Lords Sitting of 8 February 1995

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of St. Albans.

Student Grants and Loans: Fraud
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
What action is being taken to identify fraudulent applications for student grants and loans.
Lord Lucas: My Lords, local education authorities, the Student Loans Company, the Universities and Colleges Admissions Service, the Department for Education and the police are all taking action to identify and eliminate fraudulent grant applications.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for that reply. Can he confirm recent reports in the press of organised widespread criminal activity, including forgery and invention of non-existent students? If they are correct, should not counter-measures be accelerated since the money lost could be used to help genuine students who are finding it difficult to make ends meet?
Lord Lucas: My Lords, I can confirm that over the past year or two we have been aware that there has been a considerable increase in fraudulent applications for grants and loans. We have, along with the authorities that I mentioned in my first reply, taken substantial measures to combat this, including the recently announced grant to UCAS of £120,000 to develop further the measures that it already takes. I would of course be reluctant to go into any details as to what measures are being taken since that information could only help people to succeed where we hope they will not.
Baroness David: My Lords, can the Minister give us a real assurance that the Student Loans Company is itself being well run and there has been no corruption there at all, because there have been allegations that it is being run appallingly badly? Can he give us any reassurance that those faults have been corrected?
Lord Lucas: My Lords, as those who attended Monday's debate last week will be aware, we very much regret the administrative problems at the Student Loans Company which caused inconvenience to tens of thousands of students. I can confirm what I said then, that those problems have now been overcome and that we are putting considerable efforts into making sure that they do not re-occur. The noble Baroness mentioned the subject of fraud. As she will know, Coopers are conducting a forensic audit into certain matters which have been brought to our attention by a former employee of the Student Loans Company. I do not wish
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before that report is made public to comment in any detail but I can say that they are matters more of principle than of amount.
Lord Hailsham of Saint Marylebone: My Lords, can my noble friend give the House some indication in figures of the extent of this abuse?
Lord Lucas: My Lords, the Audit Commission believes that the total of identified fraud is about £2.3 million. It is inevitable that there will be some unidentified fraud but given the efforts we are making we do not believe that that is particularly large.
Lord Dormand of Easington: My Lords, how many applications are found to be fraudulent?
Lord Lucas: My Lords, I can give the noble Lord the figures for the Student Loans Company. In 1993–94 there were 67 proven cases of fraud and in 1994–95 to date there have been 41 cases.
Lord Morris of Castle Morris: My Lords, what assurance can the Minister give the House that the £120,000 over two years given to UCAS to set up computerised tracking devices is going to be enough to crack this problem in two years? If the answer is that he cannot be certain, will he now give us a commitment that appropriate support to UCAS will continue until this fraud is eliminated; and can he further confirm that universities will not be put to additional expense in solving this problem which is none of their making?
Lord Lucas: My Lords, of course I cannot give the detailed confirmation that the noble Lord asks for. However, I can say that we treat the problem extremely seriously and will do all that is reasonably in our power to eliminate it.
Lord Boardman: My Lords, my noble friend referred to proven cases. Can he say whether there have been any prosecutions and with what result?
Lord Lucas: My Lords, I am afraid I do not have the information my noble friend asks for, but I shall write to him.
Lord Orr-Ewing: My Lords, can my noble friend remind the House what percentage of total student grant applications are fraudulent?
Lord Lucas: My Lords, the answer is something less than a tenth of 1 per cent.

Heart Disease: Treatment
2.43 p.m.
Baroness Fisher of Rednal Baroness Fisher of Rednal asked Her Majesty's Government:
How many people in the United Kingdom are affected by heart failure every year; and what initiatives are in progress to improve its identification and treatment.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, the information is not available in the form

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requested, but in 1992–93 there were 660,000 admissions to NHS hospitals for all forms of heart disease. Initiatives include Health of the Nation targets to prevent heart disease, reducing waiting times for treatment, issuing guidance to health authorities and funding initiatives on training, audit and information systems.
Baroness Fisher of Rednal: My Lords, is the noble Baroness aware of the initiative of my local national health hospital in Birmingham, the Selly Oak Hospital, which has set up a one-day examination programme for GP patients? The patients go through the whole process of testing for heart failure, including an echocardiogram. Is she aware that that has saved the hospital a considerable amount of money? Will she look at that example to see whether national guidelines can be drawn from it to the benefit of patients and the health service generally?
Baroness Cumberlege: Yes, my Lords, I shall certainly do what the noble Baroness requests. Clinical guidelines are currently being drawn up by a joint audit committee of the Royal College of Physicians and the British Cardiac Society. I would expect the committee to take that example on board. I shall draw it to its attention in case it has not.
Lord Carr of Hadley: My Lords, does my noble friend agree that if we are to reduce the scourge of heart disease in terms of both death and disability in this country, early detection of any tendency to the disease is of the utmost importance? In that connection, has she considered, or will she consider, the possibility of an increased role for the technique of nuclear magnetic resonance scans as a means of identifying such tendencies in a non-invasive way? Will she also consider the possible use of mobile units which could go round the country to different hospitals and reduce the enormous capital expenditure involved in introducing such scanning units hospital by hospital?
Baroness Cumberlege: Yes, my Lords. That is a very good suggestion. I know that mobile units in other spheres, such as scanning for breast cancer, have been very valuable. As to early detection and prevention, as Valentine's Day is less than a week away it is important that your Lordships should look after your hearts, even if you do not wish to give them away.
Lord Dean of Beswick: My Lords, is the Minister aware that the black spots with a high ratio of heart disease are all to be found in inner city areas in cities such as Manchester, Sheffield, Leeds and Liverpool? As the figures in those areas are still frightening, can she give any indication whether there is any possibility of targeting increased resources to those black spots?
Baroness Cumberlege: My Lords, those figures are taken into account when resources are allocated to different health authorities. The noble Lord is absolutely right. The variation across the country is considerable.
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But we are aware of that and we try to target resources. We know that lifestyles in particular are very important in this issue.
Baroness Masham of Ilton: My Lords, is the Minister aware that this very morning I spoke to the world famous professor of thrombosis, Professor Kakkar? Is she aware that he told me that at King's College Hospital they sometimes have to cancel operations at the last minute because the intensive care beds are taken up by victims of acts of violence such as stabbings, and therefore the heart cases have to wait? Is that not a terrible waste of talent and resources?
Baroness Cumberlege: My Lords, this Chamber is a power house of information. I was not party to the conversations that the noble Baroness had with members of the public, but I am always willing to learn.
Lord Ennals: My Lords, in view of the figure mentioned by the Minister, which illustrates the enormous size of the problem, and the point made by the noble Lord on the Bench behind her concerning the urgency of obtaining rapid diagnosis, can the noble Baroness say what priority is being given by the department to ensuring that the type of facilities at Selly Oak to which my noble friend referred are available in other parts of the country?
Baroness Cumberlege: My Lords, it is up to health authorities to decide where to spend their resources in the light of the needs of their particular populations. We do not think that it is appropriate for Ministers or managers to make those decisions; it should be for clinicians to decide. The incidence of heart disease in this country is still too high, but the number of people who suffer from the disease is reducing.
Baroness Gardner of Parkes: My Lords, is it not a fact that the Royal Brompton Hospital already has mobile units? Is it not also a fact that the best approach is prevention through the health education system? Can the Minister tell us how effective the health education programme for the prevention of heart disease has been?
Baroness Cumberlege: My Lords, yes. We have set out targets in The Health of the Nation policy to reduce the incidence of coronary heart disease. We are more than meeting those targets. Increasingly health authorities are aware of effective programmes to reduce coronary heart disease and are investing in them.
Lord Molloy: My Lords, will the Minister take this opportunity to congratulate Britain's heart surgeons on the remarkable job they do throughout the country under difficult situations? With regard to some of the big hospitals, perhaps a small adjacent building or even an empty shop could be taken over to enable those surgeons to carry out their operations. Patients would not then have to wait too long, as they may do in a larger hospital. That idea has been put to me by a number of heart surgeons. Perhaps it could be examined by the department.
Baroness Cumberlege: My Lords, cardio-thoracic units have to be extremely sophisticated. There are only about 41 in the country. Increasingly more and more

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people are seeing cardiologists and we are seeking to get cardiac services into the districts. The idea of carrying out such operations in a corner shop is not very appealing.
Earl Jellicoe: My Lords, in asking a question, I declare that I am President of the British Heart Foundation in order to put at rest the mind of the noble Lord, Lord Lester.
Why is the incidence of heart disease in the United Kingdom among the highest, if not the highest, in the world, while the lowest in the world is, I understand, in Japan and France? Is it attributable to genetic reasons, or to dietary reasons—perhaps wine? Such incidence is a remarkable fact. Is it not worth considering that more research should be directed to the matter?
Baroness Cumberlege: My Lords, I should like to pay a tribute to the British Heart Foundation. It is an extremely well established, progressive organisation which invests £30 million a year in research into heart disease.
I believe the reasons for coronary heart disease need further investigation. We know that they are partly to do with diet, lifestyle and whether or not people smoke. But I suspect that other factors are involved such as genetics or heredity.
Lord Annan: My Lords, does the noble Baroness agree that we spend a great deal of money on heart treatment and research whereas hundreds of thousands of people suffer from rheumatic and arthritic conditions, very often for many years? Should not more money be spent, not on heart surgery or cancer research, but on research and treatment which helps those living in pain every day who are suffering from orthopaedic and other problems including, I may say, deafness?
Baroness Cumberlege: My Lords, a quarter of all deaths are caused through coronary heart disease, so it is the biggest killer in this country. That is why we put so much effort into trying to reduce it. The noble Lord is absolutely right. There is a huge number of calls on the National Health Service. There is a great deal of pain and discomfort that 'we should be tackling. But the National Health Service is, of course, limited in its resources.
Lord Rea: My Lords, does the noble Baroness realise that the recognition and treatment of heart failure is a basic part of good medical training? If the situation is as my noble friend suggested, perhaps the profession may be missing some diagnoses. I am in a delicate position as a doctor. Perhaps the answer lies in postgraduate education arid medical audit, to which the noble Baroness referred and preferably not through drug representatives, who call on GPs and are very clever at persuading them that they should use the latest and most expensive form of drug for heart failure rather than the cheaper and more widely used and well tested remedies which are available and are perfectly effective for most cases. Does she agree that the real answer lies in
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preventing the development of coronary heart disease, which is behind most cases of heart failure these days? As my noble friend suggested—
Noble Lords: Order!
Lord Rea: As my noble friend suggested, does the noble Baroness realise that the situation is related to social deprivation, a factor not referred to in the White Paper, The Health of the Nation?
Baroness Cumberlege: My Lords, 'I entirely agree with the noble Lord on postgraduate education. Indeed, the Royal Colleges, the General Medical Council, and others are responsible for that area.
I have to say that without the investment which the drug companies put into research this country would be a much poorer place.

Veal Calves: Protection
2.55 p.m.
Lord Bruce of Donington: My Lords, I have to report to the House that owing to an error which is entirely mine, and for which I apologise, the Question that appears on the Order Paper differs materially from the one that I thought I had asked Her Majesty's Government.
The Question on the Order Paper refer; to a proposal,
"providing for the rearing of calves in narrow boxes".
My Question was intended to refer to,
"prohibiting the rearing of calves in narrow boxes".
I have already tendered my apologies to Her Majesty's Government, who must have been put to some inconvenience. I was able to tell them only about three hours ago. I apologise, too, for any inconvenience I may have caused the House.
In the hope that the House will forgive me, I beg leave to ask the following Question:
"To ask Her Majesty's Government at which meeting of the Council of Ministers in 1989 a proposal was considered prohibiting the rearing of calves in narrow boxes; and whether they will provide particulars of the votes of the Member States on the proposal".
The Earl of Lindsay: My Lords, I am grateful for the noble Lord's apologies, which are well received, and for the correct version of the Question.
In June 1989 a proposal laying down minimum standards for the protection of calves was presented to the Council of Ministers. However, the Council did not discuss the proposal until October 1991. Although the UK opposed the directive because it dill not ban the system of veal crates, the Council recorded its agreement by a qualified majority.
Lord Bruce of Donington: My Lords, I thank the noble Earl for that reply and for the Government's indulgence in the matter. Is the noble Earl aware that the Commission has a different story to tell? According to the Commission, it made a proposal in 1989 for a regulation which would have ended the rearing of calves in narrow boxes. That was blocked by France, Spain and Italy. Is the noble Earl in a position to confirm or to correct the statement made to me by the Commission?

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Will he give the House an assurance that when the matter is discussed on 20th February at a meeting of the Agricultural Ministers in Brussels, he will this time register the United Kingdom's support for the Commission's proposal to stop the practice of rearing calves in narrow boxes, no matter how many objections come from France, Spain and Italy?
The Earl of Lindsay: My Lords, as regards the noble Lord's first question, Council minutes from 1989 and 1991 are not made publicly available. We are not allowed to refer in public to the way in which other member states voted in Council. However, I can state to the House that the United Kingdom Government opposed that directive. The rules have since been changed but the change does not apply retrospectively.
In reply to the noble Lord's second question, I remind him that the agenda for the February meeting of the Council of Agricultural Ministers will specifically deal with the revision of the 1991 directive on welfare of animals during transport. That is one of the measures that my right honourable friend sought to bring to the Commission's attention.
The review of intensive production systems for calves under the EC directive has been brought forward to this year, but because of the preparation work involved, it will not be ready for discussion at the February Council meeting.
Lord Hailsham of Saint Marylebone: My Lords, can my noble friend explain how it is that the noble Lord, Lord Bruce of Donington, apparently has access to information which the Government are forbidden to tell the House?
The Earl of Lindsay: My Lords, I think that the noble Lord, Lord Bruce, has ways with the Commission that others of us do not have. If the noble Lord received that information and it is correct, it was in fact confidential.
Lord Carter: My Lords, is the Minister aware of the belief that the basic problem in this whole question of veal crates arises from the fact that animals are regarded under European rules as agricultural goods, which presumably puts them on the same trading basis as a tractor or a bag of fertiliser? Do the Government support the suggestion that farm animals should be redefined under the Treaty of Rome as sentient beings? They would thus be recognised under European law as having the ability to suffer from pain, fear or stress.
The Earl of Lindsay: My Lords, the Government are definitely prepared to examine the proposal in advance of next year's negotiations on the treaty amendments. However, as the noble Lord will know, achieving a treaty amendment is no small matter. Therefore we need to consider most carefully the precise implications of a change in definition before pressing it.
Baroness Elles: My Lords, will my noble friend agree that despite any activity in regard to Community legislation, there is nothing to stop any member state
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bringing in its own legislation in order to abolish the rearing of calves in boxes, as we have done in this country?
The Earl of Lindsay: My Lords, my noble friend is absolutely correct.
Lord Stoddart of Swindon: My Lords, if the other countries of the Community persist in refusing to ban the rearing of calves in narrow crates, is there any time at all at which the Government will engage on a unilateral ban on the export of calves, and perhaps other live animals for slaughter, where the slaughtering procedures are in our view cruel and beastly?
The Earl of Lindsay: My Lords, the Government share the sentiment behind the noble Lord's question. My right honourable friend has already considered the best case which can be made out to support the legality of such measures as the noble Lord suggested. However, the conclusion was that any such measures could not be justified in law.
Viscount Mountgarret: My Lords, can the Minister tell the House why it takes a year for the fate of these unfortunate animals to be decided? Surely if anyone was really concerned about them, a discussion could be held well before that.
The Earl of Lindsay: My Lords, I should be grateful if the noble Viscount will tell me which animals we are talking about now.
Noble Lords: Next question!
Lord Geraint: My Lords, can the Minister confirm that those police authorities that are affected by the demonstrations at ports and airports will be able to recoup their extra financial costs?
The Earl of Lindsay: My Lords, I am afraid that I do not have that information with me to provide to the noble Lord.
Noble Lords: Next Question!

Students: Bursaries
3.3 p.m.
Baroness Lockwood Baroness Lockwood asked Her Majesty's Government:
Whether they have any plans to modify the decision to terminate the provision of bursaries for students on vocational courses in translation and interpretation.
Lord Lucas: My Lords, we have no plans to do so.
Baroness Lockwood: My Lords, I thank the noble Lord for that Answer. In pursuing the matter, I declare a non-pecuniary interest as chairman of council of one of the universities that is concerned. Can the Minister say on what criteria the decision was made to withdraw all the bursaries for postgraduate courses in interpreting and translating? In making that decision, was the Minister aware that the two universities that are most concerned, Bradford and Bath, have a very high

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international reputation for the quality of the interpreters and translators that are provided, and that that in itself brings other educational business to the United Kingdom?
Lord Lucas: My Lords, we are talking here about people who are already very highly qualified and who take an additional qualification to provide them with an even more highly paid career than they might otherwise have. Surely that kind of vocational education is best paid for either by the people who are to benefit directly from it or by the employers who will employ them afterwards, as would be the case in, let us say, accountancy or the law.
Lord Healey: My Lords, is it not the case that Her Majesty's Government make great use of those who are trained under these bursaries—for instance, in the Cabinet Office, GCHQ and a large number of other departments that I could mention—as do major firms in Britain, such as the BBC and the Shell oil company, and major international organisations? How can the Government justify terminating bursaries which provide men of this quality—which made Britain world-famous i n this field—when they rightly decided to finance training at a grammar school in the same skills but at a very much lower level? Is it perhaps that the Cabinet Office has decided that it is better that we do not understand foreigners and they do not understand us?
Lord Lucas: My Lords, the Government and industry also employ many accountants, and we do not pay for their training. These are people who are being asked to make a personal investment in their own future and who will achieve some very great rewards thereby. If the Government at any stage—or, indeed, any other organisations—found themselves short of these skills they would doubtless sponsor people on these excellent courses.
Lord Morris of Castle Morris: My Lords, does the noble Lord the Minister agree with the vice-chancellor of Bradford University, who says that abolishing these bursaries will not mean that these highly talented linguists will find alternative means of funding? There is no corporate or institutional sponsorship for this type of training. Is the vice-chancellor correct? If so, where would the Minister advise these highly trained linguists to look for alternative funding arrangements?
Lord Lucas: My Lords, there is not at present much corporate sponsorship for these courses, presumably because there are plenty of people out there with these skills. If an individual wants to finance himself on one of these courses, then all that I would suggest is that he should apply for a career development loan, which would seem to fit the case very well.
Baroness Seear: My Lords, is the Minister seriously saying that in this country we are overloaded with people who are good at foreign languages? It is the first tune I have ever heard such a fairy-tale in this House! Do not the Government recognise that the training of graduates is of the greatest possible importance? At present there is a large increase in the number of undergraduates. Does the Minister accept that if we
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want people of high quality we must back graduate courses? This graduate course, producing the people who take those very responsible jobs—including simultaneous translation, which is highly skilled—is exactly what we need to support.
Lord Lucas: My Lords, these are high-level vocational courses answering the specific needs of particular employers. If those employers have a need which is not being met, they will surely find ways of financing students to learn the skills that they require, as happens in many other industries. In this industry they do not appear to need to do so at present.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that, at a time when educational money is viewed very stringently, the Government's decision seems to me to be both fair and sensible?
Lord Lucas: My Lords, I cannot but agree with my noble friend.
Baroness David: My Lords, does the Minister realise that he has shocked a large number of us in this House by what he said today? It is very rare that we have these great centres of excellence in this country. To turn one down like this and not appreciate its value is really very shocking indeed. I am absolutely amazed at what the Minister said.
Lord Lucas: My Lords, excellence in vocational education is not a matter for the Government to express their opinion on; it is for the employers who make use of that particular skill. If employers wish to continue to employ graduates from these courses they will doubtless find ways of sending them on them.

