord Clifford, said that the capital return to the water industry is too high. Many noble Lords referred to the fact that it is possible for the water industry to reap the benefits of limited liability and of equity pricing on their shares and yet have no risk whatever. In effect, the Government have guaranteed that water undertakings will not go bankrupt. There is none of the speculative risk which accompanies truly private investment, as the noble Viscount, Lord Caldecote, made clear. In those circumstances, to have a return on capital in the water industry which is higher than the return on capital in the public sector can he achieved only at the expense of water consumers. Unless we have—as I believe we do—a very powerful and determined regulator in the water industry, the consumers will suffer very severely.
There are still a number of other measures which could be carried out to improve the functioning of the consumer protection system in the water industry, even without the issue to which I shall return; namely, the independence of the consumer protection structure. Under any structure, there could well be—and should be, in my view—some provision for a line of complaint directly to the customer services committee, not only after unsuccessful complaint to the undertaker. That matter applies not only in water but also in transport, gas, electricity and so on. If you travel on a London bus or the tube, the way in which London Transport allows the London passengers' committee to advertise is noticeable. Reference is made to "comments" or "suggestions". The word "complaint" itself is taboo on the buses or on the tube. That is clearly designed to minimise meaningful objection by consumers.
I do not see why we should not have what exists in many parts of the United States—a system of public hearings. In Wisconsin the Public Services Commission holds public hearings at which there can be attack on proposals for increased tariffs by utilities.

777
The utilities have to defend their position and the commission takes a view at the end of those public hearings. It has never been clear to me why the Government resisted that suggestion when I made it during the passage of the Water Bill.
Above all, there is the issue of the price of return on capital. Again, the noble Lord, Lord Crickhowell, is very satisfied with the present situation. All the same, it is extraordinary. What we have is statutory protection for the water undertakings to carry out the investment which they need and which they can justify to the regulator at a price which they can justify to the regulator. I admit all of that. However, they carry out that investment directly at the cost of current charges to consumers. That is a very curious concept and one which would not really find acceptance in private industry where, normally, you would expect to fund capital investment by borrowing rather than simply through the ability to raise prices on a current basis to the consumers. It does not just raise the issue of a difference between phoney market mechanisms, which is what we have in the water industry. It also raises major issues of inter-generational equity between us and our descendants and, in due course, between our descendants and us. In all of those cases, I suggest that the current regulatory framework for setting prices is more fundamentally wrong than even the Office of Water Services is prepared to accept.
As many noble Lords have pointed out, the crux of the matter so far as concerns the water industry is the role of the regulator. Nothing that I say—and, indeed, nothing that any noble Lord has said—has been in criticism of the activities of the present Director General of Water Services. His reports and his activities have been quoted with approval. I share that view. I believe that Mr. Byatt is making a conscious, deliberate and largely successful effort to overcome the difficulties which arise form the statutory provision that consumer customer services commit-tees are under the control of the regulator. But the fundamental principle is still sound: the role of the regulator ought to be to hold the balance between the consumer and the water undertakings. What he is required to do is both hold the balance and protect the consumers. There is a fundamental inconsistency there.
Therefore, with the noble Lady, Lady Kinloss, the noble Lords, Lord Allen and Lord Ezra, and with others, I, too, believe that consumer protection in the water industry ought to be independent of the regulator—that is, even the best regulator—and should be more like the Gas Consumers' Council. We have had a worthwhile debate. I am glad to have had an opportunity to contribute in a small way.
4.56 p.m.
Lord Strathclyde: My Lords, I should like to begin by congratulating and thanking the noble Lord, Lord Clifford of Chudleigh, for drawing the attention of the House to the question of consumer representation in the water industry. I thought that he made a very good speech, as did all noble Lords. Indeed, I think the House will agree that what we lacked in quantity we
778
made up in quality. I am especially glad that my noble friend Lord Crickhowell, who made an excellent speech, is present today, not least because of his great experience and technical knowledge of the water industry.
Clearly, the main event over the past decade has been privatisation. That has provided the spur to better opportunities to raise investment income and plan for the long term and has led to efficiency savings and improvement in services beyond that which would have been possible within the restrictions of the public sector with its competing interests and political interference. Privatisation of the water industry has proven to be a huge success, and the improvements made in the water industry are real.
Today's debate is about the role of the consumer and his representation. In many industries, consumers are automatically represented through their freedom to choose whether or not to buy a product or to make use of a service being offered. It is that very freedom to choose which is the basis of a market economy, and the efficiency and quality incentives which that provides were among a number of compelling reasons that persuaded the Government to privatise the utilities.
When that happened to the water industry, it was recognised that it was, to an extent, a natural monopoly but one which could equally benefit from the disciplines of the private sector. Because it was a natural monopoly, one of our primary concerns was to ensure the representation and the protection of the interests of consumers. I am sure we all agree that it is especially important for there to he clear lines of responsibility for the protection of consumers. We achieved that through the regulatory system which we established. Its purpose was to ensure that the industry could be monitored properly and that standards paid for were met, with full accountability to those who ultimately foot the bill.
In the 1970s there was a decline in investment in the water industry because of a squeeze on the economy which affected all public sector spending. The need for public sector spending restraint in later years meant that while it was in the public sector the industry could never have hoped to carry out the massive programme of investment which is now under way. Privatisation has released the water industry from the inevitable conflict with other government spending priorities. It has improved the economy of delivery and provided the means to invest in much needed renewal of infrastructure and to meet new environmental standards which we all want.
The noble Lords, Lord Clifford and Lord McIntosh, talked about capital restructuring and the debt write-off. The capital restructuring of the water and sewerage companies was necessary to encourage shareholders to take on the burden of those companies. It is the shareholder who takes the risk. The customers pay for the services that they receive. It is the shareholders who have the use of the assets to provide the services, but if they ever lose their licences, they also lose the assets. The key point must be that the services are supplied to the customer as efficiently as possible and without interruption. It is up to the

779
Director General of Ofwat—I was glad to hear so many noble Lords congratulate him on the work that he does—to endeavour to achieve cheapness of delivery without interruption at minimum cost to the consumer.
Perhaps I may touch briefly upon a point raised by the noble Lord, Lord Ezra, who talked about the possibility of having a quality differential. The problem, I suspect, would be the huge infrastructure costs of installing new water lines, but it is something which needs to be discussed more openly.
During the past few years we have seen massive investment in the industry. It is the consumers who will benefit ultimately from that investment. Consumers will ultimately benefit from the massive investment programme for which the charges limits provide. However, the consumer is not always aware of the reasons for, or the level of, investment, now estimated at £30 billion in the 10 years to the year 2000, or the extent to which standards are being raised. That massive investment is required to meet the drinking water regulations and EC standards for bathing waters and to comply with discharge consents, improve river quality, restore ageing infrastructure and raise levels of service. To that must be added a continual change to requirements as scientific and medical research advances.
Consumers, particularly those on low incomes, are generally and understandably more immediately concerned with the bill coming through their door, the rate at which it is increasing year by year and how it compares with the neighbour's bill. Their anxieties are fuelled by the media's preoccupation with high salaries of company chairmen, directors and senior management, dividends to shareholders, and pollution scares.
The bills are higher, as we knew they must be. The demand for higher standards and improved services and the cost of remedying the under-investment of past years, necessarily mean higher charges. The result is that the average consumer feels vulnerable to the whims of the water companies which can seemingly increase their charges at will.
To ensure specific, independent protection, we needed a new regulator in addition to the newly created National Rivers Authority whose role is essentially to oversee river quality regulation and the continuing Drinking Water Inspectorate. So we appointed the Director General of Water Services whose primary functions are to carry out licensing and financial regulation of the industry and protect the consumer's interest.
The director general's responsibilities range across the whole of the water and sewerage companies' activities from their duties to provide and maintain systems of pipework and treatment works for the supply of water and the removal of sewage to the calculation of individual customers' charges. He exercises those responsibilities in a number of ways. First, the industry's consumers have a right of access to information about their local company's performance and services. On charges, the director general has recently issued a consultation paper, The Cost of Quality, which expresses his concern over possible
780
levels of future increases and aims to ensure that water companies take account of customer views on the quality of service for which the customers are prepared to pay.
Guaranteed standards of service provide consumers with protection on a range of individual matters of concern such as the speed of turn round of inquiries about billing. Failure to achieve those standards entitles the consumer to payments in recognition of the failure and provides the companies with an incentive to improve. The director general has recently proposed extending the existing guaranteed standards scheme regulations to provide improvements for the consumer. Those improvements will include queries being dealt with more quickly; more convenient appointments; and payments or credits when services are affected under certain conditions being extended and increased. Details of the standards are sent annually to every customer.
However, not all consumers will feel that they have been treated fairly by their water or sewerage undertaker. Ten regional customer service committees were set up by the director general specifically to represent consumers' interests and to deal with their complaints. Many of the inquiries they receive are from customers who face difficulty in meeting bills and complain about the unfairness of charging methods. Much work is being undertaken by the CSCs in liaison with the companies to overcome those problems.
I recognise the argument put forward by the noble Lords, Lord Allen of Abbeydale, Lord McIntosh, and many other noble Lords for an independent national council able to campaign on water consumer issues, but I believe that the director general already does that with the help of the committees. They have been operating for two years and have an excellent record of dealing with customer issues and contributing to national debates. I have no reason to believe that the present system is in itself deficient, but I am always open to reasoned argument and evidence which shows that it is.
Lord Ezra: My Lords, on the basic issue, the Minister is right to say that the system works extremely well with the present director general. The anxiety is that a future director general may not be so dedicated to that principle and that there should be some greater structural safeguard for the interest of the consumer than exists under the present regime.
Lord Strathclyde: My Lords, that is the kind of point that could be looked at in the longer term. But, as the noble Lord admitted, the present system does not seem to work too badly.
Perhaps I may now turn to water metering. The noble Lord, Lord Allen, said that it is not a matter that I should take lightly. I hope that he agrees that it is a matter which is not taken lightly by me, the Government or anyone else. It is a serious and important matter for water consumers throughout the country.
Lord Allen of Abbeydale: My Lords, what I said should not be taken lightly was the idea of setting up

781
a body comparable to the Gas Council. I expressed some scepticism about metering; I did not suggest that it should be taken lightly.
Lord Strathclyde: My Lords, I am sorry if I misunderstood the noble Lord. I know that he is worried, as is the noble Lord, Lord Cocks, about metering. Metering is of course only one option for setting charges, but it is potentially the fairest. The director general has raised with the water companies the cost of installing meters. Several companies now operate schemes which reduce that cost or provide for payments to be spread. The cost of installing meters is usually met by the companies, while the customer pays for the meter. At least one company has offered free meters if customers pay for the installation.
The noble Lady, Lady Kinloss, and the noble Lord, Lord Cocks, talked about the hardship aspects of metering. As part of the review carried out it was found that less than 4 per cent. of the sample experienced difficulty. I accept that there will be cases of hardship my department and Ofwat have already indicated that there is a need to seek ways of alleviating such a problem; but, as I said earlier, although metering may not be a panacea, it must be one of the options at which water companies should look between now and the end of the current system in 2000.
Of course, if the consumer believes that he or she has failed to obtain the standard of service to which he or she is entitled, or that there has been unfair treatment in the matter of charges, having involved the company and the customer service committee he or she is entitled to take the case to the director general who is responsible for dealing with any unresolved disputes and who has the statutory duty to protect the consumer's interest.
That brings me to the question of the director general's own accountability. Apart from his or her appointment the director general remains an independent regulator. This is because the water companies are in the private sector and to introduce explicit political control of the regulator could mean that the companies were unduly and unfairly subject to controls which were commercially biased or might ultimately lead to a less satisfactory delivery of water and sewerage services to the consumer. The director general has to answer to the Parliamentary Ombudsman and ultimately the courts. Regulators also appear before Select Committees when asked.
I have concentrated on the water consumer as a customer of the water companies—as the receiver of water and sewerage services—and I realise that I have been unable to give a fuller picture of the work of the other regulators for the customer as consumer; that is, the National Rivers Authority and the Drinking Water Inspectorate, both of which regularly publish reports on their work. The NRA looks after the water environment and has powers to determine the most immediate and practical way to bring about an improvement where water quality in the natural environment falls short of prescribed standards. It also has duties with regard to abstractions from water courses, regulates fisheries and navigation and has
782
flood protection responsibilities. Anyone concerned at any of those issues may telephone their local NRA area office which will deal with the matter, often by sending one of a team of inspectors.
The noble Lord, Lord Clifford, asked about chemical additions to water. As I understand it, the standards covering the chemical composition of drinking water are strictly monitored by the Drinking Water Inspectorate. The standards are set on the basis of the best available research and this research is continuing. We can and do take every account of decisions reached in respectable scientific circles both nationally and internationally.
The noble Lady, Lady Kinloss, asked about bottled water which is subject to different regulations than those applying to public drinking water. Drinking water provided by the water undertakers is regulated to the highest standards and compares favourably in purity with bottled waters. However, to answer the point directly is rather difficult because mineral waters may by definition contain minerals which are not permitted in mains supply drinking water and there is also the question of taste. Tap water has one of the highest standards of purity and I believe that is what most noble Lords would wish.
One area I should mention is the continuing public consultation on the development of water services. At the present time the NRA is consulting on a development strategy for water resources; my department is consulting on water conservation; and Ofwat is seeking views on the affordability and desirability of various proposals relating to quality standards.
In describing the way in which the water customers' interests have been covered I have not lost sight of the fact that the consumer is also in a sense affected by the activities of the companies; for example fell walkers, farmers and holidaymakers on the beaches. I also appreciate that there are certain consumers for whom the cost and quality of service are crucial to their livelihoods as well as to their lives; for example consumers in hotels, residential homes and hospitals. Noble Lords will understand that the range of consumer concerns is very great and that the director general particularly takes account of the specific problems which they pose.
My noble friend Lord Caldecote asked about the transfer of water from region to region, particularly between Kielder reservoir in the north and the reservoirs in the south which have suffered some years of drought. There are areas where interregional transfers already exist but the costs involved in creating the infrastructure to transfer water from Kielder to the south will almost certainly be too great. However, I understand that the British Waterways Board which is responsible for our canal system is working on plans to transfer water from the North West to East Anglia.
I have already mentioned the cost of meters and metering. I should say to my noble friend Lord Caldecote that water meters remain the property of the water companies and therefore they may nominate who installs them. As regards whether the cost is too

783
high, my noble friend may wish to take that matter up with the Director General of Ofwat who, I know, is looking carefully into the whole matter.
My noble friend Lord Hardinge talked about directors' salaries and bonuses. That matter has arisen many times. I hope all noble Lords will agree that those salaries and bonuses are ultimately for the market and shareholders to decide. However, as a Government we have often expressed our concern at large pay rises and at the fact that some companies have set an extremely bad example. We hope that in the future directors will desist from giving themselves such steep pay rises.
My noble friend Lord Hardinge also asked about the Eastbourne Water Company. I shall have to look into that matter further. I hope that I may write to my noble friend. I hope that all noble Lords will agree with me that the arrangements which exist for the representation and protection of water consumers' interests are wide-ranging and effective. They may not in all cases be perfect, but I feel the debate we have had today and the questions that have been raised on consumer representation and the interests of those who may or may not be water metered are paramount in the mind of the Government. Finally, I am grateful to all noble Lords who have spoken in this debate and particularly to the noble Lord, Lord Clifford of Chudleigh, for bringing the matter to our attention.
5.17 p.m.
Lord Clifford of Chudleigh: My Lords, I am grateful for the valuable comments that have been made in this afternoon's debate. We all hope that the Minister and the Secretary of State will take heed of exactly what has been said. Before the Scottish and the Northern Ireland water authorities are possibly privatised there are many lessons to be learnt. Those lessons have been paid for at the cost of the British and Welsh consumer, just as the Scots were the stalking horse for the community charge. Whether or not water authorities are privately operated, it is still Her Majesty's Government's responsibility and elected role to ensure the defence of our shores against both human foes and nature's erosion. Her Majesty's Government must also ensure that the consumer and the taxpayer can afford that essential to life, water. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

National Security
5.18 p.m.
Lord Chalfont Lord Chalfont rose to call attention to the need for a comprehensive review of the economic, military and other factors underlying a satisfactory national security policy; and to move for Papers.
The noble Lord said: My Lords, I am gratified that this short debate has attracted such a distinguished list of speakers, including three maiden speakers, one of whom, the noble Lord, Lord Younger, is a distinguished former Secretary of State for Defence. His speech will therefore be listened to with more than usual interest.
It is not my intention to use this debate simply as a pretext for reopening the arguments about Options for Change. Nothing has happened since we last debated that issue in your Lordships' House to alter my own view that the consequences of Options for Change, unless that policy is substantially modified, will have a malign effect not only on the morale of the Armed Forces but also on the ability of this country to discharge effectively its national and international commitments.
The first of those consequences has, I fear, already begun to surface. I returned last week from Hong Kong, where I had been with a delegation of the All-Party Defence Study Group of Peers and MPs on a visit to the British forces in Hong Kong. Although the commitment, discipline, training and bearing of the troops there is of the highest order, it was in Hong Kong that I first heard, not once but several times, the rather sardonic comment from officers and soldiers that instead of the smaller and better Armed Forces that were promised under Options for Change what we are really getting is smaller and bitter Armed Forces.
There is a great deal still to be said about overstretch, tour intervals, infantry battalions and other such issues, and it may well be that some of it will be said in this short debate this evening. Indeed, I know that my noble and gallant friend Lord Bramall is especially concerned about some of those matters. My own contention is that Options for Change is no more than one of the symptoms of a much more fundamental weakness in the direction of national policy as a whole and of security policy especially.
Simply put, I believe that that weakness is the absence of a broader and deeper conception of the emerging world structure and the role that this country is destined to play in it. Some people call that a moral vision, others call it a total strategy. Whatever it is called, it is essential to the whole range of policies—foreign policy, strategic policy, social and economic policy—on which the national status, prosperity and security of this country will depend in the long term. As the Motion on the Order Paper requires me to do, I shall concentrate on the aspects which are usually known as defence policy but which involve much more than simply the organisation and strength of our Armed Forces.
What I believe is now needed is a comprehensive reappraisal of the whole of our national security policy. That will necessarily involve an intelligent assessment of the proportion of national resources which should, in the current economic circumstances, be devoted to our military capabilities. That does not mean that it should be predominantly resource driven. It must, as the military historian, Correlli Barnett, said in a recent address, reflect a comprehensive approach, embracing all the factors which are relevant to preserving the power and prosperity of the nation in the face of rivalry from other powers, other groups of powers and other developments in the political scene, in an increasingly unstable international environment.
It is silly to suggest, as some well intentioned and distinguished figures occasionally do, that it is impossible to evolve a long-term security policy

