Lords Sitting of 23 November 1994

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.

Pyramid Selling
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether they propose to increase restrictions on those forms of direct selling, involving pyramids or chain letters, which are likely to mislead the public about their effects.
Lord Lucas: My Lords, we shall be consulting soon over changes to the legislation controlling pyramid selling and similar trading schemes. We want to ensure that potential and actual participants in trading schemes are protected from abuses which are peculiar to schemes with a pyramid recruitment structure.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for that very satisfactory Answer. While members of the public cannot be protected from any foolishness of their own, are the Government concerned to deter the launching of apparently attractive and safe schemes which claim respectability, but which in practice can benefit only a small proportion of those who take part in them while losing money for the others, yet which are not presented as lotteries?
Lord Lucas: My Lords, yes. There is no end to the ingenuity of such criminals, but we have found a remedy for the worst of the current abuses. We have closed the three major funds and are in hot pursuit of the others. However, the law as it stands is clearly inadequate. We need to update it and to consult widely on how it should be updated.
Lord Haskel: My Lords, we are all convinced of the need to protect the public from the perils of pyramid selling and chain letters, but can the Minister tell us whether the Government regret that because it curbs free enterprise or because it means more regulation?
Lord Lucas: My Lords, I do not believe that we regret it one bit.

The Benefits Agency: Administrative Errors
2.38 p.m.
Lord Benson Lord Benson asked Her Majesty's Government:
Having regard to the report by the National Audit Office that the social security department paid approximately £600 million in error last year, for how many years has this state of affairs existed; and what
272
changes of staff have been made and what other reorganisations are in progress in the department to prevent a recurrence.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, the value of error represented 4.1 per cent. of expenditure and is a reduction from the 4.8 per cent. of the previous year. Improvement in payment accuracy is a top priority for the Benefits Agency and actions to reduce error include improvements to the computer system and to checking arrangements, extended staff training and a detailed review of all mortgage cases.
Lord Benson: My Lords, am I correct in thinking that the responsibility for that horrible state of affairs rests squarely on the shoulders of the Secretary of State and the accounting officer in the department? Is it not now essential to make changes in both those appointments?
Lord Mackay of Ardbrecknish: My Lords, both my right honourable friend the Secretary of State and the Permanent Secretary at the department are very concerned about the report from the National Audit Office. As I have said, steps are being taken by Michael Bichard, the chief executive of the Benefits Agency, to improve performance. Indeed, the agency has set up a project steering committee to establish the cause of the inaccuracies and to ensure that steps are taken, both along the lines that I have mentioned and others, to reduce the level of inaccuracy and its cost.
Lord Archer of Sandwell: My Lords, since we know from the recent annual report of the chief adjudication officer that in relation to some benefits over 90 per cent. of adjudications attract adverse comment at a later stage, and since a substantial number of them represent not overpayments but underpayments, can the Minister give us any indication of the proportion of mistakes that are rectified at review stage?
Lord Mackay of Ardbrecknish: My Lords, no. I am sorry but I cannot give that answer off the top of my head. I would need notice of such a question. There is no doubt, however, that mistakes cause both overpayment and underpayment. We are concerned about both —on the one hand, from the point of view of the public purse and, on the other hand, from the point of view of the recipient.
Lord Peyton of Yeovil: My Lords, to return to the Question, is not something more than a registration of concern now required?
Lord Mackay of Ardbrecknish: My Lords, I thought that I had made it clear that I have done more than register concern. I have explained what the Benefits Agency has done since the National Audit Office drew this issue to its attention and spelt out to us the number of administrative errors that are made, as opposed to other errors that are made because the clients (either accidentally or deliberately) give Benefits Agency officers the wrong information. I do not want to sound too optimistic about it, but I think that there are some grounds for confidence about improvement. The

273
National Audit Office report shows that about two-thirds of such cases occurred in the first half of the year and that only one-third arose in the second half, by which time some of the improvements that I have mentioned had begun to feed through. I am informed that internal preliminary results from the Benefits Agency suggest that that improvement has been continued.
Lord Cledwyn of Penrhos: My Lords, can the Minister say precisely where that £600 million has gone? Can he tell the House who, generally, were the recipients of that money? Does not a responsibility rest with those who were responsible for paying out those moneys?
Lord Mackay of Ardbrecknish: My Lords, the overpayments are received by the claimants, but the errors are made by officials of the Benefits Agency. We should not be in any doubt that income support is a complex system to operate and those operating it do the best that they can. As I have said, through better training and the use of computers, we very much hope to reduce that figure.
Lord Cledwyn of Penrhos: My Lords, is there any record of the claimants who receive those moneys in error then taking the money back?
Lord Mackay of Ardbrecknish: My Lords, if we make an overpayment which is not the administrative fault of the department, we seek to have it repaid. In mortgage cases, in recent months we have recovered some £30 million paid as a result of mistakes in the mortgage payment system which is a complex system to operate. We hope that by the end of the exercise on mortgage payments that figure will have risen to £50 million.
Baroness Hollis of Heigham: My Lords, I am sure that the Minister is right when he says that the system is complex, but does not the problem lie in that? There are about 30 social security benefits. Is he aware that since the 1988 major legislative changes, which were supposed to stabilise social security for a generation, there have been about 10 Bills or major legislative changes to the social security system on average each and every year? Is it surprising that local staff do not have time to digest the detail and that mistakes are made? Is it not therefore understandable, but regrettable, that about 85 per cent. of all child maintenance orders have been found to be wrong and that on appeal over 40 per cent. of DLA assessments have been found to be wrong? Is it not time that the Government gave social security legislation a chance to bed down and for staff to learn its detail?
Lord Mackay of Ardbrecknish: My Lords, the noble Baroness has widened her question considerably from the Benefits Agency and income support to other matters. I shall be happy to discuss them when the appropriate Question is put down. I fully agree with her that the income support system is complex. One of the reasons for that, as she well knows, is that we are trying to do our best to bring help to people. in various circumstances. The system will inevitably be complex
274
unless of course the noble Baroness wishes to suggest ways to cut some of the devices that we have put in place to improve the system and bring more benefits to people.
Lord Barnett: My Lords, perhaps I may follow the questions put by the noble Lords, Lord Peyton and Lord Benson. Is there any level of error over which the Minister thinks that there should be resignation?
Lord Mackay of Ardbrecknish: My Lords, the errors here have occurred over a wide field. There are 70,000 employees in the system. I know that it makes a nice debating point to say that someone should be sacked, which I think is what the noble Lord is saying, but through the chief executive of the Benefits Agency we have taken some serious steps to attack the problem. I suggest that we await the NAO's report for next year to see whether those improvements have come through, as I suggested that they would.

NHS Managers: Staff Levels
2.47 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
What is the current number of National Health Service managers; and what was the figure five years ago.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, before 1985 there were no staff in the NHS described as managers. Following the Griffiths inquiry, general management was introduced and phased in over a number of years. In 1989 there were 4,940 general and senior managers. That increased to 22,540 in 1993. Since 1986 large numbers of administrative and professional staff, many of them nurses, have transferred to general management grades. Those transfers account for two-thirds of the increase between 1991 and 1992 and half of the increase between 1992 and 1993.
Lord Molloy: My Lords, I thank the Minister for that comprehensive reply. Notwithstanding what she said, is she aware that there are reports extant that nurses are deeply aggrieved by the fact that their numbers are running down, and that the number of health visitors is being decreased? Those staff are more vital to the health service than a surfeit of managers. Would it not be possible for the department to have talks with the nursing associations and health visitors about a problem which is causing them some anxiety?
Baroness Cumberlege: My Lords, there is no question of a reduction in the number of nurses. Since 1983 the number of qualified nurses has increased by 18,500. As to meeting with the Royal College of Nursing, the Health Visitors Association, and other nursing organisations, I met them last Monday.
Lord Ennals: My Lords, is it not true that almost all those who work in the NHS, except the managers, recognise that there are far too many managers now? Is

275
it the Minister's view that the NHS has been better managed since that great influx of managers, or worse managed, as is the view of many people?
Baroness Cumberlege: My Lords, those who receive treatment from the NHS recognise that it is now better managed. During the past year the number of patients treated has risen for the first time to over 8 million. That is twice the annual average of the 1980s and five times the number achieved under Labour.
Lord Elton: My Lords, is it not misleading to talk of a vast influx of managers when the figures given by my noble friend show that a large proportion of them relate to people delivering the service who are being given the proper managerial function within the service that they are delivering? If we put that together with her second supplementary answer, has not the net loss of places as a result been made up by the recruitment of new additional nurses to the system, which is why such a vast improvement of service delivery has taken place?
Baroness Cumberlege: My Lords, that is right in that we rely on clinical staff to provide care and treatment. That is of paramount importance. When you enter a hospital, find it clean, cheerful and well maintained, the staff happy and well motivated, that the laundry works, the food is good and the medical records are at hand, you experience good management. We are giving better service, as shown by the British Attitude Survey published last week. It showed that dissatisfaction with the NHS had fallen and that there was a seven percentage point increase in satisfaction.
Lord Dean of Beswick: My Lords, what criteria are used for setting the salaries of the top managers? Figures were published only last week showing that top managers in the National Health Service have enjoyed percentage increases almost rivalling those of chairmen and directors of privatised public utilities. Is it not strange that we are seeing the salaries of managers in the NHS touching £100,000 a year, which is £20,000 a year more than the Prime Minister receives? Will the Minister enlighten the House about the substantial increases and who has taken the decisions relating to them?
Baroness Cumberlege: My Lords, trusts have the freedom to set their own levels of pay but few have moved away from the national terms and conditions. The rates of pay for regional general managers, district general managers and unit general managers are within wage brackets set by the Whitley councils. Last week publicity was given to five managers who are receiving salary levels of approximately £100,000 per year. All those managers were doctors who had a management function and also had distinction awards.
Baroness Rawlings: My Lords, as a former nurse, I know the good value of management at board level. Does my noble friend agree that much of the recent achievement in the National Health Service has been brought about by involving not only nurses but also doctors in general management?
Baroness Cumberlege: My Lords, my noble friend is right. Clearly, if we are going to improve the National
276
Health Service we must ensure that teams which include doctors, nurses and skilled managers are well established. The results show not only more patients being treated but also a considerable reduction in waiting times.
Lord McCarthy: My Lords, although we may argue about whether the health service is getting better, does the Minister agree that the figures she has given show a 400 per cent. increase over eight years? That is 50 per cent. a year. How long will this go on?
Baroness Cumberlege: My Lords, NHS managers account for just 2.6 per cent. of the NHS workforce and 3.6 per cent. of the salary levels. I do not believe that that is excessive. We need a National Health Service that is well managed. We are putting more investment into the service and the results are coming through.
Lord Campbell of Croy: My Lords, my noble friend was helpful in giving precise figures. Do they include the National Health Service in Scotland and Wales? That is relevant to the figures she has given when such precision is offered.
Baroness Cumberlege: My Lords, the figures are for the United Kingdom.
Baroness Jay of Paddington: My Lords, from what has been said today, it is clear that we are all aware that the Government would like a news blackout on the number of managers in the health service. We heard about that this week. I return to the question asked by my noble friend Lord Dean of Beswick. It is clear that large salary increases are being given to managers in the health service. Do not the Government believe that that is inappropriate when they are recommending that in the statutory bodies there should be a pay freeze for doctors and nurses?
Baroness Cumberlege: My Lords, we shall be monitoring closely the management levels and the cost of management in the National Health Service. From April next year trusts must publish management costs in their annual reports. We have put a ceiling on health authorities regarding the increased number of managers that they can employ. Therefore, the situation is under control.
As regards the media and the National Health Service, I am always surprised when I visit hospitals and wards and go into the community that the people who have experienced the service have a totally different picture from that published in the press. There are two National Health Services: there is the health service that is there and the health service that is written about.
Lord Monkswell: My Lords, in answering a parliamentary Question in another place, the Prime Minister said that the salary increases of the privatised public utilities were the responsibility of the shareholders, and that directors and senior managers were accountable to the shareholders. In answering a

277
supplementary question, the Minister effectively said that trust hospitals are able to set their own salary levels. In doing so, to whom are the trust hospitals accountable?
Baroness Cumberlege: My Lords, trusts are accountable to the Secretary of State and they have to publish the costs of their management. They are accountable; there is no secret about it. The matter has been widely published and the salary levels of chief executives are well known. Trusts must set up a remuneration committee composed of non-executive members who decide not only the salary levels but also the conditions of service.
Lord Molloy: My Lords, bearing in mind what the Minister confidently said, and despite reports of midwives and nurses being somewhat disgruntled, will she consider talking directly not to the press but to the representatives of Britain's nurses, midwives and specialist doctors? That would greatly contribute towards resolving the difficulty that threatens our health service.
Baroness Cumberlege: My Lords, there is no threat to the health service. It improves day on day, year on year. I have a continuing dialogue with those in the nursing profession and, as I said, I saw them last Monday.

EC Budget
2.57 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
What was the annual expenditure of the European Union at the latest convenient date; and what was the comparable figure for five years previously.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley): My Lords, according to the European Court of Auditors, the outturn for the 1993 European Community budget totalled 69,021 million ecu in commitments and 64,498 million ecu in payments. The outturn figures for 1988 were 43,342 million ecu in commitments and 41,279 million ecu in payments.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for giving that interesting information. In the light of the heavy increase during the past five years, are Her Majesty's Government exerting all the pressure that they can to restrain further growth in this expenditure?
Lord Henley: My Lords, my noble friend is right to draw attention to the growth in expenditure by the European Community during the five years that I cited. On paper, the growth appears to be of the order of 50 per cent. About 10 per cent. is taken into account by growth in GNP and between 15 and 20 per cent. by growth in inflation.
Nevertheless, I assure my noble friend that Her Majesty's Government are concerned about growth in expenditure by the European Community, and that is why we secured the deal at the Edinburgh Summit in
278
1992. It limited further growth to 1.27 per cent. of GNP rather than the 1.37 per cent. that the Commission was seeking.
Lord Bruce of Donington: My Lords, is the Minister aware that the figure that he has given for the limit set at the 1992 Edinburgh Summit means an increase of £8 billion during the next five years? In view of the fact that the European Community budget is decided by qualified majority vote, thereby enabling the Commission to extend the budget up to the limits, will the Minister assure the House that in future expenditure will be approved where it ought to be approved—that is, by Parliament—instead of by Cabinet without consultation with or the agreement of Parliament?
Lord Henley: My Lords, such matters will be secured by Parliament when the own resources legislation comes before Parliament in due course. I must tell the noble Lord that I believe my right honourable friend the Prime Minister secured a very good deal on behalf of the United Kingdom at the Edinburgh Summit. He preserved the budget rebate in full, something negotiated by a Conservative Government and never negotiated by any Labour Government in the past. Indeed, no rebate was negotiated by a Labour Government. As I said, my right honourable friend preserved that rebate in full, and limited the growth to 1.27 per cent. rather than the 1.37 per cent. that the Commission was seeking.
Perhaps I may assist the noble Lord as regards the figures. The net cost of the Bill to the UK will be £75 million in 1995–96 rising to £250 million in 1999—that is, after growth and inflation are taken into account—compared with the net contribution that was payable in those years that are presently under consideration.
Lord Wyatt of Weeford: My Lords, can the Minister inquire into why the recent report of the Court of Auditors is apparently not able to be afforded by the budget, because it has never arrived here; indeed, we have still not seen it in this country, although it has been published in Brussels?
Lord Henley: My Lords, I am afraid that I cannot answer the noble Lord's question as to why the report has not yet arrived in this country. However, I believe that the noble Lord is right to draw the attention of the House to the report of the Court of Auditors into the 1993 budget and the concerns expressed therein. I can give the noble Lord the assurance that my right honourable friend the Prime Minister is well aware of those concerns and recently, following the Anglo-French Summit at Chartres, he set out a number of ideas to deal with fraud, which include the Commission stepping up its spot checks for fraud and fraudsters, the European Parliament as a whole—and not just its budgetary control committees—acting on fraud, and the Council of Ministers acting on the Court's special reports on particular areas of the Community budget.
Lord Stoddart of Swindon: My Lords, when the Government produce such figures, I wish that they would do so in pounds sterling rather than in ecus so

279
that we can understand what we are discussing. Can the Minister confirm that the increase in expenditure in the EC or the EU—or whatever we have to call it these days—is 55 per cent. in percentage terms? Can the Minister also confirm that the taxpayers of this country pay no less than £10 billion to the EC and that only selected areas and persons receive any return? Therefore, the taxpayer is bearing a much larger burden than would seem to be the case if we merely take into account the net contribution of £3.5 billion, as it will be next year.
Lord Henley: My Lords, as regards the noble Lord's first point, whenever I next answer such questions I shall seek, if it is possible, to put the answer in pounds sterling rather than ecus. I can confirm that, on paper, in the years that I quoted, there has been a growth of somewhere around 50 per cent. I am prepared to accept the noble Lord's figures in that respect. However, as I made clear when responding to my noble friend Lord Boyd-Carpenter, much of that is made up by the growth in inflation and the growth in GNP which pushes up the size of the budget.
As regards the noble Lord's latter remarks, where he seemed to imply that the deal we are getting out of our membership of the EU is not a fair one, I must simply say that I do not agree with him. We have considerably reduced the potential rise in the size of our net contribution. I see considerable benefit—as, indeed, do most people—in our membership of the EU.
Noble Lords: Order!
Lord Boyd-Carpenter: My Lords, can my noble friend make it clear whether or not the report of the Court of Auditors is being obtained and will be made available to your Lordships and to the people of this country? If it is not, why not?
Lord Henley: My Lords, I shall have to look into the matter. However, I hope that I can assure my noble friend that a copy of the report will be made available to the Library of the House.
Lord Eatwell: My Lords, in his replies to other noble Lords, the Minister made several references to the Edinburgh Summit and to the European Community (Finance) Bill which is the outcome and which will shortly be before Parliament. However, can the Minister confirm that the demand made by the Prime Minister in another place last Wednesday that that Bill should be passed, "in all its essentials", was meant to imply that a vote on any amendment whatever would be a matter of confidence?
Lord Henley: My Lords, I believe that the words of my right honourable friend the Prime Minister meant exactly what he meant them to mean; namely, that the
280
Bill has to be passed in all its essentials. I look forward to debating that Bill with the noble Lord when it comes before the House.
Lord Hailsham of Saint Marylebone: My Lords, as regards any publication which is made available to this House or to the British public, can we be sure that it will be written in English?
Lord Henley: My Lords, I hope that I can give an assurance that such a publication will be written not only in English but also in clear and good English such as my noble and learned friend would like to have, so as to enable him to understand it.
Lord Richard: My Lords, can the Minister tell the House what the Prime Minister meant his words to mean?
Lord Henley: My Lords, my right honourable friend meant exactly what he meant by those words.
Lord Boardman: My Lords, is not one of the problems with the European budget that an ever-rising figure is set from the top and the Commission then decides how to spend it; in other words, it is a top-down budget? The result is that moneys are spent to try to use up the amount available instead of setting the budget in the traditional way by first finding out what is needed and then having a cut-off point to the debt.
Lord Henley: My Lords, I recognise the point that my noble friend makes. However, that is how the EU works and that is why we were very keen to limit the amount of growth that was obtainable within the EC budget. I can assure my noble friend that Her Majesty's Government are certainly not complacent with regard to EU expenditure. We shall continue to strive to achieve good management and to strive against waste in the EU budget.

House of Lords Offices: Select Committee
3.6 p.m.
The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That the Select Committee on the House of Lords Offices be appointed and that, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the Committee—

L. Beaumont of Whitley,

L. Charteris of Amisfield,

V. Cranborne (L. Privy Seal),

L. Dainton,

E. Ferrers,

L. Gibson,

L. Glenarthur,

L. Graham of Edmonton,

B. Hamwee,

L. Harris of Greenwich,

L. Hayhoe,

B. Hollis of Heigham,

281

B. Hylton-Foster,

L. Jenkins of Hillhead,

L. Kimball,

L. Mackay of Clashfern (Lord Chancellor),

L. McIntosh of Haringey,

V. Oxfuird,

L. Peston,

L. Richard,

B. Serota,

Bp. Southwark,

L. Stewartby,

L. Stoddart of Swindon,

L. Strathclyde,

E. Strathmore and Kinghorne,

L. Taylor of Blackburn,

L. Tordoff.—(The Chairman of Committees.)

On Question, Motion agreed to.

Procedure of the House: Select Committee
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
I must apologise to your Lordships, and especially to the noble Lord, Lord Clark of Kempston, for an error in his name which appears on the Order Paper. It should of course read Lord Clark with an "a" and not with an "e". With your Lordships' permission, that error will be put right.
Moved, That the Select Committee on Procedure of the House be appointed and that, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the Committee—

L. Allen of Abbeydale,

E. Arran,

L. Brabazon of Tara,

L. Clark of Kempston,

L. Colnbrook,

V. Cranborne (L. Privy Seal),

L. Dean of Harptree,

L. Dormand of Easington,

L. Elliott of Morpeth,

E. Ferrers,

L. Graham of Edmonton,

L. Harris of Greenwich,

L. Henley,

L. Hesketh,

B. Hylton-Foster,

L. Jenkins of Hillhead,

L. Lester of Herne Hill,

L. McIntosh of Haringey,

L. Mackay of Clashfern (Lord Chancellor),

L. Morris of Castle Morris,

L. Mustill,

L. Richard,

L. Strabolgi,

L. Strathclyde,

L. Tordoff,

L. Weatherill.—(The Chairman of Committees. )

On Question, Motion agreed to.

Deputy Chairmen of Committees
The Chairman of Committees: My Lords, I beg to move the third Motion standing in my name on the Order Paper.
Moved, That, as proposed by the Committee of Selection, the following Lords be appointed as the panel of Lords to act as Deputy Chairmen of Committees for this Session—

L. Aberdare,

L. Airedale,

V. Allenby of Megiddo,

L. Ampthill,

E. Arran,

L. Broadbridge,

L. Brougham and Vaux,

L. Cocks of Hartcliffe,

B. Cox,

L. Elliott of Morpeth,

L. Graham of Edmonton,

B. Hooper,

E. Listowel,

B. Llewelyn-Davies of Hastoe,

B. Lockwood,

L. Lyell,

L. McColl of Dulwich,

L. Murton of Lindisfarne,

V. Oxfuird,

B. Serota,

L. Skelmersdale,

L. Strabolgi,

L. Strathclyde.—(The Chairman of Committees. )

On Question, Motion agreed to.

Address in Reply to Her Majesty's Most Gracious Speech
3.7 p.m.
Debate resumed on the Motion moved on Wednesday last by Lord Wade of Chorlton—namely, That a humble Address be presented to Her Majesty as follows:

"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."