Business of the House: Debates this Day
3.9 p.m.
The Minister of State, Department of Trade and Industry (Earl Ferrers): My Lords, I beg to move the Motion standing in the name of my noble friend the Lord Privy Seal on the Order Paper.
Moved, That the debates on the Motions in the names of the Lord Dubs and the Lord Ewing of Kirkford set down for this day shall each be limited to two-and-a-half hours.—(Earl Ferrers.)
On Question, Motion agreed to.

Procedure of the House: Select Committee Report
The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Second Report from the Select Committee be agreed to (HL Paper 22).—(The Chairman of Committees.)
Following is the report referred to:
1. DECLARATION AND REGISTRATION OF INTERESTS
The Committee has appointed a Sub-Committee "to consider the practice of the House in relation to financial and other interests of members, and in particular the case for a register of interests, and to make recommendations".

The membership of the Sub-Committee is:

Lord Griffiths (Chairman)

Lord Hesketh

Baroness Hilton of Eggardon

Lord McIntosh of Haringey

Lord Marsh

Lord Pym

Lord Rodgers of Quarry Bank

with the Clerk of the Parliaments.

2. REVIEW OF SESSION 1993–94
The Committee decided in 1988 "to give annual consideration, at the beginning of each session, to the proceedings of the House in the previous session and, where appropriate, to make a report on procedural difficulties which may have arisen" (First Report, Session 1987–88). The Committee has accordingly reviewed proceedings during Session 1993–94. As it is the Committee's practice to consider, as they arise, any matters warranting consideration by the Committee, the review has not brought to light any further matters meriting a report to the House. The Committee has accordingly concluded that the annual review should be discontinued.
3. QUESTIONS FOR WRITTEN ANSWER
The Committee has considered a proposal that the time within which Questions for Written Answer should normally receive a reply should be a week, instead of a fortnight as at present. The Committee considers that the present time limit is reasonable, and recommends no change.
Lord Finsberg: My Lords, as regards the matter of Written Questions of course I accept the collective wisdom of the Procedure Committee, but I wonder if your Lordships in general are content to be treated as second-class citizens. Your Lordships are receiving Answers to Written Questions within two weeks, whereas in the other place it is within one week. I cannot believe that your Lordships are any less important than those Members down the corridor. Yet, when I put the case to your Lordships' committee, it decided that in its view there was no call to shorten the period to bring it into line.
I am content to leave the matter there; but if any of your Lordships feels that there is some merit in what I have said, it would certainly assist if they were to communicate their views to the Chairman of Committees.
Lord Airedale: My Lords, when we debated on 10th January the first report of the Procedure Committee, I drew attention to the paragraph in which the committee recommended that normally only the next speaker should congratulate a maiden speaker. I suggested that the custom had arisen whereby the Minister replying to a debate was just as likely to congratulate the maiden speaker as was the speaker who followed the maiden speaker. The committee was good enough to refer again to this matter in its latest meeting. I quote from the minutes of that meeting:
"The committee agreed that it was acceptable, at the Minister's discretion, for congratulations to be offered by the Minister replying to a debate".
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The Companion to the Standing Orders is being revised. I understand that the new Companion will shortly go to the printer. I fear that if such words are not added to the bald statement that,
"only the next speaker should normally congratulate the maiden speaker",
the pleasant habit that the Minister who replies to the debate adds his congratulations will tend to fall into disuse. That would be rather a pity and a disadvantage. I hope that at this late hour it might be avoided.
Lord Williams of Elvel: My Lords, perhaps I may interject a comment from the Front Bench on the point raised by the noble Lord, Lord Airedale. If one is winding up from the Front Bench, it is rather difficult not to congratulate one of your colleagues who has just made a maiden speech.
The Chairman of Committees: My Lords, I am grateful to the three noble Lords who have spoken on this matter. Let me turn first to the point raised by the noble Lord, Lord Finsberg. It would not be right for me to be tempted into making comparisons between your Lordships' House and another place. It is for your Lordships to take decisions concerning their own procedures and their own matters. That is in fact precisely what happened when your Lordships decided to accept the last two reports of the Procedure Committee.
Having been good enough to attend the meeting of the Procedure Committee, the noble Lord will be aware that his proposal on this matter did not find favour with any member of the committee. The committee felt that it was better to retain the present practice, which has operated for many years. However, the noble Lord secured a signal victory on the previous occasion, when his proposal to the Procedure Committee that there should be better provision—indeed provision—for answering Questions for Written Answer during Recesses was accepted and in due course was accepted by your Lordships' House. I hope that the House will allow me to congratulate the noble Lord, Lord Finsberg, for having brought that matter before us and for having secured that improvement in our procedures. I am sorry to have to disappoint him on the other point.
I am very grateful indeed to the noble Lord, Lord Airedale, for having notified me beforehand that he proposed to raise the matter to which he drew attention. The Procedure Committee, as indeed did your Lordships' House when it came to debate the Procedure Committee's report on 10th January, found attractive the idea of congratulations to maiden speakers by Ministers. But it is fair to say, in summarising the discussion within the Procedure Committee, that the committee felt it better to adhere to the clear practice that it should normally be the noble Lord speaking immediately after the maiden speaker who should be left to give the congratulations of the House to the maiden speaker.
I think I am right in suggesting that it certainly would not be looked at askance if a Minister decided that he would add his congratulations. But the principal point in the mind of the Procedure Committee was that it

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would be wrong to make an exception to the general rule, because inevitably that would invite further exceptions to it.
I have partly covered the point raised by the noble Lord, Lord Williams of Elvel, in what I said about ministerial replies. These are matters which, as the rule stands, breach the rule. But your Lordships tend to turn something of a blind eye to a breach of that kind, if I may say so. I hesitate to enlarge that any further, but I should be very surprised indeed if noble Lords were not to turn a blind eye should the Front Benches feel disposed on occasion to do something similar. I do not think that I can take the matter further than that. In saying that, certainly I should not dream of giving a definitive reply on behalf of the Procedure Committee itself.
Lord Monkswell: My Lords, I must apologise for intervening at this point. With the permission of the House, it might be useful if I raised a point now which, perhaps I may say, I thought other noble Lords might have mentioned. I should like to ask the Chairman of Committees whether he will elaborate a little on the way in which the sub-committee on the declaration and registration of Members' interests proposes to work.
A circular has already been sent round asking interested Members of this House to submit written evidence to the committee. One Member of the House has made statements that have been widely reported in the media. I gather that they were made not in a submission to the sub-committee but to the Nolan Committee. Does the sub-committee have any plans to hear oral evidence from witnesses? Does it intend to ask Members of your Lordships' House, members of the public or people who might have evidence, to give oral evidence and effectively to have hearings on the subject?
The Chairman of Committees: My Lords, with the leave of your Lordships, that is a matter for the sub-committee under the chairmanship of the noble and learned Lord, Lord Griffiths. Your Lordships will be aware that the noble and learned Lord, Lord Griffiths, and his sub-committee invited submissions by 10th February. I understand that the sub-committee proposes to meet on 15th February. It may be helpful if I refer to one aspect of the remit of the sub-committee; namely, to make recommendations on the practice of the House rather than to pronounce on particular allegations of breaches of the present practice. As I said at the outset, it is a matter for the sub-committee and I would not wish to venture further.
On Question, Motion agreed to.

Single Regeneration Budget: Inner Cities
3.20 p.m.
Lord Dubs Lord Dubs rose to call attention, in the light of the problems of inner cities, to the working of the single regeneration budget; and to move for Papers.
The noble Lord said: My Lords, I am delighted that I have been asked to open this debate. In order to set the context I shall refer briefly to some of the main
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problems in our inner cities. I then want to mention the way in which I believe the single regeneration budget operates. Finally, I want to spend most of my time stating what I believe to be the defects of the single regeneration budget. In talking about the problems of inner cities I do not intend to go through all the difficulties—it would take far too long. But it is right that I should at least mention the main problems; it is those problems which government policy ought to address and it is those problems which ought to be alleviated by the single regeneration budget.
The first problem to which I wish to refer is poverty. I possess rather more precise information about the London situation than about the country as a whole. I hope therefore that noble Lords will forgive me if I do not statistically sweep the country. Let me give a few examples.
It is estimated that there are 1 million Londoners living in poverty—that is, people on income support and low pay. A third of the children in London are apparently poor enough to receive free school meals. In some boroughs—Tower Hamlets and Hackney—half the children receive them but even in so-called wealthy Westminster, a quarter of the children are on free school meals. We see signs of homelessness all around us. There are over 30,000 families in London in temporary accommodation who have been accepted as homeless by the local boroughs. Over 13 per cent. of the homes in inner London are unfit. Since 1979 there has been a massive reduction in the building of homes by local authorities throughout the country—perhaps one of the largest of all reductions in government spending over the past 16 years. And we see people sleeping in the streets on a scale which was quite unknown to us before this Government took office.
Let me turn to unemployment, although I am sure that your Lordships will be fully aware of the tragedy and the way in which it affects people throughout the country as well as those in inner city areas, For example, since 1988 over 500,000 jobs have been lost in London. In terms of crime, between 1979 and 1994 recorded crime in London increased by 58 per cent. and violent crime increased by over 15 per cent. on last year. Almost 10 per cent. of the crimes in London are classified as violent, and that is the highest figure in England. The clear-up rate for crime is 16 per cent. in London and 26 per cent. nationally.
When one talks about the health situation in London, we find that one in seven children in London now suffer from asthma —an illness which has increased enormously in recent years. Noble Lords will be aware of the cuts in the National Health Service; the closure of Bart's and Guys hospitals; the crisis facing the London Ambulance Service, and the fact that From July to September last year over 3,700 patients had operations cancelled.
Let me turn to the disadvantages facing ethnic minorities, including refugees. Here I must declare an interest for I am associated with the Refugee Council and we are greatly concerned with, and I hope that we have a reasonable knowledge about, the situation affecting asylum-seekers and refugees. Above all, there is a sense of hopelessness in our inner cities, and all that

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after 16 years of Conservative government when many people would say that the situation in our inner cities is worse, the differences between rich and poor being much greater than they were in 1979.
What has been done to tackle those problems? It is my assertion that the Government have attempted consistently over the past 15 or 16 years to limit spending in inner cities, especially by local authorities. I referred earlier to the virtual cessation of house-building by local authorities. We have had a series of grants, sometimes related to new structures such as urban development corporations and training and enterprise councils, though they have not had much by way of democratic accountability. Then along came the single regeneration budget. Perhaps I can express my thanks to the many people and organisations who helped me in collecting and assembling some of the material that I am using; for example, the ALA, the LGIU, the staff of the Refugee Council and many other individuals and organisations who gave me information to help in an area where hard facts are difficult to obtain.
The single regeneration budget is an assembly of 20 existing programmes or grants. I believe that five different government departments are involved in the single regeneration budget and there is now a ministerial committee on regeneration. As regards the Civil Service, 10 regional offices have been set up to steer the single regeneration budget along. The concept of partnership has been developed and much mention has been made of training and enterprise councils involving the private sector.
There are clearly some good points in all that; nobody would say that everything is bad. But it may be worth commenting that, given the number of times training and enterprise councils are mentioned, only in recent weeks South Thames Training and Enterprise Council had the receivers called in and will now be abolished—so much for the weight given by the Government to the project when the single regeneration budget was first proposed.
If one studies the proposals carefully, it seems to me, at least as regards London—I am conscious that this debate is not merely about London but is intended to cover the whole country—that the Government have actually been contorting themselves to devise ways to make up for the absence of local government covering London. That is why we have a government office for London and that is why some of the devices used to steer the single regeneration budget along seem to send a signal saying, "Oh dear, what a pity we abolished the GLC. We should not really have done that". That is the message I get.
The main thrust of what I want to say relates to what I see as the disadvantages, difficulties and defects of the single regeneration budget, of which I have quite a long list. The first is that it is a device for reducing the amount of money to be made available. Of course the arithmetic is complicated. What has been happening is that as the individual programmes expired on specific projects, the single regeneration budget took over. The SRB therefore will not start taking over all the 20 programmes in April, but merely the elements of those
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programmes where specific projects have come to an end. There will be a phasing-in of the SRB as the others are phased out.
Nevertheless, the best estimates that one can make are that over the next five years there will be a 25 per cent. cut in real terms in the money made available under the SRB compared to that available under the 20 different grants which it is replacing. That must be seen in the context of capping of local authority expenditure. That again is a source of money which has been severely limited. My understanding is that at the present time very few local authorities will be allowed to increase their expenditure by more than 0.5 per cent; so if inflation is at 2.5 per cent., it means that there will be a cut in real terms in local government spending of 2 per cent. on top of the cuts that are coming in under the SRB.
Let me say in passing that there is an uneven distribution of money by the Government, whether through local government spending or through the SRB, and sometimes it is a distribution that is difficult to justify. Let me talk about local authorities for a moment. For example, Wandsworth is a borough that I know something about. At the moment it is receiving the lion's share of the non-needs related grant. Wandsworth—a single London borough—is receiving 12 per cent. of the national total of the non-needs related grant. That seems to be a real distortion and suggests political favours being repaid rather than needs being met.
I am reminded of the comment made to me by a councillor from a north of England local authority who said to me—this was at the time of the poll tax but the principle seems to hold good under the new arrangements—that if his city had been given the same level of support from central government as Wandsworth and Westminster received, not only would his city not have had to levy any poll tax, but they could have declared a dividend for every poll tax payer. Such are the inequalities and distortions.
Let me turn to the main thrust of my argument. My second criticism of the SRB is that it seems to have no tangible strategy. It seems to me to be a series of bids; I agree that criteria are laid down, but there seems to be no overall strategy for saying that these are the problems that need to be tackled and how it is intended to tackle them. There is a bit of a hit and miss element about it.
My third criticism is that there seems to have been a change in the balance, and that much more weight is given to economic considerations than to social needs. I am not decrying economic considerations—they are vital—but in terms of the grants that have been replaced, where there was a heavy element of looking into and supporting social needs, it seems to me that this has now changed.
The result has been that places like Bolton, Leicester, Walsall and Nottingham, which have large levels of deprivation, have received nothing under the SRB whereas Bedfordshire, Hertfordshire and Eastbourne, for example, have received nearly £7 million. Hardly anybody would say that Bedfordshire, Hertfordshire and Eastbourne are particularly notable places of deprivation.
If one looks at the situation in London, one can also be rather puzzled at the criteria that have been used. For example, why was the King's Cross scheme turned down alone among major schemes submitted? Why was every scheme from Hammersmith and Fulham rejected whereas schemes in Brent were approved? There is a very odd pattern here which does not seem to make sense in terms of the needs of areas and the problems that are being faced in inner cities.
One of the characteristics of the SRB is that private cash should be injected. Of course, where that is possible it is sensible, and I welcome it. The difficulty is that it is unrealistic to expect private cash for many social projects. Projects for ethnic minorities and refugees typify the types of schemes where it is jolly difficult to persuade the private sector to put up cash. In other types of schemes it is possible, but we have an imbalance resulting from the criteria that have been applied.
My next concern is that there is no ring fencing. Let me briefly explain. Previously there was an ethnic minority grant. That was a small sum of money which was intended to deal with the needs of ethnic minorities. That has now been subsumed into the single regeneration budget and very few ethnic minority grant projects have been supported.
However, there is one exception. Section 11 funding, relating to ethnic minority grants, now comes under two different headings. Some of it still comes from the Home Office and some falls under the single regeneration budget. There is not much logic in having the same grant available under two different headings. Perhaps the Minister would comment on that.
All this highlights not only that the Government do not have an overall strategy for inner cities, but that they do not have a strategy regarding ethnic minority communities. There seems to be an absence of commitment, for example, to target funding to support language teaching, in which Section 11 plays a fairly important part. In fact boroughs have been discouraged from bidding for Section 11-type projects. I understand that several London authorities have been told that the best chance of a successful bid lies in physical regeneration projects rather than Section 11 bids.
This is likely to lead to the dismissal of teachers, to add to the already well publicised difficulties that the Government are facing with school governors because of further cuts in local government spending. The needs in London schools are clear and the language needs are well known. For example, in Kensington and Chelsea 37 per cent. of pupils in schools have English as a second language.
Let me move to my remaining points. I am concerned about accountability. We have localised Civil Service offices—integrated regional offices—but there is not much accountability except to five government departments. I am worried about the inefficiency of the whole process as there have already been 256 losing bids, or losing partnerships, all of which took a lot of time and effort to assemble.
As to housing, the way in which the single regeneration budget is working is a major threat to the housing capital programme. For example, in 1993–94
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£80 million was available under estate action funds for new housing schemes, but it is estimated that the single regeneration budget has reduced that to a mere £15 million.
Furthermore, there is a geographical shift in funding away from the former 57 urban priority areas, which themselves were characterised by levels of deprivation which suggested above average needs. Many refugee projects have failed, and the Refugee Council's own project failed under the ethnic minority grant heading. Finally, I am concerned that, in allocation of bids, competition has been the main criterion and not the needs of the area and the viability of the project.
We could do better. I am not arguing that the single regeneration budget cannot be made to work better—I think it can—but it will need a few changes. We must find a proper way of developing strategies for dealing with inner city problems; we need a proper and democratic way of developing local plans and strategies; there probably needs to be some form of ring fencing of the most important areas if setting priorities alone is not sufficient; and the budget needs to be concentrated on high need areas.
As I mentioned earlier, I am not saying that all is wrong with the SRB. Perhaps it is better to have one scheme rather than 20, but there are a number of major defects. There have been some bitter disappointments in inner city areas; some important schemes have failed; and needs which were met in the past are no longer being met.
With some fast movement the Government could salvage something. They could modify pretty radically the SRB, and then we would have the beginnings of a little more help for inner cities; otherwise There is gloom and doom in our inner city areas, and it is the Government's fault. My Lords, I beg to move for Papers.
3.35 p.m.
Lord Gisborough: My Lords, the single regeneration budget was designed to bring together the 20 programmes of six agencies which previously had all been tackling the disadvantage of urban decay within the remits of their own organisation. As a result of bringing all these budgets together into the single regeneration budget, all agencies have come together to work in partnership.
Since people in disadvantaged and run-down areas frequently experience multiple problems, which do not take into account agency functions, the rationale behind all agencies working together is beyond dispute. The SRB from that point of view must be a good thing. Whether the competitive nature of the S RB is also a good thing, is more debatable. Competition may of course lead—and often does—to excellence in all spheres of life. But sometimes it may be a superficial excellence of presentation, or in this particular activity of regeneration it may overlook relative needs between different areas. We now have the 1991 census results and analysis, and these ought to have an important influence on regeneration priorities.