785
because, they say, what eventually happens is always what is least expected. Such thinking leads inevitably to the kind of muddling-through process which has often been accepted with a mixture of affection and resignation as a British substitute for coherent planning. Of course the unexpected will always happen, but that is no excuse for failing to make provision for what can be legitimately anticipated or for ensuring proper flexibility in the structure of our Armed Forces to cope with a more diffuse security threat and a more unpredictable security environment.
Defence planning must always begin with a range of contingencies or "scenarios", or whatever one might like to call them, in which possible developments in the international power structure have to be considered and assessed according to the degree of probability that they will actually emerge. From that it is possible to evolve a number of threat assessments, including a number of worst-case scenarios which, however unlikely, must be taken into account in any consideration of a nation's military requirements.
Of course, in the calculation of force levels the availability of national economic resources has to be a powerful factor. No one would deny that. But the vital decisions about the proportion of such resources to be devoted to defence cannot sensibly and intelligently be made until there is a clear understanding of the international role which this country is intended to play. If we are to be and to remain in any real sense a significant power, continuing to influence world events, becoming involved in the legitimate exercise of substantial power, the resources needed for the military establishment will obviously be much greater than they would be if we were to be content, as some people may well like us to be, with a tame or minor role.
It is true to say that in the post-imperial years Great Britain has exerted considerably greater influence in the world than might have been warranted by our purely economic strength. I believe that that influence has been exercised to the ultimate benefit not only of Britain's reputation but also of our political and material interests. The government of the 1980s, for example, was not impressed by the argument that we should be fearful of spending 1 per cent. or 2 per cent. more of our GNP on defence than some of our European Community and NATO partners. In two general election campaigns in which defence issues figured prominently—those of 1983 and 1987—the electorate appeared to accept the Government's view of who we are as a people and what kind of role we should aspire to. During the Falklands operation and during the Gulf conflict, which might not have been waged by the coalition forces had it not been for the strong advice given by the British Government to the US President, opinion polls repeatedly demonstrated public willingness to pursue the military option in pursuit of enlightened and long-term national interest.
The present Government seem to stand in the same tradition. Yet the fact that the formulation of defence policy should have been permitted to proceed as it did
786
during Options for Change suggests that there is a lesser degree of certainty and conviction about our national role and that there is also a reluctance to think about the deeper implications not only of our existing obligations but also of possible future risks.
It is the responsibility of Government at the highest level to establish and give clear guidance about the commitments which they need to undertake in order to pursue policies commensurate with their view of our role in the world. Those commitments will require a certain level of military capability. As we have seen so frequently, there are many cases in which diplomacy alone is inadequate to achieve the objects of foreign policy. That has been demonstrated most recently in the case of Yugoslavia, where Britain is now committed to the deployment of more than 2,000 troops. Leaving aside the wisdom of that deployment, it underlines once again the truth of the observation made by the American journalist, Walter Lippman, who said:
"The elementary means by which all foreign policy must be conducted are the armed forces of the nation, the arrangements of its strategic position and the choice of its alliances".
As new security arrangements proliferate in the new and unfamiliar post-Cold War environment, there is a distinct impression that that great truth is being obscured. If Britain is indeed to occupy the kind of world status and accept the kind of military commitments exemplified by the deployment in Bosnia, adequate military resources must be kept constantly available. Failure to do so will either leave Britain impotent on the sidelines when its vital interests or those of its allies are threatened or—and this is what concerns me in the context of Bosnia—risk the possibility, if we do not keep adequate armed forces available, that our Armed Forces will be obliged to take unacceptably high risks when military operations are finally entered into. We cannot assume that the competence and courage of our Armed Forces will always compensate for lack of material, inadequate force levels or the disinclination of political leaders to take difficult decisions.
If we are to accept a lesser role, with substantial reductions in force levels, it seems to me that another implication emerges; namely, that the industrial and social consequences of reductions in force levels also have to be confronted. It is simply not acceptable that the Government should at one moment sustain a substantial national defence industry and at the next declare that the future of that industry, faced with dramatic contraction, can be left entirely to the pressures of market forces.
That is not to suggest a return to any interventionist doctrines but simply to insist that the Government's responsibilities are not over when drastic reductions in the Armed Forces have been decided. There is far too much impact on the lives of servicemen and servicewomen and on the activities of the service industries which have sustained our defence establishments in the past.
I believe therefore that a radical review of defence policy must be undertaken. It must rest not only upon a coherent vision of the nation's role in the world order; it must derive from a comprehensive total

787
strategy encompassing the social, economic and industrial consequences of radical changes in the world scene and radical changes therefore in our security policy. To me there is no evidence that Options for Change was based upon any such consideration.
That should not be construed as criticism of the Ministry of Defence or the chiefs of staff. The business of national security cannot be left entirely to the Ministry of Defence. Still less should it be left to the Treasury. It demands clarity at the highest political level about the national ends being sought and firm political guidance about the resources to be made available. Above all, it demands an understanding that the aims of foreign policy must be matched by the military means necessary to achieve them. That includes a readiness to acknowledge that unfortunately, sometimes tragically, armed force is an essential ingredient in dealing with the realities of the international power structure, and that in its absence foreign policy will falter.
I must repeat that, from my point of view, so far it has not been possible to detect behind British defence planning as reflected in Options for Change any coherent view of the post-Cold War world order or Britain's place in it. Certainly it was a mistake to suppose that moving from a world in which there had been one single overriding threat to a world of multiple risk, equally dangerous and perhaps even more dangerous than the world of the single overriding threat, would require merely minor adjustments and that the ructions that accompany a major strategic review could be avoided.
It is also an error to imagine that change on such a scale can be managed entirely by Whitehall insiders without engaging the wider defence community outside Whitehall and other centres of influence and expertise. And it is a mistake to believe that the ultimate sanction of public opinion need not be obtained. Public opinion will not understand if the lives of our soldiers are lost needlessly because resources do not match commitments or if our people discover that Britain is denied a military role which might usefully be fulfilled in accordance with their own interests, their own traditions and their own instinctive grasp of the role that Britain should play. My Lords, I beg to move for Papers.
5.34 p.m.
Lord Younger of Prestwick: My Lords, I am highly delighted and honoured to have become a Member of your Lordships' House. As noble Lords will appreciate, I always expected that it would happen to me eventually, but my father and I are united in expressing the view that we are very happy that it has been made possible without the need for a death in the family first. I must now embark on a period of retraining since the other place, for all its merits, is not the best place to learn how to make short and non-controversial speeches.
I want to make just four points. I am extremely grateful, as I am sure is the whole House, to the noble Lord, Lord Chalfont, for giving us the opportunity to discuss this most important subject at a time when a
788
large number of decisions are awaited and the background factors affecting those decisions are changing all the time.
Running the Ministry of Defence and all its activities is very big business. One of the most difficult aspects is the management of change. Change is difficult in small organisations—it is difficult everywhere—but change in such a massive organisation is always very difficult. Today the changes are also of a very distressing type. They involve contraction and reduction of numbers which raise problems of personnel and redundancies even in the armed services. There is also the vexed question of units going out of existence, and so on.
It is inevitable that that must be done. It is right that the scale of our military effort must match itself to the needs of the day. But we should spare a moment to remember how well the servicemen and women in all three services and the civil servants who back them up are tackling this extraordinarily complicated matter of change. It is clear that the level of professionalism in the armed services is every bit as good as it ever was. I hope that those people will feel, as they tackle these formidable tasks, that they have our full backing. In that I certainly include the Territorial Army and the reserves generally because they too have an important role in change.
The second issue I must mention is our deployment in the former Yugoslavia. I hope that nobody underestimates the enormously difficult new type of task in which we have become involved. For humanitarian and many other reasons we have to play our part in trying to sort out the awful mess there. But embarking upon a massive internal security operation with the backing not of our own Government and with our own rules of engagement but with the backing of the United Nations is a very different and new undertaking. It is new because the United Nations has not done such a thing before. Previously the United Nations' actions have been passive, reactive and basically unarmed. Now it is different because it is clear that we are sending our troops into a complex and dangerous situation.
The Secretary of State has been extremely good at making clear that our forces will have from him rules of engagement which will allow them to respond if they are attacked. It is important that they should know that and that we are resolved to support them in the inevitable problems that arise. That it is a new, difficult and unusual circumstance is, I am sure, known to everyone. We must encourage the Government and the military command to treat it as new and different and not to take anything for granted.
Our troops there will be peculiarly exposed. In a way the difficulty cuts both ways: if they were to fail—which I hope they will not—in their task of bringing peace to the area it would be extremely serious. But if they succeed it will result in the conflicting sides wishing to get them out of the way so that they can carry on with their current practices. It is a very difficult role. We must wish all our service people well. We beg our planners to realise that this is a new type of activity and must be treated as such.

789
Thirdly, I must briefly refer to the aspect that worries me most, to which the noble Lord, Lord Chalfont, referred; that of numbers in the Army. Options for Change was drawn up, quite rightly, to try to reflect in the size of our forces the completely different scenario after the end of the Cold War. Its objectives were to reduce the size to match that scenario and to produce better service conditions. A smaller but better equipped Army is its aim. The result is Options for Change.
However, since then, as we all know, while that scenario has continued its inevitable course new commitments have arisen. We now have two more major units in Northern Ireland than we had at the time Options for Change was drawn up. There is no sign that those two extra deployments will no longer be necessary in the near future. Bosnia is another major commitment.
The result is that the overstretch which has been the problem in running the Army for so long is now at an unacceptable level. It was made clear that the objective was a minimum gap of 24 months between major operational deployments. I understand from evidence given to the Select Committee that that is now down to 15 months. To bridge that gap may not seem great—it is only a few months—but it would require at least three more units. Successive Secretaries of State have stated that there must be continual review of that issue. I hope that it is being reviewed and that serious consideration will be given to whether we require two or three more units to bridge the gap between 15 and 24 months.
I now refer to the problem over the dockyards. A decision has not been taken on the matter and it is therefore open season to make suggestions. Perhaps I may strongly urge that the right solution for the dockyards is a concentration at Devonport of the surface and non-nuclear refitting programme—of which there is much important work—and the concentration at Rosyth of the nuclear refitting programme, as originally intended. Over £100 million has already been spent on preparing Rosyth for that programme. It has involved an enormous amount of work. The foundations are complete and seismically correct for such deployment. What is more, future plans can be more quickly adapted if the two are complementary but different.
Both aspects can be put together under one management. That would save some costs. It is undoubtedly cheaper in the long run, operationally and otherwise, to do so.
Many of us fought hard to explain to a sceptical Scottish population that it was right that the nuclear deterrent should go where it had to go, to the Clyde. It is still there. It will be very hard to face the people whom we have persuaded to accept that decision if we now take away from Scotland the work and important refitting programme connected with it. I hope that Ministers will think sensitively about that matter. Sensitivity is important.
5.43 p.m.
Lord Bramall: My Lords, I feel rather presumptuous in offering my congratulations to the noble Lord, Lord Younger of Prestwick, on his exceedingly effective, interesting and profound maiden speech. But for an accident of a few months, he would have been my Secretary of State and I would have been doing his bidding. However, this I most gladly do. As all Members of the House will agree, he was a most respected and effective Secretary of State. No one speaks on these matters with greater experience and authority. This House is indeed fortunate in being able to have available to them his wisdom in the years ahead.
I share many of my noble friend's worries, in particular that Options for Change can hardly be described as an entirely satisfactory exercise. It was hijacked too early in the day by the Treasury. It has amounted more to an options for cuts exercise, inspired not only by the increasingly dubious premise that the world must have become, and is likely to remain, a safer place, but even more (Ministers warned against wishful thinking) by an almost obsessional determination to take what seemed to the bureaucracy as a heaven-sent opportunity, just like the 1920s, to cut defence and the military down to size, whatever the short-term costs—and there have had to be considerable extra costs in the shorter term—and whatever the longer term risks, now more evident than ever.
We have been in real danger of having an Armed Forces not only that the Treasury is prepared to pay for but of the size and shape which the Treasury in its wisdom feels is appropriate—and after what has befallen the economy perhaps I need say no more.
Certainly the exercise was not a review of all the options set against the real world in which military capability not only provides a valuable, sometimes essential, adjunct to positive and constructive diplomacy, but also to some extent reflects the scale of influence that we wish to exert in international affairs. That was the very point made by my noble friend Lord Chalfont.
I take slight issue with him in that in practice I do not believe that a useful purpose would be served by unscrambling the whole exercise. As a result of the work done on Options for Change, various strategic requirements have emerged. They have been set clearly in the latest defence White Paper. Summed up in the sentence,
"to meet our inescapable defence obligations",
they are further broken down into three main requirements: the protection and security of the United Kingdom and dependent territories; insurance against any build-up of any external threat to the United Kingdom and our allies, presumably by helping to maintain and if necessary to recreate a reassuring balance of power; and, finally, the possession of such military capability as can promote Britain's wider security interests through the maintenance of international peace and security. Frankly, in a world in which the unexpected occurs

791
with such regularity, I doubt whether one can do much better than that as a guide to what the Armed Forces ought to be able to do.
In the present financial climate the idea that we would somehow make a better shot at reconciling those of us who feel that by and large resources should match commitments, with the invariable Treasury view, no doubt given impetus by the latest crisis, that commitments should he tailored to keep within an arbitrary level of resources and if necessary replaced exclusively by diplomacy—as they were in the days of appeasement—seems very optimistic. Quite apart from the uncertainty that it would bring, it would lead only, I fear, to the financial guidelines being unjustifiably drawn even lower than they now are.
I prefer to see some fine tuning of the existing Options for Change policy—like the curate's egg it is good in parts—in the light of what is happening, and shows no sign of abating, in Northern Ireland, Yugoslavia and elsewhere. That is the real world instead of the one which planners may have hoped for three years ago, even if that may, as one fears it must, involve some robbing of Peter to pay Paul.
As the noble Lord, Lord Younger, said, the most important fine tuning should come in Army manpower. That great soldier, the late Lord Slim, once said, "Anyone in this dangerous world who did away with a Gurkha battalion was mad. It would be better to do away with one rocket". With up to 512 rockets, all designed for a particular scenario now largely overtaken by quite different dangers and potential threats, many in your Lordships' House may feel that there is still a good deal in the Field Marshal's philosophy, especially as one can envisage the Gurkhas being particularly suited to United Nations duties, perhaps even as part of a permanent United Nations cadre, which I feel must come soon. However, be that as it may—because I would be the last person to reduce important arguments on Army manpower to one of special pleading for this or that cap badge—the Field Marshal's words may indicate the incongruity of reinforcing, however flexibly, our nuclear capability when our most urgent problem is keeping our units up to strength to meet everyday commitments.
The figure of 116,000 made little sense as an army's manpower ceiling when it was plucked out of the sky nearly three years ago; and it makes even less sense now. There is irrefutable evidence, some of which was given by the noble Lord, Lord Younger, that our Army is facing as severe an overstretch as can be remembered since the troubles in Ireland began almost a quarter of a century ago. If peacekeeping and humanitarian and disaster relief looks like being the name of the game, I do not need to remind noble Lords that all those are manpower intensive. That will become all too apparent as our troops are deployed in Bosnia, which for reasons of our international responsibilities and influence should be the case, provided that certain important provisos and requirements can be met. I understand that some of the circumstances on the ground are a long way short of what we would normally accept when committing troops into hazardous areas.
792
Certainly there are no organisations more qualified to bring quick and constructive relief to the suffering which we see in the world around us than well-organised and mobile military forces, not least our own. However, we must be under no illusion that in such situations one thing often leads to another. Therefore, fine tuning in manpower is essential. Although I know almost by heart the answer of the Ministry of Defence to such issues, noble Lords are entitled to know why the present stresses and strains in the world and world events have not yet been considered sufficient to justify such a revision. Perhaps the Minister will enlighten us. Perhaps we should raise some battalions of miners—and what magnificent soldiers they would make.
I believe that that fine tuning in manpower should be targeted in three areas. The first is the regimental system which, frankly, at present is in chaos. It is beset by uncertainty and is not geared to the future. The Army is in danger of missing a unique opportunity to produce larger regiments with stronger unit establishments more appropriate to sudden emergencies and modern requirements. The second area is the training machine, which is currently going through extensive contortions in order to achieve some dubious and possibly counter-productive long-term savings inspired by unreasonable manpower pressure. The third area is recruiting. If the capping of recruiting continues the remaining units will quickly become weaker than those which we have at present. I hope that the Government will listen to the points that I have made about manpower and that having achieved the right manpower ceiling they will help the Army to put its house in order more sensibly.
5.52 p.m.
Lord Ashley: My Lords, it is an honour to belong to this great, historic House. It has been a pleasure for me to meet so many old friends, including political allies and opponents. I greatly look forward to making new friends during my stay in this House.
Your Lordships have listened to three most distinguished speakers. The noble Lords, Lord Chalfont, Lord Younger and Lord Bramall, are men of enormous experience in this field. They have dealt with the need for a review of our military problems relating to security. Nothing could be more important but I do not propose to speak on the questions of strategy, tactics and finance, as they have properly done. I wish to deal with the problems of the men and women who make up our Armed Forces.
The noble Lord, Lord Chalfont, said that the Army is now smaller and bitter. That may be so but I do not believe that the Army is bitter because it has been reduced. The men in the Army recognise the need for some reconstruction as a result of the end of the Cold War. I do not believe that the Army is bitter on that account. That is the only debating point that I am allowing myself in an uncontroversial maiden speech. However, some men in the Army are bitter because of injustice and I wish to explain why.
Some of your Lordships will recall Section 10 of the Crown Proceedings Act 1947. Under that section any member of the Armed Forces who was severely