The Minister of State, Department of the Environment (Viscount Ullswater): My Lords, in opening this Session of the adjourned debate on the gracious Speech, it is expected that the principal topics for debate will be the environment and agriculture. I know that your Lordships will be looking forward, as I will, to hearing the two maiden speakers who have added their names to the list of speakers for today's debate.
This Government have a long-standing commitment to the environment. We first set out our strategy for environmental action in the 1990 White Paper, This Common Inheritance. It was the first comprehensive strategy for the environment to be agreed by the whole Government, not just by the Department of the

283
Environment. It surveyed all aspects of environmental concern, from street corner to stratosphere and from human health to endangered species.
The White Paper contained a commitment to regular updates and reports on progress. To ensure that the whole Government continue to play an active part in developing and implementing our environmental strategy, it established the system of Green Ministers in every department.
We have followed the White Paper with annual reports which record progress on commitments to action and set new targets. The next will be published in the spring, and for the first time will also report on progress towards commitments outlined in the UK Strategy for Sustainable Development. As your Lordships will know, the 1992 UNCED conference in Rio de Janeiro, known as the Earth Summit, was an important milestone in the development of international policies for the environment. The UK took a leading role in the negotiations there and signed historic agreements including the Framework Convention on Climate Change, the Biodiversity Convention and Agenda 21.
Agenda 21 set out a framework for involving people from all sectors of society in action to bring about sustainable development throughout the world. It called on national governments to produce their own plans for sustainability. In January this year we published the UK Government's response. Four White Papers were launched by the Prime Minister on 25th January 1994— Climate Change—The UK Programme, Biodiversity—The UK Action Plan, Sustainable Forestry—the UK Programme and Sustainable Development— the UK Strategy.
As with our annual White Paper reports, the whole of Government were involved in putting together the strategy. It reviews the state of the UK environment and looks ahead to the year 2012. It identifies what needs to be done to achieve our goals for a more sustainable future. In doing so it moves beyond purely environmental policy. Both economic growth and the state of the environment affect the quality of life for current and future generations. But words alone will not achieve our aims for a sustainable future. Action is needed to put sustainable development into practice.
One of the first issues we must tackle is that of pollution control. In introducing our plans for the new environment agencies we intend to improve the arrangements for a more integrated approach to pollution control which will ensure proper regulation without undue restrictions on industry. The new agencies will reduce the number of independent regulators in each of their areas, and will improve the prevention and control of environmental pollution. As mentioned in the gracious Speech, the Government intend to introduce at the earliest possible opportunity a Bill to establish an Environment Agency for England and Wales and a Scottish Environment Protection Agency. In addition, this Bill will contain the following measures: powers and duties of the agency in relation to contaminated land, and amendments to powers and duties of local authorities to achieve consistency, arising from the inter-departmental review of policy on contaminated land and liabilities; new requirements to
284
enhance the agency's abilities to deal with pollution from abandoned mines; provisions to support industry-led schemes for producer responsibility for waste; provisions to modernise existing Scottish nuisance controls; provisions to give environmental powers to fisheries regulators, including the Environment Agency; measures to establish new independent authorities for the 10 national parks in England and Wales and to revise parks' purposes; an enabling power for the preservation of hedgerows of particular value; and new arrangements for the payment of grants for purposes conducive to conservation. I am very pleased to be able to confirm the measures which will be covered by this Bill, and I am confident that they will strengthen the delivery of our environment policies.
The new environment agencies will have major responsibilities for controlling industrial pollution and wastes and for the regulation and improvement of the water environment. The agencies will be good for the environment and good for industry: they will benefit business by bringing together the different regulatory regimes in single bodies for each country, but not at the expense of environmental protection. The agencies will promote a more integrated approach to environmental protection; they will provide a strong independent voice to influence the adoption of better environmental standards and practices; and they will contribute to sustainable development by promoting high quality, integrated environmental protection, management and enhancement.
Establishing the agencies represents an important step in taking forward government policies on sustainable development. The White Paper earlier this year set out the key principles and broad strategy: it spelt out the need to combine economic development with protection and conservation of the environment. This involves basing decisions on the best available scientific information, taking precautionary measures where necessary, considering the ecological impacts and ensuring that responsibility for costs follows the "polluter pays" principle.
Lord Cledwyn of Penrhos: My Lords, before the noble Viscount proceeds, will he explain to the House why there is a separate agency for Scotland but not for Wales?
Viscount Ullswater: My Lords, the agency is taking over the work done by HMIP and the NRA and that is how it is based at the moment. There is a different legal system in Scotland which requires the Scottish Environment Protection Agency.
My right honourable friend announced in another place last Friday that my noble friend Lord De Ramsey has accepted the important and demanding post of chairman of the Environment Agency Advisory Committee. We look forward to seeing the agency's holistic approach to sustainable and integrated control of environmental pollution take shape under his chairmanship.
In October we published a draft of the provisions of the Environment Agencies Bill which dealt with the establishment of the two new agencies. This new initiative has enabled interested parties to inform

285
themselves of the details of the proposed legislation before we introduce it to Parliament. We have listened carefully to the concerns which have been raised over the wording of the agency's conservation commitments, and my right honourable friend has had the opportunity to discuss this with Lord de Ramsey. We wish there to be no doubt whatever over both the conservation and the sustainable development role of the agency. As my right honourable friend has announced we have therefore amended the wording; the legislation will provide a clear duty not simply to consider conservation issues in relation to all the agency's functions but to further conservation as appropriate.
I am optimistic that the inclusion of national parks legislation in the Environment Agencies Bill will meet our long-standing commitment to safeguard the future of the parks. We intend to legislate to establish new National Parks Authorities for the 10 parks in England and Wales, to revise the parks' purposes, and to introduce a duty on public bodies to have regard to parks' purposes in carrying out their own functions. Overall, we expect these provisions to bring about a number of advantages for the care and protection of the parks, including a greater clarity of vision and self-confidence, a higher profile and a freedom for the national parks authorities to manage their own affairs.
Producer responsibility for waste is an innovative approach to tackling the problem of waste management. It is in line with the objective of achieving sustainable development and it gives industry a chance to produce a cost-effective, industry-led solution. The initiative challenges industry to assume an increased share of the responsibility for the waste which arises from products it places on the market. The result will be a boost in the re-use, recovery and recycling of waste. The packaging industry, and the work of the Producer Responsibility Group, the PRG, is perhaps the best known producer responsibility initiative. However, Ministers in the Department of the Environment and in the Department of Trade and Industry are in discussion with representatives of a number of other waste streams. The packaging industry was universal in its demands for supporting legislation to avoid the risk of "free-riders", who might seek to avoid their share of the responsibility. We are responding to that wish, and that expressed by representatives in other waste streams, to provide legislative support, by including measures in the agencies Bill.
I am sure that noble Lords present today are all aware that a Bill to reform the law for future agricultural tenancies was introduced to your Lordships' House on 17th November. I do not intend to say a great deal about the Bill because the debate on Second Reading is due to take place next week and my noble friend Lord Howe will deal with that topic of our debate today in his winding-up speech and in detail next week.
However, I shall say this. The tenanted sector is a vital part of our agricultural industry. The availability of land to rent is crucial for young people who cannot raise the large amount of capital required to buy a farm of their own. The long-term decline in the amount of rented land in England and Wales—from 90 per cent. of the
286
total agricultural area in 1910 to about one-third now, and still falling—has been much analysed but so far has not been halted.
The existing agricultural holdings legislation discourages landowners from letting land due to the degree of security it confers on tenants and its complexity. The Government's proposals for farm business tenancies represent a simplified and flexible framework of legislation which would give parties much greater freedom to negotiate their own tenancy arrangements.
The Bill would enable tenancies to cover a wider range of rural enterprises in which farming is the main, but not necessarily the exclusive, business. Parties will be able to agree what activities can be carried out on the holding, which will mean that diversification will be easier. The industry's ability to respond to market and policy changes will be enhanced.
Tenants will have a right to full compensation for the value of their improvements, provided the landlord gave consent. Parties will be free to decide the length of tenancy which best suits their particular needs, but there will be a requirement for either party to give at least a year's notice of the end of the tenancy.
There has been extensive consultation on the subject of these reforms with a wide range of interests. The package which is now before the House is fully supported by the main organisations representing both landlords and tenants, as well as the professional bodies. We believe that the reforms will lead to more land being made available to rent, which will benefit farmers in general and new entrants in particular. The reforms will not only encourage new dynamism and investment in the agricultural industry but will contribute to the future well-being of the rural economy as a whole.
We are conscious of the important part the countryside plays in people's lives. My right honourable friends the Secretary of State for the Environment and the Minister of Agriculture, Fisheries and Food announced on 12th October our plans for a rural White Paper. Its subject will be working in and enjoying the countryside.
That White Paper will be another example of the whole government approach to environmental policies. Jointly produced by the Department of the Environment and Ministry of Agriculture, Fisheries and Food, with contributions from all government departments, it will present a coherent view of government policy for the countryside and will demonstrate the integration of rural affairs across all departments.
The issues it will address will include the impact of agricultural policy on the countryside; ways to provide development in the countryside in a sensitive and well-designed manner; the dynamic relationship between towns and cities and the countryside, the sophisticated nature of economic activity in today's countryside and the importance of encouraging further economic development and diversification; the recognition of local identity and the role of local government; and policies to respond to the decline in biodiversity and to protect and enhance the wider countryside as well as the most valued landscapes and habitats. However, the White Paper will not be about

287
quick fixes, nor instant initiatives. It is intended to develop a long-term strategic framework for the future of our countryside.
I have mentioned that the rural White Paper will review policies to halt the decline in biodiversity. Biodiversity: The UK Action Plan was one of the four White Papers launched last January as part of the Government's response to Rio. It provides a strategy and a way forward for the conservation and enhancement of biodiversity in the United Kingdom. Putting it into practice requires a partnership among all sectors. The Biodiversity Steering Group appointed to advise the Government on the implementation of the plan has representatives from central and local government, the nature conservation agencies, scientific and academic institutions, industry, farming and land management and the leading voluntary conservation bodies. A key task for the group is the development of specific costed targets for species and habitats for publication in late 1995, European Nature Conservation Year. Those targets will be the baseline against which trends can be monitored.
I have mentioned the agency's role in sustainable development. But action is needed by all sectors of society if we are to make real progress towards our goals for a more sustainable future. Our strategy for sustainable development is not an end but a beginning. As I mentioned, the Government will publish their first sustainable development annual report in spring 1995, monitoring progress on commitments during 1994.
The strategy makes it clear that all sectors have a role to play: central government, local government, business, NGOs, individual citizens. To ensure that appropriate action is taken we have launched three new mechanisms which will work for sustainable development.
The Government Panel is an independent panel which will advise the Government on implementation of the strategy. Convened by Sir Crispin Tickell, the panel has met three times so far. It is currently looking into four main topics: environmental pricing and economic instruments, ozone depletion, depletion of fish stocks and environmental education. It will publish its first annual report early in 1995.
The second new initiative is the UK Round Table for Sustainable Development. The sustainable development strategy stressed the need to develop partnerships between the key sectors. The round table will bring together representatives of different groups to discuss the issues of sustainable development and to identify what action needs to be taken. It offers a new opportunity for partnerships. We have therefore been careful to take account of all views in setting it up. There has been lengthy consultation on the scope, format and membership of the round table, and it is hoped that it will soon have its first meeting.
However, we must not forget that it is the actions of individuals in their everyday lives that will make a difference in our quest for a more sustainable future. Recent surveys conducted by my department have shown that people remain concerned about protection of the environment. It may not always be at the top of the list, but it remains a long-term concern.. People are interested in very local environmental problems such as
288
litter and noise, as well as global issues like ozone depletion. The good news is that people are mostly optimistic and believe that a lot can be done.
We recognise that, if people are to translate their good intentions and concern for the environment into real changes in lifestyle, they need up-to-date and accurate information so that they can make informed choices about the environmental impact of their actions. That is where the third new initiative we have established comes in. "Going for Green" will encourage people's interest in the environment and make sure that they understand the real consequences of the choices they make as consumers, at work and at home.
A national campaign committee chaired by Professor Graham Ashworth, Director General of the Tidy Britain Group, has been set up. Its aim is to promote the vital messages of sustainable development to the public in clear, unambiguous language. It will organise national promotional events and projects for local action. The committee has already met three times and is reviewing the work already going on in the voluntary sector, local government, the Churches and many other groups. "Going for Green" will build on that work to encourage everyone to take practical action for the environment. We are determined to follow up the publication of our response to Rio with positive action.
I have already outlined action for sustainable development, which is our overarching objective. To quote the definition given by Mrs. Gro Harlem Brundtland, sustainable development is:
"Development that meets the needs of the present without compromising the ability of future generations to meet their own needs".
That definition was used in the Brundtland Commission report for the World Commission on Environment and Development in 1987. We used it as the starting point for our own sustainable development strategy.
I have outlined today our action to follow up that report. I have introduced to your Lordships our plans for the establishment of the agency which will act as a cornerstone for our sustainable development policy. It has a unique opportunity to influence the adoption of better environmental standards and practices. The three new initiatives we have introduced will help to translate the aims set out in our sustainable development strategy into action involving everyone. Our Rural Development White Paper will ensure that rural concerns are reflected in the development policies across government, and we are following up the biodiversity action plan by setting specific costed targets.
Finally, I should like to assure your Lordships that the environment and the countryside remain at the heart of this Government's policies. I look forward to hearing a lively debate on these very important issues.
3.30 p.m.
Lord Williams of Elvel: My Lords, the noble Viscount has rightly reminded us that today we are discussing environment, agriculture and related matters. With the noble Viscount, I look forward to the maiden speeches from the noble Lord, Lord Phillips of Ellesmere, and the noble Baroness, Lady Thomas of Walliswood.

289
In dealing with these matters I have to declare two interests, as your Lordships require: one as President of the Campaign for Rural Wales and the other as President of the Federation of Economic Development Authorities. I declare the latter because, after dealing with environmental matters, I shall have something to say about local government, leaving my noble and expert friend Lord Carter to deal with agriculture when he winds up from these Benches. I emphasise that both positions carry no remuneration. It is therefore not a pecuniary interest. In fact, somewhat to my regret and the regret of my bank manager, both constitute a negative pecuniary interest in the sense that I am out of pocket as a result. However, I take it that that is of no concern to your Lordships.
Let me start with the environment. The noble Viscount said that the Government have a long-standing commitment to the environment. I readily confess that I had hoped for much more than appears in the gracious Speech. I had hoped to be able to welcome the announcement of improved standards for reducing pollution from cars. I had hoped to be able to greet with enthusiasm a number of important measures: new laws on air pollution and dangerous wastes; new grants to encourage more small woodlands in lowland areas; legislation to safeguard common land on the basis of the Common Land Forum; and legislation to protect public access to the countryside through footpaths. My hopes were in vain. However, before noble Lords opposite jump up to say that I am being too ambitious, that those demands are unrealistic and that no one in their right senses would do all that, they should know that I am only listing—and listing verbatim—the commitments made in the Conservative Party manifesto of 1987. I repeat the year: 1987; I have not yet got to 1992.
To be honest—I always seek to be honest with your Lordships—I hardly dared to go back to 1983. I lost heart when I opened the Conservative manifesto of that year and found the words:
"The worst problems of air pollution have been resolved".
I hope not to be a cruel man, and at one point I had thought that to remind noble Lords opposite of what was in the 1983 manifesto, in the middle of the biggest asthma epidemic of our century, might have been overstepping the mark. But there it is in black and white, and it is a measure of the complacency of their party in these matters that that sentence comes back to haunt them.
But we must be fair. The 1992 Conservative manifesto promised us a new environment agency. We now have it presented to us in the gracious Speech, and indeed in the speech of the noble Viscount. But, again, I must confess to being rather baffled by the Government's approach to the matter. We are told that the Bill is to be introduced in your Lordships' House, not today, but perhaps next week. We were, of course, told the same thing about the paving Bill promised in last year's gracious Speech. I remember welcoming the principle of that Bill last year, just as I now welcome the principle of this Bill. That Bill never saw the light of day; but I will let that pass. It is this week, next week, sometime, never, as the old jingle goes.
290
Before the new Bill is even published, the Secretary of State is conceding in another place, as he did on Friday last, that he has already decided to amend the wording of the Bill to provide, as the noble Viscount said, for a clear duty to be laid on both agencies in a manner which environmental organisations would prefer. He also told us the other measures that the Bill will contain. Those have been confirmed, and I am grateful to the noble Viscount for confirming them in his speech today. But not only that; the Secretary of State went on to announce the membership of the agency for England and Wales, explaining, however, that it has to be an advisory committee for the moment,
"while legislation is going through Parliament".—[Official Report, Commons, 18/11/94; col. 310.]
I do not wish my objections to reflect in any way on those who have been invited onto the agency, all of whom I am sure will do an admirable job. The noble Lord, Lord De Ramsey, is to be chairman. I congratulate him upon his appointment. As a former president of the Country Landowners' Association, and as a Conservative, I am sure that he is well qualified. I was also interested to see on the list Mrs. Shirley Jackson, a fellow of the Society of Practitioners of Insolvency, although I am not sure that that does not introduce a rather sinister note into the activities of the proposed agency.
However, the point that I wish to make is that it seems odd, to put it at its mildest, that your Lordships are to be invited to debate a Bill which we have not yet seen, the contents of which seem to be amended from day to day, apparently setting up two agencies with powers that we do not yet know—and before any of that happens, the Secretary of State is already announcing the membership of one of the agencies. The Secretary of State for Scotland, if I may say so, seems to have been much more discreet, as has the Secretary of State for Wales, who according to Mr. Gummer is allowed one appointee on the new agency.
Furthermore, and on top of all that, I now learn from my honourable friends in another place that the House of Commons Select Committee on the Environment is to take evidence on the Bill. As far as I am aware—and I am open to correction—the dates fixed are 23rd and 30th November and the Secretary of State himself is to appear in person before that committee on the 30th. I am sure that we shall learn a great deal from his evidence—perhaps even the noble Viscount will learn something that he does not already know. Whatever the outcome, the least it seems to me that your Lordships should do is to postpone reading the Bill a second time—that is, assuming that it is introduced in the first place—until we have had an opportunity to read the glosses which the Secretary of State will no doubt wish to put on the various measures in the Bill when he is under interrogation by members of the House of Commons committee. We will no doubt accommodate ourselves to that process. Nevertheless, to use a rather crude expression, it seems to me an odd way to run a railway, and I am by no means sure that it is not derogatory to your Lordships' House.

291
Let me move from the particular of the Bill to three general comments about environmental policy. First, I very much hope that we can begin—and I think that the noble Viscount started along this road—to debate environmental matters not just in terms of stopping people doing things in order to protect the environment but in positive terms—the jobs that can be created in industries and services that are and will increasingly be necessary for environmental improvement.
New technologies are developing new ways of reducing environmental damage and new skills in handling the damage that has already been done. There is a whole new wealth-creating sector that is at present only in its infancy. Recent estimates put the benefit in terms of jobs at anything up to half a million in Britain alone. We must —and I say again "must"—make sure that we in the United Kingdom are at the forefront of this new technology. It is no use pretending that we can only compete in the old industries. We have to compete in the new. The new industries embrace the whole area of environmental technology, of engineering and electronics, of rescuing the real and frequently dirty planet on which we have to live. That should not be seen as a chore. Far from it; it should be seen as an opportunity to create wealth and employment. We should be able to rejoice in the opportunities rather than, as many now do, complain about the restrictions.
My second point follows from the first. Here again I join with the noble Viscount, Lord Ullswater. If we are to look positively at environmental matters, we must all be involved —not just those who are involved with what are known as "green" issues, such as myself, but all of us. Here it seems that we are making some progress. In the agricultural world, thanks at least in part to the efforts of the noble Earl, Lord Cranbrook, it is increasingly being recognised that agricultural and environmental policy should be integrated. That is not the case at present. Furthermore, the key—the essential key—to that process of integration lies in the redirection of agricultural support mechanisms away from production support towards environmental incentives.
In industry, too, the CBI—not naturally a political friend of my party—has taken welcome note of the matter, recommending to its members what it calls its "Environment Business Forum" which enjoins on participants, as noble Lords will know, the nomination of a board-level director with responsibility for the environment and the publication of a corporate environmental policy statement. All that is very good, although I sometimes wonder whether it is so welcome in the City of London.
My third and last point concerns local government. I hope that your Lordships will agree that there can be no serious effort on the environment unless local authorities are fully involved and, indeed, are fully committed. The opportunities for local authorities to improve their own local environment are almost endless. But nothing is worse or more demoralising than being told by Whitehall that your projects are worthless, that you will be given what you are given on the basis of an arcane Whitehall calculation called standard spending assessments, and that if you want to raise further funds from your electors you will be capped.
292
I have brought local government into our debate partly because of its importance to the environment, which I have tried to explain—and which I am sure all your Lordships recognise—but partly because I believe that in local government we now face a situation that is not far short of critical.
Let me explain. Those who are involved in local government have lived through many changes in the past few years. Probably the most traumatic was the episode of the poll tax. Apart from the trauma that that involved in itself, the resolution was almost worse. It turned out that local authorities were to be subjected by central government to a rigorous system of central control, control of how much they could spend and how much they could raise from those who were supposed to be their constituents.
Lord Harmar-Nicholls: My Lords, may I ask the noble Lord a question? Is he satisfied that a local authority can be capped against money it has raised which does not come from central government? Can capping apply to that?
Lord Williams of Elvel: My Lords, I am grateful to the noble Lord. A little later in my notes I have: "assume intervention from the noble Lord, Lord Harmar-Nicholls". However, he rose rather earlier than I expected. The answer to his question is: yes, local authorities can be capped and they are capped on the amount of council tax that they can raise from their electors. I hope that that satisfies the noble Lord and that I may now delete the assumption of an intervention from him.
Lord Harmar-Nicholls: My Lords, the noble Lord must not swank because he has an answer!
Lord Williams of Elvel: My Lords, I return to what I was saying. On top of all that —capping and the standard spending assessments—we have what is politely known as "local government reorganisation". I say "politely" because in practice I believe that the whole exercise is little more than a shambles. Scotland and Wales—where there is no conceivable Conservative majority —have had a new structure of local authority imposed on them by what, in my part of Wales at least, they call the "English Parliament". England, on the other hand, has had the continuing rigmarole of the Banham Commission which has led to the most bitter disputes, many of which were led by noble Lords opposite. They seem to me—and I confess that I speak somewhat as a Welsh outsider—to have more to do with sentimentality and party political advantage than the efficient organisation of local services.
So there it is. That is the crisis in local government. I believe that it is a sign of the Government's acute embarrassment over the whole procedure that the future of local government found no mention either in the gracious Speech or in the speech of the noble Viscount, Lord Ullswater.
Noble Lords will be aware that our debates during this Session on the environment, local government and agriculture may be matters of some controversy. This will particularly be the case with the Environment Agencies Bill—both what is in the Bill and what is not.