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The SRB is also welcome because it puts local government in a central role, whenever that is appropriate, while leaving the freedom for other agencies to lead where circumstances favour that. The time span of the SRB programme, up to seven years, is potentially valuable, enabling hard core problems to be tackled over whatever period is needed. However, there is still only certainty in funding for year one projects, and this needs to be reconsidered.
The geographical spread of the SRB over the whole of England is in many ways a benefit compared with the selectivity of the former Urban Programme and City Challenge. Poverty and disadvantage are not exclusive to large urban areas; they exist for many individuals in small towns and rural areas. But the more widely the jam is spread, the thinner it has to be, and the overriding weakness of the SRB in 1995 and immediately following years is the low level of resource. Although £1.5 billion is being made available for regeneration, there is only £125 million in 1995–96 of uncommitted money available nationally for new initiatives.
What this means—if we take what is for me a local example such as Middlesbrough—is that the approved SRB in 1995–96 is only £440,000. Three years ago this borough, with extensive areas of disadvantage and urban dereliction, was receiving £7.5 million per annum from City Challenge and £5 million from the Urban Programme. The Urban Programme has gone, City Challenge will be gone in two years, and the funding of the Teesside Development Corporation—now at last starting to make an impact on Middlesbrough—will also he gone in two or three years. I do not see Middlesbrough's problems being solved in that time. The 16 per cent. unemployment figure will not disappear that quickly. The running down of City Challenge and the development corporations must not be taken as an excuse for reducing expenditure on regeneration. Those resources should be rechannelled into a greatly expanded SRB. By then the partnerships will have had experience of working together on regeneration, and it is to be hoped that some of the snags and irritations will have been ironed out. There are already stories of excessive bureaucratic requirements being imposed by central government through regional offices. Great wads of forms have to be completed, and expenditure has to be programmed with a precision which is ignorant of how the real world operates. Out there life is not so predictable in public and private sector alike. Flexibility is needed, not sanctions for missing targets in a given quarter.
One example and particular concern for me is the funding for the Learning from Landscape project. This has brought environmental issues to schoolchildren in 20 inner city schools in the area, and could have a dramatic effect on the outlook of youngsters in future to the environment, and indeed to matters such as crime. Funded by City Challenge, it stands to have to wind down when that funding ceases.
Given the experience of the SRB and a revised and more flexible framework from central government, can SRB achieve successful regeneration? The answer, I believe, is yes, but only partially. It has a strong
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emphasis on bricks and mortar. Up to a point that provides jobs in the building industry during the construction period, but not enough jobs for disadvantaged communities. Should we now consider how we could create more jobs by direct means, in labour intensive programmes, no doubt in the main publicly funded? We need to be creating jobs for people who will never aspire to more than unskilled or semi-skilled work, who form much of the hard core of disadvantaged people, too many of whom turn to crime, and some of whom perhaps could become employable in the private sector given new experience of work.
There is plenty of work out there that needs doing, especially in the environmental sphere. The importance of our town centres can be emphasised. Let us have better cleaning and maintenance and townscape in our public areas. Community forests are in the public mind. Let us have more trees and foresters more rapidly. The Home Energy Conservation Bill is with us. More surveyors would allow a greater number of house installation operatives to be employed.
Perhaps we should now be thinking about a substantial proportion of the future resources for regeneration going into putting unemployed and unemployable people directly into work and regenerating their economic independence and self-respect, and perhaps thereby reducing their temptation and tendency towards crime, rather than putting all the money into bricks and mortar. The SRB is a good programme but needs full commitment from the Government and continued funding.
3.43 p.m.
Lord Tope: My Lords, in what I believe is known as the current climate I think I should start my remarks by declaring an interest, although most definitely not a pecuniary interest. As some noble Lords will know, I am the leader of an outer London borough council. Indeed, it is one of the very few outer London borough councils to be at least partially successful in its bid for the current SRB round, so what I have to say today will not be a whinge from an unsuccessful bidder. I am also aware that my council hopes to be successful in the second round too, so perhaps I need to temper my criticisms today while bearing in mind who may read the report of the debate at a later stage.
I am grateful to the noble Lord, Lord Dubs, for initiating the debate. The SRB is not always the most exciting subject to the general public or perhaps to your Lordships' House. Nevertheless, as the noble Lord so rightly described, it is a subject of enormous importance to the urban areas of this country. Like the noble Lord, my experience is primarily in London and the comments I make must primarily relate to London, although I am sure that they are at least as applicable to other parts of the country.
I want to start on a positive note and say why, overall, I welcome the single regeneration budget. As previous speakers have said, it brings together some 20 previous funding packages which central government allocated to local areas. Many of those packages could be applied for only by particular areas, mostly inner urban areas, and large parts of urban Britain were ineligible even to

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apply for those funds. My own authority, and other authorities like it, was excluded from programmes such as the Urban Programme, City Challenge, and so on.
Where I start to differ with the noble Lord, Lord Dubs, is on his assumption that areas such as Eastbourne and the one I represent have by definition no needs. That is not so. In among the relatively affluent parts of boroughs like mine there are pockets of quite severe deprivation—as severe as can be found in many parts of the inner cities. Quantitatively they are not as great as can he found in the inner cities, but qualitatively, for the people and families concerned, they are at least as great. Indeed, it could be argued that they are greater, simply because they are not recognised. To be in need and to be invisible is worse than just being in need.
The single regeneration budget, for which all are eligible, gives us an opportunity to start to tackle those problems. Authorities like Sutton know that within its boundaries there are areas of great need. We know that we have the ability to bring our communities together to tackle those needs and we know that we have the flair and the imagination to do so innovatively. With SRB, at least we now have an opportunity to compete for the means to do so.
On a similar positive note, I have no doubt that the existence of the SRB has been an added spur to producing real and meaningful partnerships between local authorities, the private sector and a number of other bodies. It will undoubtedly bring greater private sector funding and resources than would otherwise have been achieved. It means chat local authorities and the private sector each have to learn a different way of working and a different way of working together. All of that is good. It is a great stimulus to developing a coherent local framework for regeneration. But what it does not alone do is to produce anything of a regional basis for regeneration, a regional regeneration strategy.
While I generally welcome the SRB I have some serious concerns both about the concept and the process, many of which have already been mentioned by the noble Lord, Lord Dubs. My first concern is the Government's obsession with competition. It means that bidding for a share in the SRB is like a cross between entering a beauty contest and the National Lottery. The results seem to be as random as the lottery and the winners all too often seem to be those who know best how to appeal to the judge's eye. For instance, it is noticeable that the outer London boroughs have done very much less well than the inner London boroughs. That is partly for the reasons which the noble Lord set out. Nevertheless, I am certain that one of the reasons is that, by and large, the outer London boroughs are very much less experienced at entering these competitions and thus lose out to the experienced entrants who know how to make the best of what they have—just like a beauty contest.
My other principal criticism is the lack of any clear criteria against which to submit bids or against which the bids will be judged. Early on in the process the Government dropped the idea of regional regeneration statements, which would at least have provided a backcloth against which SRB bids could have been submitted and considered. There is still much confusion
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about funding and about allocation. The process is less transparent than other schemes, which at least have had fixed judging criteria. One of the results of the lack of clear criteria is that there has been so much overbidding. In total, there were 469 bids, of which in the end only 201 received funding. In London, 182 schemes were submitted at the outline stage; there were 124 final bids and in the end only 49 bids received funding.
Overbidding on this scale represents an enormous amount of wasted time, effort and resources by local authorities and others who are already under severe pressure. It also means the raising of loud expectations which, in reality, are never going to be fulfilled. Some work is being done to try to estimate the cost of preparing the 124 bids in London, but an early guess that others have made is that some £2 million is required in preparing the bids to secure funding of just £35 million in total. That is a waste of time and resources. It need not have been so.
To be fair, the Government Office for London was as helpful as it could be within the limitations of the process. It is significant that 42 of the 49 eventual "winners" were among those given encouragement at the outline stage. But, even so, one still has to ask about the 18 London bids which were similarly encouraged at outline stage, but which were ultimately unsuccessful. They had been encouraged and they put real effort, time and resources into submitting their bids. Local expectations had every cause to be aroused and yet in the end they were unsuccessful. Why?
One of the obvious reasons which has already been alluded to is a lack of resources. There are nowhere near enough resources. As the noble Lord, Lord Dubs, said, it is an illusion to believe that these are new resources. In the main they are not, but existing resources channelled into a different channel and a different name. The late increase from £100 million to £125 million in the current round was certainly welcome and it undoubtedly had the effect of resulting in more successful bids. But that was not new money; it was money taken from the budgets of the urban development corporations, particularly the London Docklands Development Corporation. Indeed, one has to question, therefore, whether London really is any better off overall as a result.
The next problem to which I wish to allude has been of particular concern to my authority, and that is the timescale involved. The lack of clarity in the criteria against which bids were to be judged has been compounded by the very tight timetable for meeting the various stages. Too often the process actually ran faster than the guidance!
Even more important, though, for those who give a high priority to real and meaningful partnership with the voluntary and community sectors, the timescale made that virtually impossible. The voluntary sector generally needs a longer timescale if it is to engage properly with its volunteer members, be they its management committee or the local people with whom h is working. That was just not possible in the timescale allowed and, with the added difficulty for many of those organisations of treading in very unfamiliar territory in making SRB bids, I am sure that that is one of the main reasons why

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there has been such a low level of voluntary sector involvement in London, at least. Indeed, only three voluntary sector bids were successful in London.
Similarly, an effective regeneration strategy must take the local community with it. The timescale just did not permit meaningful consultation with the local communities affected. The danger then is that those communities feel that they are not part of the process; that sometimes significant changes are being imposed upon them without their consent. The effect can be to increase still further the feeling of alienation within those communities. With time and hard work that can be redressed, but it does sometimes mean that rather than starting off on a very positive note one starts by having to retrieve a situation that need not have arisen in the first place.
In conclusion, I wish to make one or two other points. As regards resources, the Government are inviting bids for the second round this spring for which, they say, £40 million will be available in 1996–97 and £200 million in 1997–98. That is not new money, as has already been said, but money which will become available from the ending of present schemes.
We need more resources, effectively directed, to be really successful, as others have said. If more resources are not to be available, as seems probable under the present Government, at least we need more clarity on the relationship between the single regeneration budget and main programme funding. We need reassurance that the Government will not be giving with one hand—for example, through the SRB—and taking away with the other: for instance, should SRB "winners" expect a cut in their SSAs?
I believe that the Government should revive its original proposals for regional regeneration statements. These should be "bottom up", based on local strategies produced by local authorities with their partners. That would not only give a backcloth against which properly to judge bids, but would also provide the vital local democratic input to the regional strategies.
Finally, I believe that local authorities must be given a clear role in the submission of bids for their areas. They are the only democratically elected bodies which can do so. They are best placed in their local communities to bring all the partners together; they can best ensure genuine community involvement. Above all, they can enable decisions about priorities between competing local bids to be taken locally rather than behind closed doors at the regional office. The single regeneration budget could be a great opportunity: the Government must act now to ensure that it is not a lost opportunity.
3.55 p.m.
Baroness Fisher of Rednal: My Lords, I congratulate my noble friend Lord Dubs on introducing the debate this afternoon. I believe it was a fortnight ago when I spoke in a similar debate and emphasised the SRB and how it affected Birmingham. I shall speak again about Birmingham, but I shall not concentrate on the bid as regards which, to a certain degree, we were successful.
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Some of the points which my noble friend Lord Dubs made in opening illustrate the serious disabilities which people living in what we call "downtown areas" or "inner city areas" have to face. Not only is there poverty and deprivation, but there is also ill health. My noble friend mentioned the high figures in relation to asthma. We have the same problem with children in the City of Birmingham. That is put down to the existence of the motorway, although I am not sure that that is right because the downtown area has always had high asthma figures. This afternoon at Question Time I asked a Question about heart failure. Again, the City of Birmingham is one of the areas with the highest incidence of heart failure. There are all kinds of reasons for that, including climatic conditions and deprivation.
Today when people speak about local government they regard it as something which is by the way: it is not of great importance to the Government, but something which has to be put off, and if it were possible to privatise the whole lot, that would solve the Government's problem. Hence local authorities are having to bid, put out their services to the private sector and hope that they can retain those services. Local authorities' pride has been completely diminished by this Government. Perhaps that is one reason why people believe that local authorities are to blame for everything, when more often than not it is government programmes that are causing severe problems for the projects which local authorities would like to put into operation.
At the end of the last century Birmingham pioneered a water scheme to provide pure water for its citizens. It did so for two reasons. First, industry was expanding and needed more water. In addition, there were epidemics due to impure water. The good fathers of that day recognised quite clearly that if an epidemic started in the poorer quarters it would soon spread to the better quarters and everybody would be caught up in it. The good fathers started off with very practical ideas. Just think, at the end of the last century a local authority was ambitious enough to undertake building a scheme which would take a great many years! Fifty years later, Birmingham needed more water and—again, because of the Private Bill procedure—it was able to embark on the Elan Valley scheme. That scheme ensured that the citizens of Birmingham had beautiful water, coming all the way from Wales. I know that my noble friend on the Front Bench will make quite sure that I understand where that water comes from when he replies.
But what happened to all that investment which the ratepayers of Birmingham had made over the years? All our assets and all that we had invested were suddenly taken from us. We now have Severn Trent Water Plc. There is no mention of Birmingham in its title. That water authority has made tremendous profits and pays its people a tremendous amount of money, but it did not contribute in any way to the infrastructure of that undertaking. It could be said that Birmingham's residents should be the main shareholders and that they should receive the dividend when it is distributed rather than the directors of the company.
We are seeing a change in what "local government" means. Birmingham had a municipal bank. When people banked there, the local authority benefited. Again,