793
disabled as a result of negligence was not allowed to sue for compensation. That right was given to all other public servants but not to soldiers, sailors or airmen. That was wrong and in another place I campaigned to abolish Section 10. I was supported by a group of severely disabled ex-servicemen and I received the splendid help of Winston Churchill. As a result Section 10 was abolished.
But one injustice was replaced by another. The very ex-servicemen who had campaigned with me in another place to abolish Section 10 were denied the right. The Government said, "We cannot permit retrospective legislation", even though there are such examples on the statute book. Those loyal ex-servicemen were deeply embittered. They are the bitter people to whom I thought the noble Lord, Lord Chalfont, would refer. The Government refused to give way and even rejected the compromise of setting up a trust fund for those people. I find that most regrettable.
Another group of ex-servicemen who are equally embittered are Britain's nuclear test veterans. They have been denied compensation because the Government are demanding absolute proof of radiation damage, even though Professor Rotblat and other experts in radiation have said that no one can prove causal relationships. However, equally they say that nor can it be disproved. So what do we do if nothing can be proved either way? We must give those British ex-servicemen the benefit of the little doubt that remains. There is only little doubt because many people, including our Minister of Social Security, accept the fact that two cancers—leukaemia and multiple myloma—are caused by radiation. If that is the case, why cannot the Government accept that?
The United States Ministry of Defence has given the benefit of the doubt to its ex-servicemen. It recognises 15 cancers, but our Ministry of Defence recognises none. That is no way to treat British ex-servicemen. They are the reasons why I say that some of our ex-servicemen are bitter. I hope that the Government will grant them the reasonable request of a judicial inquiry. I hope that they will think again.
The Ministry of Defence thought again about another issue; bullying and brutality in the Army. When I first raised the issue some years ago the Ministry was complacent and dismissive. However, when evidence was put to it of real and appalling bullying it did something about it. The Ministry was faced with evidence of kicking, beating, enforced nakedness and buggery and humiliating initiation rites. Those facts were found in a court of law—in a court martial. When the Ministry of Defence received the evidence it did something about the situation. It took the matter seriously and said that such incidents must not be tolerated. The MoD gave orders to all the troops and then spent £3 million on trying to stop bullying and brutality. However, it did not do enough because since then there have been cases of bullying, as shown by the most recent case of some noncommissioned officers who were gaoled and dismissed from the Army.
I believe that the real answer is the appointment of
794
an Army ombudsman—an ombudsman for the armed services. That should be a man or woman of great stature and authority to whom men and women, especially young men and women, who feel bullied can go with their complaints. That is all I ask. Those people have a right to be bitter. They are marvellous service people. They love the Armed Forces. They are very loyal. They deserve the support of this House.
6 p.m.
Lord Beaumont of Whitley: My Lords, when I learned that it was to be my duty to return the thanks of your Lordships' House to the noble Lord, Lord Ashley, I was armed, as any full-time politician must be, with a general awareness of his record on behalf of the disabled and the underdog. I was armed also by the Whips Office with a short but not very helpful selection of facts about his career. Therefore, I turned to the works of my friend Andrew Roth who records the characteristics of Members of another place. I learned that we were gaining in your Lordships' House a forceful champion of the disabled and underdog, a relentless and strident battler, a genial, courageous, bloody-minded, relentless scourge of those who cause disability and unnecessary death. Your Lordships' House can do with more of those and in the speech today we have seen that the noble Lord intends to carry on his battles in this House. We hope to hear often from him.
When we consider a national security policy in 1992, we have to abandon a large proportion of the assumptions with which many of us have grown up. Roughly speaking, my generation grew up in the belief that there were two kinds of possible wars which might affect us. The first was a nuclear war between the superpowers. That did not cause many problems for someone like myself. As a Christian steeped in the teachings of the Sermon on the Mount, I believe that the intention of committing a crime is nearly as bad as the crime itself and that, therefore, it was both wrong and silly to arm ourselves with nuclear weapons, even if we said that they were only to deter. As a Londoner, I thought that I was safe to assume that I would be wiped out with London early in any nuclear exchange, so that was nothing to worry about.
The second kind of war which we envisaged consisted of skirmishes between nations which were not educated, developed or advanced enough to be privileged to contemplate killing vast quantities of mankind and who would continue to dispose of them in job lots. We thought that those wars would always happen at a distance and it might or might not be our duty to interfere on the side of right, always assuming that we knew which side that was.
I suspect that the days of that simple analysis are over. The outbreak of war in the Balkans certainly brings us back to the problems of pre-1945, if not of pre-1914. We are entitled to hope and believe that the European Community will hold together under any circumstances, although I believe—as, I think, do my colleagues on these Benches—that the faster and tighter we can bind that Community together, the better and our present shilly-shallying as regards Maastricht is as unwise as it is disgraceful. It

795
underlines some of the doubts which some of us had in voting for Britain's entry, when we feared that if Britain entered, Britain might prove to be the undoing of the great European experiment.
Now, looking round the world, we are already engaged in a terrorist conflict on our own soil and we must prepare for the possibility of wars which will be much nearer home than we are used to, and which may not be over in a matter of days or weeks. That leads me to the main contribution which I wish to make to your Lordships' debate this afternoon, which is that, no less than in 1914 and 1939, this country must be able to feed itself or, at the very least, if we accept that the European Community will hold together, that the Community must be able to feed itself. An acceptance of that means that we must turn conventional economics on its head, as we did during the course of those wars, and, as it became clear in yesterday's debate on energy, we should probably follow the same course in that field.
It may be a terrible thing to say from these Benches but it is true that free trade, like any other absolute doctrine, has its limitations and must not be allowed to rule in all fields. It is right to protect the agriculture of Europe, and France is right to do so. The appalling set-aside agricultural policy of this country should be scrapped and we must encourage the kind of low-key, preferably small-scale agriculture which could be mobilised at very short notice in times of hostilities for the maximum production of food.
I believe that that is the kind of agriculture that we need in any event. However, this debate is not the occasion on which to deploy the full ecological argument. I shall look forward to doing that in future debates on economics and agriculture.
Meanwhile, I ask your Lordships to accept—and the noble Lord, Lord Chalfont, may well agree with me on this point, although not on a number of others that I have made—that a government which do not accept the traditional obligation of considering how to feed their population in time of war are not performing what is still the primary duty of any government; namely, the defence of the realm.
6.8 p.m.
Lord Stewartby: My Lords, anyone who arrives anew in your Lordships' House is likely to be much affected, as I have been, by the warmth of the welcome received. I thank your Lordships profoundly for that. In my case, that has been much tempered by a curiosity on the part of a number of noble Lords as to why I should have added the letters "by" to my former name. Perhaps I may take a moment to explain.
I know that these days it is not the fashion to change one's name on arrival at this House, but the village of Stewartby was named after my great grandfather who was not only a Member of Parliament for many years and a minister of the church—indeed, he baptised me when he was 97—but also an industrialist. In the early years of this century an enlightened industrialist did sometimes try to provide decent living accommodation for his workers.
796
Therefore, for that reason Stewartby was named after my great grandfather. I felt that it would do honour to his ideals and aspirations if I were to take that name.
When I had the honour of serving in the Ministry of Defence with my noble friend Lord Younger, I frequently paid at least as much attention to what was said about defence matters in your Lordships' House as I did to what was said in another place. What I have experienced of your Lordships' House so far has convinced me that that was a sensible judgment. I do not believe that it would be possible to have a debate of this kind, with contributions of such quality, if the nature of this House were to be altered radically as is sometimes suggested under the more radical proposals for reform which propose some sort of replacement by a representative or elected Chamber. Therefore, I hope that I shall not be thought to be premature or sycophantic if I make a few complimentary comments about your Lordships' House.
It seems to me that one of the great strengths of the Chamber is the marvellously random and arbitrary nature of the basis of its composition. If that were to change it may well lose its value as a counterbalance to another place; it may become a weaker reflection of it and would certainly lose much of its relevance and influence. Particularly in the field of defence that would be greatly to be regretted.
I want to use the few moments available to me to raise the issue of the reserve forces. The whole process of Options for Change has caused the individual forces, the Ministry of Defence as a whole and the Government to reassess not only the structure of our forces but the type of service they may he called upon to meet in the future. The one great lesson of the past is that one should be prepared for the unexpected. I do not believe therefore that we can take any too decisive a view in regard to what may or may not be needed in terms of our defence resources in future years. We must retain not only a range of capabilities but also the capacity to reinforce our regular forces by providing adequate reserves who are trained and able to increase the volume of our forces that could be brought into action, if need be, at short notice.
Last weekend I took the opportunity, with the debate in mind, of visiting HMS "Humber", which my wife had the honour to sponsor some years ago and which is now the tender for the Royal Naval Reserve on the River Mersey. The conversations I had with those who were serving in the Royal Naval Reserve were a little worrying. They were concerned that there had not yet been defined a clear and proper role for the Royal Naval Reserve. They were heartened by the comments in the open government paper published earlier this year on the future of Britain's reserve forces. On page 4 it said that a major effort should be made to convince the volunteer reserves of all three services that they have a key role to play in Britain's defence for the 1990s.
I have no doubt that the reserve forces of the Army and the Air Force, as well as the Navy, have their own idea of the clear role that they can play. But particularly in the case of the Navy, in order for reserves to be able to carry out sensible training which would be relevant in times of need and hostilities, they

797
must be able to perform a meaningful peacetime role which will give them the training and experience to enable them to fit more closely with the regular forces in such times of danger.
I do not know whether that will be mine counter-measures, as it has tended to be in the past. But I believe that something of that kind, which gives reserve forces training in seamanship, navigation and all the naval skills in coastal waters, would be ideal. I hope also that it will be possible to bring a closer relationship into being between the Royal Navy and the Royal Naval Reserve so that members of the reserve forces can more frequently serve alongside the regular forces and in that way exchange understanding and skill. I do not want to put the point as being one of the overwhelming issues that arise from Options for Change, but it is one that is easily overlooked. I hope that my noble friend will be able to respond positively on the point when he winds up the debate.
Perhaps I can conclude by reverting from the microcosm to the broadest of all possible issues; that is, what is to happen to the defence strategy of this country in its European context as a result of the Maastricht and related processes? I read the paragraphs relating to international security many times and simply do not understand them. I do not understand the relationship proposed between the Western European Union and NATO, between the European Community and the proposed European Union or, indeed, the WEU itself.
I hope that we can avoid the mistakes made on the economic front in relation to economic and monetary union and not force the pace too fast. Gradual co-operation between friendly states who share membership of the Community and the working out of ways of co-operating and co-ordinating our efforts will be much better than imposing some idealistic framework on the whole thing and then falling sorry when it does not work.
6.15 p.m.
Lord Craig of Radley: My Lords, perhaps I may be the first on your behalf to offer our congratulations to the noble Lord, Lord Stewartby, on his excellent maiden speech. We have listened and greatly looked forward to his future contributions. I congratulate him also on moving so sharply from formal introduction yesterday through the ordeal of a maiden speech today. That is excellent. Both he and the noble Lord, Lord Younger—who also spoke most eloquently—were at one stage my ministerial masters in the Ministry of Defence. I should like to take this opportunity of saying how much I enjoyed working with them at that time. We look forward to the contributions of the noble Lord, Lord Stewartby, in the future.
This year's Statement on the Defence Estimate goes into some detail regarding new ways being used to assess our force structures and new equipment needs. The concept of risks, whether likely or less likely, high or low, near-term or in some future longer term set of circumstances, is a useful tool. But it continues to rest on the foundation of starting, as we have done for half
798
a century, on the concept of perceived threats. In the light of our experience over the past decade I question whether that is now the best way to identify and justify the needs and size of our forces.
Neither the Falklands crisis nor the Gulf War was foreseen to pose a serious threat to our security. What we planned for—a Warsaw Pact offensive—was successfully deterred; it never materialised. So in spite of the best efforts and collective wisdom of many defence experts over many years, we were left to deal with the realities of life with the capabilities with which we had provided ourselves for a totally different set of circumstances. Some of the equipment used in the Gulf was new and very much state-of-the-art. Others, to put it charitably, were kept going long after their shelf lives and consume-by dates had passed.
That brief analysis leads me to the view that there is much to be said, in a period when obvious threats can no longer be identified, for considering a different approach; to think more in terms of our capabilities rather than of enemy threats. By that I mean that any nation which wishes to take its security seriously and to provide itself with armed forces for its territorial defence and the defence of its interests in other parts of the world, needs to have a range of defence capabilities—just as a golfer needs to have a range of different clubs in his bag if he is to be able to tackle the fairways and hazards of the course on which he is playing.
It would not be difficult to identify the range of capabilities upon which a country such as ours may have to call. There will be a range of factors to consider and of course some judgment will be required; for example, factors like our geographic location, our responsibilities for dependencies and our need to deal with terrorism are clear-cut. As the noble Lord, Lord Chalfont, pointed out, less so is the degree to which we may wish to become involved in support of the UN and other peacekeeping and humanitarian activity, though those usually call for a mix of flexible and well-trained general purpose forces with the right levels of weapon stocks and other essentials.
The sorts of capabilities which I have in mind need not, and indeed should not, be threat specific. But we must recognise, after many years of justifying our defence equipments on the basis of a response to a perceived threat, that it is not going to be easy to break the habit of first having to identify the threat for which the capability and its enabling resources are a required need. My approach would start by identifying and listing the core capabilities which we should expect our Armed Forces to maintain. We already do it for our nuclear capability. There is no clear argument today that would justify this capability as a response to a present or likely threat. We justify it as a capability which it seems right in an uncertain world that we should maintain. We modernise or replace it with new as necessary due to the obsolescence or technical deficiencies of existing equipments. We do not do so simply because a new or more active threat has been identified.
What I have in mind is that we should adapt this type of approach to our range of capabilities in the conventional as well as the nuclear field. We could

799
assess the relative modernity and effectiveness of these capabilities if they were to be put to the test at the present time. The list would vary in effectiveness from first class, because we had just recently re-equipped in that area, to doubtful or positively outmoded and inadequate. From this listing we could then identify a programme of planned replacements and refurbishments.
The programme would not seek to respond to some hypothetical threat or risk, but to the need to keep our capability in that particular area up to date. In many ways such a rolling programme of planned replacements and refurbishments would be easier to manage and to project for future planning purposes.
I am reminded of a cautionary tale about updating capability. Some years ago it was fashionable to talk in terms of specialisation. In the Air Staff at that time there were some strong voices for dropping out completely of the airborne reconnaissance role. Very sophisticated techniques—expensive but in the hands of trusted allies and likely to be available to us—were coming along. Other very pressing needs faced the Royal Air Force. It would help if we did not also have to replace what by then was an antiquated, unreliable recce system, becoming more and more vulnerable to an enemy's defences.
Happily, as the Gulf War showed, we were right to continue to provide ourselves with a state of the art airborne reconnaissance system. It gave a unique and highly valuable capability to coalition air commanders. Today, in operations in air policing in Iraq, it continues to justify the confidence of those of us at the time of its near demise. I would much prefer to retain even a small scale of a key capability, thereby keeping the knowledge and expertise alive than giving it up completely. It will always be easier and ultimately quicker to build on an existing capability than to start afresh from scratch.
Today, the Royal Air Force's most pressing capability need is an air superiority fighter. Should all our partners in the European fighter programme withdraw, we must press on. We must not leave the Royal Air Force without an air superiority capability. It would not just be the Royal Air Force which suffered, but every soldier and sailor too who was at risk from enemy air attack.
Finally—because it would have a significant bearing on which capabilities we should provide—I should like to pose this question: how likely are we to need to carry out offensive operations in another country's territory? What your Lordships will recognise, and which gave me as much concern as any about the adequacy of our capabilities in the Gulf conflict, was that for the first time since World War II we were actually going to get involved on the ground inside the territory of a potentially very difficult foe; one who possessed a formidable array of modern equipment, including weapons of mass destruction, and who had had considerable recent battle-hardening experience.
Although we had adopted new training and planning guidelines as a result of our Falklands experience, even in that conflict we were operating to recover our own territory which had been taken by
800
force of arms and could never expect to have to face the whole of the enemy's war potential. That we succeeded so well in the Gulf, including deploying heavy armour—something which we had not done since World War II—only tends to disguise that we were not fully adequately prepared or trained to tackle such offensive type operations, not only at great distance from home, but most significantly in the country of our enemy. Happily for us, the period prior to the outbreak of hostilities gave time to train and to rectify many of the deficiencies we faced.
It will never be easy for a government to declare other than very obliquely that they will provide capabilities to undertake offensive invasive operations. But unless we face up to that issue, no amount of risk assessment, as outlined in the Defence White Paper, nor capability listings, will truly indicate the logistic and other back-up which such demanding operations so clearly need. We cannot always expect a period of stand-off prior to hostilities during which to make good training and other deficiencies.
So we need to devise new ways to identify our defence needs. To revert to my golfing analogy: I do not think that even Mr. Faldo would venture out to defend one of his many championship titles without a carefully selected mix of clubs in his bag ranging from driver to sand iron. For even he can be unlucky enough to land unforeseen, as it were, in a bunker. Our defence bag of capabilities needs to cater for the core ones, nuclear and conventional, and a selected range of others to fit the particular shape of our wider defence and security policies. We must no longer make its justification entirely threat specific.
6.27 p.m.
Baroness Park of Monmouth: My Lords, we have had three deeply interesting, very different and all redoubtable maiden speeches in this debate. I should like to add my admiration of what has already been said.
This is a timely debate, because defence is one of the areas under threat in the expenditure round. It is too small a budget already to cover our ever-growing commitments in the UN context, in the Rapid Reaction Force and, above all, in Northern Ireland, which must be central to our national security and where we cannot but be deeply impressed by the sheer professionalism of our forces there.
However, today I shall stick to my last and confine myself, as usual, to those developments in the former Soviet Union, and especially Russia, which bear upon any assessment of our security policy. I may mention in passing that the Russians are now creating their special force for peacekeeping and rapid reaction.
I do not enjoy the role of Cassandra, but I believe that it is essential that we should not allow our very real admiration for the Russian people and their present leaders to cloud our judgment of the threat to peace, both for us and for them, which the continued power of the nomenklatura, the defence establishment and the KGB, still constitutes. This powerful group still seeks to re-establish the status quo ante and that is a threat to the present Yeltsin government.