293
That is as it should be. But points of controversy should be openly and honestly debated in this House, and decided accordingly.
I have to say to your Lordships that in this respect I have noted a marked change which occurred in the spill-over period of the last Session. I am not sure why it was, but it seemed that there was a kind of "reserve army" of noble Lords opposite who appeared on those occasions when they were called in. I believe that in certain parts of the press they are known as "backwoodsmen". But why? Why "backwoodsmen"? Is it a new environmental agency? Where are the backwoods? Are they camps in which those noble Lords live and have their being, only to be let out to trudge through the Government Lobby under the lash of the Whip? Is there perhaps a gulag out there, somewhere in the north or in Scotland, with elaborate systems of control?
If so, my message to noble Lords of the gulag is simple but clear: relax; take it easy. Life in the gulag is good. It is much better than sitting around in the Library or in one of the bars, in constant fear of prowling Government Whips. Let those who do the daily business of this House get on with it without being submerged from time to time by a sea of strange faces blinking in an unaccustomed light.
We now know that there may be fewer opportunities in future. We are informed that the Government will do all that they can to consolidate to avoid controversy. Conservative Central Office appears to be suggesting a news blackout on the NHS. Perhaps it will go a little further, with a news blackout not just for the NHS but for some other little local difficulties as well: perhaps on the activities of some former members of Westminster City Council, the Scott Inquiry, or reports from the Ritz Hotel in Paris.
I gather from the reaction of many noble Lords opposite that they think what I am saying is distasteful and vulgar. In answer to that, I would say that they in their turn do not realise that Mr. Maples was right: their Government is regarded by the people of this country not merely as distasteful and vulgar but as corrupt, uncaring and incompetent. The sooner noble Lords opposite recognise that simple fact, the sooner we may get some sensible government. And if they cannot get it into their heads, they should stay at home and let others get on with running the country.
Baroness Carnegy of Lour: My Lords, before the noble Lord sits down, is he saying that Members of this House, who probably know most about the environment and who play a huge part in creating and managing the environment of this country, should stay at home and not attend the House when that is the matter under discussion?
Lord Williams of Elvel: My Lords, I am not saying anything beyond that those who come on a daily basis—and the noble Baroness is a regular attender at this
294
House—should participate in debates. I have made my point. I think the noble Baroness understands fully what I am saying, and I leave it at that.
3.52 p.m.
Lord Beaumont of Whitley: My Lords, we have today a rather shorter list of speakers than on the other days of the Queen's Speech. It is nonetheless a very distinguished list, and we look forward to a very interesting debate. We look forward not least to the two maiden speeches—from the distinguished scientist, the noble Lord, Lord Phillips, and from my noble friend Lady Thomas, who has immense experience in local government and knowledge in the field of transport.
The future of the British countryside needs to be ensured. Nowhere can that be more effectively argued and fought for than in this House, where, if the role of the hereditary peerage in the legislature can be defended at all—and I repeat "if"—it is surely in this area, where so many of their roots lie.
It would seem that there are three things which we, the people of this country, need to do. Each one of them has its roots deep in the past, and each one has added urgency today. The first is the preservation of the ecology of the countryside and, as a subset of that, the superficial parts of it which we tend to label "the environment". The second is the repopulation of the countryside, stimulated by the supply of suitable jobs which will serve to make the provision of services for those who live there considerably easier. The third is the preservation of a native, healthy and humane agriculture. None of those things is easy in today's climate. It would be foolish to pretend that they do not sometimes get in each other's way. But all three are essential.
In the first of these areas, the ecology of the countryside, the creation of an environment agency proposed by the Government cannot in itself be a bad thing. But its aims and duties must be spelt out; and it must not join the increasing clutch of matters which can be altered at the whim of Ministers without serious reference to Parliament. There are many of your Lordships—not least on the Law Lords' Benches—who I am sure will have a good look at that aspect of the legislation as it passes through this House.
Following the 1990 environment paper and the 1994 UK sustainability strategy, it is disappointing that the Environment Agencies Bill appears not to place environmental duties on all government departments. That is essential. The promotion of environmental and sustainable policies is not one governmental job among others; it is of overriding importance. In principle, it has been accepted by this Government. We now need to see its acceptance in practice.
To that end, it is vital that we work to a series of targets for individual actions: for instance, for the increase in the numbers of various threatened species and the reintroduction of others such as the pine marten, which has apparently become extinct in England since the last Queen's Speech. It is therefore, I would have thought, a great mistake to rob any body of its environmental duties, however much it is to be centralised or made more efficient. I understand that it

295
has been proposed that the environmental duties should be taken away from the National Rivers Authority. That would be an extremely backward move.
Again on the general issues raised in this respect—I am not yet trespassing into a Second Reading speech on the Environment Agencies Bill, which after all we have not yet seen—the Government must not pursue their course of taking all power away from the people by continuing to emasculate local government. If there is one area where local government has shown its worth recently, and not least in the many authorities that are controlled by Liberal Democrats, it is in the management of waste disposal and the whole ecological field. This is archetypally a local government responsibility and ought to remain so. I have no doubt that the noble Baroness, Lady Hamwee, will touch on this matter, as indeed may well the noble Baroness, Lady Thomas.
While I am on the subject of pollution, I should like to ask the Government what their plans are for implementing the recommendations of the Donaldson Report on shipping, safety and pollution. I have today tabled a no day named Motion to discuss the worthwhile recommendations of the Royal Commission on environmental pollution in the field of transport.
We now understand that the important Bill with which we shall deal shortly will include the long-overdue measures on national parks. Here once again we come across the need for duties to be placed on all departments to ensure that activities affecting the parks are compatible with or further national park purposes. Defence mechanisms must be erected to ensure that the parks have the highest status of protection and that development within them is allowed only in exceptional circumstances where there is a demonstrable national need and no available alternative. I am delighted to hear that there will at least be some action on hedgerows in the course of this Session.
On the creation of rural jobs, there are at least two possible prongs to the Government's attack. The first is the creation of non-farming jobs, something that is aided by the development of distance working. The second is interlocked with my third major theme—the creation of agricultural jobs. We all know that GATT is killing off diversified agriculture everywhere. If Britain is to compete in world markets and at home against world competition, we have to specialise and produce in bulk, which is ruinous to the countryside and to the environment. But for the moment we have to work within those constraints, even in agriculture. We have to save what we can from what could be a mortal blow to rural Britain and western Europe. That means that we must search diligently for the areas in which we can help and encourage farmers—especially the small and part-time farmers—without actually breaking any of the international rules that we have accepted. Perhaps in that area we have something to learn from France.
The Government will have to rethink extensively their agricultural policy, with the changes in the composition of the EC to include Scandinavia and the necessity to help eastern Europe, which is the subject on which my noble friend Lord Mackie will touch. In the area of the common agricultural policy, the Government are
296
confronted, as they well know, with the situation that the more the squeeze is put on farmers from set-aside, quotas or bad prices, the greater is the temptation to indulge in intensive and environmentally damaging farming practices. That is an intolerable Catch-22 situation.
Far the easiest way to overcome that, and one which ought to appeal to this Government given their hatred of sticks, is to be a little less niggardly with the carrots that they offer, and in particular the carrots that they offer for organic farming, including support for existing organic producers. They must stop thinking of organic farming as an area of cranks—which it is not, as no doubt the noble Earl, Lord Clanwilliam, will explain later to your Lordships —and realise that it offers them a way out of the intolerable situation in which farmers find themselves. It may be that the Agricultural Tenancies Bill, with its more flexible approach to the conditions of leases, will present at least a minor step forward in this field as well as being worth while in its own right.
The time will come—indeed, it is well overdue—for a strategy for the countryside which will integrate the welfare of farming and the preservation of the environment. If I properly understood the noble Viscount, he claimed that such integration already existed. To many of us and to those who work in the countryside, it is far from clear that such a thing does exist. The Government have every reason to take that to heart for the welfare of the nation as a whole, the sake of the countryside and their own sake.
The growth of Liberal Democrat representation of the countryside in Parliament, and above all in the local authorities of the shire counties, is not unconnected with the fact that the party opposite seems to have lost its one time—long ago one time—gut feeling of how to ensure and preserve a healthy countryside. For the short time that they are in power, they must try to lead us back or make way for those of us who will.
4.3 p.m.
Lord Phillips of Ellesmere: My Lords, some of your Lordships will know that by training I am a scientist. Therefore it will come as no surprise that I propose to devote my maiden speech largely to the subject of science and how it affects or may affect the rural economy. I was trained as a physicist during the exigencies of war. That was so that I might go and service His Majesty's radar equipment. But I had the good fortune later to join the band of physicists who played a part in the development of molecular biology, a subject which has so much enlarged our understanding of how living creatures are organised and how they function in terms of the chemical substances, the molecules, from which they are composed.
Your Lordships may also have noticed from my choice of title that I owe some loyalty to Ellesmere, which is the small country town in Shropshire where I was born and grew up. My recollection of those days and my continuing connection with Ellesmere have made me deeply aware of the dramatic changes with which our rural and agricultural economies have had to cope over the past years. Some of those changes have

297
been due to scientific and technical developments; others to the changing political and economic environment. I well remember, as I am sure do many of your Lordships, summer days in the harvest field when whole communities turned out to help with the reaping, stooking and catching of rabbits. All of that has now gone, to be replaced by the modern version of the solitary reaper on a combine harvester.
In case noble Lords may think that I paint too idyllic a picture of the good old days, I must also recall the natural shocks to which the farming community was subject; for example, the outbreaks of foot and mouth disease which ravaged our herds of cattle from time to time. One of the latest and most serious of those outbreaks originated in north-west Shropshire. I well remember the devastation that it caused. It is therefore a great satisfaction to me that, in my last days in Oxford as a working scientist, some of my colleagues, led by Dr. David Stuart, worked out in complete detail the three-dimensional structure of the foot and mouth disease virus—that is to say, the way in which the atoms are arranged in that substance—opening the door to new ways of devising remedies or combating the incidence of that disease.
I also remember that in my schooldays my alarm clock was the sound of milk lorries on their way from the local dairy—we called it the milk factory—to collect the milk from surrounding farms, which was then pasteurised and sent on to London by rail tanker. At least in Ellesmere that is now all in the past. As your Lordships know, there are now restrictions on the production of milk. Furthermore, the collection of the milk that is produced in the Ellesmere area has been transferred elsewhere, partly, I understand, in response to the vagaries of European Community funding.
But the farming community is very adaptable. This is where my involvement in science comes in. For many years I have been concerned with watching over the activities of the research councils and in advising the Government on the resources that are needed and how they should be deployed. That experience brought me closely into contact with various Members of your Lordships' House: the noble Lord, Lord Shepherd, and the noble Earl, Lord Jellicoe, during their distinguished terms as chairman of the Medical Research Council; and the noble Earl, Lord Selborne (whom I am glad to see in the Chamber and to whose speech I look forward) during his far-sighted period as chairman of the Agriculture and Food Research Council.
My period as chairman of the Advisory Board for the Research Councils, which noble Lords may remember was abolished at the end of last year, included many exciting developments in science and its application; but none more dramatic than the development of molecular biology and its application to medicine and to agriculture. Your Lordships will remember, for example, the sheep named Tracy which was bred to produce in her milk the important anti-haemophilia drug, Factor IX. Tracy is now the senior member of a small flock of sheep, whose members produce, among other things, alpha antitrypsin, which has great promise
298
in the treatment of emphysema. Those of your Lordships who may be concerned about shortness of breath will no doubt take a great interest in that development.
At the same time there have been great advances in plant breeding and in plant biotechnology. The advances in conventional plant breeding that have greatly increased grain crops around the world—the so-called "green revolution"—will be well-known to your Lordships. What may be a little less familiar is the remarkably rapid progress that is being made in the use of plant biotechnology to introduce new properties in the crops we grow and, indeed, to develop new crops.
Those noble Lords who were fortunate enough to attend the meeting of the Parliamentary and Scientific Committee last Monday will have heard excellent accounts of those developments and their potential environmental hazards by Brian Heap, the director of the Babraham Research Institute of the Biotechnology and Biological Sciences Research Council and John Krebs, the director general of the Natural Environment Research Council. My brief summary draws heavily on what they had to say.
Those developments involve the introduction of new or foreign genes into existing plants to produce so-called "transgenic" plants. Those plants may have increased resistance to pests and to diseases of various kinds. Or they may produce new, high value products that could be previously produced only by complex chemical processes. For example, scientists in the United States recently produced a potato that is resistant to the Colorado beetle and developments are in progress, both here and in other countries, that will allow the production of biodegradable plastics in potatoes; of antibodies (normally thought of as an animal product) in potatoes; and of modified fatty acids in rape.
In the USA in 1992, for example, there were 161 permits for field trials on transgenic plants on some 700 sites as compared with only five in 1987. Clearly rapid progress is being made and I am happy to say that scientists in the UK are in the forefront of this branch of science. Your Lordships may therefore look forward in the future to looking out on crops producing antibiotics and other fine chemicals in a developing revolution that may again transform the agricultural industry and the rural economy.
But your Lordships will be aware that I am painting a glowing picture of the prospects. As with all scientific developments, there is also a potential downside. Many people are deeply concerned about our new-found ability to interfere with nature and there are undoubtedly hazards to be guarded against as well as affronts to sincerely held beliefs. Our research councils—the Natural Environment Research Council, the BBSRC, the Medical Research Council and the Economic and Social Research Council—are actively concerned with those issues.
Your Lordships are well aware of the extent to which those developments are hedged about with regulations, both national and international. I shall not go into that any further except to say how widely appreciated was the report on this subject by the Select Committee on Science and Technology chaired by the noble Lord, Lord Howie of Troon. I am sure that your Lordships

299
will agree on the need for eternal vigilance if we are not to be hamstrung by well-intentioned but unnecessary regulations.
That brings me finally to the vital question of public understanding of these developments. Happily we are now moving away from an unfortunate period in which scientists complained that, "If only the public understood what we are trying to do, opposition would vanish". Of course, public understanding of science is important, and I am sure we all hope that our education system will now settle down to providing the understanding of these and other matters that well-informed citizens need.
But scientists' understanding of the public is also important and it is a pleasure to note that increased efforts are being made on that front. Just a few weeks ago a consensus conference was held at the Science Museum, organised by John Durant, at which 16 lay people made an intensive effort to understand what is going on in plant biotechnology and produced recommendations on the measures that would allay their and other people's concerns. That meeting was financed and organised by the Biotechnology and Biological Sciences Research Council—the successor body to the Agriculture and Food Research Council—and I am sure that we shall see increased efforts of that kind over coming years. Indeed, only this morning in Oxford, under the auspices of the Natural Environment Research Council, there was a public meeting to discuss the recent field trials of a virus engineered to combat the depredations of the cabbage-white butterfly caterpillar.
I am sure your Lordships will agree that these efforts are necessary and it would be remiss of me not to acknowledge the important part that your Lordships have played in promoting scientific research and its effective control and dissemination over the years. I hope that the House shares with me the hope that present advances will indeed greatly benefit our rural economy.
4.17 p.m.
Lord Crickhowell: My Lords, it is an immense privilege to follow the noble Lord, Lord Phillips of Ellesmere, in his maiden speech and, on behalf of the House, to congratulate him on what was a most eloquent contribution. If any of us had fears that anyone who was an expert on molecular biology would be speaking of matters beyond our comprehension, we were quickly and almost literally brought down to earth. We were shown that this was a subject of profound importance and interest for anyone concerned with agriculture, with marine life and so much else besides.
Perhaps I may add that it is a particular privilege to follow the noble Lord because he was educated at University College, Cardiff, of whose successor institution I have the privilege of being president. We very much look forward to many more contributions from him in this House. Education may be taking place outside the House but it will certainly be taking place here as well. Many of us will emerge with a much greater knowledge of these affairs than we had before.
It was helpful of the Government to publish draft clauses to the environment Bill well before the gracious Speech. It was unreasonable of the noble Lord, Lord
300
Williams of Elvel, to criticise them for bringing forward amended clauses as a result of the representations received on that draft Bill. It was an almost unprecedented gesture by the Government to publish a draft at that stage. We have yet to see a large part of the Bill. I do not propose to discuss it in detail today. It seems likely that when I see the Bill I will give a warm welcome to a great deal that is in it. I am a strong supporter of the principle of establishing an environment agency that embraces the work of the NRA, HMIP and the waste regulatory authorities. It is also excellent news that we are to have clauses to establish new independent authorities for the national parks. If those clauses replicate the provisions that we debated on the initiative of my noble friend Lord Norrie, they, too, will have my enthusiastic support. I give an equally warm welcome to the news that we are to see significant proposals on contaminated land and abandoned mines, and industry-led schemes for the recycling of wastes.
It seems to me that some of the initial criticisms that have been made of the proposed legislation are misdirected and unfair. Certainly, they have been overstated. However, I have to say that that is partly the Government's fault. If they had responded sooner to some of the advice given to them about sensitive issues, they might have been able to give more positive answers to legitimate questions than they provided initially. Furthermore, if one puts it about that the present chairman of the NRA is not to be considered as a prospective chairman of the new organisation because he has been too robust and independent and "has gone native on the environment", it is not surprising that environmental bodies gain the impression that the Government's intention is to create an organisation that is less robust and independent. It is also unfair to my noble friend Lord De Ramsey, whose appointment I warmly welcome. I am sure that he and his colleagues will do a first-rate job once the team has been strengthened, as I think it must be, with one or two people of the right experience of the water environment, and once it has got used to the peculiar way in which the Government sometimes conduct their business nowadays.
The Secretary of State is a friend and former colleague. I was saddened and puzzled that, until he telephoned me two hours before the announcement of my noble friend's appointment, the future of the NRA and its employees and its wealth of knowledge and experience appeared to be so low on his agenda that he had not met or spoken to me since he dined as my guest on 20th June. I might perhaps have been forgiven for having begun to reach the conclusion that the advice and expertise of the NRA board, its admirable staff and excellent advisory committees, for whom as chairman I speak, were not of much interest. Yet, when I met the Secretary of State earlier today he responded encouragingly and positively to the points that I put to him. He could not have been in a more helpful mood. He is to attend a meeting of the NRA board for the first time next February. I am afraid he will find that there are fences that need to be mended; and that, as a consequence of his handling of this immensely

301
important matter, morale in the NRA has been dented; and that the organisation which he rightly praises is bewildered and uncertain. However, enough of that.
The central point I make this afternoon is to suggest that when passing legislation of this kind we sometimes delude ourselves into imagining that what matters more than anything else is the Bill and the precise wording of its clauses. Of course, the Bill is important and it is foolish to argue that precision in drafting is not of some significance. But what people have to realise when organisations like the NRA or the proposed environment agency are set up is that there is a factor at least as important as the legislation itself. I refer to the role that is likely to be performed by the Government in implementing the Bill.
To begin with, the fact that one puts something into a Bill does not necessarily mean that it will be done. When the Government introduced the Water Act they indicated that the system of statutory water quality objectives and the methods that would be established to bring those into effect would be the keystones of the regulatory arrangements. More than five-and-a-half years later we have no statutory water quality objectives.
We live in a parliamentary democracy, and it is right and reasonable that responsibility for the way in which quangos operate and implement their powers should rest with Ministers who are answerable to Parliament. But that means that Ministers and their departments will have a huge influence on the ability of the agency to carry out its functions. To give an example, provision was made in the Water Act for appeals against revised discharge consent conditions to be made to the Secretary of State. Over the next few years, approaching 2,000 appeals were made against revised consent conditions proposed by the NRA. Not one of those was ever settled by the department, who finally completed the drafting and consultation on a set of rules which meant that the whole lot would be passed back to the NRA. One company, Yorkshire Water, appealed against almost all the tightened consent conditions.
I am sure that the department would argue, quite correctly, that the issues were important and complex and that there was a need to develop a clear and consistent policy. However, the fact that the process has taken so long and left individual disputes unresolved means that over quite a long period environmental protection has been less effective than it should have been.
In citing examples in this way, I am uncomfortably aware that I may be doing an injustice to those in the department who have had to grapple with some formidable problems. Mine may of course be a partial view. The last thing that I wish to do is to be unfair to conscientious civil servants. I seek to make the point that the new agency will be able to carry out its formidable responsibilities in an effective and timely way only if the appropriate divisions of the Department of the Environment are adequately staffed and deal promptly with the considerable number of policy decisions that will remain to be taken within government. Almost everything that the agency does—its regulatory arrangements, charging schemes,
302
corporate plan and financial arrangements—has to be approved by Ministers. The Bill is replete with phrases such as "with the consent of the Minister", "dependent on ministerial instructions or request" and "the guidelines given through the management statement". Those who have read the draft management statement will know exactly what I mean.
I cannot help noting that, while time and again it says that the agency is to act on the advice or with the guidance of Ministers, there is not a single reference to the possibility that perhaps it is a good idea occasionally for Ministers to listen to the advice of the agency. It takes two to tango. If one has a department which cannot dance or insists on treading on the toes of the agency, one will have difficulties. In the coming months what Parliament will be doing is establishing a partnership, and everything that follows will depend on whether or not that partnership works. Parliament would do well if it spent as much time probing the intentions of government about their general approach to these issues as to the detailed examination of clauses. That is particularly important at a moment in history when one knows that deregulation is the flavour of the month. One senses that there are a good many in government, and indeed outside, who are quite anxious that the scope of the agency should be limited.
Much will depend on the approach of the board and employees of the agency itself. There is great potential in the fact that the agency will be in a position to publish a state of the environment report. I hope that the Bill will provide that it is a requirement that the agency should do so. That will represent a powerful weapon, as is the ability of the agency—indeed, I hope it will be the determination of the agency—to put all the facts, monitoring results and its concerns openly on the table. Make no mistake about it. The ability of the agency to perform will depend on its ability to move the Government to work with it effectively, not just by internal discussion but by the manner in which it presents its arguments out in the open. I do not believe that there is any other way that that can be done.
I say this because I have significant doubts about the present intentions and determination of the Government on some issues. At times they look rather like a relative of the push-me-pull-you. That is a little unfair to that lovely beast, who, you will remember, can look both ways and always be at least half awake. A short time ago under one Secretary of State the DoE sought to replace regulation with economic instruments. There are very powerful arguments for the use of economic instruments, at the very least as tools to reinforce command and control regulation. I believe that the Government made the mistake of seeking to put together a comprehensive system to replace regulation instead of more measured and moderate steps to supplement it. Having failed in the attempt, they now, regrettably, seem to have abandoned it altogether.
There are three issues which I think will attract particular attention when the Bill comes before the House. There is the crucial requirement that the agency should have a duty to produce an environmental report. There has been concern about the draft clauses on conservation. Discussions between the NRA's officials

303
and officials within the DoE on this issue have reminded me of disputes conducted between mediaeval theologians. I am delighted that the Secretary of State has listened to the points put by the NRA and others and has published a new draft clause. However, even the mediaeval theologians might have been flummoxed by the complexity of what we have now been offered. I am sure that the intention is right, but we shall have to examine it closely to make certain that it does give us the strong conservation duty that is needed.
The other matter that has stirred up controversy is the clause about cost benefits. I have no difficulty at all with the idea that the agency should be subject to a cost benefit requirement. What I do find difficulty with is the possibility that there may be no mechanism for actually dealing with that requirement. We need to have answers to some pretty important questions about whether the clause is going to be strictly applied to almost every single minor move made by the agency, or whether it is going to be broader brush than that. But, however broad the brush, the agency must have adequate access to information from third parties. It must have the means to arrive at broadly acceptable estimates of costs and benefits. If it fails to do so, it seems likely that its decisions and actions will be challenged, by appeal either to the Secretary of State or to the courts.
That takes me back to statutory quality objectives, because the arrangements so sensibly designed by the Government in 1989 would enable proposed improvements to be debated, cost estimates rigorously tested, and the public to be informed and consulted about options, costs and benefits. There may be other ways in which the environmental regulator can discover the costs of regulatory proposals before the regulations are put in place and can conduct a sensible dialogue with all those affected, but nobody has yet told me about them or explained what is wrong with the schemes we already have and which the Government have held in abeyance now for more than five and a half years. Fortunately, I think that the Government are beginning to get the message, and I sense that perhaps we shall see proposals quite soon that will take us forward.
Well, where do we go from here? The NRA in the last 18 months or so of its life will continue to be as independent, as robust, and as open as it has always been, and I believe that the new agency must follow that path as well. I am confident that any agency that wishes to be effective will reach the conclusion that this is the only sensible way forward. Therefore, to those who are worried about the future and doubt the intentions of the Government, I finish on an optimistic note. Though he sometimes makes it rather difficult for us to do so, I really do believe that the Secretary of State is genuinely concerned about the environment and wants a strong agency. Knowing the huge input to the new agency that will come from the NRA and its workforce, we do not need to be too anxious, because I am confident that the lessons that the NRA has learnt and put into practice will be absorbed by its successors and that even if
304
occasionally they get their feet trampled on they will somehow succeed in dragging their partner round the dance floor.
4.34 p.m.
Baroness Nicol: My Lords, I should like to add my congratulations to those of the noble Lord, Lord Crickhowell, to the noble Lord, Lord Phillips of Ellesmere. I had the pleasure of hearing him as an expert witness on one or two occasions on Select Committees and he was very impressive indeed; and this afternoon he has been no less impressive. I hope that we shall hear him very often.
The noble Lord, Lord Crickhowell, suggests that government attitudes are more important than clauses. I agree with that. He is indeed right. But well worded clauses are the only defence we have if a government's intentions seem to stray from the path. Therefore, when the Bill finally comes before us, we must do the best we can to make it watertight.
I give a cautious welcome to the Environment Agencies Bill. It has to be cautious, and I shall explain a little later why. Integrated pollution control is obviously better than the piecemeal approach we have had until now, even though, as my noble friend Lord Williams of Elvel and the noble Lord, Lord Beaumont of Whitley, pointed out, there are serious omissions as far as we can tell. But I would feel much more confident if the agencies were described as environmental protection agencies, as the American equivalent is. I am sorry that it was not felt necessary or desirable to include that word. It would at least give the agencies the air of what so many of us hope they will be.
My confidence was not improved by the appearance in the draft of the weakest possible form of words for conservation duties, to which other noble Lords have referred, "having regard to the desirability of", instead of the much stronger responsibility which the NRA and others enjoyed before. The fact that the Secretary of State in a speech last week agreed to accept stronger wording does not console me since he did so only after assuring us that he considered the old phrases to mean the same as the new. That leaves us in doubt about which interpretation he will place on them or which interpretation will be placed on them by the new body.
The agencies will be required to minimise the burdens on industry. The noble Lord, Lord Crickhowell, had something to say about that. Given that, as far as I can see, business people seem to be in the majority on the list of names already announced, I am just a little uneasy about how this requirement may be balanced with the agencies' other responsibilities; and why does there not appear to be a scientist of any kind on the list of names? I could be wrong about that. Perhaps the noble Earl who is to reply will correct me if I am. We will need to examine this aspect very closely during the passage of the Bill and perhaps make some recommendations for improvement.
I am aware that this is not the time to embark on a Second Reading speech but I must mention one other aspect of the Bill and explain why I am cautious about it. I was delighted to hear that the long awaited legislation for national park authorities was to be