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however, under government legislation that had to go. Instead of being able to embark on such enterprises, which benefit citizens and are part of the ethos of the city, we now find that local government is faced with all the problems that nobody else wants. Local authorities have to pick up the pieces.
The Government have a policy of closing mental hospitals. I do not disagree with that policy, but the health authorities do not say, "Here is all the money that we had for that hospital which we are now closing; look after the patients we are going to send you". It does not work like that. The land on which the mental hospitals used to stand is being sold and a profit is being made on it. Local authorities, including in the Birmingham area, have to provide services on a mere pittance, as well as dealing with all the problems that arise with community care and from trying to help such people. It is not that the local authorities do not want to do that; it is simply that they do not have the finances. Instead of encouraging local authorities to be enterprising, we are giving them the jobs that other people do not want to do.
As I said in our previous debate on this subject, Birmingham was fortunate in its SRB. Although it did not get all that it wanted, it got a fair share. Now, however, we are faced with capping limits and we do not have the urban aid that would enable us to go further in helping our deprived areas.
What is Birmingham trying to do? I began with our history. During the past decade, almost 60,000 jobs have been lost in the city. That decline in employment must be contrasted with the growth in the number of jobs nationally. Most of the jobs that have been lost are manufacturing jobs. The Government, through the Department of Employment and the Department for Trade and Industry, should be considering that loss of manufacturing jobs in Birmingham because, if Birmingham loses the export markets which it has built up over the years, the decline in the country as a whole will be more severe. Birmingham is known as the workshop of the country.
It is important for the Government to realise that such problems are not fully understood. As other noble Lords have said, the bidding is a sort of competition. I suppose that Birmingham presented its case and o its bid successfully. I have read the bid all the way through and it is, indeed, well presented but, as my noble friend Lord Dubs said, other local authorities might not have had the skills or the workforce to enable them to do the same.
If we are to regenerate a city such as Birmingham, we must look at unemployment. Black, Pakistani and Bangladeshi workers are extremely vulnerable. In Birmingham, they experience an unemployment rate that is twice that of white workers. The unemployment problem is deep-seated. In July last year, almost 49 per cent. of the jobless did not come from Birmingham originally. We have to be careful about such figures.
Youth unemployment is growing in the city. My mother used to say that the devil makes work for idle hands. The increase in crime is occurring because of unemployment and deprivation. What do you do to keep up with the rest of the population if you cannot earn a
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wage? You have to find the money in some other way. It is unfortunate that the local authorities are left to tackle such problems.
The City of Birmingham was disappointed that Saltley was the only area to be helped in its regeneration. It has lost out because, under the normal procedures, it would have received urban aid grant. Although Birmingham receives help for Saltley, it has missed out on help for another area and is very disappointed. Although I am sure that everybody in this Parliament building knows about Saltley, it is important to remind your Lordships about the miners' march and the final giving way at the Saltley gasworks. While regeneration is taking place in that area, I must ask the Minister who is to take over the responsibility—and when —for dismantling the gasworks in Saltley. They cover a vast area. That land is contaminated and will blight the city until some decision is made about it. Such a responsibility should not lie at the feet of the local authority. This is an important issue. I understand that gas boards all over the country are dragging their feet about the clearance of their derelict land. It is important for those in the inner cities to know about such problems and when they will be solved.
4.7 p.m.
The Lord Bishop of St. Albans: My Lords, this is an important debate and I join others in welcoming the initiative of the noble Lord, Lord Dubs, in introducing this subject. I have been impressed by the regional expertise of those who have already spoken. From these Benches, I should like to make a much more modest contribution, beginning if I may with a personal reminiscence.
In October 1993 the Children's Society held its annual national service in St. Albans Cathedral and I was invited to preach. We were joined by a group of children from inner city Lambeth who sang a song they had written themselves as part of a church-based research project called Children in the Neighbourhood. The words went like this:
"I have a place of my own.
A place to dream—to sit and stare—
I travel fast—I'm anywhere—
In distant lands and far off times.
I've secrets kept in words and rhymes.
I have a place where I go when I am lonely.
I have a place I go to be alone.
There's peace and quiet there—
I can be anywhere.
I have a place of my own".
The research indicated that the children had a strong sense of what was right and wrong with their neighbourhoods. I was greatly impressed by their creativity, their deep insights and their aspirations for space and peace in the midst of the crowds in which they lived.
I am bishop of a diocese which is relatively prosperous, but it does have areas of urban deprivation in Luton and Bedford —yes, Bedfordshire does have its problems. I speak also on behalf of many of my brother bishops from urban dioceses, and the point I want to

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make to your Lordships is that regeneration initiatives which fail to place a high value on aspirations such as those will fail to deliver lasting change.
For centuries the churches have provided a focus for community activity, a focus which values local people and which encourages them to hope. A fine example of this is the PECAN project in Peckham, South London. There a group of churches has set up employment preparation courses with the unique feature of recruiting unemployed people by door-to-door visiting on the council estates. The project workers reach out to those who have become demotivated; people who feel they have no hope. The Church of England's Church Urban Fund provided some of the funding for this project—and I am pleased to say that an offshoot in neighbouring Woolwich is now receiving some funding through the Greenwich Council's successful single regeneration budget bid: a good partnership of church and state funding.
It is the duty of a bishop to listen closely to what people living in our most deprived communities have to say. We work on the assumption—nay, the conviction—that each person is made in the image of God and is therefore a person of great potential, creative talent and innate energy. It follows that therefore we need policies that will ensure that this kind of energy can be harnessed in programmes which are stable enough to encourage long-term planning.
We welcome many of the principles that underlie the single regeneration budget. We welcome the co-ordination of effort between different departments responsible for different aspects of multiple deprivation which need to be tackled together if they are to make any lasting impact. We welcome the delegation of responsibility to regions, and within regions, to local consortia responding to local initiatives. We welcome the emphasis on partnership between the public and private sectors and the local community. We commend and welcome the rehabilitation of local government as a lead agency—in many cases, the lead agency—for delivering the programme, while keeping open opportunities for others to take the lead where this is more effective.
We welcome the consultation that goes on throughout the process, including the guidance offered in drafting bids and the on-going dialogue between partnerships and regional offices in the formulation of bids. We also welcome the extension of coverage to all areas of deprivation, both urban and rural, and the flexibility over the scale of projects whether covering small localities or wide areas.
All this is very much to be applauded; but we would want to offer some warnings as well. First, the scale of resources: this is not a plea for spending more money but just an expression of regret that the introduction of the SRB was the occasion for a substantial reduction in overall government resources going into urban regeneration, particularly as the coverage is wider. The noble Lord, Lord Gisborough, is right: the jam has become thinner. In this case the whole was considerably less than the sum of the parts. I am glad that, on current balance, the total resources of the SRB are to be
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maintained for the next few years even at this reduced level. However, there are still strong arguments for increasing the sums involved so as to allow more new initiatives to be approved alongside the continuing funding of the first-phase projects.
Secondly, I would emphasise that the SRB, on any scale envisaged, is no replacement for the reduction in mainstream programmes affecting inner cities, and particularly those to do with training and housing.
Thirdly, the involvement of the local community must be more than lip service if projects are to have a lasting impact and if local people are not to feel let down. Recent analysis produced by Mr. Greg Clarke on behalf of the NCVO Urban Forum showed that fewer than half of the successful bids even claimed to have involved any sort of voluntary organisation. Even where the voluntary sector has been involved, the closeness of their involvement has sometimes left much to be desired both in the planning and, more importantly, in the implementation of the plan. There is inevitably here a risk of "tokenism". Moreover, one must emphasise that while the involvement of voluntary bodies is to be welcomed, it is not necessarily the same thing as involving the local community, which may be disorganised or inarticulate.
This leads me to my fourth concern, which is the absence from the SRB of any mechanism or resources for initiating, encouraging and building up the confidence and capacity of the local people themselves. If I may speak of the Church's contribution in this regard, the Church Urban Fund's trustees endeavour to respond to people's own vision for their own neighbourhoods. Each application must demonstrate that it is rooted in locally identified needs; but the fund is also aware that it must resource its intention, and so it provides special grants for feasibility studies and for management committee training. It has developed a system of application for grants which support the applicant, thus building confidence.
In the light of our limited experience in this area, I ask Her Majesty's Government whether they would note three things. First, would they please acknowledge and emphasise the importance of medium and long-term development plans and at the same time ensure that local communities are involved in their formation? Secondly, would they not underestimate the damage to hope for local people involved in failed SRB bids and endeavour to develop strategies to redress this? Thirdly, would they ensure that the SRB is seen as only one part in a much wider strategy for cities which involves adequate funding through mainstream programmes?
By the year 2000 those children from Lambeth who came to St. Albans will be reaching adulthood. What can they then expect? Will they have a place of their own; a place to dream? The Church of England and other faith communities are committed to encouraging imagination and hope in our inner cities. I suppose it could be said that we are less concerned with regional regeneration and more concerned with the regeneration

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of the people in those regions. I ask: will the Government provide the opportunities and the resources for these hopes to be fulfilled?
4.19 p.m.
Lord Ennals: My Lords, I am very privileged to follow the right reverend Prelate. I happen to be, together with the noble Lord, Lord Peyton, the patron of one of the finest inner city projects that I know of in Stepney, the Bromley-by-Bow Church Centre. My purpose in mentioning it now is that it is a church initiative in which the main objective of the church concerned, which does not happen to be the Anglican Church, is not the conversion of souls, though in fact many souls have come as a result of the fact that 500 or 600 people every week of up to 100 races and languages are involved in this activity.
I do not know much about the single regeneration budget, but it is my pleasure to support my noble friend Lord Dubs who set out his case with great clarity. I want to add some perspectives from my own experience, to one of which I have just referred. Of the other two, the first goes back into my dim and distant past as a junior Minister in the Home Office in the 1960s at the time when Section 11 grants were first initiated, and when my noble friend Lord Allen of Abbeydale was the Permanent Under-Secretary. The second is as chairman of the UNED-UK Round Table on Health and the Environment. It has produced a report on sustainable development, commenting on a UN inquiry into governments and their performance. The clear political conclusion of the Round Table, which includes over 30 voluntary organisations, some of them active and widely representative of different disciplines in this country, is:
"If the UK is to develop strategies to alleviate poverty—including inner city poverty—then the Government must play a full and active role in developing European Union social policy".
The Round Table believes that to do that outside the main agreement on social policy places an undue constraint on the role that the UN can play. The UK Government should reverse their decision to opt out, and should now endorse the Social Chapter. Many of us on this side of the House would argue that case. Our report is addressed to the UN Commission on Sustainable Development, following the greatly faulted report to the CSD sent in by Her Majesty's Government.
Perhaps I may make a brief comment on Section 11 grants which, as I said, were introduced in 1967 when I was at the Home Office in my second junior ministerial post. It was an important initiative at that time. As my noble friend Lord Dubs said, Section 11 funding, especially in areas with substantial ethnic communities, was previously available only through the Home Office. Since 1992–93 the Home Office budget available for Section 11 has been dropping steadily. The proportion of Section 11 projects funded by the Home Office was 75 per cent. in 1992–93. That proportion was reduced steadily year by year. We now know that in 1995–96 the Government contribution to Section 11 will drop to as little as 50 per cent. of the total cost of projects: a cumulative cut of 25 per cent. in government support in two years. I hope that when he replies the Minister will
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justify that reduction, and whether the circumstances in which the grants were made are ones which do not exist, or do not exist as much, in society today.
If boroughs had not struggled to make up the cuts in 1994–95, as many as 650 language teachers could have lost their jobs. The cut in London's funding in 1993–94 alone was £16 million.
The Home Secretary announced subsequently an increase in the Home Office funding available for Section 11: an increase of £15 million nationally, made up of £5 million each from the Home Office, the Department for Education and the Department of Employment. While that increase is welcome—it is helpful that local authority lobbying has had an effect—enormous concerns must remain about the adequacy of funding to meet even previous levels of demand; the absence of a government strategy for work with minority ethnic communities, and, in particular, their commitment to targeting funding to support language teaching. It is appropriate that my noble friend Lord Dubs opened the debate in view of his excellent experience as director of the Refugee Council. He has been able to watch things closely.
At the same time as the Home Office was cutting funding levels for Section 11 projects, 55 per cent. of the total Home Office Section 11 budget (about £60 million) was transferred to the SRB. The initial announcement was that only urban priority boroughs could apply for that element of Section 11 funding through the Government Office for London. That meant that 13 London authorities would not be allowed to bid for Section 11 through the SRB.
I shall move on to other subjects. I am concerned, and the Round Table which I represent is concerned, that we have no definition of poverty in Britain. We pretend that poverty does not exist when in fact poverty, not just in a comparable sense but in a real sense, is without doubt increasing at present. The European Council of Ministers has a worthy definition. It defines poverty as the condition of:
"persons whose resources (material, cultural and social) are so limited as to exclude them from the minimum acceptable way of life in the Member State in which they live".
The Department of Social Security publishes a document entitled Households Below Average Incomes, and the European Commission, the Council of Europe, and major NGOs use the relative poverty line of half the national average income. Using that indicator, the 1994 version gives the following figures for a poverty level as a percentage of actual population. If we look at 1979 which, to many of us, is a significant date in political history, we see that, after housing costs were considered, 9 per cent. were below the poverty line. Even as late as 1990–91, the figure had grown to 24 per cent., and in 1991–92 it was up to 25 per cent. I am sorry that I do not know what the figures are now. In terms of people there are now 12 million people living in poverty in the UK. That is well over double the number in 1979, which was then 5 million. It is a dramatic: and terrible commentary on the political achievements of the past 15 years.
Lord Gisborough: My Lords, while the noble Lord's figures may or may not be true, does he agree that the

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reason for it is that those who are not living in poverty have done so much better? Previously everyone was at a much lower level.
Lord Ennals: My Lords, that is true. I do not question that, because the figures show it. Ten per cent. of the population has done extremely well, but it has done so at the expense of the lowest section of society.
Lord Gisborough: My Lords, no.
Lord Ennals: My Lords, the noble Lord says "No". It is true. If we look at the levels of remuneration, we see examples day by day of absurd, ludicrous and sickening levels of remuneration at the top while there is a virtual freeze on the pay of those at lower levels. Of course, that is a factor that we must take into account.
A survey undertaken by the Association of London Authorities showed that in 1993 25.1 per cent, of primary school pupils and 18.5 per cent. of secondary school pupils received free meals in London. That is another way of testing poverty. That compares with 17.8 per cent. and 12.4 per cent. in 1991. Again, that is a sad commentary on the state of those whom some would call the lower classes.
If income for 1979 is converted in line with 1992 prices, the poorest 10 per cent. of families with children had an average household income which was £438 per year lower in 1992 than it was in 1979. By contrast, the disposable income of the average household among the richest 10 per cent. rose by £13,900 per year between 1979 and 1992.
I believe that the Government have a great deal to answer for and I hope that we shall hear some positive proposals from the Minister.
4.31 p.m.
Lord Gladwin of Clee: My Lords, I thank my noble friend Lord Dubs for initiating today's debate. It gives the House an opportunity to look at the effect of two government decisions. The first was the bringing together under one roof of the regional activities of four major spending departments; Employment, Environment, Transport, and Trade and Industry. That created the 10 integrated regional offices to which noble Lords have referred.
One of the major tasks of the regional offices has been to administer round one of the single regeneration budget. When the regional offices were created and the SRB was launched they had friends in local industry and commerce and in local government. People heaved a sigh of relief because there appeared at last to be government recognition of the need to co-ordinate activities in the regions. Furthermore the SRB brought together 20 separate funding regimes from five separate government departments.
That pooling of funding and the creation of one vehicle for urban regeneration in England was welcomed. However, doubts were expressed at the time about the total amount of money made available. The Policy Studies Institute stated that the SRB had many welcome features but it expressed concern about the cut in urban spending from £1.6 billion in 1993–94 to £1.3
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billion in 1995–96. That concern was well founded. There have been significant cuts in programmes. Those cuts have had a direct impact on urban regeneration. According to the Guardian of 11th January 1995:
"Figures provided by the Department of the Environment show that there is £6.1 billion reduction over a five year period beginning 1993–94. The cuts amount to a 21.2 per cent. reduction during the period 1993–94 to 1997–98 under the Department of the Environment's heading, 'Housing, Construction and Energy Efficiency' and the 'Urban Regeneration and Countryside' heading".
So, instead of providing more resources to meet the undoubted need of urban regeneration, the Government are providing less.
The second reason why the SRB has lost friends is because, having brought together under one roof and one director the regional activities of four major departments, there seems to be no regional framework—no recognisable, let alone agreed, regional strategy against which SRB bids can be considered. Together with other noble Lords, perhaps I may urge the Government to reintroduce the proposal that they made in November 1993, but subsequently dropped, that a regional regeneration statement be drawn up in every region.
Consultation with local authorities, training and enterprise councils, and other interested bodies should take place. As the Minister knows, there have been a number of complaints from unsuccessful bidders for SRB funds. Of course, if you allocate funds by a competitive process there are going to be losers as well as winners. That is understood. But, surely, the winners and the losers should know why they have won or lost. At the moment, it is a lottery or, as one chief executive put it to me, "You never see the ball hit the back of the net".
Let us not forget the amount of time and money spent in bringing together the bidding partnerships by private-sector companies, which are responsible to their shareholders; by voluntary organisations; by training and enterprise councils; and by local authorities. More than 450 bids were made and there were only 200 winners. Among the unsuccessful bids were 192 by local authorities; a lot of money was wasted.
The money was wasted by over-bidding for a relatively small amount of money in a competition where the rules were unclear and the criteria for success unknown. Before round two of the bidding process gets under way, will the Government enter into discussions with the major players—the local authorities and the TECs—to explore ways of making the process more transparent, more cost effective and more relevant to the needs of deprived urban communities, in particular if they expect the private sector to meet the shortfall in public spending on urban regeneration?
My fear is that local industry will begin to walk away from the process. I hope that I am proved wrong but before concluding I wish to draw your Lordships' attention to a speech made two days ago by Howard Davies, director general of the CBI. He said:
"Although… the establishment of Integrated Regional Offices, are seen as positive developments, companies are not clear that the new 'prefectural' system is right. They are confused as to whom to