801
The factors which must directly affect our assessment of the threat and therefore our definition of the defence resources we still need are, firstly, the real pace of conversion of the defence—industrial complex to civilian needs. Are we looking at conversion or a privatisation for greater efficiency and to secure western partners? Secondly, there is the pace of destruction of those sophisticated weapons of mass destruction which the former Soviet Union agreed to destroy. Thirdly, I refer to the defence and defence sales policies of, in particular, Russia and the Ukraine. Lastly, there is the stability of the country and the strength of the forces working against it.
There has been some conversion, but few of the major enterprises have been affected. That is partly because conversion costs money and of the 50 billion roubles allocated by the government,19 billion have apparently "evaporated" and have never reached the plants; but more because final policy decisions to convert are being steadily delayed. The avowed policy, which was recently quoted by the Finance and Economics Minister, Nechayev, is, on the contrary,
"actively to promote the sale of weapons abroad pending the conversion of military industries to commercial production".
The policy of defence sufficiency, moreover, requires sophisticated high technology for a leaner army and thus a careful review of the whole complex to identify what plants must not be converted.
Meanwhile, the St. Petersburg military complex, the most powerful in Russia, after a period of great difficulty will be selling military hardware and armaments, and it states that the money will go into the conversion fund. The latest figures cited on 16th October show that Russia also expects its earnings from arms exports to be between 4 and 12 billion roubles this year. The Khabarovsk aircraft plant will, for example, be selling military aircraft to fund the eventual production of a civilian passenger aircraft.
There are, of course, major social problems in any move to convert highly profitable and sophisticated plants, employing the flower of Russia's scientists and technicians, to serve civilian needs; making saucepans and light bulbs is both less satisfying and less profitable and sometimes simply not feasible. Whole towns are at a standstill. Where nuclear submarines were once repaired the town is paralysed, and the navy owes 300 million roubles. It is not surprising that Kokoshin, the deputy defence minister, should say:
"Russia cannot just close military enterprises, as is often done in the West".
However, the outcome for us is that the defence industry's programme of conversion is patchy and half-hearted, and that more effort is going into finding western partners and investment and, through them, good markets for an increased range of weapons than is going into conversion.
Verification is another cloudy issue, bound up with the defence sufficiency policy. To quote Colonel-General Dimidyuk, the chief of ground forces missile troops and artillery, on 4th August this year:
"Our former military doctrine obliged our armed forces to have … missile troops and artillery which were primarily developed in quantitative terms. Owing to our backwardness in developing and equipping the troops with intelligence-gathering systems, automation and precision weaponry, the
802
necessary level of effective engagement was achieved by increasing the number of weapons, which led to a large and diverse inventory of largely obsolete types of missile and artillery weapons".
He went on to say that despite the scrapping of the OTRK-22 TEMP and the OTRK-23 OKA operational tactical complexes under the INF treaty, in the future precision automated missile and rocket systems will play a far bigger role in effective engagement. He said:
"We are moving away from quantitative to qualitative parameters".
Thus, the destruction of obsolete weapons is a positive contribution to Russian defence sufficiency, and the power which could even yet fall into the hands of what Kozyrev, the foreign minister, has called the war party, propounding the psychology of the besieged fortress, the psychology of mistrust of the USA and the West, a dead end, a path that leads nowhere. While this war party remains powerful we should be worrying about verification of the destruction of the weapons that are not obsolete.
Even under a well-disposed government Russia is, for understandable reasons, maintaining her existing defence markets and developing new ones. She is selling rocket motors to India and diesel submarines to Iran; she is increasing sales of military aircraft and is entering new ventures like the proposed exchange or sale of defence technology to Argentina, where the joint development of an Argentine nuclear submarine is not excluded. Joint ventures, unspecified, in the Antarctic with Argentina are also on the menu. The more sophisticated successors to the Scud missile will no doubt also be very saleable in many countries.
These are only a few examples of the inevitable threat of arms proliferation, and the threat to the peace of the world which must arise from Russia's defence policies. But the other and greater threat is the internal volatility of Russia and the creeping power which could allow the old management to return to power. President Yeltsin is showing courage and an honourable openness about such things as the Katyn massacre, the truth of the shooting down of the Korean civilian airliner in 1983, and many other things. He, as much as we, needs to know that we remain strong. There is not yet any possible justification for reducing our forces.
6.35 p.m.
Lady Saltoun of Abernethy: My Lords, I am grateful to the noble Lord, Lord Chalfont, for moving the Motion for the defence of the realm and of British interests in other parts of the world is the first duty of Government. But the Ministry of Defence has based its calculations on the sustainable level of commitment for the infantry on projections which fail to recognise the present level of those commitments, far less allowing a prudent margin for the unexpected.
Civil war rages in what was once Yugoslavia, and, as I anticipated over a year ago in a speech in this House, Britain has been asked to play her part in sending a peace-keeping force there. I shall not discuss the rights and wrongs, and the advisability, of our doing so. At first, I understand, all we could muster was a field ambulance. This morning I was told that

803
we had troops amounting to approximately the strength of a battalion there, and the noble Lord, Lord Chalfont, has told us that the number is now over 2,000. Perhaps the Minister will tell us the precise number in his reply.
Well, my Lords, those troops will have to be relieved, and those who relieve them will have to be relieved in turn unless an unexpected miracle should occur. But since no real progress seems to have been made in restoring peace in the area, it looks as if we have another ongoing and probably increasing commitment for infantry battalions on our hands if we are to play our part in trying to keep the peace in Europe. How are we going to manage to do so if we proceed with what I shall call the Chapple/King plan for reducing the size of the infantry?
I much enjoyed the maiden speeches, and I warmly congratulate all three speakers. I am particularly grateful to the noble Lord, Lord Younger, who explained how the gap between tours of duty in Northern Ireland is now down to 15 months. Each tour probably requires at least three months specialist training for that particular theatre: so one may well be getting nearer to 12-monthly emergency tours and connected training. That is a serious matter for a service where overstretch has already led to an above average increase in the divorce rate, together with difficulty in recruiting and retaining high grade personnel.
It is clear to me that neither the Prime Minister nor the Secretary of State for Defence, nor a great many Members of Parliament, never having served in the Army, have any idea of the stress suffered by service personnel and their wives, families and girl friends through these too frequent and too long tours in Northern Ireland, and possibly in future in Bosnia. I have said before, and I repeat, that unless you want to have a conscript army you must make service in the infantry attractive to recruits. Otherwise, you will not get recruits, or not good ones, and even if you do you will lose them before they become warrant officers.
Unemployment may assist recruiting in the short term, but we hope that unemployment will not always be with us. Viable infantry depends on officers and soldiers—above all, senior ranks—believing that their dedication is appreciated and on their having time to train properly and meet all their tasks professionally as well as having the opportunity to enjoy a reasonable quality of life.
In the Middle East in general and in Iraq in particular we and the United Nations still seem to have unfinished business, particularly as regards locating and destroying biological weapon installations. Only today The Times reports that Saddam Hussein is conducting an intensive road-building programme to increase access to the marshes of southern Iraq in what Western experts fear may be the prelude to a final military push against Shia Moslem rebels and refugees. If we should be called upon to help finish that business, or if any other emergency should crop up, how could we respond without further reducing the time between tours of duty in Northern Ireland?
804
Then there is Russia where the situation is more unstable than ever. I was interested in what the noble Baroness, Lady Park of Monmouth, had to say. There are constant rumours of a new coup and the serious danger of hardliners regaining power on account of widespread anger at crime, civil unrest, hyperinflation, the black market and a Russia impotent to defend its interests in its former empire, let alone the world. The military and the former KGB have become the new champions of Russian nationalism and are goading Mr. Yeltsin to take vigorous action to defend the interests of Russians in such places as Moldavia and Estonia. What will happen if they succeed? Might not the United Nations forces have to take a hand? Might we, too, not be a part of those forces?
Those are just some of the areas where we know that there is already trouble or potential trouble. However, in the past trouble has often come from unexpected quarters, and no doubt it will do so again in the future. Heaven forbid that the defence of the nation be considered so unimportant that we become a second-class nation unable to play a part in world affairs or, indeed, to protect ourselves should the necessity arise. I therefore support the noble Lord, Lord Chalfont, in his Motion.
I was glad to hear the noble Lord, Lord Beaumont of Whitley, who, unfortunately, is not in his seat, speak of the importance of our being able so far as possible to be self-sufficient in food production, to which I should like to add, self-sufficient in energy production too. I hope that the review which is so greatly needed will take place and that it will he comprehensive enough to include those aspects.
6.42 p.m.
Lord Swinfen: My Lords, it is a pleasure to follow the noble Lady, Lady Saltoun. I am particularly pleased that she said what she did about the strain on the marriages of service families because of the reduction in time at home due to the decreased gap between tours of duty in Northern Ireland. I know a number of SSAFA welfare workers and I think that every one of them would back to the hilt what the noble Lady said.
The plans for the reduction of all three armed services were made and published while Mr. Gorbachev was still in the Kremlin. They were made in haste and without any debate outside the Ministry of Defence and the Treasury. At that time nobody foresaw what would happen in Europe and the rest of the world following the collapse of Soviet power. Therefore, in my view those plans must be out of date.
Although a new world order does not yet exist, whether we like it or not the world is a different place from what it was before the Soviet collapse. Since the beginning of this century the service chiefs have seen their primary duty to be the well-being of their own service. This is still true, and in many ways quite rightly so. I should be surprised if vested interests did not play their part in in-house wrangling. Why else has the Royal Air Force Regiment been retained when it has no airfields to defend? Do we really need such a wide nuclear capability in the current circumstances?

805
A broadly based comprehensive review of our defence strategy for the next 10 to 20 years that goes much wider than just the Ministry of Defence is required. There are two questions that need to be answered. First, what are the threats to our national security, bearing in mind rising nationalism in Europe in the face of refugee and immigrant pressure, general world instability following the power vacuum left by the collapse of the Soviet Union and instability in the so-called third world caused by famine, corruption, overpopulation and racism? Secondly, what are our responsibilities as a permanent member of the United Nations Security Council, of NATO, the Western European Union and other organisations?
As I see it, Russia cannot help, China will not help and the United States is reluctant to help. I suspect that after the coming presidential election that reluctance will increase. Therefore, it is left to the United Kingdom and to France to give a lead. If we do, others will follow. At present we give every appearance of being dragged into such commitments against our will. This hardly puts us in the centre of Europe, let alone of the world.
As I see it, the proposed structure of the army and, to a certain extent, the other services is designed to counter a threat similar to that which was posed by the Warsaw Pact. I suggest that that is a mistake. While we must be able to play our part in such a conflict, the likelihood of a war of that nature in Europe is small. We need a more broadly based army so that we can adopt a more responsible and helpful response to problems worldwide. I suspect that we are in danger of becoming too sophisticated in terms of weaponry and equipment.
The United Nations Secretary General is leading the argument for more money and forces to be made available to the United Nations for peacemaking, peacekeeping and humanitarian aid. Public opinion is moving in the same direction. As a permanent member of the Security Council, the United Kingdom has a duty to provide a lead. Such tasks do not call for sophisticated equipment of the kind that was required in the days of the Warsaw Pact. Indeed, much of it would be quite useless. Instead, the tasks are manpower-intensive, and the infantry, especially the British infantry, is best suited to those tasks. I would suggest that in fact the British infantry is better suited than the infantry of any other nation. I do not deny that the Army must be properly equipped for the tasks for which it is designated, but the present and future structure as currently planned is designed for a cold war scenario, albeit on a reduced scale.
I believe that there should be a proper public debate involving Parliament, academics, the Royal United Service Institute and others, as well as the Ministry of Defence, leading to a review of our capabilities in the area of support for the United Nations.
While I think of it, I wonder whether, when the Minister replies, he would let us know how many members of the Treasury Civil Service team have ever served as civil servants in the Ministry of Defence and had any experience of the needs of that ministry and of the armed forces.
806
The real peace dividend which follows from the collapse of Soviet ambitions is that the West can turn its attention and resources to bringing peace and stability to the rest of the world. If we do not do so, conflict between the haves and the have-nots is inevitable. The role of our armed forces has always been in the first place to prevent war, so there is nothing new in that suggestion.
6.49 p.m.
Lord Kagan: My Lords, the Motion of the noble Lord, Lord Chalfont, calls for a review of economic, military and other factors underlying national security. Noble and gallant Lords, and particularly the uniquely qualified noble Lord, Lord Younger of Prestwick, are better equipped than I to deal with the purely military aspects, but recent events have taught us one lesson. No one attacked the Soviet Union militarily but Soviet might was based on a steadily declining economy which went into chaos and collapsed. The Soviet Union as an empire ceased to exist without anyone firing a shot. Noble Lords will agree that any military defence is based on a sound economy.
The Chinese have seen the fallacy of simple numbers. They have carried out a mega-leap—the noble Baroness, Lady Thatcher, would be very proud of them—into a capitalist economy in order to get a sound economy going. They have abandoned Communism although they have not abandoned dictatorship. If that lesson is true not solely for those two countries, should we not review our economic situation to see how well it serves or is capable of serving our defence forces?
When the noble Lord, Lord Wilson, was Prime Minister, the British pound was worth 11 deutschmarks. In 1970 the rate fell to 8.7 deutschmarks to the pound. I am citing these figures because this is not a party political matter. Successive administrations have suffered from a steady, relentless, dangerous decline. The rate has now reached 2.4 deutschmarks to the pound. But, more disturbing than that, this has occurred despite the £69 billion windfall profit of North Sea oil.
Perhaps more instructive is a comparison of the gross national product figures of Britain and Germany translated into English pounds at the rate ruling at the time. In 1964 Germany's gross national product was £38 billion. Britain's GNP was £34 billion. Six years later Germany's gross national product was £74 billion. Britain's GNP was £52 billion. By 1974 Germany's gross national product was £164 billion. Britain's GNP was £86 billion. In 1991 Germany's GNP was £903 billion against a British figure of £576 billion. That has occurred against a background of £69 billion windfall profits from North Sea oil. Is this due to bad government or is there a fault line in our system?
After the war, in which Britain was, fortunately, victorious, we installed single unions in German factories. Our trade union leadership left us with a handicap of multi-unions. We helped the German Government to get a constitution which incorporated a massive keel of moderation and wisdom in its

807
coalition structure. The German ship of state was like a boat with a deep keel. Genscher, the Foreign Secretary of the Federal Republic for 10 years, represented a party, the Free Democrats, which had the support of only 5.3 per cent. of the electorate. Therefore the German ship of state could not lurch from one side to the other or indulge in dogma or anti-dogma. I believe that we should not always blame the Government but should look to the fault line in our constitution. This could be a fundamental weakness in our economy.
I was recently in Lithuania in the Soviet Union, or what was the Soviet Union. I was talking to a young minister about democracy, which Lithuania is trying to introduce. He said that dictatorship is not only evil but that the leadership of a dictatorship is corrupt and that populations are completely controlled. In democracies governments are very honest; of that there is no doubt. But the way they achieve power is by making promises which they cannot keep and eventually they have to answer for the results.
There are not only external but internal dangers. If unemployment continues to rise and there are millions of poor people who have no hope of getting a job, society will be destabilised. I know that we are wedded ideologically and emotionally to the one-party system—perhaps this point can be followed through by the noble Lord, Lord Mayhew—but the fact of the matter is that we are in serious crisis. During the war Churchill formed a national government because he knew that in that crisis solutions could not be achieved by one-party government. I ask this question. Is our economic crisis less serious simply because there is no gore and blood'? Britain's problems can be solved through co-operation only. The luxury of adversarial politics and debates and scoring points is something which we could perhaps afford in the days of Empire. We cannot now. My Lords, I thank you.
6.58 p.m.
Lord Vivian: My Lords, I have listened with great care and attention to this interesting debate and I would like to thank the noble Lord, Lord Chalfont, for bringing this subject to the attention of your Lordships' House.
Some of your Lordships are aware that I retired from the Army less than two years ago and for this reason I feel that the most useful contribution that I can make in this debate is to focus on the armed services as the military factor that underlies a satisfactory national security policy. I agree that a comprehensive defence review by the Ministry of Defence is needed, but I shy away from a full-scale defence review, which, combined with our current economic problems, might tempt the Treasury to impose further cuts. Defence is our insurance policy and with all the uncertainties that exist in the world, now is not the time to reduce the premiums.
I should like to draw to your Lordships' attention some of the more significant factors that underlie our national security policy. First, there must be timely and accurate intelligence from which the Government can analyse threat assessments. It is from these assessments that we should arrive at our commitments
808
and determine the required force levels of men and equipment. Without high-grade intelligence our warning time and our threat assessments, both politically and militarily, could lead us to the wrong policies, with the wrong commitments and the wrong and inappropriate force levels. There can be no penny-pinching in the funding of our intelligence resources and it is essential that the current intelligence relationship that we have with other countries continues. I suspect that there is a real need for their expansion, when so many conflicts are emerging in a new and unpredictable world, where areas that were not of interest to us now hold significant concerns.
Secondly, the tasks and commitments must be clearly defined for our Armed Forces which must be seen to be credible and large enough to carry out those commitments. They must be correctly established, equipped and trained. They must be capable of rapid deployment not only in Europe as part of the Allied Rapid Reaction Corps, but anywhere else in the world where our interests may have to be protected. Lastly, our armed services must be able to act independently of our European and American allies whenever necessary.
There is no time, even briefly, for me to focus on aspects of the threat, but merely to say that some additional commitments have clearly been taken on by our contributions to United Nations' operations, with the likelihood of further responsibilities in the future, as has already been mentioned this evening. So far, as I understand it, it has been necessary to find an additional 500 Army posts for United Nations' operations, with approximately a further 1,800 to be committed soon. If the Options for Change defence cuts continue on the present time-scale, the Army will have only eight tank regiments (a force of around 450 tanks) and 41 infantry battalions to meet 41 commitments in 1995. There is already severe overstretch within the Army and further cuts will only exacerbate the situation; the promised two years between Northern Ireland tours has not been achieved. One infantry battalion goes shortly to Northern Ireland for its 14th tour since 1969 and only 15 months after returning from its 13th tour.
I should like to remind your Lordships that twice during this century at the start of both world wars, we have committed our sailors, soldiers and airmen to battle badly equipped, poorly trained and in too small numbers. In those days the cutting of defence funds caused thousands and thousands of unnecessary deaths. Since 1984, the United Kingdom has been receiving the so-called "peace dividend" as we have been reducing our Armed Forces significantly since then. To continue to do so will not create a "smaller but better army" but, regrettably, a smaller and worse army putting at risk the defence of our country.
I ask myself why we imperil the security of the nation by insisting that all the proposed cuts go ahead without, once again, carefully examining the changing circumstances of the world—events now are very different from those in 1989 and 1990. Is the policy of slashing the teeth arms in an unrelated time-scale to continue regardless of world change? In these days of