305
included and that it would be almost identical to the Norrie Bill which was discussed in this House and passed with enthusiasm earlier this year. But in a speech yesterday to the Council for National Parks, the Minister for the Environment and Countryside implied that many of the desired effects would be achieved through guidelines rather than through requirements on the face of the Bill. Again, I hope that the noble Earl who is to reply will correct me if I am wrong, but we should be very careful about the wording of that part of the Bill when it comes before us. As we all know, guidelines are not subject to parliamentary scrutiny. I hope I am wrong. Therefore, my welcome for the Bill must be qualified pending closer examination of the structure and composition of the agencies and indeed of the proposed means they have of achieving their aims.
I particularly welcome in today's debate the grouping of environment and agriculture—at last an acknowledgement that any discussion on conservation of the countryside cannot be separated from agriculture and its effects! In a briefing which I am sure many of your Lordships will have seen, English Nature stressed the importance of an integrated view of countryside management. It suggests that countryside management should include a holistic view and advises that agriculture should be environmentally sustainable. It suggests a redirection of CAP moneys to embrace environmental benefits if the industry is to move to more sustainable practices. I am quite sure that my noble friend Lord Carter will have something to say about that at the end of the debate.
The encouragement of organic farming was mentioned by the noble Lord, Lord Beaumont. I believe that it has a real contribution to make towards a sustainable farming industry, particularly towards maintaining biodiversity. Demand for organic produce in the United Kingdom outstrips supply by between 60 and 70 per cent. We have to import the balance —quite often from doubtful sources and we are not sure just how "organic" the organic imports are. It would make sense at least to fill that gap with British produce. Of course, I understand that it may be many years before organic farming can make a substantial contribution to the needs of this country and I do not suggest that we should aim for that in the near future.
One way of encouraging organic farming in this country would be to take a more realistic view of its funding. As far as I can discover, the funding of organic farming in the UK is lower than in any other member state. The United Kingdom offers £70 per hectare in the conversion years one and two; £50 for year three; £35 for year four and £25 for year five. That is a pittance by any standards. Germany, by contrast, offers £200 per hectare for the conversion years and £150 per hectare thereafter. If we really want to encourage organic farming, we shall have to come to terms with the need to finance it better.
On the whole, however, I am encouraged by the noble Viscount's speech which opened the debate. At least he is saying the right things. We shall watch the Government's attempts to put what he has said into practice. I believe that the present Secretary of State for
306
the Environment has the right aims. Although I often differ from him on how those aims can be achieved, I am nevertheless encouraged by many of the things that he says. I hope that we can go forward from here to a really useful Bill.
4.41 p.m.
Baroness Thomas of Walliswood: My Lords, your Lordships' warm welcome to all new Members is known even beyond this House, and has been gladly received by me. I only hope that by the end of this short speech I shall not be craving your Lordships' indulgence because my voice is at that rather peculiar stage when one does not know what is going to come out when one speaks, a squeak or a groan.
As my noble friend said, I have spent the past 12 years mostly engaged in local government. In fact, I spent 10 years in local government and the rest of my time attempting to enter the elected House of Parliament. I tried most earnestly to achieve that end. Indeed, I tried quite recently to become a Member of the European Parliament. It was during that campaign that the suggestion was made to me that I might allow my name to go forward in order to join this House. That shows how providence may close one door, but opens another.
During my years on Surrey County Council, I was always a member of the highways and transport committee. I know that that is not considered to be a woman's subject, but I have always enjoyed it and found great interest in it. Indeed, I am now chairman of the highways and transport committee. I do not think that it is an accident that Surrey was one of the first counties in this country to draw up a transport plan. It resulted from the fact that in 1989, when we first began to consider drawing up such a plan, Surrey was already suffering twice the national average of traffic. We now have nearly three times the national traffic average, so the impact of traffic on the environment in every way is something about which Surrey's residents are deeply concerned.
I had the good fortune to serve—albeit in a rather junior capacity as a member of a small group—on the first working group that produced that transport plan. The main principles of the plan were based on the realisation that we could not satisfy the apparent demand for road transport,
"without unacceptable financial and environmental costs".
That statement was a response to the then recently published Government forecasts which indicated that we might expect within our lifetimes to see a doubling in the volume of traffic going past our homes. I think that it was that which set us going.
Obviously, we had a wide range of main objectives. We wanted to maintain our strategic network so that the heavy traffic would be encouraged to drive along that rather than seek ways round it. We wanted to achieve what is called, in the current terminology, "modal change", so we put forward methods of increasing public transport and promoting walking and cycling.
We also had social objectives. Although Surrey has a very high percentage of car ownership—again, one of the highest in the country—even in Surrey some people

307
do not have access to cars and many people find all modes of public transport difficult to cope with. We had objectives to relate to those points. We hoped that our planning procedures might ensure either that there was development only in key locations where sufficient transport networks or facilities were available—I am not talking only about road networks, but about other types of transport also—or that the developer might fund appropriate transport provision. By that, I do not mean simply improving roundabouts or building a new road; I mean providing better bus services or contributing to improvements in rail links, if that could be arranged.
Perhaps I may say at this point how much we have all welcomed the recent policy guidelines discouraging out-of-town shopping centres. Such centres have led to an enormous increase in traffic in our county. When we drew up our structure plan, we had originally planned to have 12 such shopping centres, but we have 15 already and more are in the pipeline. When those have been built—if they are ever built—I hope that we shall be able to resist future such planning applications.
Subsequently, we have modelled our policy on those objectives, and have contributed to increasing the bus services. This year, for example, £0.5 million was put into our budget to increase the bus services serving our secondary schools. I do not think that I need to state the difference that is made to the volume of traffic on our roads in the morning peak when schools are working as compared with when they are not. If we can reduce the number of cars travelling to and from our secondary schools —and, incidentally, make young people aware that there are other modes of transport besides the private car—we think that we shall be doing something useful. We have also supported a large number of studies into improving rail transport, particularly in south London, and relating to access to Heathrow.
Interestingly enough, in the course of some of our activities we have done a good deal of opinion sampling. Your Lordships might be interested to hear some recent results. The citizens of Surrey feel that road congestion, air pollution and crime against property are, in that order, some of the most important problems that they face. As a solution to congestion, they favour improving public transport and improving the facilities for walking and cycling. Many people feel that the roads are now so dangerous, particularly in our villages, that they dare not walk along them. Therefore, they use their car when going to buy a loaf of bread, particularly if they are taking a child with them.
Perhaps your Lordships will not be greatly surprised that the least favoured solutions are charging for the use of motorways in order to improve or increase the road network, and discouraging the use of cars by increasing the costs of travel for motorists. So, the two areas in which the Government have recently intervened are not very popular with motorists, especially the suggestion about increasing the cost of petrol. I should have thought that that was a statement of the blindingly obvious. If one is in government, I do not need to remind noble Lords that one needs to take popular opinion into account if one possibly can.
308
We are currently revising our transport plan, and among other things we are seeking to determine some targets against which to measure whether we have been successful. I find that an interesting concept. Although we were the first county to produce a transport plan, other counties—many of them, as my noble friend said, with considerable input from the Liberal Democrats—have outstripped us now. They have gone further down the road upon which we first started. It will be interesting to see whether we can set ourselves targets; for example, for modal change. Can we try to see that more people use the trains and buses and cycle, especially over short distances? Can we use those targets as a measure of our success in achieving our policy objectives?
Among other things that we have done, we organised jointly with SERPLAN—whose chairman of course is a Member of your Lordships' House—a three-day conference last March which was well attended on all three days, and for which invitations were sent to a large number of people. As a result of that, we are developing a transport plan for the south-east, because today we lack a transport strategy for the country.
I regret that in the Queen's Speech we see no recognition by the Government that they have a role to play in setting a strategic context for the efforts of local government. I thank noble Lords for listening to me so patiently.
4.52 p.m.
Lord Palmer: My Lords, it is a very great privilege and honour on behalf of the whole House to be able to congratulate the noble Baroness, Lady Thomas, on her excellent maiden speech. She is, outside the House, a well known campaigner for many causes. Today, inside the House, she has proved to be a speaker of great distinction, despite the problems with her voice. I am glad that we did not have a squeak or a croak; but we congratulate her most sincerely. Few of your Lordships may know that she has conducted carol services in such diverse locations as Moscow and Havana. If today's performance is anything to go by, I feel certain that in a year's time she will be conducting your Lordships. I hope that we shall often hear from her.
With help from the right quarters and careful planning, I believe that there is an exciting future for some sections of agriculture; but let us first dwell on the serious black spots—the danger areas, if I may so call them. I refer first of course to the hill farmers. I remember when I represented Scotland on the European Land Owning Organisation that I had the honour to invite its president to come to Scotland on a fact-finding mission. He was to see for himself the terrible problems facing the landowner and the farmer. I shall never forget when he looked at a barren, snow-covered Glenshee mountain face how difficult it was to persuade him that it was home to 3,000 blackface ewes. The plight of the hill farmer, I am sure, will be pointed out later by the noble Lord, Lord Geraint.
The hours that those poor people work, their conditions of work, remind one of Victorian sweat houses. Their net income pro rata must be the lowest in the country. In 1992–93, 30 per cent. of all hill farmers

309
earned less than £5,000 per annum. Their incomes have in fact now fallen back to 1991–92 levels. Over the past two years Her Majesty's Government have cut the HLCAs as incomes rose, and I believe that it is now their moral duty to restore them to 1992–93 levels. I must make a plea that they are not further cut in the Chancellor's Budget.
I also make a plea that the price of petrol does not go up in next week's Budget. When it is increased, people living in rural areas are severely disadvantaged as they have no option other than to use their own transport. I know of one farmer who has a round trip of 102 miles to buy a pint of milk and a loaf of bread. I am sure that many of your Lordships, particularly the noble Lord, Lord Mackie of Benshie, may have even further to travel. In the countryside it is a very serious consideration.
The Government, I believe rightly, have set a low inflation course, as we heard in the gracious Speech. To raise the tax on petrol would, however, fuel inflation and defeat the Government's aim. Fuel in rural areas, it must not be forgotten, is already considerably more expensive than it is in urban conurbations. The noble Viscount will remember well what it was like to live in the scenic Cheviot Hills, far distant from shops; and, sadly, today there are a good deal fewer of those than when he lived there. The noble Earl the Minister is well respected within the farming industry, and I hope that he will mention these points to his right honourable friend the Chancellor.
At this juncture I should just like to say how grossly unfair I believe it is to impose VAT on fuel. Last summer —which, even in Scotland, was considered hot—I guarantee that every person living in a small cottage in the countryside lit a fire. I do not believe that the same could be said for a small cottage in the home counties, and therefore VAT on fuel is a tax upon where one lives. For the elderly in particular I believe that this is terribly unfair and discriminatory.
As we all agreed in the debate on 10th October, the CAP needs to be reformed, and, as the noble Earl, Lord Onslow, said, "pulled up by the roots". It saddens me greatly that this is due to total incompetence. If we think back to the 1970s, we were told, "More food is required. Drain the wetlands, and here is a grant". Now we are told, "Stop. Set it all aside; and here is a grant to do so". I believe that it is madness—total madness—and I do believe that Her Majesty's Government must take measures to ensure that that type of situation does not happen again.
Another black spot is the appalling plight of the pig farmers whose incomes are now less than they were 20 years ago—20 years ago, my Lords! If we compare these hard-working pig farmers—or indeed the hill farmers—to Eurocrats sitting on large, inflation-proof pensions, with mega holiday entitlements and not a particularly onerous workload, I feel certain that the comparison would be unjust, unfair and positively immoral. I am sad that the noble Lord, Lord Bruce of Donington, is not in his place today, because I feel certain that he would be one of the first to agree.
310
Enough of the gloom—and how much I enjoyed the maiden speech of my noble friend Lord Phillips, and the little bit of optimism that I detected in it! After the war, farmers accepted the challenge to change and to adapt; and what a great success they have made of that challenge. I believe many of us are now ready for a further challenge, but with short-term help from Her Majesty's Government—and I emphasise "short-term". Given the tools, the advice and research, we can restore land use to a full capacity and thus maximise the income not only for rural communities but also for the country as a whole.
There is, I believe, no reason why industrial crops cannot make considerable contributions to our balance of payments, and here I am referring to bio-fuels, straw, bio-mass chemical production, which includes lubricants from oilseed rape, biodegradable plastics and paper from cereals and sugar.
Let us hope that research done in this countries is not, as so often happens, developed for use elsewhere. It is a horrific statistic that here in the UK the Government spend 2.1 per cent. of GDP on research and development, which is almost a full percentage point less than what is spent in Japan. I strongly believe that a co-ordinating centre needs to be set up to maximise the use of all research and development being carried out all over the country so that we can compete on a world-wide basis.
We must all believe in the future but we need a helping hand from the Government to set us on course. I end with a quotation from the then Minister for Agriculture, Mr. Gummer, who said at his party's 1990 conference,
"Under this Government the future of farming is secure".
It may well be too late; but, for all our sakes, let us hope and pray that it is not.
5 p.m.
The Earl of Selborne: My Lords, I consider myself particularly privileged to be participating in a debate with two such notable maiden speakers. As a member of the Royal Commission on Environmental Pollution, which reported recently on transport, I naturally followed with particular interest the noble Baroness, Lady Thomas of Walliswood. I agreed with so much of what she said.
The noble Lord, Lord Phillips, in his excellent maiden speech, made it evident that during the years we have had much opportunity to work together. I am only too delighted that he is able to contribute to our affairs. It will come as no surprise to your Lordships to hear that at the first meeting of the Select Committee on Science and Technology after its reconstitution the first item will be to co-opt the noble Lord as a member.
I was delighted too that he reminded us how dependent agriculture is on the biological sciences, even on molecular biology. I could not help remembering that when, as an apple grower, I spoke to a distinguished audience of scientists I was able to remind them that even the physical sciences were once totally dependent on apple growers. After all, where would Newton have been without us?

311
My noble friend the Minister began by referring to the Earth Summit. The national action plans, which have been produced in order to meet our commitments made at that summit, form a good framework within which all our environmental policies must be set. I detect agreement from all sides of the House that we require a holistic approach to environmental issues. It is also agreed that the Government must set the framework and that they have done so in the four documents which constitute the response.
Equally, we acknowledge that the Government have taken on commitments which imply ultimately a degree of regulation. The Montreal Protocol on ozone depletion requires us to phase out the use of such chemicals. That requires regulation. The commitments relating to CO2 levels that we entered into at the Climate Change Convention will require massive intervention either with economic instruments or by regulation. The Biodiversity Convention also implies the meeting of stringent targets.
We also accept that it is much easier to work in a European or international context because the element of unfair competition cannot be so obviously used as an excuse to do nothing. We have recently seen legislation to implement the habitats and species directive of the European Union.
Nevertheless, there is a debate which my noble friend Lord Crickhowell put most cogently. It is between industry and the environmentalists on the balance of regulation as against the balance of voluntary agreements. To put it another way, it is the balance of green taxes against incentives of one kind or another. In a sense, that debate is encapsulated in the two words "sustainable development". It implies, on the one hand, that environment is considered but, on the other hand, that development is essential for the economic prosperity which we clearly recognise as an objective for all nations. Perhaps in our debate we have talked too much about the environmental agencies, and we must not have a Second Reading debate. However, the debate has been polarised by our reading between the lines on whether the Government intend to deregulate environmental issues or to impose firm standards on industry, including the public at large. Clearly, people are unsettled by those issues. As my noble friend Lord Crickhowell made clear, at times the Government's attitude has been ambivalent at best.
It is reasonable to explore the extent to which regulation is appropriate and the extent to which it may be undesirable. Industry is clear that its competitive status should not be jeopardised by inappropriate regulation. It is also clear that without economic growth it is difficult to see how we shall pay for the measures that will be required for environmental enhancement.
The first and obvious conclusion to draw is that we must beware of inappropriate regulation. That is not as uncommon as it may sound. Many of us recognise that the nitrate level for drinking water of 50 parts per million was an example of inappropriate regulation. It was not based on good scientific evidence and it put an enormous cost on water companies. That money could have been much better spent on other areas of the environment.
312
A more obvious example is the German waste recycling system. It was full of good intentions, but the proposals, which were badly thought out and regulated, caused total chaos in recycling industries throughout Europe.
Equally, industry recognises that in that regard some regulation is necessary. The gracious Speech refers to an industry-led scheme for recycling. The proposal comes from industry itself and is an excellent way of ensuring that it will be widely adopted. However, it requires regulation, as is recognised by the CBI and other bodies.
In some sectors we have suffered because our competitive status has been hindered by a lack of clear regulation. The refrigeration industry in this country appears to be losing its market share. The reason is that the domestic market is not regulated as stringently as some of the markets to which it is exporting. The result is that we are importing refrigeration goods that are unacceptable in other markets and clearly we are not in a position to export elsewhere. Our motor manufacturing industry lost an opportunity to market the catalytic converter merely because our regulation was not pressing as fast as other markets. With hindsight, the catalytic converter was bound to be introduced but, alas, we were not forcing our technology to adopt the new systems.
In essence, it must be accepted that regulation should be based on good science. The noble Lord, Lord Phillips, reminded us that the regulation of biotechnology should be based on good science. It must be based on well-informed, well-disciplined risk assessment. Again, perception and risk assessment are often different. However, at the end of the day, regulation must be based on firm risk assessment and not merely on what people perceive. The Consensus Conference, referred to by the noble Lord, Lord Phillips, is important in bringing to the public the issues in a way that is easy for us all to understand.
Cost benefit analysis is another area that causes considerable consternation among environmentalists. Everyone must accept that there must be an element of cost benefit analysis. Clearly, it is unacceptable to have environmental measures at any price. It may be that the discipline of cost benefit analysis is not yet sophisticated enough. How does one take a long-term view about the value of a species? How does one prevent discounting short-term advantage? Rightly, those are the issues about which environmentalists are concerned. It is not a question of discarding cost benefit analysis but of making sure that it is sufficiently robust to include such kind of information.
I welcome the fact that the new agency to be chaired by my noble friend Lord De Ramsey will now be given very much more specific terms of reference in the legislation. I understand from my noble friend the Minister that the agency will now be asked to further the conservation as appropriate. I agree with the noble Lord, Lord Crickhowell, that that means some very clear objectives—for example, reports to the Secretary of State and to Parliament each year as to how much has

313
been achieved and against what parameters. We must know precisely how positive measures have been taken to promote environmental issues.
As the debate is about agriculture and the environment, perhaps I should declare an interest as a farmer. I should also declare a number of interests on the environmental side. I am a member of the Joint Nature Conservation Committee, of the sustainable development panel and of one or two other things.
As regards agriculture, we have an industry which is highly imbued with any amount of economic instruments available to be adapted if one so wishes. Yet, at present, we have area payments, set-aside and price support, all of which deliver very little environmental benefit. It would not be beyond the wit of man, even if we were to concede that we could reduce the support for agriculture—as clearly must happen —to realise that we could get very much greater environmental benefit out of that degree of economic involvement in the industry.
I do not much mind whether one goes for the organic farming system, to which reference has been made, or for extensive or intensive farming systems. One must have sustainable agriculture. However, leaky systems are unacceptable. I believe that noble Lords will recognise that one can get just as many leaky systems from extensive farming as one can from intensive farming. We must ensure that the system protects soils, waters and air.
I am all for favouring market niches, if that is what organic farming represents. But please let us understand that, by sustainable agriculture, we mean competitively produced food of high quality, especially safety quality, produced by environmentally benign systems which also take account of animal welfare considerations.
5.12 p.m.
Lord Jenkins of Putney: My Lords, it is not really surprising that there is no mention in the gracious Speech of what has been called,
"the greatest act of corruption in the history of local government".
I tried to get in touch earlier today with the noble Earl who is to reply to the debate to warn him of my intention to refer to the City of Westminster. I hope that he received my message. I note that he nods his head in acknowledgement.
The description that I quoted did not come from a hostile politician; it came from an eminent Queen's Counsel, Mr. Andrew Arden, QC, after reading the 750 pages of the preliminary report of the District Auditor, with its 12,000 pages of evidence. As many noble Lords will doubtless be aware, Mr. Arden is the author of several works on local government law and on housing. I refer of course to what the popular press have called Westminster City Council's "Homes for Votes Scandal".
Mr. Arden continued:
"Not corruption in the conventional sense but corruption of the machinery of the authority itself, given over to Party gain in a way—and to an extent—that is absolutely without precedent. Nothing prepared me for such a naked abuse of power, people and resources. I would have said it was unthinkable".
314
I could go on to quote many more trenchant comments in the responsible press, but perhaps it is sufficient to say that the District Auditor's provisional finding is that Dame Shirley Porter, the leader of the council, and nine other members and officers of the council should be barred from office and surcharged a total of over £21 million.
In 1986, the ruling Conservative administration of the council came within a whisker of losing control; so a policy called "Building Stable Communities" was introduced. As a result, a number of marginal seats were recovered and the majority of the ruling party rose from four to 30. That was against the national trend at the time. How that was achieved is the subject of the report which is now being examined in public hearings at which the burden of proof lies with the 12 objectors, who needed legal representation; that is, the 12 citizens of Westminster.
The comment of the Observer was:
"It is outrageous that private residents should be left to scratch together money to make the case".
It is certainly unfortunate that justice, which Disraeli, no less, described as "truth in action", so often depends on money. Perhaps that could have been avoided if the Government had decided on a judicial review at an earlier stage. But the present procedure is in train, it will continue until the end of the year and may end up in the High Court next year.
There are members of the Conservative Party—for example, Mrs. Kirwan, the former housing chairman—who revolted against the policy. She gave evidence showing how the deed had been done and how local government officials became embroiled. That is a good example that this need not necessarily be a party issue, although on the face of it it must be.
When replying to the debate, I hope that the Government will feel able to give an assurance that they recognise the seriousness of what has been exposed and the need to root out political corruption before it becomes the norm. I believe that many will agree that the illegitimate use of political power, by whichever party employs it, is in the end an even more dangerous form of corruption than the bribery or the personal misbehaviour of politicians.
For that reason, I thought it right to raise the matter this evening. But in the end we are all in it because if we do not keep the parties clean the electorate may come to the conclusion that democracy itself is inevitably corrupt. That would be a very wrong and disastrous outcome. The truth is quite the opposite. Democracy is the form of government in which wrongdoing can be and is exposed. It is one of our most important duties and we must not shirk it, especially not in this Chamber which depends on a representative parliamentary democracy that it does not yet share.
Perhaps I may draw the attention of the House to a letter which appeared in last Sunday's Observer. It was written by Mr. Roy Hattersley MP and was supported by many distinguished people, including my noble friend Lady Jay and Helena Kennedy QC. The letter draws attention to the fact that the 12 objectors are strapped for cash. As I have already said, the matter may