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consult and what criteria they take into account. There is... a growing consensus that a regional focus for decision-making across the public sector needs to be created".
I hope that the Government take note of that concern and act accordingly along the lines suggested by noble Lords who have participated in today's debate.
4.38 p.m.
Baroness Hamwee: My Lords, at this stage of a debate it is almost inevitable that there will be a good deal of repetition. Perhaps the only excuse is to emphasise the seriousness of the points already made. All noble Lords have made similar points and I apologise that mine will not be very different, even though each of us may put a slightly different gloss on our analysis of the position. Perhaps another reason for repeating points is to give noble Lords speaking in the next debate the opportunity to get here because we shall finish a little early.
After preparing for today's debate, the question that remains is: what have the Government learnt from the bidding process? I say specifically "from the bidding process" because we shall not know for a little while the success on the ground—"ground" perhaps being the operative word—of the particular projects to be funded. Like other noble Lords I am concerned about a lack of transparency and a lack of clarity in the criteria on which the bids have been judged. I accept that criteria have been published but they have tended to be technical criteria unrelated to the type of project which would be acceptable. I am concerned at how the criteria may he publicised and I am also concerned—this perhaps should have been the first point—at how the Government and all the parties involved consult on establishing those criteria. As many noble Lords, especially the right reverend Prelate, have emphasised, unless the criteria used are based on the communities which the projects are to benefit, they will not be successful.
It should not have taken so much effort to second guess what the Government and the regional offices have been about. There is a great deal of commentary attempting to analyse the process after the event but the parties who should really be explaining the position are not the ones who are doing so. I am not the only one who is relying on newspaper commentary for this afternoon's debate.
The strategic—or, if one likes, the holistic—nature of the assessments made by the regional offices is unclear. That goes along with a lack of accountability. The integrated regional offices' papers are not available even though there is no regional regeneration statement, as has been mentioned by my noble friend Lord Tope and the noble Lord, Lord Gladwin. One must assume that there is some sort of regeneration framework which is capable of being articulated. However, I do not believe any of your Lordships would be able to agree what that is, as we have not been told.
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I looked at the Conservative manifesto to see what it had to say on the subject. In promising to bring together resources for targeted inner city programmes into a single budget, it stated:
"This will mean that funding will go where it is most needed locally rather than according to a set of priorities determined in Whitehall".
One must hope that that is so, but how do we know that it is? The integrated regional offices are not a substitute for accountable government, or indeed—as the noble Lord, Lord Gladwin, said—for regional government. I think he described them as co-ordinating central government activities. He did not emphasise the adjective "central" but it is, I think, the apposite term.
It is beginning to be clear that there is an over-emphasis, in the acceptance of bids, on the leverage of the private sector. I understand that the Government's press release on the successful bids showed a ratio of £1 SRB money to £4 private and other public sector moneys. Like other noble Lords, I welcome the partnership that is being fostered by the process. The process is not all bad. I welcome the opportunities that are being given for each of the partners to talk to one another and understand one another. I have a little experience of this myself—in what is certainly not "son of strategic London government"—in London First, which, I suggest, is quite far related from any sort of democratic government. However, it has been fascinating to see how difficult it is for those who represent industry and business to understand the processes undertaken by local government, which naturally moves at a slow pace because it is concerned to ensure that all those to whom it is responsible so far as possible are taken along and are part of the process. Those who are responsible to a small group of people for their decisions are able to take those decisions much more quickly. They find it difficult to understand the slow and consultative processes both of local government and of the voluntary organisations. On the other hand, it has been salutary for those in local government to see the frustrations of those in the private sector when they experience the snail's pace at which local government sometimes moves.
The question of competition has been referred to. I agree with those noble Lords who say that competition is not the right way to approach strategic matters and in particular is not suitable for tackling deprivation. I suggest that urban deprivation should not be a matter for the market. The costs of bidding have also been referred to. It costs about £2 million to prepare bids for an allocation of some £36 million. The right reverend Prelate was right to comment on the raised expectations and of course the sense of anti-climax among those who undoubtedly put an enormous amount of effort into what turn out to be unsuccessful bids. I hope that the lessons learnt can be spread among those who need to understand them as to why some bids, encouraged at the outline stage, eventually failed.
There are certain policy areas which concern me. The noble Lord, Lord Gladwin, and the noble Lord, Lord Dubs, referred to housing and cuts amounting to a figure which I believe the noble Lord, Lord Gladwin, said

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amounted to over 20 per cent. during the period 1993–94 to 1997–98 in budgets under the DoE heading of housing, construction and energy efficiency, urban regeneration and countryside. Those are real cuts.
The noble Baroness, Lady Fisher, referred to air quality. That is a matter to which noble Lords will return tomorrow in the context of the Environment Bill. It would be helpful if the Government, today or tomorrow—preferably both—indicated their concern for our deteriorating air quality and the need for real steps to be taken to improve it.
There is also, of course, the question of education which one might describe as being investment in people. In the context of the current protests by school governors and others we must all be concerned about the fact that education may well have been a loser in this exercise. The noble Lord, Lord Ennals, referred to Section 11 funding. I will not repeat the figures he gave but I would endorse the concern he expressed.
We have all talked about clarity. The relationship between Section 11 funding and the SRB is one that needs to be much better understood so that boroughs bid in the right budget. I understand that they have been discouraged in many cases from bidding for Section 11 projects because, although the SRB may now be the vehicle, they have been told that their best chance of success from the SRB is physical regeneration rather than thematic Section 11-style bids. I believe, too, that central government argues that the SRB has been very popular with regard to Section 11-type bids and that the evidence given in support of this view is that a large number of bids have been received. That seems a somewhat circular point but it perhaps emphasises if anything the need and anxieties concerning Section 11 funding.
Noble Lords will be familiar with the needs. Indeed, many have been involved at an individual level in promoting the sort of undertakings which have addressed those needs. I shall give just two figures. A recent survey showed that 198 languages are spoken by pupils in London schools. In the borough of Kensington and Chelsea 37 per cent. of pupils in schools had English as a second language, 23 per cent. of pupils were not fluent in English and a total of 92 first languages other than English were spoken in the borough.
Sadly, given that physical regeneration seems to have been, by a long way, the priority in the recent round of successful bids, I have come to the conclusion that PR and the public impact of the announcements must have been at least as important as tackling deprivation and regeneration. Are the Government going for big splashes in the form of physical regeneration and new buildings to which they can point and say, "Look, we did that"? That is much easier to identify than investment in people through education and training which will have an important long-term benefit. I do not deny that physical regeneration in itself is important. It is important not least in giving people a feeling of well-being and confidence in themselves and as an expression of their own concern for their surroundings, but it should be part of a total package.
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I make that comment bearing in mind a completely different area of expenditure, the National Lottery. I do not mean the big prizes but the Millennium Fund and the good causes that will benefit. Again, those are important PR items rather than mainstream funding. I agree with the right reverend Prelate that that must not be a substitute for mainstream funding. If the mainstream funding suffers we must look at the budgets together.
I believe that we must look at long-term integrated programmes and tackle the root causes of deprivation. I conclude as I began by asking what the Government have learnt. I hope that the Minister can assure us that they are more concerned with investment than PR.
4.52 p.m.
Lord Williams of Elvel: My Lords, I have to declare an interest, like many noble Lords. I am unpaid President of the Federation of Economic Development Authorities, many of whose members have been involved in bidding for funding under the single regeneration budget.
Secondly, I should like to congratulate my noble friend Lord Dubs on both initiating the debate and also on the way he introduced it with great clarity and conviction. The debate comes at a very opportune moment since the Government are now reviewing the first round of the SRB and are preparing guidance to be issued for the second round. This is therefore the right time for your Lordships to be debating the matter, in the hope—which I hope is not entirely vain—that the Government may actually listen to what your Lordships say and take account of your Lordships' views in formulating the future approach to the SRB.
Many noble Lords concentrated on the problems of inner cities. My noble friend Lord Dubs and the noble Lord, Lord Tope, spoke about the areas of London that they know well. The noble Lord, Lord Gisborough, talked about Middlesbrough in a very moving manner. My noble friend Lady Fisher talked about Birmingham, bringing in not only deprivation, homelessness, unemployment and poverty but the ill health that follows from those. I am glad that my noble friend did not accuse the water that Birmingham gets from mid-Wales as being responsible for that ill health! My noble friend Lord Ennals, at a different level, spoke of the problems of ethnic minorities in the inner cities. All these are matters which are still with us and will no doubt remain with us for many years to come. Therefore, we have to ask ourselves how effective the single regeneration budget is and how effective it could be. I propose to concentrate my remarks on those two questions.
In our view the introduction of the single regeneration budget was potentially an extremely significant step in improving the way in which regeneration strategies were formulated and implemented. As many noble Lords have said, before it was introduced there was widespread criticism of the variety of funding schemes—some 20 in all—and of the way in which they operated. Therefore, bringing them together was potentially a sensible move. Furthermore, the new arrangements at least allowed the possibility that

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funding would be allocated in a way which would truly reflect local needs and priorities rather than centrally imposed rules and regulations.
I have used the word "potentially" because, like other noble Lords, we do not believe that the SRB has yet achieved anything like the results that it should. I propose to set out to your Lordships what we believe has gone wrong and what needs to be done if we are to avoid those mistakes in the future.
Before I do so, I want to make one thing clear. I am not going to go into the level of resources that are available, although like other noble Lords I regret the overall cut in inner city programme funding illustrated with great clarity by my noble friend Lord Gladwin of Clee. I accept that the overall funding must be a function of the overall financial situation of the country at the time. But I hope that when the noble Earl replies we will be spared the kind of specious double counting to which we have been treated in the past. If we are told that nearly £4 billion will be spent under the SRB I shall have to point out that of that total only £800 million will be available for new projects over the five years, and that organisations submitting bids in the second round later this year will be competing for a meagre £40 million in 1996–97. It is even doubtful whether that is new money. That is thin gruel, and I hope that the noble Earl will not try to fool your Lordships by dressing it up as the richest gravy.
So what mistakes have been made in the first round? I put first the way in which the bidding was conducted. I know, as the noble Baroness, Lady Hamwee, said, that Ministers have boasted about the number of bids received. Of 469 bids submitted last September 201 were successful. However, there is nothing to boast about. In the majority of cases those who were successful, like Birmingham, received substantially less than they asked for.
Although the number of bids sounds good, there are two problems of which I have become aware as President of FEDA. The first, as other noble Lords have said, is that the awards seem to many bidders to be something of a lottery. That is particularly true of those who submitted preliminary bids in June, were encouraged to work out full bids for the deadline of 7th September (thus in many cases having to cancel annual holidays) and then lost.
The second problem, which was mentioned by the noble Lord, Lord Tope, is cost. I can supplement some of the figures which the noble Lord gave. One bidder reported to FEDA that it had cost some £75,000 to put together a bid. That bidder was successful and is not complaining. However, the 250 losers also spent similar amounts—a total of over £15 million of taxpayers' and council tax payers' money—which have gone down the drain. Think, my Lords, too of the morale of those who have spent the money and, after initial encouragement, have had their hopes dashed.
Furthermore, the key point of contact between bidders and the Government has been through regional offices. I am advised that the various regional offices have adopted significantly different approaches to the administration of the budget, both in the indications to prospective bidders on the level of resources available
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and, even more important, in the nature and extent of contact between the offices and bidders once the preliminary bids were in. Regional offices have also varied in the amount of regional interpretation that they have put on the national criteria, and the indications that they have given of the size of bid which they would favour. Some favour large bids; others try to spread their resources more thinly and more widely.
As the noble Lord, Lord Gisborough, pointed out, even if you win it is a hard task because you then have to submit a delivery plan. In that delivery plan you then have to provide milestones. As a successful bidder, you can only draw quarterly in arrears. If you fail on the milestones, you do not obtain your money. That is a pretty tough programme for bidders to achieve. Many bidders now—I speak of many members of the federation—find it extremely difficult to put together exact timetables in the way that regional offices require simply because firms outside are unable to bid within the time-frame required; and that is another problem.
In the light of the experience of the first round, I suggest that there are three objectives for the second round. Having slated them, I shall suggest how they could be met.
The first objective should be to reduce wasteful overbidding. That will be particularly important if 469 bidders will again bid, but this time for only £40 million. The way to meet that objective must be to involve local authorities at an early stage in the co-ordination of bids so that decisions between competing bids for the same area could be taken earlier, and locally rather than by the regional office. It was one of the great virtues of City Challenge that local authorities were invited to co-ordinate the preparation and submission of bids for City Challenge designation. That role has been lost in the transition to SRB and should be restored.
The second objective should be to remove what the noble Lord, Lord Tope, called the beauty contest element inherent in the current competitive process. It is absurd and wasteful. It is right—indeed it is desirable—to preserve regional diversity, but it cannot be right for regional offices of London departments—after all, they are only satrapies of Whitehall—to decide unilaterally what the features of that diversity should be.
This brings me to my third objective: to build on the regional office concept in a way which involves to the full local authorities and other organisations in the regions. I believe that this is the key to the matter, since if that can be done my second objective would be met. The key to strengthening the regional offices in the way that I suggest is, as the noble Lord, Lord Tope, suggested, and others have confirmed, to revive the notion of regional regeneration statements which were mentioned in the original announcement of November 1993. Those statements should be drawn up by regional offices and local authorities in partnership and would serve—as the original plan intended—as a policy context within which the SRB would be administered. Regional statements, once agreed between regional offices and their local partners, would be submitted for ministerial approval. Once that was given they would

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provide a framework, endorsed politically both locally and nationally, within which the SRB could be administered, more tightly, by the regional office.
The Association of Metropolitan Authorities and other local authority associations support that approach. I hope that the noble Earl will give us his assurance and that the Government will see its merit and go back to the plan announced in February 1993. If there is to be a genuine truce in the war which the Government started between central government and local government, this is the way to start. It is only if the lessons of City Challenge are learnt and not cast aside—that there must be partnership between local authorities and central government—that we shall make progress. Only in that way will there be a resurgence of hope in our inner cities, to which the right reverend Prelate the Bishop of St. Albans referred. It is only if we can recreate hope that the single regeneration budget scheme will achieve the success which we believe it should.
5.5 p.m.
The Earl of Lindsay: My Lords, I begin by thanking the noble Lord, Lord Dubs, for bringing to the attention of the House the important issues concerning the condition of our inner cities and the role of the single regeneration budget. As the noble Lord, Lord Williams, said, the debate comes at an opportune time.
We have bad a number of speeches from noble Lords with a great regional expertise and experience in inner city matters—not least from the noble Lord, Lord Dubs. Although it will not be possible for me to comment in detail on all the individual issues raised, I welcome this opportunity to underline the Government's determination and commitment to tackling the problems of the inner cities.
The most important factor in regenerating our inner cities is a healthy national economy. It is for this reason that the Government are determined to bear down on inflation, control public expenditure and raise standards of education and training. At the same time, the Government recognise that special measures may need to be taken to ensure that our inner cities benefit from overall economic recovery.
The type of measure applied depends very much on the individual circumstances of cities; there is no single-club solution. We should therefore make no apology for introducing a range of tailored measures to address inner city problems. Indeed, Lord Pitt (whose knowledge and insight on inner city matters is greatly missed) said in the House when we debated inner cities nearly two years ago:
"The problem requires local participation, support, and flexibility so that different methods can be adopted in different areas".—[Official Report, 24/3/93, col. 356.]
The single regeneration budget is crucially important. It is thus that we wish to learn from and feed off the rich experience of inner city initiatives. It was for that reason that the Secretary of State for the Environment announced in November 1993 the formation of the SRB. From April 1994 that has brought together, as many
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noble Lords said, no fewer than 20 separate programmes, each with its own rules and methods of working.
The noble Lord, Lord Dubs, referred to the casualties of the SRB, in terms of the number of individual programmes which were brought together at one stage. Government policy had been criticised for being too fragmented. For, example, the Audit Commission reported in 1989 that the programmes were seen as being "a patchwork quilt" which encouraged compartmentalised policy approaches rather than a coherent strategy. A report by the Association of District Councils in 1993 stated that what is required is a strategic approach which encompasses all relevant objectives. Therefore the general welcome to the SRB was legitimate. The criticism of the "patchwork quilt" had to be, and was, answered by the formation of the SRB.
It places the initiative with local communities to come up with solutions tailored to their needs and priorities. It recognises that although the most deep-seated problems are focused in our inner cities, there are other areas with pockets of need which require a flexible approach. The noble Lord, Lord Tope, and the right reverend Prelate recognised that point. That approach recognises that regeneration cannot be brought about by an edict from Whitehall or by any single local player alone. Thus a condition of success in competing for single regeneration budget resources is the formation of a broadly-based and active local partnership. That partnership should not simply be a talking shop. Those taking part in single regeneration budget projects have a genuine responsibility and a clear stake in the activities which are being promoted.
Many noble Lords today have questioned the concept of competition for resources. The noble Lord, Lord Dubs, suspected that it might have been the main criterion on which the SRB was being run. I stress to noble Lords that the competitive mechanism was the methodology and had nothing to do with the criteria on which schemes were assessed. The Government are convinced that the very process of competition improves the standards of projects which are brought forward and, even in the case of unsuccessful bids for resources, managed to promote effective local partnerships which might not previously have existed. This is not the Government's view alone; local authorities, TECs and the private sector have all acknowledged the strengths of the competitive approach. Competition produces judgment by merit (I stress to the noble Baroness, Lady Hamwee) and has already proved successful with programmes such as City Challenge, of which my noble friend Lord Gisborough thoroughly approved.
In this process, various noble Lords have questioned the role—or the lack of role—allocated to local authorities, but I stress that local authorities are at the very centre of the Government's urban policies. Within the SRB bidding Round 1, they led in 53 per cent. of the bids and were involved in 90 per cent. of bids. They quite clearly had an important role. That role was laid down and anticipated by the bidding guidance. I stress to the right reverend Prelate that through the