809
high technology, I am sure your Lordships are aware that we can no longer issue soldiers with rifles and tanks and produce formed and effective units in a few months. It takes years and years to become a skilled and professional infantry battalion or tank regiment.
I believe that our defence policy is based to a certain extent on the premise that our European allies, as part of some future European defence policy, will always join battle with us against our enemies thus allowing us to reduce our force levels in peace time. I believe that those procedures have already started. However, after some episodes concerning the Gulf and some recent acts by our European partners, a policy of that nature should not be relied upon. We must be able to act independently. That not only means having sufficiently large armed services, but it also means retaining an independent capability of deploying those armed forces. Today we do not possess a realistic military airlift for rapid deployment, but are dependent on our own civil airlines or the military aircraft of our allies. Before any more cuts are made, we should see how the years evolve and when we are satisfied, and not before, implement the prescribed cuts. We cannot afford to reduce our forces now, based on merely how we feel future events may turn out. Yet that would appear to be exactly what we have done and what we are about to do.
I am aware that I have painted a gloomy picture. But the real truth of the matter is that if the Options for Change cuts go ahead as planned, Great Britain will have Armed Forces that are too small—in particular an Army incorrectly established, poorly trained and incapable of acting independently. What is the solution? I believe that it is to suspend the majority of the proposed cuts; re-examine our commitments; review our force levels against those commitments and adjust them to cover current world uncertainties. In reality, the United Kingdom has retained the majority of its defence responsibilities. However, the newly forming Allied Rapid Reaction Corps and the rundown of the Berlin and Hong Kong garrisons save some manpower. But the proposed cuts would appear to demand a reduction of 40,000 troops by 1995 when there will have been real savings of only about 20,000 troops.
In conclusion, if we retain our existing commitments, the Army will need about 130,000 troops and not just the 104,000 trained soldiers that have been proposed. If the future Army can be established at around 130,000, it would be one of the military factors underlying a satisfactory security policy for our nation. Failing that, commitments will probably have to be cut which may put the security of our nation at risk.
7.6 p.m.
Baroness Strange: My Lords, we are all very grateful to the noble Lord, Lord Chalfont, for initiating this debate on defence. It comes at a very opportune moment, for all this week we have been thinking and talking of short-term decisions with disastrous and unfortunate consequences for the confidence of our nation. Defence is a long-term issue.
810
It is something which needs thinking through carefully: it is planning for the future security and safety of our nation, and of the world. Like marriage, it is not to be taken in hand lightly or unadvisedly, but discreetly and soberly, duly considering the due purposes for which it was ordained. It was ordained for the future peace and tranquillity of our realm. As John Donne said:
"No man is an island".
Nor, in that sense, is Britain. We are all part of Europe and, through Europe, of the world.
There have been so many excellent informed speeches to which it has been a pleasure to listen that I dare not, if I could, inflict a lengthy diatribe on your Lordships. In a debate not long ago, my noble and learned friend Lord Hailsham said that he felt like a minnow among Tritons. Although appearance may belie it, I also never feel more than a very small amoeba.
There are just two points that I should like to make. The first has already been made most tellingly by my noble friend Lord Younger in his truly excellent maiden speech. I should like briefly to congratulate him, my noble friend Lord Stewartby, and the noble Lord, Lord Ashley, on a winning treble. My noble friend Lord Younger spoke of the future of Rosyth. There are three important factors which argue strongly for its retention as a nuclear refitting base instead of Devonport. First, it is only 60 miles by road from Faslane, as opposed to the 400-odd miles between Faslane and Devonport.
Secondly, there is the question of safety. In Rosyth no civilians live within one kilometre of the docks; in Devonport 3,500 do. Within a radius of two kilometres there are only 1,600 at Rosyth compared to 38,000 at Devonport. If there ever had to be any kind of emergency evacuation, there could be no doubt as to which would be easiest to operate.
Thirdly, there is the question of employment in Scotland. Were Rosyth to close down, thousands of jobs would be lost in the Rosyth and Edinburgh areas, with estimated redundancy costs of £137 million. Currently I can think of no more sensitive or upsetting issue.
My second point is about not reducing the present levels of the Armed Forces. That point has already been made most splendidly by the noble Lord, Lord Chalfont, the noble and gallant Lord, Lord Bramall, the noble Lady, Lady Saltoun, and my noble friends Lord Younger, Lord Swinfen and Lord Vivian.
Last week I had the privilege and honour, as president of the War Widows Association of Great Britain, to attend the El Alamein service in Westminster Abbey—for which we must all be grateful for the persistence of noble Lords and, in particular, my noble friend Lord Boyd-Carpenter. It was, as many of your Lordships who were also there will know, the most beautiful and moving of services. In his address, the Dean of Westminster praised the quality and dedication of our forces today, who work long, dangerous, anti-social hours without overtime, and who are indeed the flower of our nation. We think

811
of our forces in Northern Ireland, Yugoslavia and elsewhere in the world, preventing terrorism, saving lives and succouring the hungry and those in need.
Already the prophetic words of the late gallant Lord Cheshire, in his speech on 16th October 1991, are coming true. He said:
�The Armed Forces have a far greater role to play in the future good of mankind than we may think at present. I hope we shall not let that opportunity go�.—[Official Report, 16/10/91: col. 1127.]
I echo his words. Let us not cast away our finest flowers. We shall not get them back.
7.12 p.m.
Viscount Allenby of Megiddo: My Lords, your Lordships have heard a great deal about the problems facing the Armed Forces today. I too am most grateful to the noble Lord, Lord Chalfont, for again raising the subject of national security policy in the House.
The Armed Forces of the Crown are fundamental to this country's security. Without them, we undoubtedly face the breakdown of law and order which leads to eventual anarchy of the type that we see in several parts of the world today—Somalia and Bosnia, to name just two. There are many other places in the world where our forces are committed to maintaining order through the United Nations.
Chapter 3, paragraphs 324–328, of the 1992 Defence Estimates highlighted a number of manning, recruiting and retention problems. Since those estimates were published the problems have become more acute. Due to economic uncertainty, the predicted outflow of manpower has not occurred and to date force restructuring has not led to a better match between commitments and manpower levels. That, in turn, has led to a virtual standstill in service recruiting. The Royal Navy and the Royal Air Force are allowing just a trickle of new applicants—principally for the technical trades. However, that is leading to serious shortages in a number of key posts, principally in the manning of ships and the servicing of our aircraft.
For the Army, where much greater numbers are required, the situation is much more serious, especially in the infantry. The recruiting of junior soldiers has been stopped. There are currently over 1,000 vacancies in the recruiting organisation. Those men, if recruited, would greatly relieve the overstretch in infantry battalions.
We face uncertainty, inflexibility and dogma within the chain of command. I should like to give one example. It is of a commanding officer of a well-known Scottish battalion who recently asked his affiliated Territorial Army battalions for TA manpower to reinforce his battalion before it was committed abroad. Volunteers were forthcoming in the true spirit of the TA, as happened at the time of the Gulf conflict and on other occasions since. However, for political reasons, TA soldiers were not allowed to reinforce that Scottish battalion, nor do they look like being allowed to serve with their regular counterparts for the foreseeable future. In the event of a total ban on recruiting for the Army, are the Government prepared to allow TA soldiers and reservists to make
812
up deficiencies in the regular forces when those regular forces are faced with manpower bills above their current strength?
As with the regular Army, there is natural anxiety in the TA about wastage and an overall drop in manning levels. Figures for the TA show a drop from 74,500 in August last year to just over 68,500 in August this year, the date of the latest figures. That is a drop of nearly 6,000 men. If the trend continues, TA strength will drop well below the target figure of 63,500. That may well be welcome news to the Treasury but not to the Ministry of Defence. However, there is some good news in that recruited units which are above strength can overbear that strength. That is a sensible move and will, I hope, keep up the TA's overall strength.
I congratulate those responsible for the work done by the National Employers' Liaison Committee, and I very much hope that the amount of money available to it will not be so reduced that it cannot continue to function as effectively as it has in the past.
As part of his Statement on reserve forces made in another place on 10th December last year, the then Secretary of State, Mr. Tom King, said:
"It is our duty to see that they"—
referring to reserve forces—
"have the support, equipment and training that they deserve".—[Official Report, Commons,10/12/91; col.739.]
When the regular forces are experiencing difficulties of undermanning and under-equipping, can we realistically maintain the reserves at their present level? I am especially worried about the companies of those battalions committed to the Allied Rapid Reaction Corps and that they have all the man-training days, the challenging and worthwhile training and, above all, the equipment that they need. There is anxiety in the TA that support companies may not receive all the mortars, Milan anti-tank weapons and machine guns that they need to match their regular counterparts.
I apologise for raising this matter yet again in your Lordships' House but it is of major concern to the TA and those committed to the Allied Rapid Reaction Corps. We live in dangerous and uncertain times, as we have already heard. If we fail to look after and harness our excellent regular reserve forces effectively, the country will lose interest in them and we shall endanger this country's security.
7.18 p.m.
Lord Lyell: My Lords, every Member of your Lordships' House should express gratitude to the noble Lord, Lord Chalfont, not just for the debate that he has set in train but above all for his expertise and enormous encouragement of us all, and all the places that he has visited. He told us that he had just returned from Hong Kong with a group of your Lordships and other parliamentarians. I too have been with him. I know how much work he puts into the subject. I hope that the debate will show him and your Lordships how much we appreciate what he does.
We have listened to three impressive maiden speakers today. We are all very much in their debt. I hope that all three of them will continue to give us

813
their opinions in the excellent and charming way that we heard today. We hope that they will be able to expand at greater length than is allowed in a time-limited debate such as we have had today.
My thoughts can be encapsulated in four letters—GCHQ—but my noble friend the Minister need not panic. I shall not refer to the establishment in Cheltenham. G stands for a general overview, although virtually everything I could have said has already been said. It could also stand for "get on with it", which is what I shall do.
In 1968, when I first started coming to your Lordships' House I remember a great review of defence policy and a White Paper. I remember hearing of a concept known as "East of Suez". It was said that we would never again necessarily engage in military activity or take a major military stance east of Suez. Yet in 1991 an immensely valuable and valiant contribution was made by all our armed forces in the Gulf and above all in the liberation of Kuwait.
Many noble Lords may remember that in 1982 we assembled in your Lordships' House one Saturday morning and heard how the Falklands had been invaded by a ruthless aggressor. I remember that Saturday morning. I remember wondering what might happen as an enormous expeditionary force was assembled and engaged. I believe it was my noble and learned friend Lord Hailsham who said that that engagement was a feat of arms that was comparable with the Battle of Agincourt. Many of us remember that battle from our history lessons. Perhaps my noble and learned friend expressed himself in a fairly flowery fashion, though succinctly, but the Falklands episode, together with the operations in the Gulf in 1991, shows how extremely lucky we are to have the support of our military personnel in mounting such military campaigns as may be needed.
In 1969 other events took place within the United Kingdom. Some 23 years later we have in Northern Ireland thousands of servicemen committed to trying to suppress one of the most ruthless and professional campaigns of terrorism of the 20th century. The role that the British Army now adopts in Northern Ireland was completely unforeseen in 1969. All noble Lords, including my noble friend Lord Stewartby and myself, have reason to admire the professionalism of the men and women who serve in Northern Ireland.
Was it last year that we received a fascinating document entitled Options for Change? I seem to remember thinking, on reading through that document, that it was somewhat more erudite than my university essays. Nevertheless the same comment can be made of Options for Change as of my essays. My tutors used to tell me that a great deal of work had gone into my essays but they did not necessarily concentrate on the required subject. It seems that a great deal of work had been done on Options. for Change but it is not clear that that valuable document answered the necessary questions.
The defence situation in this country changes every day. The noble Lord, Lord Chalfont, and other speakers today have spoken about the position in Bosnia. Let us never forget the Cheshire Regiment,
814
which has set sail for Bosnia and which will soon commence its engagement there. We wish that regiment well, as we also wish the best for each and every one of the supporting servicemen who will accompany the regiment.
I wish to speak on the role of the army and the infantry in Northern Ireland. The role of infantrymen and young officers is far different to the role I was expected to adopt when I underwent my national service in 1957 to 1959. Looking at the list of speakers in this debate today I think there may be four or five noble Lords who have not been engaged in distinguished roles in the armed forces. However, I believe my noble friend on the Front Bench, Lord St. Davids, has undergone national service like myself. When I think of the skills I had to learn as a young platoon commander some 35 years ago, they cannot compare with the skills that are now needed in Northern Ireland in terms of the complicated new equipment that infantrymen have to use. I have tried to operate the new SA80 rifle, the Milan anti-tank weapon and the new radios. I have tried to use those weapons on a practice range. It was fortunate I was on a practice range, as I found the weapons terrifying.
Can my noble friend the Minister confirm that valuable, enthusiastic and skilled recruits to the armed forces are not being put on hold, let alone being turned away, because of financial or other organisational problems that may have arisen as a result of Options for Change? I wish to mention a hobby-horse of mine. I live in the county of Angus. My noble friend Lady Strange lives not far from me, although not quite in Angus. Both of us are familiar with Royal Air Force Leuchars, which is our local Royal Air Force station. I understand that Leuchars is not responsible for the low flying planes that pass overhead, although my noble friends Lord Trefgarne and Lord Glenarthur made a low pass over my home from Leuchars some years ago. However, those of us who live in Angus are familiar with the yellow Wessex helicopters that fly from Leuchars. They venture up the glens of Angus to rescue civilians who for some reason or another have got into difficulty in the mountains. We have heard there is to be an announcement on the helicopters. I hope my noble friend the Minister will accept the thanks of all of us in Angus and Perthshire for everything that has been done by RAF Leuchars in this field.
Finally, is my noble friend satisfied with recruitment, particularly for the army? Is he concerned about overstretch, especially as it applies to Northern Ireland? I hope my noble friend and all other noble Lords will join with me in expressing our best wishes to each and every serviceman who serves in Northern Ireland, Bosnia and anywhere else.
7.27 p.m.
Lord Astor of Hever: My Lords, I wish to reiterate the words of my noble friend Lord Lyell about the noble Lord, Lord Chalfont. I was lucky enough to go to Hong Kong under his able leadership. One military factor to consider is our responsibility for the security of Hong Kong before we hand it over to the Chinese on 1st July 1997. There appears to be a serious

815
divergence of views between us and the Hong Kong Secretary of Security about the speed of the security run-down. The Hong Kong Secretary of Security is under pressure from the Hong Kong Legislative Council to sell valuable military land and cut Hong Kong's contribution to the cost of British troops, although some of these same troops risk their lives daily in dangerous operations to catch smugglers and net the Hong Kong Government many millions of dollars. The Security Secretary felt a fast cut-back was necessary and that the number of helicopters in particular should be dramatically cut. He asserted that in the event of a future emergency troops could move by road. However, as any visitor to Hong Kong knows, most roads are solidly jammed with traffic.
The Security Secretary envisaged little risk of civil unrest in Hong Kong leading up to 1997. If that event arose he was confident that the police could handle the situation, although they now rely extensively on the military for back-up. However, no one knows what will happen and the proposed cuts mean we could be ambushed by an unforeseen scenario when the military personnel is far too scarce. As Mao Tse-tung said,
"A single spark can set the prairie afire".
There could he instability in China, with illegal immigration swamping the police. There could also be anti-British feeling over the passport issue and as 1997 approaches the belief may grow that we sold out to a brutal regime. Normal Chinese behaviour is to bully and the current arguments with China frighten people.
Hong Kong has a volatile society, as I discovered in 1967, when as a young troop leader I was mobilised during the appalling riots that lasted several months and caused much destruction and death. Recent public demonstrations in Hong Kong have often verged on spontaneous violence. I am told that the police, while being well trained and well equipped, are not always well led and corruption is on the increase. With all the uncertainties recruiting is difficult. In the event of a major problem the police would undoubtedly have to fall back on the garrison, as they quickly did in 1967. Even then, with a much bigger garrison, extra troops were brought in at great expense.
There is also a risk that members of the Hong Kong Service Corps, volunteers fully integrated with our troops and used as extra back-up to the police, could leave in large numbers through resentment at not being given a fair quota of British passports.
Military authorities to whom I spoke in Hong Kong, the business community, and the man in the street who, in a recent opinion poll, put law and order as a far higher concern than more democracy for 1997, all want a sufficient British military presence. So do the Chinese leadership, who have made it clear publicly that if the "weak" British were incapable of handling unrest before 1997, they would move in. That would be a real humiliation.
Last but not least, the lives of those troops who stay until the end, and their families, must be protected.
816
I hope therefore that my noble friend the Minister can reassure me that a policy of "stronger for longer" will be pursued and we can hand over Hong Kong with British honour upheld.
7.30 p.m.
Lord Mayhew: My Lords, the noble Lord, Lord Chalfont, was surely right to remind us in his Motion that security is far wider a concept than military defence. It involves economics, overseas aid, disarmament, and many other factors which contribute to or otherwise affect the safety of a country.
However, having begun on that note the noble Lord was tempted, as were so many other speakers, into the familiar pattern of demanding stronger forces and criticising Options for Change. I confess to having been astonished by the number of powerful speeches from the Benches opposite and from the Cross-Benches calling for greater Armed Forces and increased defence expenditure, because that is what it means. I have one sad warning for those speakers. I believe that when the Government finally decide on public expenditure for the next year they are in for a severe disappointment.
My own view is that Options for Change is right in one important respect and wrong in another important respect. It is right in that the document sets out plainly that the threat has changed and, overall, has diminished. Of course the threat overall has diminished, as the Government said: the Soviet Union no longer exists. I listened with great attention to the speech of the noble Baroness, Lady Park. A few years ago the likelihood of being invaded or attacked was very much greater than it is today. The threats have changed, but the overall threat has diminished. In that Options for Change is right.
Where Options for Change is disastrously wrong is that, though it referred to the new threats, it does not include plans to reorganise our Armed Forces to deal with the new threats as against the old ones. To begin with, I believe that we all agree that the new threats demand a major peace-keeping, peace-making and terrorist suppression role for the Army. Therefore Options for Change should have redressed the balance in favour of conventional arms rather than nuclear arms. In fact, it lays down an increase in nuclear arms and a decrease in conventional arms. That is the first major mistake. It provides for more warheads for Trident—more power than Polaris—and, in addition, an entirely new nuclear system—TASM, and on the other hand it provides for a reduction in conventional weapons.
Secondly, if Options for Change were realistic it would put more emphasis on ground forces than on naval and air power. However, there again, Government policy set out in Options for Change calls for a decrease in Royal Navy manpower of 13 per cent., RAF manpower of 16 per cent. and in Army manpower of 27 per cent. by 1995. That is exactly the opposite of what is needed in order to organise our Armed Forces to meet the new situation.
Further, in respect of conventional forces, and in particular the Army, the new threats require a greater