315
well reach the High Court at the end of the year. But even now the objectors are already deeply in by having to try to match the considerable resources deployed by Dame Shirley Porter and her friends. And this in spite of having been helped by much reduced fees accepted by their legal advisers, including Andrew Arden, QC. It is unfortunate that justice so often depends on money. Our noble and learned Lord Chancellor is, I hope, going to do something about that before very long. However, if any of your Lordships in any part of the House feels able to help, I know that it will be most welcome from all and any source.
The 12 residents are striving to raise £200,000 and if the matter goes to the High Court they will certainly need that. Remarkably, they have already reached £65,000. I hope contributors will include supporters of the Government. There are those of us, including Conservatives, as I have shown, who do not always confine our perception of wrongdoing to members of other parties. I hope that Mr. Hattersley's internal post will be heavy in the next few days.
5.21 p.m.
Lord Dixon-Smith: My Lords, it is a little unfortunate that the noble Baroness, Lady Thomas of Walliswood, has slipped out of the Chamber for a moment for I would have wished to thank her for her remarks, with which I have a great deal of sympathy as a man who has spent much of his life toiling in county government. I particularly wish to say how much I enjoyed the speech of the noble Lord, Lord Phillips of Ellesmere. It really was a pleasure to listen to, and more importantly it gives me the pleasure of thanking him as one of the leading scientific figures of so often unsung teams of researchers on whom simple farmers like myself depend for the enormous increases in productivity that we have been able to achieve over past years and some of the developments that are still going on.
The conjunction of environmental and agricultural issues in a single debate is a fortunate one. For many people agriculture, as custodian of the countryside, has a major responsibility for the environment. A simplistic view is that if we can reduce urban ugliness and keep the countryside attractive all is well. I wish things were so simple. Before the commencement of this debate on the gracious Speech, the noble Lord, Lord Williams of Elvel, invited my noble friend the Leader of the House to request the Select Committee on Sustainable Development to consider the meaning of the words "sustainable development". That committee, which very kindly tolerates my attendance, may well be equal to the task; I must confess that I am not. There is too much that we cannot know with any certainty. The strategic environmental issues arising as a result of population growth, which is the main motor for pollution, will be dealt with only as a result of concerted international action; but will that happen? There are hopeful signs. However, the possibility of environmental degradation as a result of economic or technological development can only be assessed within the limits of current knowledge. We can only travel hopefully and use the information and tools that are available to us.
316
With that preamble in mind the House will probably be relieved to hear that I intend to talk about agriculture, or more specifically, as I prefer, farming. It cannot be said too often that farmers as custodians of the countryside are dependent upon the level of their profitability if they are to fulfil their custodial responsibilities. The farming community at large will welcome the arrival of the Agricultural Tenancies Bill and wish it God speed through the legislative process. It is facile to say that it is too little and too late. There has been no agreement within the wider agricultural industry as to what was necessary by way of reform until this time. With generous helpings of hindsight, it might have been better if those who were responsible for some of the earlier legislation in this field had stayed their hand.
Security of tenure across the generations, together with Finance Act provisions that penalise let land for inheritance tax purposes, have done their work. Farmers out in the real world, which is unsentimental, commercial and very competitive, have been developing their own solutions. It is to be hoped that the Agricultural Tenancies Bill will assist that development, but at best that assistance can only be slow as the Bill cannot upset existing agreements and it will be a very, very long time before they have all expired.
In the meantime the needs of farmers and the pressures upon the industry are forcing an evolution that will transform our traditional way of looking at farm organisation. These pressures are perhaps best illustrated by discussing the problems that would face an imaginary landowner with a small farm of, say, 100 acres who has a reasonable and not wholly inaccessible house, and at the same time the problems faced by a young man who has appropriate training but no agricultural background and limited capital who wishes to become a farmer.
First, the problems of the putative farmer: in times past, although it was never easy, it was possible for an energetic young man to hire a small block of land, buy perhaps a score of cows, some sheep, a few pigs, an old tractor and a few secondhand implements and make a modest living as a result of total devotion to hard work. Today, however, besides energy, knowledge and ambition, he will need a considerable block of capital. An ordinary milking cow at present costs around £500. It is interesting to note that six months ago it would have cost more than twice that sum and in six months' time that may well be the case again. Who can say?
Sheep cost around £60 a head and we could select an arbitrary figure for machinery of £5,000. Then there are things called quotas, as we have heard, and set-aside regulations. Milk quota currently trades at 60p per litre of annual production. That is approximately £3,000 for the production of an average cow, which I should say is only about half the production that my older brother would expect to get from his cows. If the landlord has a quota, it is a tradable asset and its value will be assessed in the rent by raising it. Sheep are on quota too, quota trading, I believe, at about £30 per head. With banks as cautious as they must be today, how can any young man overcome such problems? The set-aside regulations raise another obstacle. Eligibility for

317
set-aside payment requires two years of occupancy and this reduces cash flow in the start-up period. What a nest of problems!
Let us now consider the reverse side of this coin—the landowner's problems. The first advice that he will probably receive is that, if he lets his land, he will put at risk 100 per cent. relief from capital transfer tax on inheritance because let land attracts only 50 per cent. relief. That position is now changing, as the Bill we are to consider shortly, with the creation of farm business tenancies, which are short-term but continuing agreements subject to conditions of notice, in conjunction with the latest guidance from the Capital Taxes Office that 100 per cent. relief may be available where the value of tenant right has little impact on the freehold value, should be of help to our landowner and reduce his qualms. However, I expect that many valuers, accountants and even lawyers will become rich before those matters are finally determined.
Then there is the matter of the farmhouse. Because of its situation it would probably command rent of approximately £100 per week in the open market. There is no conventional system of agricultural production on a farm of that size that can carry an overhead cost at that level unless the system of farming is highly capital intensive. Indeed, because of that factor, my land agent friends tell me that one of their most difficult tasks is assessing the proper rent for small blocks of land.
Our landowner has family commitments and must do what he can on his children's behalf. So what happens? Somebody, probably one of his advisers, mentions management agreements, and our friend finds himself facing a hardened professional farmer. He finds that he could let the house separately. He finds that he can earn a return that is greater than he would be likely to earn if he did all the work himself and certainly greater than any return he could gain from letting. He finds that there is apparently no downside risk on the inheritance tax front. I say "apparently" because the validity of some arrangements that have been entered into may yet be fought through the courts. I do not need to say any more about that particular problem. The conclusion is inevitable.
Farming practice is moving ahead of the legislative framework which surrounds the industry. The creation of farm business tenancies is a bold and imaginative attempt to reverse to some extent some of the ossification created by our legislative predecessors. However, the industry is moving on. A century ago only 15 per cent. of farm land was in owner occupation. Today the figure is 65 per cent. and there is an increasing trend for either landlords to buy out their tenants or tenants to buy out their landlords' interests.
Add to that a rapidly increasing number of highly professional farmers who are prepared to tailor their services to suit the needs of individual landowners and who, because they can offer real economies of scale and highly technical cultural techniques, can offer the landowner a better return than he can earn himself, and the picture of the future begins to emerge.
318
I expect land to go increasingly into owner occupation, with the owner playing a real part in the management of the farm while much of the work is undertaken by farmer-led, very efficient management companies.
There is little point in deploring that trend, even if the tax man shakes out some of the agreements which presently exist, which I hope he will not be able to do. This House recently considered the report by the Select Committee on the European Communities on the implications of the expansion of the European Community. One conclusion enunciated during the debate was that the Community could have expansion or the common agricultural policy but it could not have both. In any event, the common agricultural policy is vulnerable because its high cost may become politically untenable. Farmers out there in the harsh real world are contemplating life without the CAP. Some of them are already mapping out the way ahead.
5.35 p.m.
Lord Mackie of Benshie: My Lords, I rise with a number of apologies to make. First, I must apologise to the Minister for the fact that I shall not be present when he winds up the debate. Needless to say, that is for the usual inescapable reasons, which overtook me against my will. I grovel. It is a practice I deplore, but I feel that I may not be missed.
Secondly, I must apologise to the noble Lord, Lord Dixon-Smith. I advised my noble friend that she did not need to listen to every speech, that it was permissible to go out for a cup of tea and that only Ministers have to listen all the time. She was prepared to stay but sensibly accepted my advice.
I have read the gracious Speech, and I find that I have an excuse for everything that I have to say. If I say something for which there is no excuse, there is the great phrase:
"Other measures will be laid before you",
to which one can add, "or not".
First, I should like to welcome the Agricultural Tenancies Bill. It is a useful measure and will bring a little more land into conventional tenancy, which is socially very desirable. The noble Lord, Lord Dixon-Smith, is a brutal, nasty man. He told the truth about what is happening, and he laid out the facts extremely well. It is true that a great many able farmers are taking over from landlords who are not noted for their competence in business, and are operating agreements which give them a great deal of land, and they manage it extremely competently. We are rapidly moving towards a situation in which competent people will find land to let under some form of agreement to suit them. In living memory—in mine certainly, but I am an old, old man—landlords were desperate to find tenants who would farm their land. That situation may be recurring in a different form. However, I have no doubt that the noble Lord, Lord Carter, who knows all about these matters, will go into detail on the subject.
The next point which I want to raise, which is not mentioned in the gracious Speech, has already been addressed competently by the noble Lord, Lord Palmer.

319
I should like to correct the noble Lord on one point. He said that perhaps I had gone many miles for a pint of milk. I have gone many miles for a pint of something else, but not for a pint of milk. What the noble Lord said about hill farms is perfectly true. The Government behaved miserably. Because hill farmers had had a better year, which did not bring them up to anything like the standard enjoyed by the vast majority of people in this country, the Government took £50 million in two years from the 60,000 hill farmers of this country. I trust and hope that they will reverse that policy.
They ought to do so for many reasons. One is that I do not know what you do with the hills unless you farm them with sheep and cattle and keep the population there—the crofters of Scotland and the hill farmers of Wales and elsewhere. If you do not do so, you have removed an economic stay which keeps the population there. In the highlands of Scotland one would leave nothing except sporting estates on which one would encourage many rich people to come and shoot grouse; and where would one get the people to manage those estates? Such farming is an integral part of the maintenance of the beauty and the use of the hills and their outlet for the ordinary people of this country.
It is absolutely essential that the Government think again on the policy of reducing the support which hill farmers receive to make their hard life tolerable, as the noble Lord, Lord Palmer, said, and, more importantly, to give them a standard of living which will encourage their children to continue to farm. At present there is no inducement to do that.
My next point concerns the CAP. There was reference in the gracious Speech to the issue. It must be strongly in the mind of everyone who has anything to do with the CAP. As it stands, the CAP is in great danger. The critics are becoming increasingly confrontational, saying that the policy is an absolute piece of nonsense. When considering the different devices that we use to seek to make the policy work, one realises that the critics are right. The situation has reached an extraordinary stage.
Sweden, Finland, and possibly (but only possibly) Norway, will be coming into the European Union. Those are countries with high cost agricultural support. With regard to Norway, the policy is purely social because without it large areas of the country would not be populated. We have a problem with those countries which is easier to address than in regard to the next batch of obvious entrants. I refer to the most advanced Eastern European countries: Hungary, Poland and the Czech Republic. It is absolutely natural, right and proper that they will seek entry. However, at present we are doing such countries enormous harm because we are pushing heavily subsidised grain and other products into their market. We have increased exports to them while their exports have been reduced in proportion. Therefore we have in that respect a tremendous problem. In the view of most people, it is absolutely essential that those countries enter into the Community. They have great stretches of very good land. They have competent people who with training will be able to farm extremely well, and their production will come on to the European market.
320
Those countries also have a great advantage: they do not have a CAP. I have cited the figures previously, but they are useful. A tonne of barley in the East European countries fetches about £70 to £80. The wage for a month for a man on the land is about £20. Therefore a tonne of barley will pay a man for three or four months. In this country a tonne of barley will pay a man for about three days, or perhaps four if one does not pay him much. That situation places the current CAP of the European Union in grave danger. The situation must be addressed.
I have no doubt that the Minister has been thinking about the situation and will have had sleepless nights about it. It is right that that should be so. However, I must congratulate a committee of the English and Welsh NFU on producing a document entitled Real Choices. I have no doubt that the Minister has seen it. It puts starkly the choices before this country and the European Union. There are two real choices. One is completely to decouple: to allow prices to fall and pay direct area payments, payments per head, or whatever it may be, to farmers. The other has great attractions: it is to buy out farmers, leaving them totally without support in a free market system. I refer to buying them out by means of a bond which could be paid for 10 years, and sold on the market if necessary, which would provide support for a period of change-over.
Those are both fairly brutal solutions. However, they are solutions which the Minister, this country, and Ministers in the Community must consider. The sooner they face the problems and produce some forward thinking on the matter, the better it will be for all of us. I do not envy them the task but the situation must be faced because at present no one believes that the existing CAP can last beyond the present period—that is, about three further years.
Lastly, I wish to say something on the environment as it affects agriculture. I wholly agree that we have to have sustainable agriculture. I wholly agree with the noble Earl, Lord Selborne, who said that we have to have modern systems. We must have all the aids for production. Those were instanced by a scientist. I refer to the maiden speech of the noble Lord, Lord Phillips of Ellesmere. We must have fertilisers and methods of controlling pests. We must ensure that such methods are sustainable. It is not possible to return to the system which made my native county of Aberdeenshire fertile. It was a rigid system involving three years of grass crop, one year of oats, one year of turnips, and followed by oats and undersowing with grass. One then had a gradual build-up of fertility which turned Aberdeenshire from a blasted heath into a fertile agricultural area within 100 years. I do not think it is possible to return to that system, but some of my smart and able farming friends in the area are growing crops and working forms of rotation—ploughing back, green manuring, and so on—which appear to sustain the land. However, we need absolute scientific evidence that it is so doing. It is not enough to say that only the old systems, or organic farming, can keep up the sustainable land and can improve it. We have to consider new systems. We have to condemn systems which do not keep up the fertility of the soil. Research is absolutely essential.

321
I refer again to my native land. I do not always agree with my noble friend Lord Beaumont and other environmentalists, but it is true that we all have to work at the situation. However, with regard to the highlands of Scotland, if the corncrakes are pushing out the crofters, then my vote is for the crofters.
5.48 p.m.
Lord Norrie: My Lords, I am one of many in this Chamber who are delighted that a major Environment Agencies Bill is to be introduced shortly into this House.
I have taken a close interest in the Government's environmental programme in recent years. I believe that I have commented on every Bill with an environmental dimension which has passed through this House since 1989. Your Lordships may know that there is a special place in my heart for national parks. My own Bill to establish free-standing authorities for all national parks in England and Wales passed successfully through this House last Session. I am therefore particularly glad that the Secretary of State for the Environment and indeed the Minister in his opening speech this afternoon both confirmed that the Government's Bill will achieve what my own Bill sought to do.
It is now nearly four years since the National Parks Review Panel published its report. We have been awaiting legislation ever since to implement its recommendations. All along, the Government have promised to act. The Edwards panel, as it is known, made a large number of important recommendations, some requiring legislation. I was pleased that the Secretary of State confirmed on Friday that the Government will be establishing free-standing authorities for national parks. I trust that the legislation will be on the same lines as my Private Member's Bill.
The Minister has confirmed today that the Bill will also revise the park purposes. I should welcome clarification that both the conservation and enjoyment purposes for which the parks were designated will be revised in line with the recommendations of the Edwards Report. But it is vital that these changes are the right changes if we are to put national parks on a sound basis for the next century. In particular, the way the parks are to be enjoyed needs to be more carefully expressed in the statutory purposes.
National parks receive 100 million visits each year. It is essential that those who do visit do not destroy the very qualities they come to enjoy. Parliament's challenge is to ensure that the parks are for quiet enjoyment, away from urban pressures and noisy motorised sports.
Further, economic activities in the parks should be environmentally sustainable. The Government have made a number of welcome commitments to the concept of sustainable development and this fact has been highlighted by the Minister today. Nowhere is this more important than in our national parks which cover 10 per cent. of the land area of England and Wales and are part of the critical natural assets of this country.
National park authorities should be able to work with those who are responsible for the social and economic welfare of the parks. These efforts must ensure that the
322
needs of park communities are met in ways that sustain and, where possible, enhance the environmental qualities of the parks.
The Edwards panel made two other important recommendations requiring legislation, and it is not yet clear whether the Bill will include these. They are, first, that a duty should be placed on all Ministers and government departments to promote the interests of national parks; and, secondly, that a test should be applied to all major development proposals in national parks. This would permit damaging development only if there is a proven national need and there is no alternative means of meeting that need. To rely on planning policy guidance for such a test is too weak and in any case excludes important forms of development such as energy and road projects. I shall be very concerned if these measures, which are Edwards Report recommendations, are not included in the Bill.
I have concentrated in these brief remarks on the parts of the Bill which will affect national parks. But I shall also be scrutinising the rest in order to satisfy myself that the progress achieved by the Government in recent years is carried forward. I am particularly interested in whether the Government's commitment to environmental policy integration will be taken forward by the Bill. So I shall be exploring the potential for duties on government Ministers to promote the environment as part of their wider responsibilities.
I shall also wish to explore the concerns raised by environmental groups about the environment agency and to examine closely the welcome announcement that there will be measures for hedgerow protection in the Bill.
Environmental legislation rightly arouses great interest in this House and there are so many expert opinions that I foresee many long nights ahead. But there can scarcely be any legislation more important than ensuring that we leave an environment worth inheriting to our children and our grandchildren. I therefore relish the weeks ahead.
5.54 p.m.
The Earl of Lytton: My Lords, I welcome the announcement in the gracious Speech that the Government will continue to promote enterprise, to reform agricultural tenancy laws and to strengthen the delivery of environmental policies. It is particularly on the delivery side that I should like to address your Lordships. However, I cannot go on without paying tribute to our two maiden speakers. I thought that their contribution was outstanding. On these Benches I particularly congratulate the noble Lord, Lord Phillips, who referred to the Natural Environment Research Council. I have some recent experience of that body and it has an outstanding contribution to make.
The measures that have been announced are potentially good news for the countryside. I also applaud the recent appointment of the noble Lord, Lord De Ramsey, to the chairmanship of the advisory committee on the new environment agencies. His is an impressive track record, not least in environmental matters, and I wish him well.

323
Noble Lords may wish to note that I, like many others, am a landowner and I also farm within a national park. I am also a chartered surveyor and a member of the Country Landowners' Association and the National Farmers' Union. So I have both a strong personal and a professional reason to be interested in rural land management. Furthermore, I have an involvement in the use of information technology in this area.
It is really about land management as part of the delivery system that I am concerned this evening. Whatever the precise use of our rural areas, they require active and positive management, not least to provide for employment and for the goods and services which are so urgently required in some areas. My father used to describe graphically the appalling state of the countryside in the 1930s when effective management simply disappeared because of economic circumstances. Even now, some of our most important habitats and landscapes—often in marginal agricultural areas—are at risk from poor and absent management of the right sort. Failure of the delivery system is therefore an extremely serious matter. Non-management is practically never beneficial in the long run.
Like any other activity, land management requires sustained commitment, motivation, the deployment of resources of time and money, a vision or target and the prospect of benefit at the end. In other words, to use just another term, it is a conventional socio-economic model, even if we refer to it by some other name such as farming, forestry or sporting. It is also a technical resource in its own right, with an enormous amount of empirical knowledge and experience which is not replicated elsewhere.
The management systems in our countryside have to meet the minimum standards of compliance which are set for the industry sector as a whole: health and safety, employment, environmental protection and animal welfare. Those costs all have to be paid for out of the activity in question. The more marginal the profitability of the activity—for example, for agriculture or forestry—the greater the risks of failure and the greater the chance of management being redeployed to safer ground. So it matters how easy or difficult it is to comply with the requirements of regulators or how far those requirements add to administrative or other costs.
Referring to what the noble Lord, Lord Williams, said in his opening comments, it is a terrible mistake to make the requirements a chore. We must regard them as positive matters which are attractive objectives. After all, if ultimately it is impossible to manage land in a traditional manner, or for that matter in any alternative way, the question has to be asked: why waste time on it? Standards are comparative. I raise the point as to whether the British public will insist on cheap food from abroad at world prices and on environmental standards at home which make existing agriculture uncompetitive. I think that that is an important issue which we have to address. I know that the Minister is aware of the problem.
The countryside is, above all, about people, but land managers are human beings and they are involved in local businesses and employment. They have the same aspirations as the rest of the nation. They respond to risk
324
and cost in broadly conventional terms and they try to be proactive and positive-thinking businessmen. But they are in something of a dilemma.
First, management of the countryside is increasingly being dictated from outside the industry: by local planning authorities, political lobby groups and environmental agencies, and—yes—by central government. There does seem to be the appearance of very little discussion and very little investigation going on as to what happens on the ground. Theory is all very well, but it is time now, as much as anything else, that those regulators started investigating how things actually work, and, if necessary, doing a little retraining themselves rather than expecting the industry to retrain itself in aspects that are set externally.
Secondly, the industries that currently pay for management costs and the management process have been severely affected by the constant chopping and changing of policies, and particularly by unintegrated environmental standards. To judge by the talk of cross-compliance, it seems to me that that may get worse. I wonder how many of those who advocate farm plans have ever tried to draw one up. It is not easy. However, I hope that I detect correctly that the Government propose to do something about all that. I was pleased to note the noble Viscount's comments about an integrated approach for the future.
Thirdly, environmental targets are simply not being set. On the ground it often appears that there is an aimless set of management prescriptions which concentrates on methodology without stating clearly the objectives that are being aimed for. Worse still, thresholds of compliance are being set which, because they are set nationally, may be appropriate in one location but could be quite senseless in another. The system is simply inflexible. Like the noble Lord, Lord Crickhowell, certainly those on the ground find it terribly confusing. After all, what happens when one day those targets are reached—the ultimate preservation order perhaps? I do not know what the answer to that question is, but it is a matter about which we need to think.
The results, I am afraid, are all too obvious. Land managers are telling their offspring in many instances that there may be only a limited future in the sector. We hear time and again of the concern of constituency Members in another place that their farmer constituents say that there is no future in this sector. That is a terrible thing to have to admit. Income and employment in the traditional sectors of our rural areas are, I am afraid, in marked decline. The risk is that disinvestment will follow. In the meantime, some are reconfiguring their operations so as to get maximum return on their most fertile land and profitable areas of endeavour. That, of course, is producing an intensification which may itself be unsatisfactory.
My plea is therefore quite simple. If the Government are serious about management systems and the delivery of environmental policies that are something more than job creation schemes for bureaucrats, they have to rethink what they are doing. Environmental land management schemes are sound in theory but need a great deal of fine tuning. Land managers need proper,