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involvement of local authorities and the creation of local partnerships, it is a genuine objective of the SRB to create local sensitivity and local confidence.
Some noble Lords have maintained that the single regeneration budget is a cover for cuts in public expenditure. I ask the noble Lord, Lord Williams, to be patient while I explain how the finances work, because he will no doubt recognise some of the figures that I am about to set out.
The Chancellor of the Exchequer's Autumn Statement preserved the baseline for the single regeneration budget at more than £1.3 billion per annum over the next three years, adding up to almost £4 billion in total. These resources will go to support ongoing investment in housing and other regeneration initiatives. In particular, more than £1 billion of the £4 billion will be spent on estate action and housing action trust commitments.
On top of meeting commitments, over £800 million will be available for new regeneration projects over the next three years, with more to come in later years. This £800 million will support both the first bidding round, and the initial years of the second bidding round announced by my right honourable friend the Secretary of State for the Environment on 5th December 1994. I should add that we have been able to secure, within the overall baseline for the single regeneration budget, an additional £25 million per annum for each of the years of the public expenditure survey to boost the resources available for the first bidding round.
The first single regeneration bidding round has been outstandingly successful; local people have risen to the challenge—
Lord Williams of Elvel: My Lords, is the noble Earl about to read the figures, or will he come back to them?
The Earl of Lindsay: My Lords, if the noble Lord will be patient, I will return to the figures in the later stages of what I have to say.
The 201 successful bids stand to attract some £1.1 billion in single regeneration budget support over their projected lifetime—that is up to seven years. The right reverend Prelate inquired about that point in wondering whether the medium term and the long term were being looked after. That £1.1 billion is expected to attract a further £2.9 billion in private investment, and a further £1.8 billion in other public investment. This is another important feature of the single regeneration budget: the extent to which it levers in or attracts resources from other contributors. Of this very substantial investment, some two-thirds will be directed into our cities.
The 201 projects which were successful in the first SRB bidding round will produce substantial benefits on the ground. I congratulate the noble Lord, Lord Tope, on his involvement as one of the successful first round winners. On bidders' current estimates, during their lifetime of up to seven years the projects will improve some 75,000 homes, support over 7,500 voluntary groups and support some 60,000 new businesses.
The noble Baroness, Lady Hamwee, suspected that the Government were seeking big splashes and that the glossily presented applications would stand a better
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chance than those which did not have a glossy format. I can assure the noble Baroness on both counts that that is not the case. I can also assure her that physical regeneration is not an overriding priority of the Round I budget. I have here the figures as they break down across the different objectives: 95 per cent. are directed to employment and training; 72 per cent. to business support; 35 per cent. to housing; 35 per cent. to ethnic minorities; 47 per cent. to crime prevention; 50 per cent. to environmental projects, and so forth. Physical regeneration is not being pursued at the expense of all other objectives.
Baroness Hamwee: My Lords, I am grateful to the noble Earl. I am very interested in those figures, but I wonder whether he can tell the House if the objectives were made clear to bidders and potential bidders beforehand.
The Earl of Lindsay: My Lords, I am about to come to the criteria for the bidding.
These figures relate simply to the first round of the SRB, which will start from April this year. The second bidding round will be launched later this year—once again, I hope that the noble Lord, Lord Tope, is as successful the second time as he was the first time—with £40 million available for the early approval of bids in 1996–97, and £200 million in 1997–98. The second round will produce further substantial benefits to local communities. It will also ease some of the problems of timescale that noble Lords mentioned in relation to first round applicants, who found that the timescale had been a little too fast for them. Many of the first round losers are returning to bid. The Government offices of the regions are giving them all the advice that they need to complete their second round applications.
The noble Baroness, Lady Hamwee, suggested that there was a lack of clarity and consultation, and a complete lack of guidance on the type of projects that would be acceptable. That is not true at all. The bidding guidance was subject to full consultation. There were 11 regional seminars. The guidance is not technical; it is not frightening. It is a commonsense checklist to guide bidders on how bids will be assessed. The guidance also goes into types of projects which will be acceptable, and into the size, the cost and so forth.
The noble Lord, Lord Gladwin, and others sought assurances about whether the Government would consult the local authorities and the TECs before going into Round 2 of the SRB. We are taking stock of the first round of the SRB by talking to such organisations. We are co-operating on research and meeting with the TEC national council and the National Council for Voluntary Organisations. I hope that that gives the noble Lord some assurance.
The role of the government offices has attracted some comment both in the press and briefly in the House tonight. But I stress that the new arrangements for those offices were widely welcomed by the local authorities, business and the Opposition when they were introduced in April 1994. They have been used to advise Ministers on the basis of the bidding criteria set out in the national bidding guidance and so forth. For noble Lords' information, I should say that Ministers then collectively

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take decisions on the bids, and also in consultation with the recently created ministerial committee on regeneration.
Employment has been a regular concern of many speakers today. The right reverend Prelate and the noble Baroness, Lady Fisher, both mentioned specifically some of the problems in this area. The noble Baroness mentioned that the Devil makes work for idle hands. I was glad that the very next speaker was the right reverend Prelate so that we had some balance between Satan and the good Lord.
We announced following the Autumn Statement proposals to pilot a new in-work benefit for people without children on low earnings. The Budget also announced an extra £10 in family credit for full-time working families. In addition the jobseekers' agreement will be tailored to individual need; a back-to-work bonus will encourage part-time work with up to a £1,000 lump sum on transition to full-time work. In all, the package of work incentive measures announced following the Budget will help three-quarters of a million people to be better off in work.
Possibly more important than employment is housing. The noble Lord, Lord Dubs, among others, mentioned that single issue. Providing decent and affordable housing is at the heart of making our cities more attractive and competitive. We expect to exceed comfortably our 1992 commitment to supporting the provision of 153,000 housing association homes in the first three years of this Parliament. We now estimate that around 60,000 are being provided by associations this year, bringing the three-year total up to over 180,000. Over the next three years, Housing Corporation funding for housing associations should provide around 135,000 new lettings; taken together with outputs funded by local authorities and by regeneration programmes, we estimate that the grand total of new social lettings over the next three years will be around 180,000.
Our investment in social housing and local authorities' efforts to tackle the problem of homelessness are bearing fruit. The third quarter of 1994 was the 10th in succession to show a drop in the number of households needing to be rehoused by local authorities through the statutory homelessness provisions. The use of bed and breakfast accommodation is dropping even more sharply: it's down by 24 per cent. over the past year. Bed and breakfast now accounts for only 10 per cent. of all households in temporary accommodation. We hope to see that progress continue.
The noble Lord, Lord Dubs, referred specifically to the position of ethnic minority communities in inner city areas. I know that that is an issue of great interest to other noble Lords in the Chamber. Well over a third of the successful bids in the first single regeneration bidding round have as a significant objective the support of ethnic minority communities. The type of support ranges from funding for business starts to specific health and housing initiatives and the provision of community facilities. The extent of support for ethnic minority communities varies from region to region. For example,
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in London 83 bids were received which embodied the specific objective of supporting members of ethnic minority communities. Of those 83, 35 were successful. This means that 35 of the total of 49 successful bids in London contained measures of specific benefit to ethnic minority communities. This support through new SRB funding is in addition to the continuing funding of ethnic minority community initiatives arising through existing commitments on programmes such as Section 11, the ethnic minority business initiative and ethnic minority grant. It is worth pointing out that even where a project does not have the support of ethnic minority. communities as a specific objective, two-thirds of SRB resources will be targeted to the urban areas where there are above average concentrations of ethnic minority communities.
We are determined that SRB resources should benefit the communities for which they are intended. For this reason, the government offices for the regions require SRB partnerships to make effective arrangements to ensure that those sections of the community intended to benefit from support do so. The guidance on the preparation of delivery plans specifically lays down that practical steps should be taken to ensure that co-operation with the voluntary sector and priority to work with ethnic minority communities are, where appropriate, carried through into practical action on the ground.
Two or three noble Lords have expressed concern about the fate of Section 11-funded projects. It may help if I give some background. Funding has been cut. In November 1992 the then Home Secretary was driven to conclude, with regret, that due to the general economic situation, in particular the Exchequer deficit and the consequent need for further control of public expenditure, it would not be possible to sustain the level of Section 11 expenditure that had been planned. But local authorities were given over 16 months' notice before any reduction would need to take effect in 1994–95 in order to consider how to react to the changed funding situation. In practice, we are pleased to see that over 60 per cent. of authorities have been able to make good the shortfall in funding to enable projects to continue at their original level. The Home Secretary hopes to announce the results of the Section 11 bidding round by the end of this month. Resources for the Section 11 bidding round have been doubled from £15 million to £30 million as a result of additional funds being contributed by the Home Office, the Department for Education and the Department of the Environment.
Health has been a recurring theme in this afternoon's debate. The noble Lord, Lord Dubs, and the noble Baronesses, Lady Fisher and Lady Hamwee, have mentioned air pollution and asthma. As many of your Lordships know at first hand, the special circumstances of inner cities and their residents call for special measures. The Department of Health has produced guidance for local authorities to draw attention to the need to take account of the problems of living in the inner cities when assessing needs in relation to community care plans. This year the Department of Health is organising a conference on the causes of

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asthma and what can be done to alleviate its effects. Consequently, there is sensitivity to the specific needs of inner cities through the guidance documents.
Primary health care is also a crucial issue in inner cities. For this reason, from April 1990 the GP contract has provided for payments related to patients in deprived areas and more assistance for the improvement of surgeries. The ethnic minority communities also have particular health care needs. The Race Equality Unit, which is funded by the Department of Health, advises social services departments on good practice to ensure that ethnic minority needs are taken into account in the planning and delivery of both health and personal social services. Inner city areas have special problems relating to drug and alcohol misusers. Local authorities may apply for a specific grant to provide 70 per cent. of support to voluntary organisations to assist drug and alcohol misusers who tend to drift to inner city areas.
In view of the fact that in particular the noble Lord, Lord Dubs, the noble Baroness, Lady Fisher, and others from London are here, I should add that our urban policy is very much geared towards encouraging cities to come forward with their own prescription for success. It was for this reason that in November 1993 the Secretary of State for the Environment invited civic and business leaders in three cities—Birmingham, London and Manchester—to draw up what was known as a city pride prospectus setting out a vision for their cities over the next 10–15 years and the practical steps needed to achieve that vision. The three cities are now well advanced with their plans. The London pride partnership chaired by my noble friend Lord Sheppard published their prospectus on 23rd January. At the core of the city pride vision is the need for cities to compete internationally and to raise the living standards of their citizens. It is still early days, but the early success of city pride is yet another demonstration of the determination of cities themselves to shape their future.
The single regeneration budget has released a sense of commitment and partnership at local level which is truly astonishing. The hundreds of local partnerships which the first two rounds will support will play a major part in the regeneration of our cities and other areas into the next century.
I am grateful to all noble Lords who have taken part in the debate.
Lord Williams of Elve1: My Lords, the Minister said nothing about regional regeneration statements about which the noble Lord, Lord Tope, and I talked a great deal. Perhaps I may ask the noble Earl whether or not the Government have ruled those out completely.
The Earl of Lindsay: My Lords, they have not. The government offices fully intend when drawing up local assessments and criteria that there will be maximum consultation with local authorities and exposure to local development plans. Therefore, to an extent they will provide a less formal version of what the noble Lord seeks. The danger of regional regeneration statements is
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that they set out prescriptive policies for the regions. The SRB has been trying to get away From imposed solutions. One must be wary of that danger.
5.28 p.m.
Lord Dubs: My Lords, I thank all noble Lords who have taken pan in what has been a very interesting debate. With the exception of the Minister, every noble Lord on all sides of the House has had criticisms to make of the SRB. I welcome the fact that there is a broad consensus that the SRB is not a bad thing but has faults. I hope that the Government will take it to heart, even though the Minister in his speech has not given an indication that the Government will change their policy.
In reply to the criticisms about competition being the basis of SRB bids, the Minister said that it was a matter of methodology and not criteria. I put it to him and to the House that, when people and partnerships bid, inevitably they will be influenced by the kind of bid that is likely to be successful. Therefore, bids that may be more important in terms of inner cities but which are likely to be less successful will not be made, because the more successful bids will, as it were, have priority. The fact that there is competition will have an effect on influencing the types of bids that come forward.
I still believe that the losers have been the voluntary sector, particularly ethnic minority bids. The Minister said that one-third of the bids had an ethnic minority element. Of course, that is so. One of the criteria put out by the Government was precisely the needs of ethnic minority communities. It is all too easy to claim that a bid is in the interests of an ethnic minority community when its effect may be marginal rather than central to the particular community. Nevertheless, I believe that it has been a very useful debate. I hope that the Government will think again about the criticisms that have been made. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Transport Infrastructure
5.30 p.m.
Lord Ewing of Kirkford Lord Ewing of Kirkford rose to call attention to the needs of industry for an effective transport infrastructure policy in the United Kingdom and the European Union; and to move for Papers.
The noble Lord said: My Lords, I am grateful for the opportunity to introduce this debate on an effective transport infrastructure policy in the United Kingdom and the European Union. In a spirit of co-operation, let me open my remarks with the comments made by Dr Brian Mawhinney, the Transport Minister, on 7th December last year:
"I wish to see an end to the shouting and insults—sometimes even the actual violence"—
in view of the weekend's events, that sounds more like a prediction than a wish—
"—that have characterised arguments about transport in recent years. I want a ceasefire; a fresh start. We need to move back to properly informed, rational argument, with respect for opposing views, in a manner more fitting to the democratic traditions of our country. My aim is to define the questions and seek to pose them in as sharp and

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clear a way as possible. I hope others will contribute to that process and, more importantly, will then help shape the answers to those questions".
It is in that spirit that today I want to make my contribution to the debate. The Government must be aware of the deep concern of British industry and commerce—in 1995 we must include tourism in that—about the condition of the transport infrastructure of the United Kingdom or, in this case, Great Britain. In comparison with, for example, Germany, the Netherlands and France, Great Britain does not come out particularly well. To be fair, in terms of access to our airports and seaports, we are in the top half of the European Union league. But, in terms of our rail network and road infrastructure, we are well in the bottom half of it.
Reading first the Department of Transport's statement on a transport infrastructure, followed by the Scottish Office's statement on a transport infrastructure and then the Welsh Office's statement on a transport infrastructure, it strikes one forcefully that none of them—neither the Department of Transport, the Welsh Office nor the Scottish Office—says in its statement of aims that we ought to develop good transport links with the European Union. That is an astonishing omission for the United Kingdom Government to make—to omit from their transport objectives the need to create good transport links or transport corridors with the European Union.
The statement from the Department of Transport does not even mention the need to use good transport links to develop the economy of the country. To be fair to the Scottish Office and the Welsh Office, in their statements—I suspect that it is because they cover a whole range of subjects rather than transport only—they both refer to the need to use good transport links as a means toward developing the economic prosperity of Scotland and of Wales. They include in that a specific reference to the need to develop tourism. I find it astonishing that the Department of Transport does not mention the need to develop the economy through using the transport routes.
Let me begin from the position that we need to develop a proper transport infrastructure to the level that is environmentally sustainable. One of the features of the developments that take place in Germany, France and the Netherlands is the way in which the environmental lobby is taken into the discussions and consultation process when transport infrastructure programmes are being decided. The outcome is a consensus. We do not have that in this country. Regretfully, we seem always to be in conflict when we seek to develop a transport infrastructure. In the three other comparitor countries to which I refer, there is a consensus which is simply not to be found in the United Kingdom.
I know Dr Mawhinney well. He is someone for whom I have great respect and I believe that he means what he says. When we come to decide the transport infrastructure, which is the centrepiece of this debate, it is essential to include the environmental lobbies.
I do not argue that we should litter the British countryside with new roads. However, the figures available from Germany, France, the Netherlands and the United Kingdom show that our roads are more heavily congested than the roads in those other three countries. It is not mentioned in any of the material that I have studied, but in the Netherlands heavy goods vehicles are not allowed on the roads between 6 o'clock on Friday night and 6 o'clock on Sunday night. Our roads therefore appear to be much more heavily congested in comparison with roads in the Netherlands. Indeed, many of our main transport groups are taking. roads way beyond the capacity for which they were intended when they were first constructed.
Part of my argument is that we should examine the existing network and consider the possibility of additional lanes. We must examine how to develop the existing network. I do not for one moment suggest that we should litter the countryside with new roads. But we certainly cannot sustain the present position. In the Midlands of England and the west central belt of Scotland the roads are very heavily congested. We must look at that situation.
Another aspect of the argument that appeals to me is the way in which other European Union countries—again, I refer to the three comparitors: France, the Netherlands and Germany —can say roughly what their transport infrastructure will look like by the year 2015. For obvious reasons, there has been slippage in the Netherlands. But those countries can say broadly what the transport infrastructure will look like by the year 2015. There is simply nothing like that in this country.
I hope that the Government are serious about having an open debate and seeking consensus, which I believe to be in everybody's interest, from whichever political party or economic standpoint they come. It is in the interest of us all to achieve consensus on this important issue. If the Government are serious about achieving that consensus, they cannot afford simply to publish a document which states their policy. Brian Mawhinney is serious about this matter. We need to have a debate. If the Government are to publish anything, it needs to be a Green Paper giving an outline of the views that they hold at the present time—something on which we can build a debate that I hope will lead towards consensus.
Our rail network is smaller per head of the population than that in any other European country. One of the main functions of our rail network is the transport of large numbers of people to and from work, which helps to develop the economy. The Minister must surely come to terms with the fact that one factor inhibiting economic growth in this country is the inability of people to get to work in reasonable journey times. That is not unimportant. There is nothing worse than leaving the house at 7 o'clock in the morning and not reaching one's office until half-past nine. That is not a reasonable journey time. Therefore, in my view, we must develop a rail network that will transport people to and from work in reasonable journey times.
We have the new development in manufacture and retail of what is called "just-in-time" production, where the goods are produced just in time to be delivered to