817
emphasis on lightly armed troops compared with armoured regiments. But Options for Change lays down a decrease in armoured and armoured reconnaissance regiments from 14 to 11 and a decrease in infantry battalions from 55 to 39.
That is the trouble with Options for Change. It is not that there is a need for more Armed Forces. That is absurd. It would involve more defence expenditure. What the policy fails to do is to adjust to the realities of the new threats. That is a great condemnation of Options for Change, which bears all the hallmarks of the outcome of a familiar Whitehall war in which the RAF and the Navy outfought the Army. I say that with great respect to the noble Lord, Lord Younger, whose speech I greatly admired.
A serious, realistic defence review would begin by cancelling the TASM project. I have every hope that that will be done, and soon. All the arguments so well advanced by the noble Viscount struck no chord of agreement anywhere in this House, either on the Benches opposite or on these Benches. A realistic defence policy would then allocate Trident a fire power no greater than that of Polaris, or perhaps less. Such a defence review would make a careful assessment of the Royal Navy's role in the Atlantic in the new circumstances. It would carefully assess the RAF's air defence role in the new circumstances in which we find ourselves. A realistic defence policy would give priority to increasing the capability of the Army for peace-making, peace-keeping and terrorist suppression. Already, as was expressed so well from the Benches opposite, our soldiers are much the best in the world at that job, not only for their professionalism—not being conscripts—but also, as Yugoslavia shows, because they speak the most widely understood language in the world. That is very important for United Nations peace-keeping. Half of our soldiers are in the Rapid Reaction Corps. I should like the Government to consider that aspect. We provide 50 per cent. of the manpower of the Rapid Reaction Corps. That is too much; our partners should be doing more. Our forces should be specially trained and easily available for the threats which face us in the real world today.
Therefore, when the Government cut defence expenditure, as I believe they will, let them do so not in the spirit of Options for Change, not piecemeal, and not just to satisfy this or that service lobby. Let them have an overall concept of the real threats facing us and make sure they take the decisions to meet those threats.
7.40 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to the noble Lord, Lord Chalfont, for introducing the Motion that we are discussing today. Noble Lords will also be grateful to our three "maidens" who have made such a distinguished contribution this evening. I was particularly impressed by the different points made by the different maiden speakers.
The noble Lord, Lord Younger, with his great experience in these matters, made some very telling
818
points on the whole question of management of change. My noble friend Lord Ashley, who has enormous sympathy for the problems of disabled people, brought fiercely to our attention the fact that we are dealing with human problems. If problems come up as a result of service—bullying or whatever—we must treat people with the maximum of compassion. We cannot be callous in that respect.
The noble Lord, Lord Stewartby, brought our attention to the question of the reserve forces. As the noble Viscount will know, that is a problem which I have discussed with him in this Chamber on a number of occasions. I personally believe that we cannot go in for Options for Change on the basis of a cut in our reserve forces at the same time as we cut our front-line full-time forces.
Having congratulated the three maiden speakers and mentioned the most impressive points they made, I again congratulate the noble Lord, Lord Chalfont, on his framing of the Motion. In my view, and I thought also in his, such a review would not simply be another look at defence policy in Options for Change. The Motion urges the need for a comprehensive review of the economic, military and other factors underlying a satisfactory national security policy. Therefore I thought the wording of the Motion was most successful. Indeed, my noble friend Lord Kagan, in a very powerful speech, pointed to the economic point; namely, that unless the economy is right, the defence will not come right. I say that very directly to the noble Viscount.
I welcome the recognition by the noble Lord, Lord Chalfont, that security policy is not just a matter of a narrow defence policy. It needs to embrace defence but also to encompass arms control and disarmament, non-proliferation, export controls on nuclear technologies, arms trade policy and, in the economic context, overseas aid policy. Unless we get all those areas right, we shall not be secure in the sense implied by the noble Lord's Motion.
The United Kingdom commits some 95 per cent. of its defence budget to NATO tasks. NATO was created to deter the Soviet Union (by "Soviet Union" I mean the Soviet Union and its Warsaw Pact allies). In that role NATO was extremely successful. The Warsaw Pact has dissolved, the Soviet Union has disintegrated and the communist régime has fallen. As the noble Baroness, Lady Park, remarked, there is still all kinds of turbulence within the remnants of the former Soviet Union which need to be studied very carefully. In terms of the review called for in the Motion, we have to consider not only the forces that we require for our defence, which include the nuclear forces to combat any possible threat from disintegration in the former Soviet Union, but also the arms control policies that might or might not be in place and the non-proliferation policies needed to make us more secure.
Many noble Lords are much more expert than I on Options for Change. I have put forward my views and I do not want to bore noble Lords with what I feel about Options for Change. The noble and gallant Lord, Lord Bramall, quite rightly and eloquently spoke about overstretch, as did other noble Lords. I

819
should like to concentrate on other aspects, and pick up some of the points made by the noble Lord, Lord Mayhew.
First of all, there is our nuclear role. Clearly, we have to retain some ultimate deterrent capability and that will be Trident. But it must be right to limit the number of warheads in the Trident system to the same number as those employed in the current Polaris fleet. In the world in which we live, it cannot make any sense at all to multiply our nuclear strike capability. Secondly, I agree with the noble Lord, Lord Mayhew, that it makes no sense to employ TASM at this stage. If the Treasury is looking for cuts it seems to me that that ought to be the first to go.
My next point concerns non-proliferation and arms control. As the noble Baroness, Lady Park, and my noble friend Lord Kagan emphasised, there is undoubtedly a clandestine nuclear weapons programme in places (such as Iraq) which are signatories to the non-proliferation treaty and still violate that treaty. In the context of a general security policy, the Government must encourage the greater use of short notice inspections if there are suspicious activities. That is the only way to do it. If my figures are correct, the UK provides the International Atomic Energy Authority with around 0.025 per cent. of our defence budget. That is not particularly convincing as a contribution.
I believe that we need to move much further on the comprehensive test ban treaty. Unless we do so, we shall find that any small or medium sized state in military terms will be able to test in a way that will be damaging to the security of the whole world. If I may put it this way, it is a shame that Britain has been forced to stop testing rather than taking the lead in the positive measure of stopping all testing in a comprehensive manner. However, for some reason the Government have refused to do that and I should like to know why.
We must tighten control on the export of nuclear materials and nuclear related technologies. Nuclear exports are still going to countries suspected of pursuing nuclear weapons programmes. They are subject to International Atomic Energy Authority safeguards, but those safeguards are inadequate. We must strengthen arms trade policy. According to the 1992 Defence White Paper, the Arms Transfer Register requires all parties by 30th April 1993 to provide the UN Secretary General with details of imports and exports in seven categories of major weapons systems. When do the Government intend to bring the necessary legislation before Parliament to provide for the disclosure of such information in the UK? Perhaps the noble Viscount will answer that question when he comes to wind up the debate.
With regard to chemical weapons, we welcome the outcome of the conference on disarmament in Geneva. We hope that the agreed text will be debated at the UN General Assembly to be held next month and that it will be signed in January 1993. Generously, I congratulate the Government on the efforts that they have made to secure that convention.
I apologise that I have overrun my time. I have tried to cover a number of subjects while leaving until the
820
end the basic questions that I hope the Government will answer. First, as the result of this debate will the Government consider, in the words of the Motion by the noble Lord, Lord Chalfont, that national security will be studied as a whole in terms of economic, military and other factors, and will the study then be debated in this House? Secondly can we be assured that the study—let us call it a defence review if that is what the Government want—will start from the basic problem of what is necessary for the United Kingdom and the world? If the study starts from that base, and the Treasury input comes later—I accept that there will be a Treasury input—then we shall have a satisfactory outcome to the study. Thirdly, will the Government now recognise that there is much more to security policy than the simple minimum defence of this country? I pick up the theme of the noble Lord, Lord Chalfont. We are an international player and a European player. We should behave as one.
I return to what my noble friend Lord Ashley said. The callousness that has characterised so many Government decisions over the past few years, months and even days can no longer prevail. We are dealing with the lives and livelihoods of human beings and our own kith and kin. I warn the noble Viscount that unless that lesson has been learned by the Government his life, even in his job as a Minister in the Department of Defence, will be made very difficult by myself and my noble friends.
7.51 p.m.
The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne): My Lords, like virtually every other noble Lord who has spoken in this most interesting debate, I am extremely grateful to the noble Lord, Lord Chalfont, for the opportunity that yet again he has given us to address ourselves to the higher and intellectual facets of the fascinating subject of defence and security. However, before I endeavour to answer the final questions that the noble Lord, Lord Williams, put to me, I wish to associate myself with the remarks that have been made about the three extraordinarily elegant maiden speeches to which we have had the privilege of listening today.
I warmly welcome my noble friend Lord Younger because he and I form a rather exclusive club in your Lordships' House. He adds a great deal of strength to the father and son teams which I hope will increasingly become a feature of your Lordships' debates. I welcome him for another reason. I know how much he was liked and respected during his time at the Ministry of Defence.
I too remember the noble Lord, Lord Ashley, for the distinction of his contributions to debates in another place when I was briefly there. His knowledge and commitment on matters affecting welfare, poverty and the disabled are known to all your Lordships and struck me during my eight years in another place. I was particularly pleased at the remarks he made. The worries that he addressed in his distinguished contribution are directly my responsibility in the Ministry of Defence. I have endeavoured to pay a great deal of attention to them during the seven months that I have been in the department. I certainly

821
shall take up the challenge put by the noble Lord, Lord Williams, as well as taking to heart the remarks of the noble Lord, Lord Ashley. I say to both of them that my door is always open and I very much look forward to discussing those matters, in particular with the noble Lord, Lord Ashley.
I also remember the distinguished contributions of the noble Lord, Lord Stewartby in another place. I welcome another Hertfordshire man (if that is what he has become by adoption) to your Lordships' debates. I know that he speaks from a great deal of knowledge of the department that I have the honour to represent in your Lordships' House. I greatly look forward to the contributions that he will make to our debates.
As noble Lords know, for many years the noble Lord, Lord Chalfont, has made a deep study of the subject of security. Indeed Ministers in my department were grateful for an advance copy of his recent extremely interesting pamphlet on defence reviews and defence strategy. I believe that my right honourable friend the Secretary of State for Defence made that clear in reply to the noble Lord. We were also extremely grateful for his subsequent acknowledgment in the follow-up correspondence that the Statement on the Defence Estimates had addressed a number of his anxieties. I was grateful for the qualified support of the noble and gallant Lord, Lord Bramall, in that respect.
However, in reply to the debate, I hope that your Lordships will agree that I should try to address myself principally to the Motion and the wider questions which the noble Lords, Lord Chalfont and Lord Williams, addressed. I shall endeavour to address myself to some of the points which a number of noble Lords have made during the course of the debate. If I miss any, I hope that noble Lords will forgive me, and I shall write to them.
We know that there has been a consistent call for a fundamental defence review in your Lordships' House at least since the fall of the Berlin Wall. Indeed, it has become almost a truism to say that the great events of the last few years have fundamentally altered the strategic situation.
As I believe I mentioned to noble Lords in May of this year when I first had the honour of addressing your Lordships' House, the old certainties have disappeared along with the immediate strategic threat. I also said, and it has been stated again a number of times today, that those certainties have been replaced by uncertainty. We have to face a new range of security risks, all characterised by the quality of uncertainty. The noble and gallant Lord, Lord Craig, spoke most pertinently to that point. I say to the noble and gallant Lord that his remarks have been carefully noted by the Ministry of Defence, as they will have been by your Lordships.
In Europe we face an increasingly complex situation where we cannot yet be certain that we have successfully left the old threat wholly behind. As the noble Baroness, Lady Park, with her great knowledge and authority of the former Soviet Union and Russia, so rightly said, we do not know what will happen in the former Soviet Union. After 70 years of Stalinist
822
and post-Stalinist permafrost, the thaw has come. We hope and believe that democracy is taking root, however slow and painful that process may be. At the moment we cannot envision, even in our wildest dreams, a direct assault on the West. However, as the noble Baroness so rightly pointed out, Russia is still extraordinarily well armed and, as other noble Lords have said, quantity has given way to quality. Indeed, Russia still possesses a formidable military capacity, both conventional and nuclear. Your Lordships and the electorate would surely not expect us as Her Majesty's Government to relax our guard completely until the transition to stable government and a stable economy is complete. In that context I have noted the remarks of my noble friend Lord Vivian about the importance of intelligence.
Elsewhere in our continent the permafrost's melting reveals that atavistic instincts that the East-West stalemate had kept frozen are still alive. Conflicts such as the dreadful one in former Yugoslavia do not impose a direct threat to the United Kingdom, but they undermine the stability of Europe and threaten to spill over into the NATO heartland.
Outside Europe many countries are beginning to acquire sophisticated weapons which could pose a threat to our strategic interests. In that context I wish to ask the noble Lord, Lord Mayhew, whether he would have preferred lightly armed troops to take on Saddam Hussein rather than the heavily armoured troops we were able to send to that conflict with the results that many of your Lordships have referred to this evening.
The changed situation and climate have in many ways prompted a gratifyingly swift response from NATO. When your Lordships consider the nature of the resources which we devoted to the Warsaw Pact threat they were fairly static in nature and in general terms our main forces pointed in only one direction. The security arrangements and the military alliance which we had in place were working well. Indeed, they were working so well that we can claim that NATO has proved a success almost without parallel for an alliance of that kind. In the circumstances there will always be a temptation to try to cling on even in the face of changing events—what one might call man's natural conservatism.
We can claim that we in the alliance have reacted swiftly to radical change. One must consider that we began with the London Summit in July 1990. There the 16 nations of the alliance had to decide to change as one, which is always more difficult than one person doing so. The process of giving birth to a new strategic concept came to formation in November 1991 in Rome. Here the alliance fundamentally overhauled itself and based itself on three key interlocking principles. I ask the noble Lord, Lord Williams, to consider that I am beginning to answer some of the questions which he addressed to me at the end of his remarks. The three interlocking principles can be described as dialogue, co-operation and a strong collective defence.
I have previously observed to your Lordships that our first line of defence lies with the institutions which give practical effect to the first two of those principles.

823
That is a point which the noble Lord, Lord Mayhew, appeared implicitly to recognise. I hope that the noble Lord, Lord Williams, recognised it too when he said that security policy encompasses more then merely defence expenditure. The United Nations plays a vital role. Through it we can promote international stability. The CSCE has become an important forum for consultation and co-operation; for instance, last year it decided to create a conflict prevention centre and an office for democratic institutions and human rights. At the Helsinki Summit this year outline mechanisms for crisis management were agreed upon. We also established a European security forum providing an institutional framework for arms control and confidence building. Indeed, I say to the noble Lord, Lord Williams, that in the arms control field we have made a great deal of progress. The CFE Treaty, under which we have already conducted a number of practice verification inspections in central Europe and Russia, is in place. We signed the Open Skies Treaty in March this year. In the nuclear field the Strategic Arms Reduction Treaty provides for extensive verification—a matter to which the noble Lord, Lord Williams, addressed himself in particular—and a reduction of about one third in the superpowers' strategic arsenals. That is what one might call a start, indeed.
However, your Lordships will know that we cannot be complacent about the risks of nuclear control and proliferation. That was another point made by the noble Lord, Lord Williams. In parenthesis I wish to add that we are pleased that not only were shorter-range nuclear weapons quickly concentrated in Russia but that the new nation states of Ukraine, Kazakhstan and Belarus have agreed that strategic systems now within their borders should remove to Russia within the implementation period of the Start Treaty. Those three states have also agreed to accede to the Non-Proliferation Treaty as non-nuclear weapons states.
Your Lordships will already know of the NATO nuclear planning group's planned reductions in sub-strategic nuclear weapons and of the successful conclusion of the Chemical Weapons Convention after many years of negotiation. That is an achievement in whose accomplishment this country played a distinguished part and I am grateful to the noble Lord, Lord Williams, for his congratulations to the Government in that respect.
Those general security mechanisms form the first line of our strategic shield. However, they cannot carry conviction unless the western allies maintain a military capability which gives our diplomatic démarche credibility. In that respect I find it difficult to over estimate the importance of the alliance. In the uncertain world to which I have referred, a solid alliance of nations, whose very nature is rooted in representative government and liberal economics, is in itself a force for stability and peace of inestimable value. To that end we are fortunate that NATO exists and has shown the welcome signs of adaptability which I have attempted to describe. Indeed, I would go further. The fundamental strategic approach so eloquently advocated by the noble Lord, Lord
824
Chalfont, would be almost impossible without the NATO alliance. It is the outstanding example of the whole being greater than the sum of the constituent parts. A strong NATO which is adaptable to changing circumstances is fundamental to our strategic approach and to the security of the United Kingdom.
I am all the more delighted, therefore, that our most important ally, the USA, continues to commit herself to the alliance. It is equally significant that France is showing signs of interest in participation once again in certain NATO forums from which she has excluded herself for so long. In that context we welcome in particular the recent remarks made by the French Minister of Defence in Paris and we shall follow developments in that sphere with the greatest interest. In particular, we hope that the WEU will develop primarily in its role as the European pillar of NATO as we believe it can and should.
Fundamental to the success of this approach is the British contribution. Our ultimate national survival is underpinned by our independent nuclear deterrent. In that context I point out to the noble Lords, Lord Mayhew and Lord Williams, that we have publicly set a maximum on Trident warheads of 128 per boat. The noble Lord, Lord Mayhew, knows because I have told him more than once in your Lordships' House that we have not yet come to a decision on TASM. I know that he will be pleased to receive an update on that study. However, more than any previous government we have had to reconcile what I would call our "unduckable" commitments towards Northern Ireland, Belize, the Falklands and Hong Kong. Perhaps I can reassure my noble friend Lord Astor, who made a most interesting contribution, that we intend to discharge our full responsibilities in Hong Kong. We must reconcile that with our contribution towards the alliance, which must be the bedrock of our security policy.
It is essential that in these times of financial stringency defence Ministers should, however resourced-disciplined, be strategy led, as a former Secretary of State for Defence put it. The noble Lord, Lord Chalfont, made that point more elegantly than I. Therefore our contribution to the alliance is clear. As regards NATO we have a leading role to play in the ace Rapid Reaction Corps, a formation successfully inaugurated earlier this month. I repeat that with the kind of weapons that are being bought by dictators outside the NATO area I would not like to send, to coin a phrase, "our troops naked into the battlefield." We shall continue to play a role in all three categories of NATO forces.
Our role and that of our allies in support of the United Nations is likely to become increasingly important. Indeed, it is significant that our contribution to escorting relief convoys in Bosnia is in NATO-committed troops. All noble Lords, and everyone in the country, will wish those men and women well. I am delighted that we in this House and my right honourable friends in another place have been able to give assurances on the rules of engagement. I answer directly the question asked by the noble Lady, Lady Saltoun. There are at present 101 service men and women in Bosnia, including the

825
base at Split, which is not strictly in Bosnia. The number varies and it would build up if our plans were to mature.
Many of your Lordships have expressed, not for the first time in your Lordships' House, extremely severe doubts as to whether or not our Armed Forces are sufficiently numerous to sustain the commitments which our overall strategy demands. It would be idle of me to rehearse the list of noble Lords who have mentioned that. However, one matter which we take extremely seriously is the point raised in particular by my noble friend Lord Stewartby about the importance of reserve forces. That was a point made also by the noble Lord, Lord Williams. Last week I was fortunate enough to visit HMS "Eaglet" which I believe is the mother ship of HMS "Humber". I heard of Lady Stewartby's impending visit. I was able to hear also of the strong views expressed by the officers and men of the Royal Naval Reserve during the course of that visit to Liverpool.
In spite of the fact that no one is able to deny that the situation is tight, most of your Lordships' doubts have concentrated on the Army. Therefore, I must make it clear that the advice from our professional advisers on this matter is clear. Once the transition under the Options programme has been accomplished, the present too-short tour interval of an average of 15 months will rise. A target of at least 24 months will be achievable once the transition period is over. That will include the whole question of public duties for the Foot Guards, on which my right honourable friend the Minister for the Armed Forces has answered a Written Question, the details of which I have placed in the Library of your Lordships' House.
Lord Bramall: My Lords, can the Minister give any indication as to when that 24-month period may be reached?
Viscount Cranborne: My Lords, that will be once the draw-down has been completed, somewhere around about 1995. However, I should add—and I have said this to your Lordships on more than one occasion—that if circumstances change, and we all know that they are changing rapidly at present, we stand ready to change our approach on the question of the number of infantry in particular. We keep that under continuous review.
I pay tribute to the men and women of our Armed Forces. As a newcomer to defence matters I have been constantly impressed in the past seven months by their extraordinary cheerfulness and professionalism under extremely trying circumstances. I would be the last to say to your Lordships that I take them for granted or that we owe them anything less than the full attention and sympathy which they deserve.
This has been an interesting debate. I know that we shall often return to the matters raised this evening. As always, I shall look forward to listening to your Lordships' highly informed opinions and advice on this vital subject.
8.13 p.m.
Lord Chalfont: My Lords, I thank all noble Lords who have taken part in this debate, which has been interesting and valuable. In particular, I express my appreciation to the three maiden speakers. As other noble Lords have said, they were three memorable contributions, each of a different kind and character, and all extremely welcome.
There has been a general consensus in the House that a review of some kind is necessary. The noble Lord, Lord Mayhew, thought that I and others concentrated too much on a desire for stronger forces. However, if he consults the Official Report, he will find that at no time did I call for stronger forces. I want a review and I am not attempting to pre-empt the outcome of that. I do not know what size or shape of forces will be recommended by such a review but a review is necessary. It must be comprehensive and, as I said, it must not be regarded as a defence review. In other words, it should not begin or remain in the Ministry of Defence. This matter affects other government departments—the Treasury, the Department of Trade and Industry and the Foreign and Commonwealth Office—and the broader defence community in this country. We need not a defence review but a review of national security.
The noble Viscount answered the debate impressively. I was pleased with some of his remarks, especially in drawing attention to some of the anxieties which have been expressed as regards the 1992 White Paper. As the noble Viscount said, this subject will be before your Lordships' House again and again. With that, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Minicabs
8.16 p.m.
Baroness Gardner of Parkes Baroness Gardner of Parkes rose to ask Her Majesty's Government what action they propose to improve the safety of users of minicabs in London.
The noble Baroness said: My Lords, that I am asking this Question in your Lordships' House this evening will surprise no one. In February 1989 I moved the Second Reading of a local authorities Bill which included in its provisions the licensing of minicabs. That was referred to a Select Committee and considered fully by it. It returned to the whole House and was given a Third Reading in February 1990. Later, it fell in the Commons.
Since then I have asked questions on the subject, which concerns me greatly, and I was pleased that a working party was set up to consider the matter. The report of the working party was published as your Lordships' House rose for the Summer Recess, so that this is the first opportunity to pursue the matter further and to ask the Government to set in train legislation to control minicabs in London.
Everywhere but in the London area controls already exist on private hire vehicles, but the situation is not the same here. Of course, only in London do the black cab drivers have the "knowledge", as it is called. That means that they know every street and how to get