325
long-term partners and shared objectives. They need to discuss the issues that lie before them on an equal basis with competent and experienced officials. The risk is that the environmental straitjacket that now looms in some areas of our more heavily protected countryside may be just as damaging as the pursuit of production in agricultural products was beforehand. I have said previously in this House that good management follows attractive prospects. That always remains the case.
So much for the theory. I now wish to touch on one or two particular experiences of my own. In the rest of my speech I speak on my own behalf. Not so long ago I contemplated a management scheme for a woodland fringe area to enhance a colony of a nationally rare butterfly within a site of special scientific interest and in accordance with guidelines set by an acknowledged national expert. Not one agency was prepared to assist with any sort of grant aid for a project which for me would have been totally uneconomic in any sort of farming terms and would have been nothing other than a loss-making activity. It was outside the parameters of some agencies, and in the case of others there was said to be no money. Unless my holding, a hill farm, starts making very significant profits, that work will almost certainly never be done.
Consultation is another area on which I have touched before. In many instances it is supposed to take 28 days but regularly takes months, even for quite simple applications. It slows forward management to an absolute crawl. The response has to be not to apply for grants, unless it is unavoidable, and to try to avoid having to consult. A price is being put even on simple dialogue, and that price is too high.
Tree planting is another vexed area. On marginal land it is often relatively uneconomic, and it is therefore peculiarly awkward when, for landscape reasons, agencies and others insist on species that simply do not do well in that location—either because they are not windfast or for some other reason. That does not make any sense. I am a great believer in the idea that, if one does not plant something that will be worth while for a future generation, the likelihood is that it will not be looked after. I could add to those examples with instances where there seems to be a level of official ignorance about how things work in practice and some very partial interpretations of the law or fact. That sort of approach destroys confidence among land managers in the way in which governance is being pursued in this area. It is vitally important that there is more talk with land managers. They may be the only people capable of delivering the environmental objectives that are set by the Government.
6.6 p.m.
The Earl of Clanwilliam: My Lords, it was a great pleasure to hear the maiden speeches of the noble Lord, Lord Phillips of Ellesmere and the noble Baroness, Lady Thomas. The noble Lord gave a fascinating speech. It is not surprising to hear that he has immediately been co-opted to your Lordships' Select Committee on Science and Technology. The noble Baroness gave clear proof of the need for public transport and indeed of how
326
vital it is to the evolution of a sustainable environment. The noble Viscount the Minister who opened the debate said that he was interested in having a policy that was not an end but a beginning, and that it was to be a combination of agriculture and environment. I welcome that approach most clearly.
Noble Lords on all sides of the House have mentioned the subject of organic farming. Perhaps I should take this moment to declare my interest as a patron of the Soil Association. Noble Lords may appreciate that that is one form of patronage that comes quite cheaply.
I wish to speak about the organic aid scheme—though I hope not too deeply in the method of a Second Reading speech. The scheme has been in force for a year and there seems hardly a bud in sight, although it has had all that time to bear fruit. The scheme is ungenerous. It is too small in its concept of trebling the organic acreage—which would still be an infinitesimal proportion of the farming land of this country. It would not fulfil the aim of creating the critical mass that would make organic produce competitive in the home market. Rather than 100,000 hectares—which is what is sought—we should go for 1 million hectares. So much for the scale. The scheme is perhaps ungenerous in the aid that is provided. It does not match the allowances that are given to organic farmers in the European Union. As the noble Baroness, Lady Nicol, clearly pointed out, in the German Länder some 5 per cent. of land has already been converted to organic farming, and east Germany has converted 3.5 per cent. That is way beyond the limit of the 100,000 hectares that is being considered in this country. It is not worth mentioning a figure as small as that if there is to be any effect at all.
Organic farmers are also concerned with what they see as the dead hand of the Treasury in the matter. They see the support given as divisive and derisory. In terms of value it is about one third of what their partners in Europe receive. We are in fierce competition with the Europeans, who have some 60 per cent. of the home market. In that sense the aid scheme is not only derisory but unfair. No wonder we are suffering fierce competition.
Regarding divisiveness, the aid is available only to new starts and not to existing organic whole farm (symbol associated) farmers. In such circumstances, why should existing established organic farmers bother to help their neighbour convert to a new and difficult system which involves re-learning the arts of their forefathers? In last year's debate the noble Lord, Lord Carter, emphasised the quality and skill involved in farming organically. Those vital points demonstrate the need for adequate support for organic farming.
In terms of the environment, we need to implement the decisions of the Rio Conference. We need to reform the CAP which subsidises intensive farming to the tune of £1.175 billion a year. We need to reform set-aside, which is another £140 million thrown down the drain. In the meantime, we are generously supporting ESAs and the stewardship campaign with some £65 million.
Perhaps I may here take up the point made by my noble friend Lord Selborne about the need for extensive farming in all directions. I do not suggest that organic

327
farming is the only one, but that all forms of extensive farming should be developed. Indeed, the country is doing a great deal in providing £65 million to that end.
What is the organic farmer getting? He is getting £1 million. Is not that derisory? In all these areas organic farming makes a defined and useful contribution; but the opportunity is being wasted. The noble Lord, Lord Mackie, who unfortunately is not in his place, showed the need for friendly farming. It is the organic farming system which has been developed and is the basis of the new venture of understanding that there should be friendly farming. That is why I believe that organic farming needs special support from this Chamber. Indeed, it deserves it.
On the occasion when the Minister opened the Organic Harvest Month, in the somewhat unusual venue of Waterloo Station, The Times leader reported:
"Mr. Gummer, of course, is now looking at farming more for the damage it does than the crops it raises … the intensive farming of arable land, especially in East Anglia, has drenched the ground with fertilisers, polluting rivers and groundwater … All this has been done in the name of efficiency. And abundance has been the result—indeed abundance throughout Europe on a scale that its people can neither eat nor store".
Surely that says it all.
I ask my noble friend the Minister to prevail upon his right honourable friend to review the organic aid scheme. I believe I can say that there is some sympathy on the part of my noble friend towards organic farming, especially in view of the kind speech that he made at the 50th anniversary dinner of the Soil Association. We truly need his help if we are to make a fully sustainable environment in the kingdom, which I am sure is the aim of all concerned in this matter. It would be in sympathy with the gracious Speech, which I am glad to commend to your Lordships.
6.15 p.m.
Lord Geraint: My Lords, enough has been said over the past few days about the shortcomings of the gracious Speech: notable omissions and lost opportunities. However, today I shall not dwell on those aspects.
I should like to begin my contribution to the debate by congratulating the Government. I do so because they promised to produce a White Paper on agriculture—but not just on agriculture. I understand that the paper will take into account the place of agriculture in the development of the rural economy and will encompass the social and environmental changes that are taking place in the countryside.
That is a very welcome move and one that has been advocated for some time by Liberal Democrats. Life in the countryside as I knew it has changed beyond all recognition. Thousands of jobs in agriculture and related industries have vanished; some 100,000 alone went between 1971 and 1987. Holdings have increased in size and declined in number. In some areas farmers have been forced to become part-time farmers and have had to look for other ways to supplement their income. I hold the view—I have given it once or twice before—that the majority of farmers in Wales. 80 per cent. to 90 per cent., will be part-time farmers by the end of this
328
century. I have nothing at all against that, so long as the people remain in the countryside and have a reasonable standard of living.
Over the years there has been a pattern of declining services, from vanishing public transport to fewer village schools and scarce provision of health and social services. It is not only in our towns and cities that we see deprivation today. Life can be very bleak for young and old in the rural areas, where there is a shortage of affordable housing, few jobs and minimal transport. We need to look at those things seriously if we want to maintain a fair balance between the needs of the rural dweller, the protection of the environment and the necessity of encouraging a viable and thriving agricultural economy. Therefore I welcome any move to bring meaningful discussion on these topics into the political arena.
Naturally, I consider agriculture to be the focal point of any discussion on the countryside. Farmers have traditionally been the backbone of the rural economy and their labours have formed the British landscape to a great degree. Over recent years they have had a rough ride and deserve to be given some credit for staying in there. They should have adequate support to carry on. A sensible plan for the future could give them the stability that they need.
We have all been appalled at the extent of the fraud uncovered in the operation of the common agricultural policy. What we should do now is to make sure that any system of support should go towards helping those farmers who are genuinely in need of that support. In this country we should encourage the family farm and also give more incentives to those farmers who wish to diversify and achieve environmental goals.
I have always been very keen to see new blood in the fanning industry. We must do everything we can to encourage young people who wish to take up agriculture as a career. Therefore I was very interested to learn of the Government's latest proposal for changes in agricultural tenancy, mentioned in the gracious Speech. They should be examined carefully, as the provisions are crucial for the development of farming in today's economic climate. I am not entirely uncritical of the proposals, but tenancy reform is badly needed if relationships between landlord and tenant are to be maintained and improved. I understand that we shall have the opportunity to discuss the proposals next Monday.
I turn to the plight of hill farmers. Hill farming and the live export of animals to the Continent are the two burning issues in the agricultural industry at the moment. In this regard I declare my interest because I am one of the beneficiaries from the system of hill livestock compensatory allowances. I was also involved with exporting live animals and carcasses to the Continent over many years, though I have now given that up.
The confidence of hill and upland farmers in relation to the long-term viability of their businesses has been seriously undermined over the past two years. Today farming unions in England, Scotland and Wales are calling for the restoration of money cut from the HLCAs during the past two annual reviews with no further cuts

329
this year. The Government used a rise in incomes during those years as a reason for cutting their financial support, even though around 30 per cent. of hill farmers received an income of less than £5,000 in 1992–93. Experts now forecast that incomes will drop this year. The National Farmers Union is insisting that such farmers are provided with the necessary resources to ensure that the essential fabric of the countryside can be maintained. It said:
"If the Government is serious in its intentions towards hill farming then it must acknowledge that restoring the confidence of those working and living there must be a priority".
As was mentioned earlier in the debate, there is a danger that unless the current generation of hill farmers has the ability to invest in the future of their businesses then younger generations will think twice about following such an occupation. Sir David Naish, president of the National Farmers Union, also holds that view. He said,
"That would be bad for farming, bad for allied industries, bad for the countryside and bad in terms of the public's ability to continue to enjoy such areas".
I turn now to the export trade of lambs. The United Kingdom is the largest lamb producer in Europe. In the 1980s, as production increased, UK producers also became major exporters of sheep meat and live sheep. Since the removal at the beginning of 1992 of the export clawback—a tax on exports equal to the variable premium paid to farmers—exports have increased substantially. In the past 15 years the United Kingdom has moved from being 57 per cent. self-sufficient and heavily reliant on imported New Zealand lamb to being a net exporter of sheep meat and live sheep. We now export 43 per cent. of all the lamb, mutton and live sheep we produce each year and the trade is important to our balance of payments.
In 1993 total lamb exports were worth almost £400 million; that is, £4,300 to every lamb producer in the country, many of whom farm in marginal areas. The trade is dominated by the export of carcasses, although live sheep exports have risen in recent years. Estimates for 1993 indicate that around 80 per cent. of all exports were as carcasses—123,000 tonnes or the equivalent of 7 million carcasses—and 20 per cent. were live sheep, or 1.9 million head.
Live sheep exports have increased substantially in recent years from a total of 582,000 head in 1990 to 1.9 million in 1993. Research by the Meat and Livestock Commission in the early part of this year indicates that 80 per cent.—1.6 million—of all live sheep exports are consigned to France, with the remainder going to Germany, the Netherlands and Belgium. A small number of those sheep may have been re-exported to Spain and Italy. Within France almost three-quarters of the sheep are consigned to the north-west quarter of the country—Brittany, Normandy, the Vendee and the Loire area. The remainder go mostly to the south-east of the country, south of Lyon.
Restrictions on the time or length of journeys, in order to constrain live sheep exports, may be a severe constraint on the national movement of breeding, store and finished sheep from the Scottish islands and
330
Highlands or the more remote parts of upland England and Wales. The sale of sheep or lambs to farmers elsewhere in the country is the only option that many hill and upland farmers have. It is therefore important that legal changes to satisfy one interest group should not be detrimental elsewhere in the industry.
I am pleased that the Meat and Livestock Commission is acutely aware of the public concern about the welfare of sheep exported live and attaches great importance to trying to ensure that those fears are allayed. The Meat and Livestock Commission is helping to fund, with the Ministry, studies into the precise impact on their welfare of the way in which sheep are handled—transportation, loading and the resting of sheep in transit. The Meat and Livestock Commission is also helping and encouraging the industry to operate to the highest standards of animal welfare.
As a hill farmer, having been involved with the meat trade all my life and having exported thousands of live lambs to the Continent, I feel that all finished or fat lambs should and must be slaughtered in this country. I hope that this Government will take heed of the views of the majority of farmers on that issue. In the meantime, I ask them please to get their act together with other European governments regarding animal welfare regulations. It is a very important matter and should be resolved sooner rather than later.
6.27 p.m.
Baroness Strange: My Lords, the debate on the gracious Speech has been well supplied with excellent maiden speeches as well as the eloquence one has come to expect, but never fails to enjoy, from other noble Lords, and was started so elegantly and gracefully by my noble friends Lord Wade of Chorlton and Lord Lindsay.
Although much has been said in the gracious Speech about NATO, peace in Bosnia, preventing proliferation of nuclear weapons, terrorism, Europe, GATT, foreign aid, drug abuse, human rights, South Africa, Hong Kong, former communist countries, linking up with Asia and the Pacific, something about debt, the Channel Tunnel link and discrimination against the disabled, not much was said about environment or agriculture except for the new environmental agencies and the changes in agricultural tenancies about which we have been speaking today. There has also been much said in relation to organic farming and I shall be grateful to my noble friend if he can define "organic farming" when he sums up.
Nothing at all, as far as I can see, has been said about the heritage and conservation. Does that mean that the Government have lost interest in it, have washed their hands of it, have abandoned it altogether? Yesterday I went to the AGM of the Historic Houses Association, and here I must quickly declare an interest. Not only are my husband and I members, but we live in a beautiful, slightly decayed pink castle where, when it rains, water pours not only through the roof where the slates have worn out but sometimes comes up through the ground-floor plumbing like a fountain as well. Our house is only open to selected tours—and of course

331
friends—but it is set in the heart of our garden which we love and work at and which is always waiting to welcome visitors.
Anyone who lives in an historic house with an historic garden is very lucky to do so, whatever the inconveniences. The President of the Historic Houses Association said that living in an historic house was rather like breast-feeding a dinosaur which can never be weaned. What he did not say—which is perfectly true—was that one would not do it if one did not love the dinosaur. Which brings me back to the gracious Speech.
The Government will continue to implement policies and programmes responsive to the needs of the individual citizen. Historic house owners are individual citizens, too, just as much as anyone else. The Minister has said that the countryside is at the heart of the Government's conservation and environmental thinking. If not the heart, our historic houses are the jewels with which the countryside is decked.
There are three areas in which individual citizens who live in historic houses open to the public can very well be helped. The first is a lower rate of VAT on repairs to listed buildings. All buildings need repair but listed historic buildings tend to need more repair than others. In France, 95 per cent. of the costs of running a house open to the public can be claimed back in tax relief. Even a listed house which is not open can claim back 50 per cent., and that is for running costs. I am suggesting that there should be tax relief only on repairs.
The second area is capital gains tax. If you live in an historic house and money is desperately needed for repairs, anything that you sell may possibly be subject to capital gains tax. If the money from the sale is not spent on riotous living but is devoted to the repair of an historic house, it will be a very real help if capital gains tax can be waived on this issue. After all, if the house or property in question belonged to the Government and not to a private person it would cost the taxpayer a good deal more to maintain; or do we want to live in a country in which there are no privately owned historic houses?
The third area is that glorious financial bonanza: the national lottery. Although I bought a ticket last week—and will do so again—I have not won anything yet. I do know someone who bought two tickets and won £20. A large part of the profit—possibly as much as £300 million—will go to the heritage section. Not a penny of this can be paid out in grants to individual historic house owners, although in areas other than heritage, perhaps football or something else, individuals can benefit. In the heritage sector only government-run properties and the National Trust can receive grants.
We have a Conservative Government. Surely the policy of the Conservatives is to conserve; or in the field of heritage is it only to conserve properties which are publicly owned? Historic house owners do not throw stones, but they, too, are individual citizens with their own very specific needs. Surely the principles of the Citizen's Charter should apply to all citizens. Historic house owners are fast becoming an endangered species.
6.33 p.m.
Baroness Wharton: My Lords, I should like to focus my few remarks in today's debate on the intention of
332
Her Majesty's Government to ratify the GATT treaty. While I appreciate that the evolution of this treaty has been a process that has lasted some 40 years, I am particularly anxious about the potential effects of the treaty on animal welfare.
Clearly, people are deeply concerned about the environment and the welfare of animals. In many cases such concerns have been dealt with in international agreements, such as the International Whaling Commission's decision to introduce a moratorium on commercial whaling and the European Union's decision to ban the importation of fur pelts caught by the leg-hold trap. However, there is growing unease that the GATT agreement may not give due weight to such animal welfare and environmental concerns. With the new powers of the soon-to-be-created World Trade Organisation, there is a strong fear that disputes will tend to act against those countries which actively promote higher welfare or environmental standards.
Perhaps I may summarise the principles that I believe and hope can still be embodied within the GATT agreement. I deal first with the protection of the global commons. I believe that the GATT committee on trade and the environment should produce an interpretive statement on Article 20 of the treaty to the effect that conservation of exhaustible natural resources includes resources held in the global commons: for example, action to protect whales or other cetaceans in the high seas.
The second point is respect for international treaties. Action derived from international treaties should be exempt from challenge. This would recognise that important treaties, such as the Convention on the International Trade in Endangered Species (CITES), would be granted equal status to GATT. There must be reassurance that such treaties do not have subservient status in comparison with the general agreement.
The third point is the open settlement of disputes. So that future disputes can be minimised and rulings gain more legitimacy, it is important that outside bodies can submit evidence to dispute panels and that the decision-making process is open to scrutiny in the same way that a court is. There is a fear that the GATT disputes procedure can be unduly secretive, and this need not be the case.
The fourth point, which is terribly important, is concern over Article 3 of the agreement. A statement of clarification should be produced which is unambiguous as to the fact that action by any country may apply to the way that a product is created and not just to the product itself: for example, the way that fur-bearing animals are caught and concern over the cruel leg-hold trap, rather than the quality of the finished pelt itself.
Another example is the use of BST, which is a growth hormone drug that is used in certain countries to increase milk production. This drug causes an increased incidence of mastitis in cows. This is extremely painful. Should we be obliged to buy from another country this kind of product produced with the help of this drug, having already banned its use in our own? So that there is no misunderstanding, these principles should be incorporated into the treaty, thereby recognising that unnecessary suffering to animals is quite unacceptable.

333
The final point is the recognition of standards. International standards are set to a recognised minimum and not a maximum, but states should be allowed to legislate for higher animal welfare or environmental standards if they wish without being penalised by the World Trade Organisation. That is the principle adopted in European legislation. I would be very grateful to the Minister if he were able to reassure the House on this point.
In conclusion, the United Kingdom has always been a leading voice in matters concerning cruelty and suffering. We have legislated against cruel farming systems such as the veal crate, sow stalls and tethers. In Europe, we have pressed for tighter legislation concerning the transportation and slaughter of animals. I believe that the British people support those humane advances and that there will be a huge public reaction if the General Agreement on Tariffs and Trade adversely affects the higher standards that we have already achieved.
I was very interested to hear from the noble Lord, Lord Geraint, statistics on sheep exports. Even though 20 per cent. are exported live, I heartily agree with him and look forward to the time when all our livestock is slaughtered near its source and travels abroad only in carcass form. In that regard, I believe that we still have a long way to go.
6.39 p.m.
Viscount Mills: My Lords, first, or should I say almost last, perhaps I may add my congratulations to the two maiden speakers on their excellent speeches. I hope that the noble Baroness, Lady Thomas of Walliswood, will forgive me if, as a fellow scientist, I pay an especial welcome to the noble Lord, Lord Phillips of Ellesmere.
I have not spoken in a debate on the Address before and I fear that my speech might be better suited to a Second Reading. My comments are specific to the proposed Environment Agencies Bill, but many of the issues I will raise are those that we shall have to address generally in order successfully to manage our environment. So I hope your Lordships may on this occasion indulge me.
In the setting up of any business, there are a number of obvious considerations. What do you want to make or do? How will this be achieved? Where will the necessary funds and resources come from? And what is the likelihood of success? It seems to me that the setting up of the new Environment Agency for England and Wales requires a fundamentally similar approach, but do the proposed Bill and the draft management statement issued with it provide all the answers; and, if likened to a business plan, how successful might these be?
At this point I should declare that I am an employee of the National Rivers Authority, one of the organisations which will be incorporated into the new agency. I do therefore have a vested interest in it being a success!
334
The role of the environment agency is spelt out in a draft management statement prepared by the Department of the Environment. In this statement, the agency's overall aim is declared as being:
"To help promote sustainable development through high quality, integrated environmental protection, management and enhancement but in all its decisions, the Agency must give proper regard to economic as well as environmental impacts".
Two aspects of this will, I believe, give rise to much debate during the passage of this Bill through your Lordships' House; first, there is the goal of sustainable development, which is notoriously difficult to define—so much so that no attempt has been made to define it within the draft Bill. Instead, it is stated that Ministers will, from time to time, give guidance upon this matter to the new agency. Will the nature of this guidance be revealed to your Lordships as the Bill passes through this House?
Leaving that aside, how much emphasis will be placed upon development and how much on sustainability? Will this requirement for sustainable development lead to a weakening of the agency's regulatory and operational activities? And what targets will be used to test sustainability?
Secondly, within the overall aim of the new agency, the phrase,
"Having proper regard to economic as well as environmental impacts",
is also open to various interpretations. Many environmental groups fear that this requirement could be used to constrain both the scale and pace of the environment agency's activities.
In his speech, my noble friend Lord Crickhowell supported the concept of cost benefit analysis in relation to the future agency's activities. However, he questioned the actual mechanisms by which costs and benefits will be established and debated as well as the extent of their application to the new agency's activities. These are important practicalities that need to be considered.
Concerning the same issue, I was particularly struck by a recent article in New Scientist which quoted David Kinnersley, who, incidentally, was the architect of the legislation that set up the NRA, as saying:
"Often firms complain about the terrible burden of cleaning up. But if they are forced to do it, they frequently find ways to reduce costs that could not be foreseen at the start".
The Aire and Calder project is an outstanding example of this happening in practice, albeit in this case it was a voluntary initiative. Initiated by the Centre for the Exploitation of Science and Technology and funded by the NRA, Her Majesty's Inspectorate of Pollution, Yorkshire Water Services and the British Oxygen Foundation for the Environment, 11 companies in the Aire and Calder catchment participated in this project. It was established to demonstrate the benefits of waste minimisation and cleaner technology. As a result, these companies have made savings of more than £2 million within the first 18 months, with a further £2 million to be saved over the next two years. Here is a clear demonstration that reductions in pollution and