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the consumers, to the retail outlets. If that system is to work, then we must provide a good transport infrastructure in order that the just-in-time approach can be successful. There is no point in producing these goods just in time if what happens then is that they arrive three days late. That takes the heart out of the system and that is something that the Government should consider in their discussions.
I turn briefly to the question of ports and to the state of our merchant shipping fleet. It is a worrying feature that in the mid-1980s our merchant shipping fleet was the oldest in Europe and now it is the oldest in the world. No other country in the world has an older merchant shipping fleet than the United Kingdom. The Government must look at that in terms of an integrated transport infrastructure linking us effectively to Europe.
I turn to air travel. I mentioned once before in your Lordships' House the need to develop effective rail links, particularly from the world's busiest airport—Heathrow. It is an astonishing fact that even in 1995 Heathrow Airport is not yet linked into the main rail network. We really should be looking ahead at the possibility of replacing many of the domestic flights. Is it necessary to go from Heathrow to Manchester by plane? If the airport was linked into the main rail network people could go from London to Manchester by train and the airports would be left free to deal with the kind of international traffic for which they were originally built. Much of the airport capacity is being taken up by domestic flights. When we talk of second runways at Manchester Airport, when we talk of additional capacity at Heathrow, that is not to meet international traffic needs; it is to meet domestic traffic needs. That does not help in developing a proper infrastructure which would link us in with Europe.
I close my remarks, because time is short, by reminding the Minister of something we are all inclined to forget: even though we want to be at the heart of Europe—here I speak for myself—geographically we will always be on the periphery. Of all the European Union countries, the United Kingdom has the most to gain by the creation of the infrastructure for which I am arguing today and has the most to lose if we do not create it. Therefore in opening the debate I trust sincerely that I have built the platform on which we can have a constructive debate; that the Government will take away the comments that are made and consider them in a constructive fashion; and that this will be the beginning of the creation of a meaningful integrated transport infrastructure for this country. My Lords, I beg to move for Papers.
5.43 p.m.
The Earl of Caithness: My Lords, I agree with much of what the noble Lord said, except for the point on integration. I too would like to express the importance of a good transport infrastructure for this country. It is essential for our goods to be able to travel around the world and to their destinations quickly so that our industries remain competitive and this country remains a good place in which other countries can invest. That was one of the bonuses of the 1980s; let us continue it through the 1990s.
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I agree with the noble Lord, Lord Ewing, to whom we are extremely grateful for initiating this debate, that the present infrastructure is not as good as it should be despite the billions of pounds that have been spent on it, and that it should be improved further. I therefore look to take his argument forward. Having reached that stage, let us pose the key question: who will pay for all of this? I do not believe that it should be the taxpayers. I do not believe that the taxpayers should have to fork out more and more money. Taxpayers have done very well in the past but if we are to maintain the infrastructure, or bring it up to the standard we would like, we must involve the private sector.
I need to stress two points in this regard. First, if we are to involve the private sector, there must be a great deal more consistency in the Government's policies. We have seen Roads. for Prosperity; we have seen the road programme enhanced and, sadly, we have seen the road programme cut back. We have seen investment decisions made when times were good only to have them trimmed. That is not a background into which the private sector will willingly come. Too many private sector companies have been led on by government to make a lot of investment into a project only to find it turned down at the last moment. That is not healthy.
How do we involve the private sector? There are opportunities in the rail network. The Channel Tunnel is an incredible success and provides the unique opportunity this country needs to transport more freight on the railways. It is fairly uneconomic within UK Limited by itself; but if we can reach Europe by rail with our freight, then there opens up a huge new opportunity waiting to be taken.
In the future will those infrastructure improvements be undertaken by Railtrack in the private sector or are there opportunities to involve other private sector bodies? I can understand that Railtrack may want to keep it all to itself as a private sector body, but that, too, would be a missed opportunity.
Notwithstanding the opportunities presented to us by the Channel Tunnel, most of the freight in this country will go by road. In this regard again I stress the importance of consistency. My noble kinsman Lord Thurso drives from Thurso as far as Perth. With a sigh of relief he gets onto the dual carriageway heading towards Spain but then comes to the block at Newbury. It is a tragedy that that is the only section of non-dual carriageway between Perth and Spain. It is ludicrous; it is time wasting; and it is costly for our industry. If any noble Lords wish to sit in a traffic jam, try Newbury at five o'clock on a Friday evening.
The other areas that concern me are the sudden changes where road schemes that were to be public sector financed are put on to Design, Build, Finance and Operate. Again, construction firms have gone a long way, and spent a lot of money, in getting their tenders right only to have their feet chopped from under them. We must have more consistency. Regrettably, the private finance initiative did not work as well as many of us would have liked. The Birmingham North relief road is an example of something that went horribly

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wrong and again a lot of money was wasted. But the Design, Build, Finance and Operate initiative stands a much better chance of success.
There is a further role for the Government. My right honourable friend the Chancellor of the Exchequer has done a good job in educating the public sector into thinking on a better basis. But there is a huge job for the Government to do in educating the private sector. I know that the Government and the public sector talk a different language from the private sector. If one is to persuade companies of all sizes—the big, the medium and the small—involved in DBFOs, they must know what it means by "transfer of risk". They must know what "value for money" means. The Government must be aware that the private sector must make a return on the money it invests. These things are not clear. The more I talk to people the more uncertain they are what the end result will be. I fear that a lot of companies will think this is a good idea and run with it, only to have the rug pulled from under them at the end because they did not know what the transfer of risk really meant.
So this is a wider point than just transport; it is the whole of the private sector finance initiative. The private finance panel is doing an excellent job, but it does need to produce a brochure of the underlying philosophy of what they are trying to do and what it actually means. That will save a lot of tears later on.
I move from roads to airports. I am grateful for the answer my noble friend gave me on RUCATSE with regard to airport congestion in the south-east. It was an answer to an extremely difficult problem; an answer that was never going to suit everybody.The noble Lord, Lord Ewing, talked about how he would like to see a greater consensus in this country. I, too, would like to see that when it comes to development, but I do not think it is likely to happen. Although we have the same population as France and the old West Germany, our country area is much, much smaller. When it comes to development—and there must be development—there are too many interests at stake, which they do not have in France and the old West Germany. That applies even more so in the East, which badly needs development. So I always see conflict. This is where the Government must be bold, must be brave, and must make a decision and stick to it.
Having ruled out a third runway at Heathrow, and virtually ruled out a second runway at Gatwick, I hope that they will turn their attention to the possibility of feeder relief airports in the south-east which can do an equivalent job. I am happy to declare an interest here as a consultant to Redhill Airport, which has the potential for relieving Gatwick of its smaller aeroplanes. I have to be very careful in what I say because that is subject to planning.
I will move on from that to another opportunity—Northolt. If ever there is a wasted asset in this country it is Northolt. What is the cost of keeping that airport for the RAF and a few private sector flights? The attempt to involve the private sector was not a great success—it was half-hearted, to be complimentary towards it. I should like to see Northolt put into the private sector, with a special arrangement taken for the RAF. Making
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Northolt the domestic runway for Heathrow would solve the problem raised by the noble Lord, Lord Ewing, about allowing greater capacity on the two runways at Heathrow. I hope my noble friend will take on board that rather new initiative. I know that he has his mind on it, and I hope that he will take it very seriously.
I hope my noble friend will confirm that it is the Government's intention to privatise the operational arm of NATS. It has extremely difficult decisions to make as judge and jury. It has to set standards. But it is also an operator in a large number of cases, and there is growing concern that it is finding that role too difficult to manage at a proper distance. With London City Airport, right up to the last minute NATS said that it could not be combined with the existing London pattern, and yet it is the operator of London City Airport and fitting into the London pattern.
We have problems when it comes to Manchester's second runway and Liverpool, and we also have a potential problem in the south-east. I hope that the Government will get to grips with this problem and separate the two arms of NATS in order to allow the Government arm to set the standards and the operational arm to get into the private sector and compete with others on a fair and equal basis.
I agree with much of what the noble Lord, Lord Ewing, said about seaports. I discussed shipping two weeks ago and I will not bore your Lordships again with that particular issue. But, on that point, I hope that my noble friend will bear in mind that our ports are suffering heavier burdens than continental ports, which are much more subsidised than ours, and ensure that when it comes to trans-European networks British taxpayers' money is not given in subsidies to European ports.
The private finance sector in this country has an immense part to play. I commend the Government most strongly for what they are doing. There are potential flaws, but I hope that they will now seek to get those flaws right, before there are tears later.
5.54 p.m.
Lord Houghton of Sowerby: My Lords, I am sure that we all welcome the noble Earl, Lord Caithness, back to our debates.
Noble Lords: Hear, hear!
Lord Houghton of Sowerby: My Lords, it is a great pleasure to hear such a constructive contribution on a very difficult problem.
Let me say straightaway that, as a resident living near Redhill, I am dead against what he is trying to achieve for the development of Redhill Aerodrome. We have enough from Gatwick, we have enough from London Airport and we have had enough from the Redhill Air Club, which ran a fleet of Tiger Moths—all more than 50 years of age—and made a great clatter and rattle on a Sunday afternoon.
I occupy a privileged position in this debate, and I hope I am not going to spoil it. This is pie in the sky. The canvas painted before our eager eyes by my noble friend in opening this debate—on which I congratulate

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him very warmly indeed—was a comprehensive and knowledgeable sketch of a world problem, and was a rare treat indeed.
A great deal of this traffic and road transport infrastructure is on its way to India. There are other groups of countries besides Europe. Radical change is taking place in India. Road makers, technicians, communications experts and all those necessary for the development of a country from an agrarian way of life to an urban way of life are on their way to India. This is supported by American capital of such volume that it cannot all be absorbed in capital expenditure at the present time, with the result that they have about 20 per cent. inflation.
I am a bit of a cynic about transport because when I was a member of Harold Wilson's Cabinet he asked me to preside over a Cabinet committee into transport policies. Apparently we did not have any, and it was desirable that our views on transport should be made known. All I was given was the party formula, which was for an integrated system of transport. That is all I had to work on. By the time we had finished with the quarrel between the National Union of Railwaymen and the Transport and General Workers' Union over a supply line to a porthead in the south-east of England, we realised that there would not be an integrated system of transport.
That is history, but some of the problems remain. The canvas which my noble friend has drawn before our eyes this afternoon sought to show what may be achieved in the next century. I doubt it very much. I do not think that the world will develop along those lines because the resources will not be available for it. With the demands of so many people for a better standard of living—people want to reap the benefits of their higher skills and the signs of prosperity around them—how much can be devoted to this vast reconstruction of the world's communications in anything like a reasonable space of time? I wish that there was an encouraging message on the accomplishments that was anything like the complete picture which my noble friend has drawn. The noble Earl, Lord Caithness, by directing his attention to the number of items, schemes and needs, certainly brought some improvements within our grasp. But that is only part of the problem.
I shall conclude what I have to say because I am under a very strong emotion. I can think of the word "transport" at the present time only in terms of the brutality that we are imposing on millions of our animals as we transport them along the roads of Europe for slaughter at the other end. This is becoming a major political issue. What is the transport infrastructure for? What is it to carry: more and more animals around the world, more human cargo around the world? What is the outcome? How much happier are people going to be? The Government have to face the fact that transport at the moment means only one thing to a great many people: they do not like to see what is being done to our young animals when they are transported to Europe. Better roads to cart more of them there? Better slaughterhouses to kill them when they get there? This is becoming a national emotional issue. The Government will have to take notice of it.
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I cannot go on any longer without noble Lords realising that I am almost completely out of order. But I got up to give the House that message and I am going to take every opportunity I can of repeating it. That is all I have to say.
6.2 p.m.
Viscount Thurso: My Lords, what a difficult one to follow! When I listened to the noble Lord, Lord Ewing of Kirkford, I was filled with hope at this beautiful vista that he painted for us of a better Europe with better communications, more development, and industry getting about its business without let or hindrance. I would like to go back to thinking in those terms during this debate.
There is no doubt that an effective transport infrastructure is vital to any industry, indeed to any firm, or to the success of any individual manufacturing plant. It is vital to existing industries and existing industrial communities but it is, if possible, even more important to developing areas, developing industries and developing trade between countries. It is no good making a better mousetrap if the world cannot find a path to your door to buy it or if you cannot find a satisfactory and economic means of delivering it to would-be buyers.
It is obvious therefore that if industrial firms cannot find an existing transport infrastructure that suits their convenience they will seek to set up something which does. This usually means putting their own lorries, vans and cars on the road regardless of the effect it may have on the road system and the transport infrastructure enjoyed by other people. Your Lordships will, I hope, forgive me therefore if I examine this proposition in the light of what I know of my home area, the northern Highlands of Scotland.
In Caithness we are engaged in trying to carve out a future for ourselves in the aftermath of the shutdown of the fast reactor at Dounreay. Our search for industry wherewith to replace the employment lost by the closedown and to strengthen an economy weakened by the closedown is made much more difficult by a lack of effective transport infrastructure policy and the problems which arise as a result.
One piece of infrastructure which had been put into place to serve Dounreay is now of little further use and of no help in developing most of the industrial projects which we could hope to attract. I refer to the strengthened national grid power line. You cannot send boxes of fish or freezer cabinets down a power cable, yet these are two industries which are being successfully developed on an important scale. What therefore have these industries done to ship in their raw material and ship out their product?
The successful white fish industry is a direct result of infrastructure improvement. Scrabster Harbour Trust, on which I have the honour to serve as a management trustee, had the wisdom to foresee the possibilities of developing the port and the fish marketing arrangements. With the aid of loans from the Scottish Office, it constructed a new basin for fishing boats from ports all over Britain—Grimsby and Buckie to name but

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two—whose catches now constitute a multi-million pound trade both in fish sales and in consigned catches which go to other markets for ultimate sale. The harbour trust has provided the infrastructure to bring in the raw material of this trade but the story of how it is shipped out is not so happy.
At one time refrigerated fast fish trains left Thurso every night bound for Billingsgate, and a very satisfactory arrangement it was. But the Beeching axe put a stop to that. Now all this vastly increased fish trade has to go on refrigerated lorries. One haulier alone sends 10 38-tonne articulated lorry loads on average per day down the A.9; obviously, on average 10 articulated lorries return with or without a load.
The problem is that all this trade must use the A.9 as it is the only road out of Caithness going directly south down the east coast. As it leaves Caithness it takes the form of an extremely steep series of hairpin bends at Berriedale which are difficult enough to negotiate in a private car. To the driver of a 38-tonne articulated lorry who does not know the road it sometimes proves impossible. The other day a lorry load of pipes bound for Rockwaters oil pipeline manufacturing plant just north of Wick got stuck on the top of a hairpin like the plank of a seesaw. In the large queue of traffic trying to go south which quickly built up were a number of unfortunate people with Apex tickets from Inverness to London in their pockets. None of them made it to their flights except one enterprising person who walked to the other side of the blockage and did some sort of a deal whereby someone took him to Inverness. However, British Airways were merciful—I suppose they wanted to keep their trade—and did not penalise the rest of the ticket-holders. My noble kinsman Lord Caithness will therefore realise that if I can negotiate the bend at Berriedale I am not put off by trying to get through Newbury.
I mention all of this to illustrate the fragility of a transport infrastructure which is ill-thought-out and unco-ordinated. Why could the pipes not come up by rail or by sea? Why are the flights at Wick so inadequate? Why do more people and consignments not use the existing railway? Why is the railway not brought up to date?
In looking at these questions it must be noted that many consignors have deserted the railway because it has not been modernised at the same time as the roads have been greatly improved. One must ask the Government, who are responsible for both: is this in the public interest? The question is all the more pertinent in the light of widespread condemnation of pollution due to too many vehicles using the roads. There should be greater use of the railway. But how can one use the railway when it refuses to be used?
All the livestock markets in the north were originally set up beside the railway—but Dr. Beeching put an end to that by refusing to accept green field traffic. This was a source of great disappointment to farmers and stockmen who knew how much kinder and better it was to use the railway for the transport of stock than the road. So now, whether we like it or not, at sale times our roads are crowded with huge, four-deck stock lorries
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with four-deck stock trailers, adding to the refrigerated articulated lorries carrying a fish trade which has already been turned off the railway.
Post Office trade which used always to be carried by rail or air is now brought in one articulated lorry carrying parcels, three vans carrying letters and one special van carrying Data Post per day; a similar number are sent south. Add to that number the two or three articulated lorries per supermarket chain (the Co-op and Safeway) as well as the lorries of the wholesalers who supply the smaller shops and businesses and licensed premises, most of whom used to send their goods by rail until the railways unilaterally stopped carrying goods. You can see that there is not much room left on the roads for the tourists with their caravans about whom everybody complains during the summer season.
Now, anyone starting a manufacturing business in the north has to find a road haulier or else run his own transport on the roads. That is why our most successful manufacturer in Caithness, Norfrost, had to set up its own haulage business in order to ship out its product. It sends on average some 10 articulated lorries south daily with a like number returning.
Successful though our road haulage firms are, they are inhibited from achieving maximum efficiency by restrictions which are imposed upon them. If they invest in a trailer capable of carrying the full legal EEC permitted load of 48 tonnes, why are they then restricted to a mere 38 tonnes? This means that as soon as they have gone through the Channel Tunnel they are carrying some 10 tonnes less than their French competitors. In that context one must remember that they have to give up a tonne or so of payload to safety equipment which has recently been made mandatory.
If in a little and sparsely populated place like Caithness, our transport structure is in such desperate need of modernisation and co-ordination, how much greater must the need be in larger and more populous areas of the country which are grappling, like us, with the loss of traditional industries and which need all the help which the Government can give them to replace the lost jobs and develop new industries and new trade. I am grateful to the noble Lord, Lord Ewing of Kirkford, for giving us this chance to debate this matter in your Lordships' House, and I support him in his call.
6.12 p.m.
Lord Elibank: My Lords, I propose to confine my remarks tonight to rail and road transport, not because marine and air transport are not important, but the crisis in our transport system is largely one of the roads. That applies to industry and industrial transport as much as to private transport. Indeed, industry is subjected to the same dilemma which confronts all of us—the clash between freedom to move goods where we want and how we want, and at the same time preserving an unpolluted environment and a quality of life acceptable to our citizens.
My other general point is that we are going to retain our present infrastructure for quite some time. In my view the road building programme has been quite rightly curtailed. We can hope for developments on rail and