827
there and they have to pass a test to prove that. It may take two to three years to acquire the knowledge. Drivers who satisfy the Public Carriage Office and pass the test become licensed hackney carriage drivers. A so-called green badge is awarded to a driver licensed to operate in the whole of the London area. A yellow badge driver is licensed only for a particular area or zone. In reality, the badges are brass and they have either a green or yellow line on them.
The public have lived with the hazardous situation of no control whatever over private hire vehicles, mainly minicabs, as the public know them, for years. Crimes have been committed and the public are justified in demanding safe standards in all forms of public transport. Apart from crimes against the person, which are at a level which cause great anxiety, there is the added hazard that vehicles are sometimes of such a poor standard that they could not possibly pass an MoT inspection and, therefore, they carry no insurance. The driver is frequently unlicensed and may have a relevant criminal conviction which makes him unfit to be a licensed cab driver.
In 1989 anxiety was expressed by the noble Earl, Lord Russell, that local authorities might not be the right bodies to be the licensing authorities. In that same debate, the noble Lord, Lord Underhill, who I see is here this evening, also expressed reservations about the proposition that I was putting forward for local authorities to license black cabs and minicabs in London. Now, local authorities do not want the job in London. That has become quite clear from recent votes on the Westminster council and I understand that other councils, such as Greenwich, never wanted the job, even at the time of the last debate.
Time has shown too that local authorities are not the ideal organisations for the job. Black cabs are licensed by the Public Carriage Office and I am convinced that the same body must be the licensing authority for all London cabs and hire cars so that a uniform standard will eventually be achieved. By that I do not mean uniform standards of the vehicles themselves. Many black cabs are now—and by the end of the century I believe all of them will need to be—specially designed for invalid carriages. However, for the volume of transport that we need there is room for other vehicles, as I believe drivers of black taxis now accept. Again, it would be limited to the area and use.
Two years ago drivers of black taxis were opposed to extending licensing to minicabs. I detect a change in their attitude and believe that they accept that it is unwise and unsafe for 40,000 completely uncontrolled and unidentifiable vehicles to be carrying fare-paying passengers in the London area.
Black cabs are not themselves entirely without fault, as I have often said before. Many people I know have told me that if one lives south of the river one has little hope of obtaining a black cab for the journey home, particularly late at night. Even in the past few days drivers of black cabs have agreed with that statement. The present economic situation is making them slightly more willing to go further. But we hope that times will improve and we may then be back in exactly the same position.
I agree with the point made to me by the drivers that it is important for there to be a levelling up rather than a levelling down. Even with my proposed scheme I should want to see a different type of badge for those people who were registered immediately but only on a provisional basis. We must have licensed, identifiable drivers; licensed, insured and fit vehicles; tested and reliable meters with set maximum charges. Those charges may of course be different in the case of a chauffeured limousine hire service, the type we think of as being at the top end of the private hire market. There may be some room for variation in that regard.
I was interested to learn that even in black cabs the meter shows the maximum charge rather than the minimum. A black cab could make special arrangements with a hospital, school or organisation, for which they provide a regular service, to provide that service at a lower fee. But how often do we hear stories of tourists, unaware of what the correct fare should be, being fleeced by unscrupulous drivers? Reports and statistics show that in many cases the greatest cause of arguments and assaults in minicabs is arguments over fares.
The vehicle and the driver must be identifiable by a member of the public. Was it not in Forest Gate that the tragedy occurred when a legitimate call was intercepted by a criminal who presented himself to pick up the fare and the victim had no idea that the car was not the one she was expecting. By providing a definite registered plate on the car a customer could be told what vehicle would be coming. The vehicle could then be identified before the customer entered the car. Elderly and invalid customers come to know their drivers well when they have them on a regular run and thereby establish a valuable rapport.
Clearly there is a need for the transport that minicabs provide. If there were not that need 40,000 of them would not be in business. The answer therefore must be to devise a system whereby those people now driving could register at once but be given a date by which time they would need to pass a "knowledge" test on either a local or all-London basis, in the same way as years ago people who had ridden motorbikes for many years, suddenly found that they had to pass a test by a certain date or give up driving.
I am delighted that we have a Minister of Transport for London—Steve Norris—with special transport interest and knowledge. He will need to work out the fine details. I do not intend to take your Lordships' time to go into detail tonight. I merely want to establish the principle of need.
I believe the point will be made tonight—it was certainly made in our previous debates—that the proprietors of reputable hire car firms should be given some kind of discretion and control over licences. That is perhaps interesting and possibly a good idea. However, I should like also to see the licensing of individuals. I do not want to see a monopoly or power-base created only for people who own fleets of hire cars. Many minicab drivers, and indeed many drivers of black cabs, are individuals who own and drive their own vehicles.
A few drivers may not register in the way I suggest. Among them will be those whose vehicles are unfit,

829
those who are disqualified drivers or those with relevant recent criminal convictions. If licensing does no more than weed out those dangerous vehicles and unlicensed drivers, it will have achieved quite a lot. The good, honest, reliable minicab drivers, of whom there are many, must welcome recognition and an opportunity to show their reliability.
My hope would be for an immediate registration system with appropriate area restrictions. That would mean no interruption in the working of minicabs and we would retain continuity of the full service. Neither the service to the public nor the employment of the drivers would be affected. But the public would be afforded the added safety and protection that they deserve.
8.27 p.m.
Baroness Hollis of Heigham: My Lords, I am delighted that the noble Baroness, Lady Gardner of Parkes, tabled the Unstarred Question tonight and I should like to support her.
No woman in her right mind, no child, no elderly person, walks on the streets after dark for fear of being attacked. Nor would those women, children or elderly people care to wait at a deserted bus stop late at night, waiting for a bus that may not come; nor would they enter a strange car with a strange man, again for fear of being attacked. They—we—are afraid, and rightly so, prudently so.
We therefore turn to taxis for safety, convenience and for peace of mind. As the noble Baroness, Lady Gardner, explained to us, in this country there are three standards of service provided by our taxis and minicabs. In London we have black hackney cabs which are licensed, inspected, regulated and tested by the Public Carriage Office of the Metropolitan Police. The result, as we know, is one of the most respected, knowledgeable and safe black taxi services in the world.
Outside London local authorities license and inspect both hackney carriages and private car hire vehicles—minicabs. Until April of this year such regulation and inspection was essentially limited to the state of the vehicle; that is, its roadworthiness, its cleanliness and its insurance. But thanks to an amendment to the Road Traffic Bill of June 1991—warmly supported by your Lordships—which permitted local authorities to require from the police evidence of criminal convictions, local authorities can now license and inspect, so to speak, the character of the driver alongside that of the vehicle. Both are equally important to public safety.
Nonetheless, outside London differences remain between black taxi cabs or hackney carriages, and private hire vehicles. Hackney carriages can ply for hire; they have regulated, registered and metered fares whereas minicabs have not and do not. But that outside London both vehicle and driver, whether hackney carriage or minicab, are fit and proper for their purpose, is undeniable. Local authorities and the citizens of this country whom they represent are truly and appropriately appreciative of that. The safety of the car and the integrity of the driver are now assured.
830
Women outside London may safely use such cars late at night. The elderly may use them to go to hospital, children to go to school and the disabled to go home. As a result of your Lordships' report—here I would like to pay an especial tribute to the noble Earl, Lord Ferrers, who made the amendment possible—we all now, outside London, enjoy greater peace of mind. That is, if we live or work outside London.
For I said that we have a three-tier service; there is the black London hackney cab, licensed by the police, the provincial hackney and private hire car, licensed by the local authority, and the London minicab, licensed and inspected by just no one at all. Yet there are as many minicabs in London as there are in the whole of England and Wales put together. We estimate that there are between 40,000 and 50,000. Too often they are dirty, dubious and even downright dangerous. They are unregistered and uninspected. A man with a criminal record for grievous bodily harm, rape or serious drink and drug offences, whose only legitimate skill may be driving a car, who may be a stranger to London and whose car, as the noble Baroness, Lady Gardner, has said, may barely have scraped through the MoT, can set himself up in minutes as a minicab driver.
I stood outside a theatre the other night looking for a black taxicab. An unmarked private car cruised up outside the theatre. A young woman called out "Are you my minicab?" He said, "Yes". She got into the car and off they went. I hope he was. I hope that he was reputable. I hope that she was safe. In Norwich, Nottingham or outside London that car would have had on its door the name of its firm so the woman could have identified it visibly. She would have known that the driver was safe, proper and a decent and fit person to drive that car. She might have taken a chance in Norwich; she was certainly taking a risk in London which I believe to be quite unnecessary.
Why should London—London people, London women, London elderly, London frail and London children—be denied what the rest of the country now has, which is a safe, inspected, regulated and licensed minicab system? Why should London people alone expect to take risks? Why should I be able to use such a minicab safely outside London and take a chance inside London if I use one? Indeed, it is precisely because the private car firms and minicabs are being licensed, regulated and inspected outside London that those who would fail such tests, those at the dubious end of the market—that is to say, the undesirable and the unemployable—are now moving into the London trade.
We all know that the need for minicabs is much greater in London than elsewhere. As the noble Baroness, Lady Gardner of Parkes, rightly said, black taxis will not always work unsocial hours; they will not always go out to suburbs or to South London and they cannot always be found when it rains. We all know not only of the need but also that the demand for speedy and safe transport to jobs, appointments, hospitals, schools, hotels, railway stations or homes may well be greater in London than elsewhere. We all know, do we not? that it is impossible to walk across London because, unlike most cities, it is too large. One

831
cannot drive one's own car in London because one cannot park, which is not the case in most of the rest of Britain. We all know that London is a more violent and dangerous place than most others in Britain. We all know that in London one takes more risks walking home late at night through deserted streets than in most other parts of Britain.
The need for minicabs, the danger of taking them and the lack of a safe alternative are factors which are all much greater in London than elsewhere. Yet it is precisely here that private car vehicles are unregistered and unlicensed.
I hope that your Lordships will not think I am overstating the case. Clearly, most minicab drivers are decent family men who are careful and courteous. They do not have to have a clean driving licence, but they probably do. They do not have to prove that they can drive safely, but they probably can. They do not have to show evidence of any knowledge of their locality, but they probably have some. They do not have to have adequate or good physical health, but we hope that they have. They do not have to be law abiding, but they probably are. They do not have to indicate whether they have any previous criminal convictions, although by the law of averages statistically perhaps about a third of them will have. They are probably good, decent and courteous law abiding family men.
But undeniably a substantial minority of minicab drivers should not be on the roads. We have paedophiles driving children to school; former burglars helping old people into their homes; convicted rapists driving women down unknown streets and men convicted of assault and grievous bodily harm taking the disabled to hospital. The Suzy Lamplugh Trust—I know that the noble Baroness, Lady Gardner of Parkes, like myself, has met Diana Lamplugh and recognised and responded to the work she has done—has interviewed 1,000 people who use taxis and minicabs. About a fifth (199 of them) had experienced from minicab drivers dangerous driving or physical abuse. More horrifying still, is a figure which I could barely bring myself to believe, which comes from Scotland Yard. It indicates that a quarter of all stranger rape was associated with minicabs. That is a level of risk, violence and threat that we would tolerate nowhere else in the United Kingdom, and we should not tolerate it in London.
We do not have to tolerate it in London and why should we? What are the options? Self-regulation has failed because those who most readily accept it are the better and more reputable firms. Those who most need it, such as the cowboys and the marginals, are precisely those who do not regulate themselves. What are the options? First, as the noble Baroness, Lady Gardner of Parkes, has said, we could require all minicabs in London to come under the regulation of the Public Audit Office, which is analogous to the control imposed on black taxis, although there might be a problem of workload here for the police. There might also be a problem because of the flexible fares and flexible arrangements which the minicabs can offer. But that is one way forward.
Secondly, we could have a twin-track licensing
832
system, with local authorities regulating minicabs in London as they do outside. Again, there is the problem of the workload and again, as the noble Baroness said, there may be a problem in achieving common standards. Thirdly, there is another option which I should like to suggest to your Lordships. I hope that the noble Viscount opposite will respond to it. It is to require all minicab drivers to operate from licensed premises rather as is done with heavy goods vehicles. The proprietor has to be registered and inspected by the police or the local authority and that is perhaps analogous to environmental health officers inspecting restaurants or factories right across the country. That proprietor would be held responsible for the streetworthiness of vehicles and for the drivers. He would be required to have the vehicles inspected and to ask for previous criminal convictions, if any. He would be regularly inspected. He would require the minicabs operating from his premises to carry an identifying sign on the door in the form of an external plate. Such 40,000 cabs might operate out of, say,1500 such premises or 50,60 or 70 from a London borough. That is a perfectly acceptable workload either for an individual London borough or for a joint committee of such boroughs. It may also be acceptable for the audit office of the police.
I recognise that there is no consensus within the trade as to what should be done. Understandably black taxis wish to protect the property of their knowledge and understandably the minicabs wish to protect the current deregulated and flexible system that they mostly now enjoy. However, there is almost complete consensus among users that registration is essential and that Londoners should no longer have to tolerate what no one else will tolerate. With the help of your Lordships we could and do now enjoy a safe and reputable minicab service outside London, thanks in part to your Lordships' own amendment made about 15 months ago. Londoners deserve nothing less. I hope that, as a result, your Lordships will support the Unstarred Question introduced by the noble Baroness this evening.
8.40 p.m.
Lord Teviot: My Lords, I should first like to thank my noble friend Lady Gardner of Parkes for asking this Question, and also the noble Baroness, Lady Hollis of Heigham, from the city of Norwich. Both have produced excellent speeches on this subject. At one time I thought there was going to be variance and that I should have to make a longer speech, but I am now going to stick to my own speech, which will be extraordinarily brief. For over 20 years now attempts have been made by all parties to introduce legislation to control the private hire or minicab situation in London. It is well known that this is an area of transport where the total absence of control has led to a lowering of standards and increasing concern among the public.
The last time the matter came before your Lordships many spoke on behalf of the black taxi trade, because it was thought that controlling minicabs in some way implied the end of the black taxi. This is quite wrong and totally misleading. The

833
black taxi in London provides a service that enjoys the highest reputation both with Londoners and visitors from abroad; it must be encouraged to continue to retain its preferential right to ply for hire in London. We are not suggesting that minicabs should ply for hire. However, this should in no way deflect anyone from dealing with the 40,000 to 50,000 minicab drivers presently offering their services to members of the public without any guarantee of even a minimum standard.
Because this problem has been with us for so long perhaps we should look at more practical solutions than those so far proposed. Perhaps it is time to consider how problems of this nature were dealt with in the past, specifically in the betting industry, which was at one time run by a type of underworld bookmaker who employed bookies' runners, and from whom the public got a very bad deal. It was the Betting and Gaming Act 1961 which offered licences to all those who were soundly vetted and who wanted to run such businesses. In a very short time that industry was transformed and now contains national and international companies who employ several thousand people and who have the confidence of the betting public. That was a situation dealt with at a stroke and dealt with successfully.
We must look at the vital ingredient of putting responsibility with the operator. My noble friend Lady Gardner knew that I intended to speak on this matter. The noble Baroness, Lady Hollis of Heigham, put it in a slightly different way as regards HGV or PSV drivers, but I do not think we are too much at variance in this area. If the operator fails to comply with the conditions of his licence he puts his whole business prospects at risk. Therefore it would appear sensible at this time to consider offering operator licences to "fit and proper people", as I think legislation states—I believe that "a reputable person" is better, although both sound patronising—within the private hire or minicab industry, putting conditions on their licence relating to the drivers under their control.
That would not involve licensing individual drivers, but the licence conditions could have the same effect. The fee charged to the proprietors would cover the cost of the administration involved. All drivers would have to work for a licensed operator, and details of each driver would be sent to the Metropolitan Police and the Department of Employment. Those operators holding licences would of course offer great assistance to the police when dealing with any drivers operating illegally. The end result would, at minimum cost and to maximum effect, be a system of control that would guarantee the public the protection which they have been demanding for over 20 years.
I have been brief on purpose. The Government said that they agreed that something should be done. We want to have some action, and I beg my noble friend not to put this issue on the back burner. Let us deal with it, and within a year or 18 months from now.
8.45 p.m.
The Viscount of Falkland: My Lords, I should like to thank the noble Baroness, Lady Gardner of Parkes, for introducing this Question in the House, not only on behalf of myself but on behalf of my noble friend Lord Winchilsea and Nottingham who, under normal circumstances and had he been here, would have addressed this Question. I have a particular interest in this subject as a motor cyclist, as one of the co-founders of the all-party motor cycle group, as a road user, and as one who is aware of motor vehicles in London. Therefore, I have to say that a proliferation of minicabs without the kind of controls that have been so well covered by previous speakers would pose a great threat to that particular class of road user.
It must be remembered that the "knowledge"—the term that is used for the procedure by which black cab drivers get to know their streets in order to pass the requisite examination—is gained by using a two-wheeled vehicle, often a scooter or a small motor cycle. Whatever complaints one may have from time to time about drivers of black cabs, their knowledge of motor cycles and two-wheeled vehicles is such that they are considerate towards motor-cyclists. The same cannot be said about the majority of minicab drivers.
The safety of the public is paramount in this respect. It is quite unacceptable to have unlicensed and unexamined drivers driving vehicles which are unsuitable for the trade that they ply. I do not think that any noble Lord has mentioned it, but may I say in passing that if competition from cheap cars, which are probably unroadworthy, at prices well below those charged by black cabs were allowed to exist, it would eventually put the black cabs out of business.
The London black cab is an expensive vehicle. My noble friend Lord Winchilsea told me—and he should know because he drives a black cab, obviously without a meter—that the black cab costs about £22,000. It is a hand-made vehicle. I regret to say that nowadays it has a Japanese engine but the bodies are made in the Midlands. It is especially made for the use to which it is put, and I imagine would require little adaptation for invalid carriages. I think that was mentioned by one noble Baroness. A car that can be bought for £4,000 or £5,000 and used as a minicab is not going to be able to meet that kind of special requirement.
I do not intend to add in any way to what the noble Baroness, Lady Hollis, said. She has not overstated the case at all. I did not know that one-quarter of all stranger rapes were associated with minicabs. It is terrifying. If it were 10 per cent. or 5 per cent. of all stranger rapes it would be horrifying, and would lead those in authority in the country to look carefully at the licensing of these vehicles. The safety of road users, of the people outside the cabs and of those who ride in the vehicles, must be protected. The cabs must be licensed. Only a lunatic would take another view. I know perfectly well that the noble Viscount, Lord Goschen, is no lunatic. In fact, he is a very sensible chap who rides a motorcycle, and I hope he will have a long life ahead of him. He is a sensible rider as I have observed, and I am sure that he will give us a sensible and helpful answer.