335
improvements in profitability are not mutually exclusive. But Mr. Kinnersley was also quoted as saying:
"The Agency needs to have a duty to reduce damage to the environment without knowing precisely what it will cost. You simply don't know in advance".
Those who are actively involved in these matters would, I feel sure, agree with that statement, at least in certain situations.
This raises the wider issue of what exactly is meant by cost in this context. When "having regard to economic impacts", the agency must surely include environmental costs; and will there be a recognition that the environment cannot and should not always be valued solely in monetary terms?
Moving on to how the agency will be structured and run, this has been considered in detail by Touche Ross, who prepared a report for the Department of the Environment entitled Options for the Geographical and Managerial Structure of the Proposed Environment Agency. In its response to this report, the NRA pointed out that the study appeared to have concentrated overly on administrative needs rather than examining the fundamental aim of the new body. Consequently, the NRA has recommended to government that environmental need should be the main criterion used to assess the various options proposed in the Touche Ross report. It is therefore encouraging that the Secretary of State for the Environment, when announcing the publication of the draft legislation, stated:
"It will, first of all, need to take an integrated approach to providing effective environmental protection, integrated to take account of impacts on air, water and land and integrated geographically so that interconnected systems like river catchments are considered as a whole".
These views have already been supported by the NRA and are the product of its hard won experience over the past five years. Furthermore, the NRA's revised model for the agency is the only one which gives a strong link between regulation and operation; which provides for local delivery of services within natural geographic boundaries; which is locally accountable through statutory regional committees; and which proposes local multi-disciplinary teams providing a single point of contact for customers. It seems to me that this is the model most likely to deliver the Government's aims and mission for the new agency.
To return to my analogy of a business plan and the question of funding, the setting up of the agency will require considerable resources, and some fear that a failure to provide adequate resources for its start-up would be detrimental. An additional fear is that in setting up the agency the effectiveness of the organisations involved will be decreased. Dr. Tom Crossett of the National Society for Clean Air and Environmental Protection was recently quoted in Environmental Business as saying:
"The Bill represents change without development and predicts a large amount of resources being used up during the transition, with little net gain to environmental protection".
This is indeed a danger, as anyone who has been through a major reorganisation will recognise. Government will need to provide adequate funding and manpower if the agency is to get off to a successful
336
start. There are, of course, many other funding issues, such as the exact nature of the cost recovery charging scheme, but I am sure these will be debated in full at a later date.
Lastly, I should like to say a few words about what the draft Bill does not contain. When I first drafted this speech, I highlighted what I regarded as a major omission with respect to the wording of Clause 7 of the Bill. I was therefore delighted when I read the recent announcement by the Secretary of State for the Environment that he had decided to amend the wording of the agency's conservation commitments in Clause 7. However, to my mind and as I understand it, there still remains an anomaly in that the duty to further conservation will not apply to the pollution control function of the new agency. Especially for pollution control in the aquatic environment, this would be a retrograde step.
For the past two decades water pollution control regulation in the United Kingdom has been based on the setting of environmental quality standards for the protection of aquatic life. Thus, conservation objectives are already at the heart of the regulatory system. There are already numerous binding commitments through EC directives to meet water quality standards for the protection of aquatic flora and fauna. Commitments have previously been given by government that conservation interests would be incorporated into the statutory water quality objective scheme. The proposal that the agency should only,
"have regard to the desirability of",
conservation in its pollution control activities would leave it with no clear direction and could weaken the basis for future pollution control regulation.
However, that is far from the only omission from the draft Bill. There are a number of issues for which no provisions have yet been made. I refer, for example, to provisions to address the problems of contaminated land and abandoned mines; to add incentive elements to the charging scheme provisions; to introduce specific statutory powers to carry out preventive works to reduce pollution in the aquatic environment; to allow drought orders to be made on the application of the agency on environmental grounds; and there are others.
I started this speech by posing some important questions that need to be answered if the new environment agency is to be a success. It seems to me that much further work will be required in order to provide answers to these questions, thereby ensuring that the environment agency will contribute more to environmental protection, management and enhancement than its predecessor bodies.
We need to build on the experience and expertise of our existing agencies. We need agreement on how to measure sustainable development and environmental improvements in a broad sense, not just in economic terms. The new agency must deliver environmental

337
protection, wherever possible in collaboration with industry, but, where necessary, fully supported by an effective regulatory framework.
6.51 p.m.
Baroness Hamwee: My Lords, I knew that I would learn much during today's debate, particularly about agriculture. I confess to being very much an urban person. Indeed, on becoming a Member of your Lordships' House, I was a little surprised to be asked by one of your Lordships whether I farmed. I know that I am not the only urban Member of this House—perhaps I should say "suburban"—because the last two speakers and I live within about a mile and a half of one another.
I knew that I would learn a good deal from today's maiden speakers. I might have expected to learn something about potatoes, but I less expected a reference to biodegradable plastics in connection with potatoes. I certainly did not expect to hear a reference to Tracy. I have no doubt that the noble Lord will refer to Tracy in future debates in this House.
I am particularly delighted to be able to welcome the maiden speech of my noble friend Lady Thomas of Walliswood. I am glad that providence opened the door of this House to her. Perhaps I may share with your Lordships my belief that I owe my own political career to my noble friend. Her assistance with my first election for a local authority was probably directly responsible for the 22 votes that made up my victory.
We have inevitably talked much this afternoon about the new environment agency, or ENVAGE as we seem to be expected to call it in the brief. I have noted references to ENVAGE and to SEPA, the Scottish environment protection agency. As the Minister said, the environment is a consensus subject.
Partnerships are imperative. However, as well as partnerships, we need standard bearers and standard setters. We need targets as well as monitoring. I share the concern of those noble Lords who feel that the sights of the agency need to be set on real protection, not merely on reaction in the event of problems.
We have talked also about the fact that today's political climate calls for deregulation. I suspect that environmental protection is an area in which we need regulation in order to change our culture before we can think about deregulation.
We have also talked today about the objectives of the agencies. I share the concern of those who feel that the promotion of such objectives should be spelt out and that guidelines, guidance or management statements—whatever terminology one wants to use about wording that is outside the scope of the legislation—will not be as satisfactory as words on the face of the Bill. The noble Baroness, Lady Nicol, referred to that point.
I am sure that we were all interested to hear the comments of the noble Lord, Lord Crickhowell, who talked about the need for the Government "to implement" their proposals. In the noble Lord's view, words are perhaps of secondary importance. His description of the experience of the NRA is salutary. I hope that when it comes to the environment agency the
338
Government will confound the psychologists' view that the best predictor of future behaviour is past behaviour. I hope that lessons will have been learned.
We have referred to the cost criterion. The question should not be: are environmental benefits worth the money? but: can we afford not to provide environmental security? I hope that Treasury control will not mean that in this area the watchdog is without teeth.
It has seemed ironic to me for some time that we should have awaited the arrival of this new quango so impatiently while criticising the general role of quangos in our society. One area in which democracy and accountability will be affected by the new agency is waste regulation. As in the counties and elsewhere, local authority waste regulators in London will be swallowed up by the new authority. About 1,100 staff and a budget of —43 million for England and Wales will be affected. Waste is not a glamorous subject but it is important for many reasons, yet it is to be removed from the control of our local authorities. I fear that that removal will harm the success of the authorities concerned and that there will inevitably be a further reduction in local democracy.
Over the past five years or so, the waste regulators have had increasing success, helped by the new legislation. I am concerned that their work will be divorced from other work of the local authorities. We all know of the problems associated with waste sites, fly tipping and scrap metal dealers. Solutions to those problems can often be linked to other aspects of local government work such as planning, environmental health, recycling and traffic management. Removing waste regulation to a quango will not help us.
I join other noble Lords who have welcomed the announcement on legislation relating to the national parks. However, that announcement made me wonder about the purpose of the Queen's Speech. The Queen's Speech contained no references to the Bills that we wanted to see, but announcements of them appeared shortly afterwards. Perhaps, however, I am merely carping. I must say—this is not carping—that I welcome the fact that the Government are to alter their proposed legislation in response to public comment. I welcome the early publication of the Environment Agencies Bill. I hope that the changes will not be merely semantic, as the noble Baroness, Lady Nicol, suggested. The fact that the Government are prepared to make such changes is a move forward.
One matter relating to the Queen's Speech which has not yet been mentioned but which falls within the subject of "the environment" is the Channel Tunnel rail link. There will no doubt be a huge amount of discussion about its environmental acceptability and environmental impact at local level. At national level, the question of stations will be very important. I use this opportunity to raise my concern that work on the development of a station at Stratford should go forward. I believe that the stations will have a huge impact on the success of the Channel Tunnel link.
Also on transport, I would have welcomed a mention in the Queen's Speech of the effect of transport on the environment. The speech of the noble Earl, Lord Selborne, was particularly welcome. An announcement

339
of an integrated transport policy—perhaps a White Paper—would have been something that we should have been glad to hear. I accept that the Government show some signs of appreciating the effect of transport policies on the environment, but they are little more than hints and whispers. We need a loud declaration on the issue. The noble Lord, Lord Williams of Elvel, referred to the 1983 Conservative manifesto which said that air pollution problems had been resolved. That was about the time that the Clean Air Council was abolished. I wish that it was still in existence.
There was no mention either of housing, despite decent housing being as much a fundamental right as the right to free speech, although there might be some who would say that we do not have that either. The best reference I can make to housing would be to take some extracts from a recent open letter from the director of the Joseph Rowntree Foundation to the Chancellor of the Exchequer. It is in advance of next week's Budget, but, after all, in this House we have to take what opportunities we can to mention financial matters. He talked of the singling out of housing benefit as a target for spending cuts, and said:
"No doubt it has now been explained … that the increase in Housing Benefit (to the individual) is the intentional outcome of cutting 'bricks-and-mortar' subsidy (to housing providers) which causes rents to rise… Total housing support to council tenants …is costing you 18 per cent. less in real terms than in 1980/81".
Similar considerations apply to housing associations. The levels of grant have fallen from 75 per cent. to 58 per cent. over five years. Private borrowing has to make that up and that means substantially higher rents. Subsidy costs may be cut in the short term, but there are huge bureaucratic hassles and expense and greater costs in the long term. We now know that a low-grant, high-rent policy actually means increased inflation. That creates job losses, a higher retail prices index and higher public spending on index linked social security and pensions. When rent levels reach the point at which even those in full-time jobs have to become reliant on a means-tested benefit, work incentives are destroyed.
There needs to be a revival in the private rented sector. That requires something such as housing investment trusts with a tax-driven kick start—some support for real investment in that sector. With housing benefit, the Government should stop the trend towards more rent increases and swing back to bricks-and-mortar subsidies which provide better value for money. Best of all they should stabilise housing benefit costs by calling off council rent rises and cuts in housing association grant levels and forget any thoughts of boosting private market rentals for people on low incomes. The director says that those 1980s policies have run their course. It is now generally agreed that we need more than 100,000 affordable homes a year. A nod in that direction in the gracious Speech would have been welcome.
Finally, an omission to which I am bound to refer is that of local government. There is no mention of it, and yet this is the first Queen's Speech after the establishment of integrated regional offices—an apology for regional government. I cannot help but observe that if we had regional government there might have been a
340
little less aggravation in connection with the local government review as we should have had a proper context for it.
We are lucky in this House to have joining us, although neither has spoken in the debate, two members of the European Committee of the Regions—my noble friend Lord Tope and the noble Baroness, Lady Farrington of Ribbleton. I am sure that their experience will inform our debates as well as that of returning MEPs.
There are inevitably major financial matters upon which local government concentrates. The single regeneration budget administered by IROs clearly does not cover the areas that it has replaced. Capping and gearing have been referred to. I wonder whether we shall not soon be at the point when a determined effort should be made to review the workings of the council tax to amend anomalies and unfairnesses.
I shall end by saying two things. First, I take issue with the noble Lord, Lord Williams of Elvel: the greatest crisis in local government is that it is becoming such an impossible job that good people cannot be attracted to it; and, secondly, I should like to have heard the words:
"My Government attach the highest importance to local government and local democracy".
On these Benches, we do.
7.5 p.m.
Lord Carter: My Lords, we have had a wide-ranging debate with many excellent speeches, but none more notable than the maiden speeches of the noble Lord, Lord Phillips of Ellesmere, and the noble Baroness, Lady Thomas of Walliswood. We all look forward greatly to hearing their further contributions to our debates when we shall all have the benefit of their considerable expertise.
My noble friend Lord Williams of Elvel covered adequately the environmental aspects of today's debate, and I shall therefore concentrate upon agricultural topics. My noble friend commented upon the vital importance of integrating agricultural policy fully into environmental policy. I should like to expand on that point a little to link today's topics of the environment and agriculture.
The majority of land in the UK and throughout the European Union is used for agriculture. It is vital that that land continues to be readily available for food production of one form or another. However, since the future of our wildlife, traditional landscapes, and natural resources depend also to a great extent upon the management of that agricultural land, it is essential that all farming activities are undertaken in an as environmentally friendly manner as possible.
It is inevitable that farmers will be subject to increasing public scrutiny on that issue. If they are to retain their standing and respect within the wider community, they must be prepared to deliver those environmental goods to the highest possible standard. They involve not merely the creation of beautiful and

341
accessible countryside for society as a whole but they must also fulfil our national commitment to conserve and enhance the UK's biological diversity.
The full integration of agricultural and environmental policy offers a fundamentally new agenda for UK agriculture. It is an agenda that recognises that agriculture is central to a prosperous and environmentally sound rural economy; that largely involves the continuation of commercial farming activity in all areas, with some exceptions; and ensures that environmental criteria are pursued on an equal footing to production objectives.
The principle of integration is accepted increasingly; but practical implementation is yet to be achieved generally. That is despite numerous opportunities, the most significant of which, when the opportunity was largely missed, was the package of CAP reforms announced in 1992. Some proposals have been put forward. The Labour Party proposed green premia and grants for environmentally friendly farming. The CLA has produced its own scheme for environmental land management systems. There have also been proposals from the NFU and the CPRE. It will be interesting to know whether the Minister can give us any idea when the White Paper to be produced jointly by the DoE and MAFF is likely to be seen by us. I have seen some rumours in the press about September of next year. It would be useful if he could help us with that.
If the CAP is to become more environmentally driven, we must be sure that any measures taken in that respect do not add to the long list of existing possibilities for fraud. Much has been made of the recent report of the Court of Auditors which has been mentioned a number of times today. The figure of £6 billion for fraud on the Community budget, largely in agriculture, has been referred to. But that figure is not new. Your Lordships' European Communities Committee reported in the 1988–89 Session. I was a member of the committee which was ably chaired by the noble Baroness, Lady Robson of Kiddington. In that report we stated:
"No authoritative assessment of the level of fraud in the Community has been made, and a firm estimate is difficult to achieve".
But the committee received evidence from witnesses who were prepared to estimate the scale of fraud. Those estimates indicate a loss of between £2 billion and £6 billion each year, which is the range of figures mentioned recently in the press.
As we know, some 80 per cent. of the expenditure of the EU budget is in the hands of the national treasuries. In an excellent publication entitled Farm Brief there is a quotation from an official of the Court of Auditors. He stated:
"Which country has the best control of agricultural spending? None, they're all equally bad. The UK government is just as guilty of sloppy management of inspection and controls… Sure there are big companies involved. Defrauding the Commission is not the same as doing it to the bank—it's more or less a sport".
In addition to fraud in the European Union there is malfeasance on a grand scale. That is the wilful misconduct of public affairs. We have the recent 342
example of certain member states which did not pay their fines for exceeding their milk quotas. The figure of £1 billion was mentioned, and I do not believe that it has been refuted. On the morning of the relevant meeting of European Union Finance Ministers, Mr. Kenneth Clarke, Chancellor of the Exchequer, appeared on the "Today" programme. With that particular brand of ebullient machismo which he has made his own, he described the tough stand that he would take on the issue. Of course, by lunchtime he had rolled over and given in. The fines were halved and Italy was given an extra milk quota so that it would not feel too hardly done by.
That contrasts with the Prime Minister's attitude, which he expressed to his own Back-Benchers only last week, with regard to additional payments to the European Union budget. It appears that the Government's policy is a combination of supine hand-wringing in Brussels and faintly ridiculous muscle flexing at home. I suggest that that posture is neither dignified nor consistent.
That is all compounded by today's news that the Treasury forecast of our contributions to the EU budget this year was too low by £732 million. The forecast of £1.7 billion looks like an out-turn of £2.4 billion. The effect of the CAP is not just the result of the budgetary contributions; there is also the trade flow effect. A recent report from the Centre for Research in Economic Development and International Trade at the University of Nottingham was extremely enlightening in that respect. It states:
"One point emerging forcefully…is that there is no apparent correlation between a country's relative wealth and the distribution of transfers from the budget and trade effects. Although the highest per capita benefits accrued to Ireland, which in terms of GDP per capita is the third poorest country in the Union, this is followed by Denmark, which is the richest. Similarly, the Netherlands and France receive large per capita transfers from the CAP (the transfer to the former is larger for instance than that going to Greece), even if both countries have per capita incomes above the Union average. On the other hand, the UK, Portugal and Spain appear to be net contributors even though they are relatively poor countries within the Union. This supports the view… that the so-called 'UK problem' is more accurately described as a poor country, small agricultural sector, net importer problem".
That is some kind of comment on the past 15 years of the Government's control of our agricultural policy.
There are other aspects of the CAP and the European directives. Slaughterhouses will be prohibited from enjoying the traditional meat inspection service provided by local authorities since 1992 and must pay for the ruinously expensive veterinary inspections that are required by the EU. More than 200 small slaughterhouses have gone out of business since provisions came into force and they have put hundreds of people out of work.
Under EC hygiene rules, small cheesemakers are prohibited from collecting milk from neighbouring farms. A refrigerator tanker is required, irrespective of the distance and quantity. There are times when we enter the realms of high farce. Are your Lordships aware that there is an EU ban on the sending of live worms by post unless they are accompanied by a journey plan, provided with food and water and rested after 24 hours? The same provision, which causes only irritation and amusement

343
to the worm trade, is, more importantly, stopping the small poultry breeders from distributing their stock, thus threatening dozens of small firms with bankruptcy and the loss of more jobs.
Turning to matters of more immediate parliamentary interest, next week we shall begin consideration of the Agricultural Tenancies Bill. I do not wish to foreshadow our Second Reading debate. However, I must tell the House that, if the Bill is not substantially amended, there is genuine anxiety on these Benches about the effect on the future security of tenure for farm tenants under the new farm business tenancies and the provision of openings for new entrants into farming. I also understand that the Bill as drafted does not give to existing tenants the security of tenure that we all thought the Government intended to ensure. We shall certainly be seeking to improve the Bill, and I respectfully suggest that this House is well equipped to do so.
The debates on the gracious Speech provide an opportunity to raise a number of matters which are of concern to the agricultural industry. The Government's proposals for the future of the State Veterinary Service are causing considerable alarm. Perhaps when the Minister responds he will comment on the views of the British Veterinary Association which has described the slimming down and quasi-privatisation of the SVS as at best a bureaucratic bungle and at worst an act of criminal folly. The association calls it a recipe for disaster and a purely bureaucratic response which will,
"castrate if not crucify the SVS at this critical time".
It also claims—and correctly—that our SVS is the envy of Europe. Yet, as with so many areas, dogma appears poised to risk all the investment made in the UK since the war as regards the protection of animal health, public health and animal welfare. Those are strong words from a well-respected profession and I shall be interested to hear the Minister's response. I must repeat that many farmers are convinced that it is only a matter of time before we have a major outbreak of animal disease resulting from importation.
This week the House of Commons Select Committee on Agriculture reported on health controls and the importation of live animals. The report is valuable and makes a number of important recommendations affecting farm livestock and horses, and there is the headline matter of the ending of the quarantine for cats and dogs. It would be helpful if the Minister could give the Government's initial reaction to the report, in particular on those matters affecting farm livestock. It would be nice to think that the report covered the historic dinosaur mentioned by the noble Baroness, Lady Strange. I was a little confused; I was not entirely sure whether when she referred to the historic dinosaur she was referring to government policy or to her castle in Scotland. I know which interpretation I prefer.
The noble Earl, Lord Clanwilliam, my noble friend Lady Nicol and other speakers, dealt adequately with organic farming. Perhaps I may ask the Minister—and not for the first time —why our support for organic farming is at rates that are so much lower than in other member states of the EU. Is it a typically perverse Treasury policy? This policy, if it were adopted, could reduce surpluses, add to environmental protection and
344
reduce the import bill. It is an example that we always seem to get in Government, irrespective of party, of the left hand not knowing what the right hand is doing.
The whole concept of the organic management agreement is similar to the ESA approach; it is an adaptation of the environmentally friendly farming approach. Obviously, it can be seen as a part of a matrix of conservation grade farming, environmentally friendly farming and, for those who want it, organic farming. It is a logical extension which increases the reduction of surpluses and environmental protection.
There are many other matters that I should like to cover, but time does not allow me to do so. There are two topics in particular upon which I should like to spend a little more time—one is the transport of live animals, and the other is the debacle in the milk market caused by the winding-up of the Milk Marketing Board which produced results that were exactly as we forecast when debating the agriculture legislation in the last Session. Does the Minister support the proposal from my honourable friend Mr. Gavin Strang (who is our spokesman on agriculture) that the Meat and Livestock Commission should undertake an urgent study to see whether we can replace the live exports of sheep with exports of sheepmeat?
When I recently asked the Minister during Question Time when the consumer would see the benefits of the deregulation of the milk market, he said that that would he in the long term. I have to say that the consumer of milk is beginning to feel that the Government's view of the long term has not only discounted the future but also the hereafter.
In conclusion, I believe that we need a coherent statement on the objectives of agricultural policy. As a suggestion, I should like to offer the Labour Party's objectives for such a policy: to provide food of a high quality to consumers and to provide it at reasonable prices; to support incomes and employment in rural areas; to protect and enhance the rural environment; the biodiversity and public access provisions and to ensure the highest possible standards of animal welfare; to ensure that support arrangements give the taxpayers and consumers value for money; and to reinforce our overseas development policies. It would be nice to think that the Government's proposals on agricultural policy in the coming Session will fulfil those objectives, but I fear that their record to date does not give us much hope.
7.21 p.m.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe): My Lords, as ever, when rural and environmental issues are discussed in your Lordships' House this has been an informed and worthwhile debate. As is customary after the gracious Speech, it has been a debate which has ranged over varied and sometimes disparate topics. We have heard two splendid maiden speeches by the noble Baroness, Lady Thomas, and the noble Lord, Lord Phillips. I join with other noble Lords in expressing the hope that we shall hear them both often. It is not fortuitous, however, that the subjects of agriculture and the environment have been combined on the Order Paper. Agriculture lies at the hub of what, to most

345
people, the term "environment" signifies. It is an industry whose primary role is to produce food. But it is also the industry which, more than any other, shapes the rural landscape and influences its ecology.
That link is one which will be central to the Government's rural White Paper to which my noble friend Lord Ullswater and the noble Lord, Lord Geraint, referred. But it is also a link which has been increasingly recognised in agricultural policy. Largely at our instigation, the European Union has now adopted environmental measures as a compulsory and integral part of the common agricultural policy. Lest that statement seems like a commonplace, we would do well to remember how impossible a dream it would have sounded 10 or even fewer years ago. The example of environmentally sensitive areas, and similar imaginative schemes pioneered in the United Kingdom, demonstrated what could, and what should, be done across Europe.
However, the rural character of this country, where nearly 80 per cent. of the land is devoted to agriculture, should not lull us into overlooking the pressures upon it. Competing demands from housing, industrial and retail development and roads, as well as from agriculture itself, have to be recognised and managed; and farming can itself create environmental pressures through, for example, overgrazing, nitrate leaching, or the loss of biodiversity. Those agricultural pressures can be eased in a variety of ways: by advice from government agencies such as ADAS and English Nature or from the many active voluntary bodies such as FWAG; by regulation, such as, in the sphere of pollution; by administrative penalty—for example in the withholding of payment of CAP subsidies where farmers permit serious environmental damage (the so-called cross-compliance principle); by encouraging farmers themselves to put environmental awareness into practice through initiatives such as the LEAF movement, or through organic systems; or, lastly, by financial incentives to reward environmentally positive management going beyond good agricultural practice.
It is in the area of incentives where we can be particularly proud. This year saw the launch of the Habitat Scheme, the Organic Aid Scheme, the Countryside Access Scheme and new nitrate sensitive areas. It also saw a major expansion of the ESA Scheme with eight new ESAs being designated in England and Wales. That brings the total to 43 ESAs—15 per cent. of all agricultural land. Once those and the new schemes are fully operational, we shall be spending over £110 million a year in the UK on promoting environmentally sensitive farming. At a time of serious constraints on public expenditure, that is a significant commitment by government in addressing the main environmental needs and opportunities associated with UK agriculture. I see that my noble friend wishes to intervene. I give way.
The Earl of Clanwilliam: My Lords, I am most grateful to my noble friend for giving way. He
346
mentioned £110 million for environmentally sensitive programmes. Will that mean an increase of £1 million in respect of organic farming?
Earl Howe: My Lords, I shall be turning to the subject of organic farming in just a moment. Perhaps my noble friend will be content to wait until that time.
Agricultural policy has a major part to play in pursuing the Government's aim of conserving and, where practical, enhancing biodiversity. Since the Maastricht Treaty amended the Treaty of Rome, it has been an obligation on the Community to integrate environmental protection requirements into the definition and implementation of all Community policies. In agriculture, the Government have taken a lead: we have a strong commitment to promoting further "greening" of the CAP, and continue to press for a closer linkage between agricultural and environmental policies and objectives.
We have also taken the lead in the Community in seeking to achieve rules for set-aside which maximise its potential for the environment. I believe that the noble Lord, Lord Beaumont, was quite wrong in his analysis of the effects of supply control measures on the environment. The Government successfully argued for environmental management conditions to be applied to set-aside land and we also secured the non-rotational set-aside option which allows for longer term environmental benefits. However, the Government are seeking to go further in deriving long-term benefits from set-aside by allowing arable land taken out of production under the various environmental schemes to count against a farmer's set-aside requirement—
Lord Beaumont of Whitley: My Lords, is the Minister suggesting that the existence of set-aside does not mean that farmers have a great deal more intensive agriculture on the rest of their land? If he is making that suggestion, it goes against the evidence. However, if he is not, he is not addressing himself to anything that I actually said.
Earl Howe: My Lords, the noble Lord overlooks the whole tenor of CAP reform which was to reduce the incentive to farm intensively on land that is cropped with arable produce—
Lord Beaumont of Whitley: But, my Lords—
Earl Howe: My Lords, there is evidence to show that that is what is happening. If the noble Lord cares to talk to the Royal Society for the Protection of Birds, I believe he would find that the society has most interesting things to say about the beneficial effects of set-aside on bird populations.
As I was saying, the European Commission has undertaken a study into the question to which I referred and a report is expected very soon. When that report is placed before the Council, my right honourable friend the Minister will be pressing very hard for positive action.
It might, perhaps, be useful at this stage to take stock of our experience with the CAP over the past 20 years. The CAP was one of the first common policies to be established by the EC. Despite long-standing criticisms

347
from the UK and elsewhere on the grounds of its cost to taxpayers and consumers, its economic distortions and its adverse impact on trade, the coverage of the CAP has tended to expand and its cost to rise. Through the 1970s and into the early 1980s support prices were regularly increased as a result of a perceived need to maintain farmers' incomes. But insufficient allowance was made for the benefits of technological advances and structural change and, combined with that, there was excessive optimism about the growth of world markets.
Only in the mid-1980s did the direction of policies begin to shift, but the comparatively limited extent of those changes reflected the concern of most member states to preserve the essential characteristics of the CAP. There was a general desire to avoid radical change, even where significant budgetary expenditure was at stake. The 1992 reforms were more significant; but a strong influence on both the timing and content of these reforms was the GATT Uruguay Round negotiations on agriculture. It became increasingly clear as these negotiations progressed that the more trade distorting features of the CAP—excessive import protection and uncontrolled use of export subsidies—would have to be subject to limitations under any GATT agreement capable of achieving wide acceptance. The 1992 reforms were thus aimed at delivering the obligations which the Commission judged it could secure in the remainder of negotiations. In addition, some member states were concerned that the CAP was no longer capable of ensuring an acceptable income to their farmers.
The Government's principal long-term objective for the CAP is to reduce its cost both to taxpayer and consumer by reducing support levels and phasing out direct compensatory payments. However, in tune with the noble Lord, Lord Williams, and indeed the noble Lord, Lord Carter, we also seek to get the CAP operating with much more regard to environmental considerations, with a higher proportion of EC expenditure to farmers being applied to encourage more environmentally sensitive farming and with the application wherever appropriate of environmental conditions to support payments. These objectives spell out the direction in which the Government wish to see the CAP develop but within those broad objectives the first priority for the UK must be to bring down end price support. This will bring both economic and environmental benefits where current support levels are encouraging over-intensive farming systems. In doing so we should improve the balance of supply and demand, thus making redundant the raft of supply controls which, as my noble friend Lord Dixon-Smith rightly said, act as a barrier to new entrants. As the noble Lord, Lord Mackie, pointed out, it is not only the Government but the NFU and others who have been considering how change to the CAP could be brought about.
But there is one central point to remember regardless of any such changes. If our countryside is to be maintained and the land is to be kept in good heart, agriculture must continue to prosper; and for the agricultural industry to play its full part in a thriving rural economy we need to encourage landowners to offer more land for rent. There has been a long-term
348
decline in the amount of rented land—now down to just one-third of the total agricultural land in England and Wales. The shortage of tenancies hinders the industry's ability to respond to market and policy changes and makes it very difficult for new blood to enter the industry.
As my noble friend Lord Ullswater has pointed out, the existing agricultural holdings legislation discourages the letting of land because of the degree of security that it confers on tenants and because of its sheer complexity. My noble friend referred to the Government's Agricultural Tenancies Bill which was introduced into your Lordships' House last week. I am glad that so many noble Lords have welcomed it, although I look forward to some interesting debates with the Benches opposite. I do not propose to devote time to this subject now as we shall have the opportunity to debate the Bill in more detail on Second Reading on Monday of next week. The main point I wish to make today is that we want to simplify the legislation for future tenancies and give parties much greater freedom to negotiate tenancy agreements which suit their own needs and circumstances. We believe that the reforms which we have proposed strike the right balance for landlords and tenants, will lead to more land being made available to rent and will benefit the future well-being of the rural economy as a whole. I am sure that the points made this afternoon, which I shall consider carefully, will feature in our debates as the Bill proceeds on its passage through the House.
Many questions arose during the course of the debate which I should now like to deal with. If I do not succeed, because of pressure of time, in covering all the questions posed by noble Lords I apologise to them in advance and either I or my noble friend will follow up such omissions by letter where appropriate. I welcomed the remarks of my noble friend Lord Crickhowell in favour of the new environment agency and in support of the appointment of my noble friend Lord De Ramsey as its chairman designate.
My noble friend has served with distinction as chairman of the NRA since its inception. It is thanks to him and his board and to all the dedicated staff under him that the standing and success of the NRA are now what they are. My noble friend has achieved the enormous task of bringing together people from the different water organisations and welding them into a cohesive, effective body to protect the water environment. We aim for the new agency to be a centre of excellence, combining in one organisation the experience and expertise which the existing bodies have built up over the years. I welcome the contribution of the NRA and its chairman and that of the other bodies, HMIP and the waste regulators, to that process.
My noble friend and my noble friend Lord Mills referred to the agency's duty to take costs and benefits into account and hoped that that would not restrict its day-to-day operation or subject it to challenge. As both my noble friends will recognise, sustainable development involves reconciling the needs of achieving both economic development and effective environmental protection. Regulators should not be able to impose costs which are not justified by the

349
environmental benefits which they will bring. The provisions as drafted require the agency to consider costs and benefits in the round, including environmental costs and benefits. The provisions do not override the agency's other duties and obligations.
My noble friend Lord Crickhowell asked whether the Bill would require the agency to prepare a state of the environment report. Under the agency's pollution control duties—Clause 5 of the published draft—it states that the agency shall compile information relating to such pollution and report back to Ministers. If required by Ministers to do so, the agency will carry out assessments and prepare and send reports on those assessments. Clause 31 of the published draft also requires the agency to prepare each year a report on its activities during that year. Copies are to be sent to Ministers and must also be laid before both Houses of Parliament. The noble Lord, Lord Beaumont, expressed his worry that the NRA's environmental duties might be taken away from it when its functions are transferred to the agency. We have listened to concerns expressed that the agency is to be given a less effective duty to protect and conserve the environment than the NRA has now. We have amended the wording to make it clear that the agency is to have a strong and effective role for protecting the environment and that that is what its core functions are all about.
The noble Lord, Lord Beaumont, questioned the wisdom of the local management of waste functions being transferred from local government to the agency. It is essential that the local waste regulation function is transferred to the environment agency. It would be impossible to provide an integrated approach to the control of pollution and waste if more than 80 authorities in England and Wales continue to operate separately. This proposal was announced following the Government's consultation exercise in 1991 on the agency's core functions. But this is not to denigrate the achievements of local waste regulation authorities or any of the bodies which will be incorporated into the agency. I would expect the agency to consult and to co-operate with local authorities where this is necessary and appropriate in the context of its effective operations.
The noble Baroness, Lady Nicol, expressed criticism of the fact that there is no scientist on the advisory committee. We have appointed an advisory committee which contains a range of expertise relevant to the agency's functions, including environmental protection, business and local government. Many members of the agency's staff will of course have a scientific background and I feel sure that there will be no lack of expertise in that direction.
The noble Lord, Lord Williams, raised a questionmark over the fact that amendments to the Bill have been announced already. The provisions published by my right honourable friend on 13th October were draft provisions; clauses and schedules to set up the two new agencies reflecting the stage we had reached over a month ago. This early publication, as my noble friend Lord Crickhowell was kind enough to point out, was a new and virtually unprecedented initiative. It was intended to give interested parties a chance to inform
350
themselves of the details of the proposed legislation before it is introduced into Parliament. My right honourable friend stated that the provisions would continue to be refined in the period prior to presentation to Parliament, and that is what is being done. I was grateful for the welcome which many noble Lords have given to the new wording of the clause on the agency's conservation duty.
My noble friends Lord Selborne and Lord Crickhowell referred to the polarisation of debate on the agency and other environmental measures on the question of regulation versus incentives. The Government aim to shift the emphasis away from regulation as the only means of achieving environmental objectives and targets, and to use incentives of economic instruments and voluntary environmental action to complement legislation and avoid the need for excessive and over-detailed regulation, but regulation will continue to play a vital role in protecting the environment.
Such regulations should be clear, fair and as proportionate as possible and should be implemented in a professional and consistent manner. Creating a body which will do that has been one of the Government's key aims in establishing the agency. The environment agency will be good for the environment and good for industry. It will benefit business by bringing together the different regulatory regimes in a single body, but certainly not at the expense of environmental protection.
My noble friend Lord Mills spoke about the concept of sustainable development. As my noble friend said, the agency will make an important contribution towards promoting sustainable development through the way in which it carries out its functions. It can be difficult to define in practical terms what sustainable development might mean in specific cases, although we have the guiding principle of the Brundtland definition which my noble friend quoted in his opening speech.
It is particularly difficult to define in precise legislative terms what sustainable development might mean for the agency in future years. However, it is not appropriate for the agency to have to decide what sustainable development means, nor to make policy decisions about what the overall balance of industrial development and environmental protection should be. That is a role for government. It is, however, right that the agency's aims and objectives should reflect the contribution it can make in the light of guidance from Ministers. That is what the provision in the Bill seeks to secure.
My noble friend Lord Mills also asked about resources for the agency. Transitional costs will be dependent on decisions yet to be taken on the new body's management and geographical structure, the location of offices and other management strategies. Offsetting savings will arise from efficiency gains through rationalisation. The net effect is likely to be small relative to the agency's overall budget.
The noble Baroness, Lady Hamwee, spoke about local democracy and quangos. Accountability and responsiveness to individuals' concerns do not necessarily require control through local authorities. Building on the success of the NRA, the agency will be

351
a non-departmental public body accountable to Parliament through Ministers and subject to clear financial controls. We look to the new body to ensure transparency in the way it conducts its affairs and adherence to Citizen's Charter principles.
The agency will have three sets of regional and local committees concerned with environmental protection, fisheries and flood defence. We would expect a wide range of local interests to be represented.
I was sorry to hear the remarks made by the noble Lord, Lord Williams, that the relatively infrequent attenders of your Lordships' House should spare themselves the trouble of coming. Besides being somewhat ungracious to noble Lords on all sides of the House, his sentiments run directly counter to those expressed by the noble Lord the Leader of the Labour Benches when he responded to the gracious Speech last week. It is one of the strengths of this House that its expertise lies not only in those who attend every day but also in those who give us the benefit of their wisdom when time permits and when the right opportunity arises.
Many noble Lords, including my noble friend Lord Mills, made detailed points about the Government's proposals for the agency. My noble friend Lord Ullswater looks forward to dealing with those points when he speaks to the Bill at Second Reading and later stages.
The noble Baroness, Lady Thomas of Walliswood, spoke of her experience in local government and of her particular interest in transport policy. The Government are concerned that smoky emissions from badly maintained vehicles do considerable damage to the appearance of buildings, and vehicle fumes can lessen the quality of life for all who live and work within the urban environment. The claim sometimes made that 10 to 12 per cent. of motor vehicles are responsible for 50 per cent. of vehicle produced air pollution is not borne out by government research. It is likely that the contribution of the worst 10 per cent. of vehicles is somewhat closer to 25 per cent. of pollution.
However, the Government are committed to tackling the problem of gross polluters, although that alone will not solve the whole problem of traffic pollution. In October my right honourable friend the Secretary of State for Transport launched a concentrated series of roadside spot checks aimed at catching gross polluters. I am sure that the noble Baroness will welcome that.
The noble Lord, Lord Phillips, showed us how valuable a Member of the House he is likely to prove. His balanced analysis of the opportunities and problems associated with animal and plant biotechnology was one to which I am sure we will return whenever that important subject is debated over the years ahead.
We were delighted and grateful when my noble friend Lord Norrie introduced his National Parks Bill in the last Session. I became aware of the almost universal support for the Bill and the amount of good will which my noble friend generated by its introduction. He asked in particular about the revision of national park purposes in line with the recommendations of the Edwards Report. We have considered very carefully the recommendations of the Edwards Report and those put
352
to us by the countryside agencies in respect of revisions to national park purposes. The national parks, as the jewels in the countryside crown, require particular care and attention. I am confident that our proposals for revised purposes reflect the special needs and qualities of those most precious areas.
The noble Lord, Lord Beaumont, expressed his concern about development in national parks. Our policy on development in the parks is set out in the planning policy guidance note on the countryside and the rural economy. That is that major development should not take place in the parks save in exceptional circumstances. Any proposals for such development should be subject to the most rigorous examination.
My noble friend Lord Crickhowell asked whether the national park clauses in the environment Bill replicate those of the Bill of my noble friend Lord Norrie last Session. I can confirm that the environment Bill replicates the provisions in my noble friend's National Parks Bill.
The noble Baroness, Lady Nicol, asked about the extent of the proposed legislation for new national parks authorities. All of our commitments to legislate will be reflected in the Bill. The Bill's provisions will set out a comprehensive framework within which the new authorities will conduct their business. We also intend to issue a circular which will fill out and expand upon that framework.
The noble Lord, Lord Palmer, and the noble Lords, Lord Mackie of Benshie and Lord Geraint, referred to the importance of hill farming. The Government remain firmly committed to the continuation of extensive livestock farming in the hills and uplands and to the HLCA scheme itself. That is demonstrated by the total estimated expenditure of around £546 million this year in subsidies to some 67,000 sheep and cattle farmers in the less favoured areas. We expect that the total subsidies on cattle and sheep in the LFAs in 1995 will amount to more than £600 million. Those are substantial sums. They demonstrate the importance that the Government attach to that sector of the farming industry and the contribution which it makes in environmental, social and economic terms to the well-being of upland areas.
The noble Lord, Lord Palmer, also spoke about the importance of alternative and industrial crops. We are keen to encourage the development of viable alternative crops. Crops for industry and energy are an exciting and positive use of set-aside land as well as a sustainable and renewable source of raw materials for industry and an opportunity for new rural enterprises. When she was Minister for Agriculture, my right honourable friend Mrs. Shephard launched a consultation document called Alternative Crops: New Markets at the Royal Show to stimulate debate on that subject. We are now looking at responses to that consultation paper. A new Alternative Crops Unit has been formed within MAFF to act as a catalyst and help bring together people with an interest in the subject.
The noble Lord, Lord Williams, asked about local government reorganisation. He suggested that it was a shambles. Far from it, my Lords. The Local Government Commission has published 19 final reports and my right

353
honourable friend the Secretary of State for the Environment has announced decisions on 10 of those. We are getting on with the job of implementing the recommendations for those areas for which we have announced reorganisation in 1996. The Local Government Commission is drafting the remaining reports which are due by the end of December.
Baroness Hamwee: My Lords, perhaps I may intervene briefly. Do the Government regard the chaos into which local government has been thrown—with the amount of money and man hours spent—as a considerable problem?
Earl Howe: My Lords, I do not. However, with the leave of the House, I shall not expand in detail on that because we are running short of time.
The noble Lord, Lord Jenkins of Putney, spoke about Westminster City Council. That is a matter for the council, its auditors and its electors, not for the Government. It would be wrong to comment on any specific case until the legal processes are completed.
Lord Jenkins of Putney: My Lords, perhaps I may ask one question on that. At a suitable time will the Government consider having a judicial review of the matter? It is one of great importance and deserves treatment at that level. Of necessity the Government are involved. I suggest to the noble Earl that it is possible for the Government to consider the matter as suitable for judicial review.
Earl Howe: My Lords, we must wait for the judicial process now in train to be completed before any such decision is taken.
I should like to say how much I agree with my noble friend Lord Selborne in what he said on sustainable agriculture. The agricultural chapter of the Government's sustainable development strategy—it was launched by my right honourable friend the Prime Minister in January—sets out the aims of sustainable agriculture as follows: to provide an adequate supply of good quality food and other products in an efficient manner; to minimise consumption of non-renewable and other resources including by recycling; to safeguard the quality of soil, water and air; to preserve and, where feasible, enhance biodiversity and the appearance of the landscape. The chapter recognises that prior to reform, the CAP often ran counter to some of those aims. It also recognises that a continuing process of reform will be needed in order to meet the aims more fully.
My noble friend Lord Clanwilliam bemoaned what he regards as inadequate support for organic farming. We agree that there is a need to increase organic production. That is why we are encouraging the sector with support for organic standards, research and development and direct aid for conversion. Let us not forget that that is on top of the general assistance which is available to all farmers. The recent CAP reforms have also improved the relative position of organic farmers by switching resources from output to area support. It is true that there has been a modest response with regard to the uptake of the organic aid scheme. However, it is too
354
early to draw any firm conclusions on how things may progress. There is no closing date as there is with other schemes. We shall keep the matter under review.
The noble Baroness, Lady Nicol, joined my noble friend in criticising the rates of aid in the organic aid scheme. The key requirement at present is to encourage more farmers to convert to organic systems so that production is expanded. Those already farming organically can receive aid for converting new land. However, resources are not unlimited and therefore aid has to be targeted to where it will achieve most benefit. The targeted threefold increase in the organic area as well as the rates of aid will be kept under review.
The noble Lords, Lord Geraint and Lord Carter, expressed their concerns about the welfare of animals in transit. As both noble Lords will be aware, we are currently pressing for strict and enforceable EC measures to help restore public confidence. In particular we are pressing in negotiations for the concept of journey limits to be recognised at Community level. We are also introducing tighter national laws to make it easier to prosecute the UK traders who break the welfare rules during journeys abroad. The consultation period for our proposals has now ended and we are working to finalise the new legislation. Meanwhile we realise that UK traders are suffering hardship because of the ferry company ban. That is why we are checking all proposals for new routes as fast as humanly possible so that those which are satisfactory can proceed. A number have already opened.
The noble Baroness, Lady Wharton, spoke about the effects of the GATT on animal welfare. It is an important subject. The Government believe that the Uruguay round agreement will, over time, result in more countries adopting animal welfare measures which reach the higher standards prevailing in the European Union. Moreover, the technical barriers to trade agreement establish the right of each signatory country to implement domestic legislation to protect animal life and health in a non-discriminatory manner.
The noble Lord, Lord Carter, referred to the milk quota disallowance suffered by Italy and Spain. He has misread the situation. It was a good agreement for the United Kingdom. We have secured substantially increased fines on Italy and Spain for not implementing milk quotas. The increase of 1.1 billion ecus was entirely due to action taken by the Government in bringing ECJ cases against the Commission. Italy and Spain will be paying 1.5 billion ecu more than they received from the CAP milk budget. We have served a clear warning to others of the consequences of a failure to implement CAP rules, and justice, I feel, has been done.
The noble Earl, Lord Lytton, drew attention to forestry consultation procedures. The Forestry Commission has written to interested organisations with proposals to review consultation procedures with the aim of streamlining them. That follows a recommendation by the Select Committee on environment in another place. I hope that it may lead to making consultation procedures less burdensome for the noble Earl and others.

355
The noble Lords, Lord Geraint and Lord Carter, referred to CAP fraud. The Government have been at the forefront in getting the Community to tackle fraud. Specific areas of action are through reform of the CAP itself, direct payments being subject to tight control, administrative penalties and strict levels of controls specified in EC schemes. Member states must also improve their reporting procedures. All those improvements are fully supported by the Government. However, we are not complacent and we continue to press both for further reforms of the CAP and for adequate controls in all member states.
I shall conclude and apologise to the House for having overrun my time. We all wish to see a healthy rural economy. Agriculture and its associated industries play a key role in rural communities. They are fundamental to the maintenance of a beautiful and thriving countryside. The Government are determined to ensure that our rural areas continue to thrive. That is one reason why my right honourable friends the Minister
356
and the Secretary of State for the Environment announced last month that they will be producing a White Paper on rural affairs. We expect that to be issued in the middle of next year. There is a need to have a coherent overall strategy for the future of the countryside in all its aspects—economic, social and environmental. The part to be played by farming will be central to our approach. Ensuring that the interests of farmers, the rural economy and the rural environment are given the recognition and support that they deserve will be one of the Government's guiding themes.
Lord Inglewood: My Lords, on behalf of my noble friend Lord Ferrers, I beg to move that this debate be now adjourned until tomorrow.
Moved, That the debate be now adjourned until tomorrow.—(Lord Inglewood.)
On Question, Motion agreed to, and debate adjourned accordingly.
House adjourned at two minutes before eight o'clock.