835
I support everything that has been said about the need to inspect proprietors as well as vehicles, but I would add what might seem a trivial point. The noble Lord, Lord Teviot, mentioned it. Black cabs in London have been part of the scene of London for years, rather like London policemen. Tourists come here and expect to see black cabs, and they like talking to taxi drivers. In fact, they probably learn more from taxi drivers than they do from anybody during their visits here. If the black cabs were forced to disappear from our streets because we did not bother to protect them against the wrong kind of competition, it would be a sad day for the London environment.
Lord Teviot: My Lords, the only point I should like to make—probably the noble Viscount would have gone on to make it—is that what we are suggesting here is that no other order of black cabs should be able to ply for hire in the streets. The minicab situation is different. They have to be procured by telephone or by going to their offices. That is a different situation. There is no reason why the black cab should ever disappear on that pretext.
The Viscount of Falkland: My Lords, I take the noble Lord's point. This is neither the time nor the place to expand on it and perhaps I may talk to him about it outside this Chamber. But there is definitely a threat to the existence of black cabs, especially in times such as these when people are very hard up. Obviously, too, rather than going out at night to find a black cab, if people can get a cab at a quarter of the price, they are tempted to do so. I thank the noble Lord for his interjection, and I thank the noble Baroness for having had the chance to speak. I hope that I have done my noble friend justice. I know that he feels passionately about black cabs and their continued existence and about all the other points which have been so eloquently raised this evening.
8.52 p.m.
Lord Underhill: My Lords, I join with other noble Lords in thanking the noble Baroness, Lady Gardner of Parkes, for opening this question. It is a matter which she has raised a number of times and one in which she has a great interest. She referred to reservations which I have had from time to time, so before this debate took place I thought I would check what I had said on the last occasion when I intervened on a Question which the noble Baroness put on the 1st July. I said then that I thought that there was a general public desire for legislation to bring the minicabs into line with the black cab trade, but I also said that nothing should be done to weaken the position of black cabs in the splendid service that they give to the people of London. That remains my view today.
We are very grateful to the Suzy Lamplugh Trust for the publicity that they have given to this general problem which led to the establishment of the working party by the Department of Transport. That working party was very widely representative of the taxi trade, the minicab trade and everybody involved in that industry. We should look carefully at what they were asked to do. Their terms of reference were:
836
"To make recommendations on the framework needs to ensure that users of taxis and minicabs in London can travel in reasonable safety and security".
Reference has been made to the very strict regulation that there is on the black cabs. There is a very useful section in the report which details all those points. I shall not refer to it, but I think it is useful to take a look at the numbers involved. The report says that there are 17,000 licensed black cabs and 20,000 licensed taxi drivers, of which 2,000 are licensed to operate only in designated suburban areas. Contrary to that, there are over 40,000 minicabs operating without any regulation whatever. That is a point which has been made by other speakers.
I should like to assure the House and the reputable taxi firms that nothing that I may say is intended to be an attack on the minicab trade. I frequently use minicabs in my area. Plenty of black cab drivers seem to live in my area but no one seems to operate there. Therefore I use minicabs quite a lot, particularly to come to your Lordships' House when I need to come very early. Reputable operators of minicabs or taxicabs can only but gain from good, strong and fair regulation. In my local area, two minicab operators have recognised the desirability of introducing some identification of drivers. Without there being any mandatory requirement, they have voluntarily introduced identification cards for their drivers because they want to reassure passengers, particularly women passengers.
Reference has been made to the position outside London. I think we all understand the position, but, in relation to what my noble friend Lady Hollis said, and without referring to any particular area, when using a black cab in a certain conference town recently I was disgusted with the state of the taxi cab and with the attitude of the driver in his discourtesy. That was a case where it was obvious that the regulations were being ignored, and where, even though the district council had the responsibility for licensing, a lot more needed to be done. That does not apply to the black cab trade in London.
The report of the working party to which I have referred goes on to recommend that regulations should be introduced to cover minicabs in London. But instead of proposing how that should be done the working party concluded:
"However, given the diversity of views expressed by members during our deliberations we are unable to recommend what form such control should take".
That is not a very helpful recommendation.
The diversity of views is exemplified in a number of paragraphs of the report which set out two possible options: a single tier system for all vehicles and drivers wishing to provide a taxi service in London, with a single set of standards; alternatively, a two-tier system, one for taxis and another for minicabs.
I should like to draw attention to paragraph 23 of the report:
"If the Government were minded to propose a two-tier system of licensing in London, we believe that it should first look hard at the provincial system and any difficulties being experienced there".
It is surprising that no explanation of the difficulties referred to appears in the report, even though there were four representatives of the Department of

837
Transport on the working party, including the chairman. Yet we have no details of the difficulties that have arisen in the provincial system. That is surprising because there are press reports of intense differences of opinion arising in some towns. I particularly refer to Liverpool, Bradford and Hackney, in which there are quite strong press reports of differences of opinion and arguments between taxi drivers and minicab drivers. Yet we do not have any account of the differences and the problems that have arisen in the working party report.
The CBI recently issued a helpful memorandum which set out three options. The first was to leave things in London as they are—the status quo. The CBI claimed that there is a consensus in the industry that this position is completely undesirable. I believe that all noble Lords would agree with that. There then follow in the memorandum arguments for and against the single tier and two-tier systems. The CBI conclusion is that, despite initial difficulties, a single regulatory system for the minicab and hackney carriage industry in London is the most preferred route to take. The CBI memorandum suggests that the Minister for Transport in London, Mr. Steven Norris, who incidentally is my Member of Parliament, is considering the working party report and is likely to reach some conclusions by the end of the year. Can the noble Viscount tell me who will advise Mr. Norris? There were four members of the department in the working party. It failed to make any decision as to how regulation should be introduced. Therefore there are intense problems.
A single tier seems to be the answer, but how are we to proceed? This is not a party political matter but I have checked the position of my party on this subject. It is as follows:
"Labour is committed to a reform of the taxi and minicab trade to create a safe, regulated service. But we recognise that black cabs have traditionally been unwilling to work outside the central area"—
a point that has been made by previous speakers"—
"leaving large tracts of suburban London without a service and that it is this that has led to the growth of small minicab firms in such areas".
That is what is happening in my own area.
"Reforms will have to ensure that people dependent on these firms are not deprived of a service".
Moving towards a single system of licensing cannot be done over night. The CBI made a helpful suggestion and the Minister should consider the matter carefully. The CBI suggests that the Minister for Transport in London, Mr. Norris, should set up a committee to advise on the timetable and the best means to move the industry towards single tier regulation. The Government must accept that there is need for regulation of some kind. They should then decide on what kind of regulation it should be and how it is to be introduced.
The present position cannot continue. The public want some regulation. At the same time they want to see no damage done to the black cab trade. At the moment some areas of London have to rely solely on minicabs because of the desire of black cab drivers to work in central London. One can understand that. Can the Government say whether they accept the
838
recommendation that there must be regulation of minicabs in London? Do they agree that a working party, as suggested by the CBI, should be set up to consider a timetable for bringing this into operation? One cannot deal with regulation overnight, particularly when one bears in mind that some 40,000 minicabs operate in London. Do they agree that there should be a single tier? A decision has to be made.
This cannot be left to one Minister to determine. It is certainly not a matter that can be left to the political parties to argue about in Parliament. The working party that was set up should have made a recommendation of this kind. It did not do so. I should like to see something on the lines of a working party set up by the Department of Transport to work out these problems, having at the outset accepted the principle that there shall be some regulation of minicabs.
9.5 p.m.
Viscount Goschen: My Lords, it was because the Government share the real concerns that have been expressed tonight that the working party was set up late last year by the predecessor of my honourable friend the Minister for Transport in London with the following terms of reference:
"To make recommendations on the framework needed to ensure that users of taxis and minicabs can travel in reasonable safety and security".
Its report has been with the Minister for Transport in London since its publication on 15th July of this year and copies have been placed in the Library.
I should first like to say one or two words about the background to this report and what has happened subsequently. The licensing of taxis in London has a long history, as you can tell from their legal name of "hackney carriages". Some of the legislation still in force in London dates back to the first half of the last century. The London taxi trade is a tough one to enter and its members are proud to work in what is, I think, the best taxi service in the world. They are therefore naturally sensitive to anything that they fear would damage London's taxi service.
The question of "what shall we do about minicabs" has been with us now for more than 30 years, since they first appeared with a flourish on the streets of London in 1961. They were introduced in an effort to fill what was seen as a gap in transport provision for hire cars at lower rates than the traditional taxis. Since that date there has been considerable animosity between the London taxi trade and the London minicab trade, and while an uneasy truce is perhaps the best description of the present state of the parties, this has not always been so.
In more recent times allegations have been made that the unregulated minicab trade is not a safe place for passengers. As the noble Baroness, Lady Hollis of Heigham, so powerfully argued, the issue of safety in minicabs, especially for women, is a very emotive one indeed. We frequently have reports in the media of women being assaulted by bogus minicab drivers or driven to an isolated spot, robbed and abandoned. I am sure that I speak for the whole House when I give due credit to the way Diana Lamplugh and the Suzy Lamplugh Trust have campaigned for users of

839
minicabs and taxis to be made aware of the dangers of getting into a strange car in a strange place without first checking that the driver is genuine. I am aware that my noble friend who instigated tonight's debate is a strong supporter of the trust. As a result of work sponsored by the trust and funded by the Department of Transport and the Woolwich Building Society it appeared that a case could be made for improving the safety of users of minicabs and taxis, so a Department of Transport working party was set up last year with representatives from interested parties.
Given the respective histories of the London licensed taxi and minicab trades, it will come as no surprise to your Lordships to learn that, after a few meetings, the chairman of the working party came to the conclusion that, although there was a measure of agreement that something ought to be done about minicabs, the two sides had really reached entrenched positions and however many meetings were held, agreement was unlikely to be reached over just what should be done. The report of the working party reflects that fact. Since its publication, my honourable friend the Minister of Transport in London has been consulting widely and has met with all interested parties. In answer to the noble Lord, Lord Underhill, the views that my honourable friend has heard, together with those expressed by your Lordships this evening, will be very carefully considered. My honourable friend hopes to announce proposals by the end of the year.
I should now like to turn to some of the issues that must be taken into consideration. The traditional "black cab", which of course nowadays comes in a multitude of colours and advertising liveries, is, as has been stated tonight, very much a symbol of London to tourists and Londoners alike. There are two manufacturers of London taxis, which are built to unique standards and have some very special features. They can turn on a sixpence—so useful in congested areas—they have good headroom inside so that everyone can sit in them in comfort, and, most importantly, by the year 2000 all licensed London taxis will accommodate people who are confined to wheelchairs.
That is a very important point because it will mean that people who are in that situation will be able to get out and about in London without taking someone else along to help them. But it does depend on wheelchair-accessible taxis being available. That, in turn, means that we must protect the concept of the London cab, as it is at present the best type to meet requirements for a highly manoeuvrable vehicle, able to seat four or five people in reasonable comfort, carry an amount of luggage and be easily useable by a person in a wheelchair.
As we have heard this evening, some people have asked that a single standard should apply to all hire cars in London; that is, both minicabs and taxis and their drivers. That is the so called "one-tier system". The idea is that minicabs would be phased out over a period of several years, by the end of which their drivers would have had to pass one of the knowledge of London tests. and be licensed as taxi drivers. At the same time, they would have to acquire a vehicle
840
meeting the standards set for a London taxi. If the standards for London taxis are to be maintained—and we intend to do so—that would mean the purchase of a black cab by all minicab drivers who remained in the business. As the noble Viscount, Lord Falkland, emphasised, those cabs cost a good deal more than the secondhand saloon cars used by many minicab drivers.
The advantage of licensing minicab drivers as taxi drivers is seen to be that it would weed out the "unsafe" ones who would fail to meet the character tests that London taxi drivers have to undergo. That is all very well in theory, but there were two instances where the London licensed taxi trade does not fulfil the needs of the public. These are now largely met by the minicab trade, but would we be able to ensure that a 100 per cent. taxi trade in London did meet them in future?
First, as my noble friend Lady Gardner of Parkes noted, there is the question of the area of work. London taxi drivers either have a green badge entitling them to ply for hire anywhere in the Metropolitan Police district, or else they have a yellow badge confining them to a suburban area. As I am sure your Lordships are aware, it is relatively easy to get a cab in central London, unless it is raining! Certain suburban areas like Croydon or Wimbledon also have a supply of taxis, but there are large parts of the inner suburbs and many of the outer ones where, as the noble Lord, Lord Underhill, illustrated, you cannot get a taxi for love nor money. It is in those places in particular that minicabs make a useful contribution to public transport.
Secondly, there is the question of cost. Minicabs are cheaper. You can get a minicab from a reputable firm to take you from Kenton to Heathrow for £13.50, whereas for a licensed taxi cab the fare will be more like £30.50. We are conscious that there are many people who cannot really afford taxi fares, but who find great advantage in being able to hire a car when one is needed.
An alternative scenario is for a two-tier system where minicabs and their drivers and possibly, as the noble Baroness, Lady Hollis and my noble friend Lord Teviot, suggested, the operators of radio circuits, would be subject to some form of licensing regime. At present, the only preconditions are that there is planning permission to cover the use of the office as such, and payment of the correct fee for the radio. There are also problems with that scenario.
First, there is no consensus as to what standards should be required for drivers or their vehicles. For example, should drivers be required to do the "knowledge", or should we continue to rely on them looking up the route beforehand? Should minicabs be required to have four doors? Should there be a partition between the driver and the customer in the back? What maintenance standards should be required? How would they be enforced?
Secondly, would a licensing or a registration scheme for minicabs and/or their drivers damage the motor cycle friendly licensed taxi trade in the way that the latter fears? If so that would make the outlook for

841
the London-type taxi bleak indeed, and in turn that for disabled people for whom ordinary saloon cars can cause a very real problem.
Thirdly, if we continue with the present knowledge of London test for taxi drivers, but license minicabs as well, would anyone still want to become a London taxi driver? After all, to pass the "knowledge" takes 18 months to two years, and the initial investment in a £20,000 London taxi is much more than the initial investment in a car suitable for a minicab.
With regard to the point made by my noble friend Lord Teviot, I make it clear at this point that the Government have no intention of licensing minicabs to ply for hire in the street.
There is a final point that I should like your Lordships to consider. We are all aware of the problems that occur with the minicab trade. As my noble friend Lady Gardner of Parkes said, we have heard of unlicensed, uninsured, unsafe cars being driven by drivers who do not know where they are, let alone where they are going, except if it is to sign on for unemployment benefit. The Suzy Lamplugh Trust's recent advertising campaign drew attention to the situation whereby a man can be released from prison in the morning and be driving a minicab by lunchtime, or he can have convictions for drunken driving and having had his licence back, or not having had it taken away, is still driving a minicab.
Lord Clinton-Davis: My Lords, I am obliged to the noble Viscount for giving way. I believe that he is reaching his conclusion. Before he does so, I want to ask him a question which arises from the proposition he put forward that the Government were intending to come forward with proposals before the end of the year. Have the Government in mind a White Paper, or, as I hope, a Bill? He will realise from the observations that have been made all around the House this evening that this a matter where time is of the essence and that further procrastination would be undesirable. I ask the noble Viscount to be more specific about that point.
Viscount Goschen: My Lords, I appreciate the fears expressed by the noble Lord, Lord Clinton-Davis, that further delay would be harmful, and I agree with him. All I can say is that the Government are consulting widely and hope to put forward proposals before the end of the year. I cannot be any more specific.
842
This is obviously an emotive issue as we have heard this evening, but we must not get carried away with the idea that all minicab drivers are rogues and criminals; and, in any event—this is an important point—one cannot detect the first time offender before he or she has committed the offence.
The problems with the safety of minicab users are, by common consent, largely those of the bottom end of the trade. In answer to the noble Baroness, Lady Hollis of Heigham, and the point she made about rapes and minicabs, I have to say that the Metropolitan Police advise that they do not collect figures in that form and cannot substantiate that statement.
Baroness Hollis of Heigham: My Lords, I am grateful to the noble Viscount for giving way. I quoted from a report from Scotland Yard. I defer to the Minister but those were not my figures; they were attributed to Scotland Yard.
Viscount Goschen: My Lords, that is the information that I have, but I shall go further into the matter and of course write to the noble Baroness on that important point.
We must remember that there are thought to be over 40,000 minicab drivers in London (as compared to about half that number of licensed taxi drivers) and that large numbers of people are carried in perfect safety each day and night by minicabs. What the Government have to weigh up is whether the advantages of regulating minicabs in one way or another is worth the costs, and more importantly, whether it would be effective. Or would the rogue element still trade in defiance of the law? It might well do so, and enforcement could well be a real problem. There are some parts of the minicab problem that could perhaps be dealt with by changes in the law independently of licensing; for example, touting and insurance. The Government will also be looking at those matters.
I am grateful to my noble friend Lady Gardner of Parkes for putting her case so well, and to all noble Lords who made this such an interesting and useful debate. I am sure your Lordships will understand the complexities of the problem and will appreciate that a great deal of care is being taken on making the right decision.
House adjourned at twenty minutes past nine o'clock.