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certainly we hope to see the Channel Tunnel link built, which would be a notable advance. Apart from one or two items like that, the infrastructure which we have today is very largely the infrastructure which we shall have in certainly 10 years time and probably 20 years time. So the problem is not developing the infrastructure so much as making better use of that which we have.
The almost knee-jerk reaction when one talks about moving goods is to say, "Move them from the roads to the railways". The Royal Commission on the Environment took a look at that and, despite the declining percentage of goods moved by rail in recent years, the commission felt that, with the right management policies, a decline to 6 per cent. could, over a 20 year period, be boosted to something like a 20 per cent. improvement. That would be a very significant advance in rail freight, but it would still leave 80 per cent. to be transported largely by road, although air and merchant shipping would play their part.
When one looks at the possibilities for further rail transport, there are limiting factors. I believe that we are all familiar with them. Goods carried on short journeys simply cannot be justified by rail, except in the case of very specialised loads such as coal. So one needs a journey, usually of hundreds of miles, to justify moving freight by rail. That has been almost impossible in this country because rail journeys are not more than 200 to 300 miles at the very most. But with the advent of the Channel Tunnel there is every hope that that distance can be extended to a 1,000 or more miles. Then rail freight will become a real competitor with the roads.
I congratulate the Government on making sure that the rail link passes to the north of London and comes into St. Pancras where there is a very real prospect of making proper rail connections to the Midlands, the north and Scotland. I hope that we shall make good use of the Channel Tunnel, and develop our rail freight trade as best we can.
The Government have taken a number of measures to try to encourage the movement of goods by rail. They have introduced two types of grant—the freight facilities grant and the track access grant, which are specifically designed with this kind of movement in mind. Unfortunately, the amounts involved are small and, perhaps even more sadly, the take-up—at least when I was last informed of the amounts involved—is also rather small. It seems unlikely that these two grants will make a particularly strong impression on freight traffic.
The really key factor to rail freight is the combined terminals. These have to be efficient, manned 24 hours a day and cheap. I believe that in the past British Rail has looked on freight transport as an unfortunate competitor. It has not gone out of its way to attract road freight onto the railways, using the various ways in which that can be done. This has to be a partnership between rail and road if it is to work as well as possible. One can only hope that the new privatised organisations will take this on board with rather more enthusiasm than British Rail seems to have done in the past.
I would now like to deal with one particular aspect of road transport which has come to my notice fairly recently, but with which some of your Lordships may be fully familiar. I refer to natural gas vehicles. They
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are a fairly old development. Some of your Lordships will remember seeing vans running around after the war with large balloons on the roof. Then natural gas faded from the transport scene and, although I am sure development carried on, I, as a casual observer, only noticed it again some 18 months ago.
Natural gas has many and considerable advantages as a fuel. I have some figures and I shall only bore your Lordships with three or four of them which I have obtained through the courtesy of my noble friend Lord Brabazon of Tara as the president of the relevant institution. Natural gas vehicles reduce emissions of carbon monoxide by 76 per cent., nitrogen oxide by 83 per cent., and non-methane hydrocarbons by 88 per cent. compared with petrol vehicles. They give extremely low particulate emissions compared to diesel vehicles. Carbon dioxide emissions per vehicle kilometre are reduced by 25 per cent. compared to petrol vehicles. That is a tremendous reduction in pollution. In addition. the fuel can be piped along normal gas pipelines, thus eliminating the need for vast fleets of tankers and lorries.
However, there are disadvantages. The obvious disadvantage is that at present most natural gas vehicles can run for only 200 miles on pure natural gas or for approximately double that distance if the engine is designed to take both natural gas and petrol or diesel. That means that the vehicle must return to a refuelling point, usually by evening. The fuel is therefore extremely suitable for large fleets of lorries and coaches which often do just that: after a day's run, they return to a common terminal. There is no problem setting up a fuelling depot in a vehicle terminal.
Such vehicles are being developed as motor cars for private citizens, but it is a chicken-and-egg situation. Until there are enough such vehicles, it is not worth having refuelling depots, but until there are enough refuelling depots, it is not worth people buying such cars. For the immediate future, therefore, the use of natural gas will be confined to heavy vehicles, buses and coaches. I should like to congratulate the Government on the fact that in the last serious increase in fuel duties in the recent Budget, although duties on petrol and diesel were sharply increased, no extra duty was imposed on natural gas.
Finally, by way of a general comment on the use of our existing infrastructure, perhaps I should point out that anybody who considers our transport network must be struck by its under-utilisation at night. One of the reasons for that—perhaps the main reason—is the multiplicity of rules preventing heavy vehicles entering urban areas. One can well understand the reason for that, but that area of use should be investigated. The obvious route seems to be to compel manufacturers to make quieter engines. If they are given enough time and, if necessary, some financial incentive, it seems possible that the noise level of heavy vehicles could be reduced to approximately that of the motor car. If that happened, heavy vehicles could use urban areas at night and the distribution of retail and industrial products could be speeded up; better use could be made of our roads and our citizens would find driving on them much more pleasant and convenient.

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As I have said, one or two things need to be done. The danger is that most of the steps that are required in relation to industrial transport will cost money. The challenge to freighters is to try to avoid passing on those additional costs to the customer.
6.23 p.m.
Lord Dean of Beswick: My Lords, I join in thanking my noble friend and colleague Lord Ewing of Kirkford, and in congratulating him on his wide-ranging speech. He has given us plenty to think about. I imagine that most noble Lords will have received the CBI report, Missing Links—Setting National Transport Priorities. It is a discussion document of nearly 50 pages of information and points of view. It provides answers to some of our questions.
However, in order to get another view, I contacted the Institution of Highways and Transportation, which has made one or two comments—not criticisms, but suggestions—about where it feels that the CBI's report . requires further consideration. The institution stated:
"The report should be welcomed since it highlights the historic under-investment in United Kingdom transport infrastructure".
The institution continued:
"plans like Roads to Prosperity have no status (other than policy)".
That means that there is no commitment to ensuring that such plans are achieved.
The institution continued:
"The Secretary of State wishes our road network to 'sweat' before new construction—i.e: increase the through-put. This will lead to greater congestion and road wear.
The UK has a particular weakness in lack of maintenance of our existing transport infrastructure.
The Private Finance Initiative is not making progress in raising funds for investment—for a variety of reasons".
The institution stated that it was,
"unsure about the CBI suggestion that a national transport strategy be developed. How would this work within a privatised framework? The aims of the private sector may not match those of the government".
I recall that only a few weeks ago the Prime Minister said in another place that he would give the public a railway system that would be the envy of Europe. I do not believe anybody who tells me that the private sector will suddenly come up with bucketfuls of money to build a super railway system which is in advance of that in France. I do not think that such an offer is on the table. I do not think that there is any possibility of it happening.
I took particular note of what my noble friend Lord Ewing said about airports. Being a Mancunian, I have always been deeply interested in the development of Manchester Airport and, indeed, played some part in that some years ago. A couple of weeks ago there was a presentation in the Cholmondeley Room about why Manchester Airport requires a second runway. The presentation sought to explain how the airport authority is trying to allay the fears of those who are currently expressing opposition to a second runway. An excellent case was made. There is no question but that if the north-west is to make progress and to be able to compete equally with other parts of Europe, Manchester requires
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a second runway. We are not talking only about transport within the United Kingdom, but about Manchester's ability to expand its worldwide capabilities. When this country's trade starts to revive, the north-west will be one of the busiest areas of the country yet it is at present under-provided with transport links.
Our railway system being what it is, what British Rail calls its "West coast mainline"—that running from Manchester to Euston—is grossly under-resourced if it is to be able to deal with the traffic that is expected to come through the Channel Tunnel from Europe. I am not making a party political point. I believe that that is the general view of those of all political parties in the north-west. That railway line needs radical improvement if it is to be able to cope with foreseeable developments.
Manchester has gone out of its way and has bent over backwards to meet the anxieties of those in the area who are worried about the development of a second runway. Manchester has gone as far as anybody could expect in that regard. If that proposal is accepted, I believe that construction could start within a matter of months rather than years. That is what the area needs. When that proposal lands on the Secretary of State's desk, as it will, I hope that he will expedite it quickly and let Manchester and the north-west have that second runway. There is no other international airport to match Manchester. There is nothing else between London and Manchester.
I was concerned by my noble friend's reference to the merchant navy. It is a strange fact that until 30 years ago —immediately after the last war, between the wars, and before the First World War—we were the world's leading maritime nation. If this country had no aeroplanes, we would be in effect a landlocked nation because we now have so few ships. We do not have a merchant navy. We have gone from the top of the league 30, 40 or 50 years ago to the bottom. All that we keep being told is "the market determines it". I suspect—and I do not think I shall be alone in saying this—that if the situation ever arose where this country was threatened again and needed goods brought to this island in defence of the realm, we would not have the ships to deal with that situation. That needs to be looked at very quickly.
People ask whether the present road system is adequate. If I may speak on a personal note, I live on the border of Stockport and Denton, which is just on the outskirts of Manchester. I live on a main road which has a rather restricted part, where there is a small stone bridge. Traffic has to go over the bridge, and about three weeks ago there was a crash which caused damage to the bridge. The bridge has been closed for three weeks. That added one hour and a half on my journey from home to your Lordships' House. Therefore, instead of travelling direct to your Lordships' House, I had to go all the way round Manchester. Juggernauts from the Continent are also having to be turned back because of the problem. This has happened in this day and age, and it is not for the first time. It does not inconvenience me, but what must it be costing industry? In the Stockport section alone there is a huge industrial estate which is developing and thriving. So what must the cost be to the

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manufacturers who are moving goods in and out of that estate? One could go on giving more and more examples of such cases.
However, I am also concerned about the railway link to and from the Channel Tunnel. It has had a sad start, because it has not covered itself in glory. One hopes that things will improve because if the venture fails, a lot of finance will be lost and it will do a lot of damage to the proposed infrastructure of this country. So it is up to the people involved to get it right as quickly as they can.
Last but not least—although it might be a little removed from the subject of this debate—now and again in your Lordships' House, we have had questions about roll-on, roll-off ferries. I think the noble Lord who is going to reply answered a Question only a few weeks ago about the safety of these ferries, and he spoke as if everything was all right.
However, it was only a few weeks ago that a totally independent group of people compared the safety factor of ferries with that of normal liners and the survival chances of passengers when ships were in distress. They said that a ship which was on fire in the Indian Ocean had 100 per cent. of people saved because there was time to abandon ship, whereas once roll-on, roll-off ferries are in difficulty, everything happens very quickly. People who have no axe to grind say that the system is flawed and needs to be altered.
I close by saying that while this is not particularly relevant to this debate tonight, it is something which ought to be lookedat as a matter of urgency because—God forbid!—it could happen again. It is certain that something will happen again at some time because there have been two recent accidents—the one in the Baltic and at Zeebrugge—and these things do happen. Irrespective of the expense that is involved, I believe that the operators of such ferries will have to look again al what can be done. Once again, I want to thank the noble Lord, Lord Ewing, for his opening remarks, which were very enlightening and opened the door to diiscussion on many points of view.
6.34 p.m.
Lord Mountevans: My Lords, I too am very grateful to the noble Lord, Lord Ewing, for giving us this opportunity to debate transport and infrastructure at home and abroad. I agreed with quite a lot of what he said, save perhaps in the Dutch context where, no matter however much one plans ahead, politicians can interfere. For example, in the last general election in Holland a major party did well by promising a massive increase in road fuel taxes to pay for railway investment. Alas, that fell by the wayside as a consequence of the political problems of proportional representation. Similarly, when the noble Lord prayed in aid the Greens, I am sure he will be aware that the press this weekend has reminded us that the Greens have a heavy burden to carry in terms of the flooding problems that hit Holland last weekend.
I also found myself greatly in agreement with my noble friend Lord Caithness on how we must bring the private sector in through the PFI. My own particular concern about getting it wrong is that it seems to me
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tragic that the Bill that will enable the high speed link to the Channel to be built, and will define it, will go through long after we have asked the consortia who wish to get involved in the project to pug: their bids on the table. That really seems to me to be a matter of the cart before the horse.
As ever, I am concerned about the railways, in which I declare an interest, and also, to a lesser extent, aviation. Though rarely a road user, I would very much like to see more freight transferred to rail. Infrastructure usage costs for current and potential freight users have increased as a result of the restructuring of the railways, and these increases can be justified only if they are used largely to pay for the maintenance or renewal of the system. The PFI, hopefully, will take care of new investment.
I fear that these increases may actually restrain transfer of freight from road to rail because the charges are quite steep. They can be offset, however, by grants made under Sections 137 and 139 of the 1993 Act. The first section broadly restated the old Section 8 rules about grants towards the capital costs of sidings, wagons, cranes and other capital investment in infrastructure.
Section 139 facilitates grants towards the payment of Railtrack access charges, and is a most welcome development since it extends considerably the old Section 8, provided, as my noble friend Lord Elibank says, that we have enough money available. However, in evaluating the case for a grant a value is assigned to the lorry miles that would be saved if the traffic switches to rail. For local or single carriageway roads, this value is between £1 and £1.50 per lorry mile. However, for dual carriageways and motorways the value is only 5 pence per lorry mile.
Rail's strength lies in the trunk haul and the majority of flows which might switch are, I suspect, largely routed over the major roads. This poses road investment problems, and also problems in regard to the environment of congestion and noise. The grant differential makes the switch to rail much less attractive, and I wonder whether the Government would consider a more generous value—say, £1 per lorry mile for main road miles avoided rather than 5 pence. I feel that this, allied to the Channel Tunnel, could make an appreciable difference in persuading people to transfer freight from road to rail, not least those who so concern the noble Viscount, Lord Thurso.
My second point builds upon experience with other utility privatisations and the tendency for increased charges to go to finance dividend streams at the expense of new projects or the renewal of the infrastructure. Wearing my tourism hat, the case of the Cornwall beaches and sewage springs to mind. Elsewhere, many US railways have run into trouble by diversifying away from the core businesses and by putting excess emphasis on deferred maintenance to enable them to invest outside.
As regards new projects such as the Channel Tunnel rail link and CrossRail, I believe that if the Treasury can get the ground rules right the PFI has a part to play, if it ever gets off the ground. My real concern is regular maintenance and renewal—a matter for Railtrack, and

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one to be funded by the higher access charges I have already mentioned, together with a contribution which I believe should come from government in recognition of congestion and environmental benefits.
The train operators need to be assured that the money generated by higher charges is spent on renewal and replacement of track and signalling, and is not used for diversification or ever-growing dividend streams once Railtrack is in the private sector. The regulator has a part to play in that, as have the Government, but how will the latter ensure that the necessary maintenance and renewal continue at the level paid for at access charges? Will it be through licence conditions, contractually, or by direction? Will Railtrack's rail industry plans include renewal proposals?
I turn now to aviation and, in particular, navigation and air traffic control in Europe. European charges are universally agreed to be far higher than those in America or Asia. That applies to all levels of fares. It gives the airlines higher cost bases, inevitably passed on to passengers in the form of higher fares. They are fares which do not stand comparison with those available in other parts of the world. European costs are higher because we have individual national systems. In a way, our air traffic and navigation control systems are reminiscent of where the railways were 70 years ago when a train was passed from one signal box to another and then to another, whereas nowadays it can be cleared for, perhaps, 100 miles under a modern signal centre.
That leads to inefficiency over flight routings, in the use of radar and data co-ordination, particularly across national frontiers. Those technical problems are sometimes compounded by industrial unrest and low productivity. The former—industrial unrest—will have had a bad effect on many of your Lordships' journeys in Europe. We need a Europe-wide approach to the technical and managerial problems. Will my noble friend the Minister tell us what steps Britain is taking to secure such an approach?
I turn, finally, to the problem of runway capacity in the south-east. While it is adequate at present, we cannot put off that issue indefinitely. Lead times are long, not just for the statutory procedures but for construction. They are long for terminal capacity and access. I seem to remember that when the Heathrow Express Railway Bill went through the House it was planned that it would be opened by now. Instead of which, we are now talking about 1997 or 1998.
Access is especially important not just for airport users but for the residents of the area around the airport, particularly Heathrow, and those who have non-airport related employment in the vicinity. I hope that the proposed Terminal 5 will be built. I am not asking my noble friend to abuse the statutory powers of his honourable friend, but we should consider both mainline and London Underground access. In more general terms, as the noble Lord, Lord Ewing, said, we should be considering a westbound access from Heathrow towards Reading as that would take a great deal of pressure off the M.4. That comes into an infrastructure policy, localised though it may be. Such a link would, I believe, cost some £325 million and fit neatly into the CrossRail
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electrification to Reading, if that ever gets off the ground. The present Heathrow Express route is not built to deal with diesel traction.
By happy coincidence, £325 million is the sum expected to be raised by Her Majesty's Government in a year by the airport departure tax. Would not the use of the one to pay for the other be an excellent and effective example of transport infrastructure policy?
6.45 p.m.
Lord Haskel: My Lords, perhaps I may welcome the usual robust contribution to our debate of my long-standing and long-lasting noble friend Lord Houghton. After his contribution, and the contribution of other noble Lords, I do not need to rehearse again the needs of industry. It is sufficient to say that we do not have factories where iron ore goes in one end and cars come out at the other. To be competitive, European industry is highly decentralised. Transport is crucial to that and to the growing trend towards long-term relationships between customers and suppliers, which result in cost reductions. That is central to the ability of European industry to be competitive. The other crucial aspect of European industry's competitiveness is service. Of course transport plays an important role in that.
Over the past few decades it has become clear that in the UK the development of the motorway network has led to a great improvement in industry's productivity. However, rising congestion and growing environmental concerns probably mean that our road development has gone as far is is possible. Of course, there are some common-sense additions to the inter-urban network and completion of some missing links, but nothing major. The major future development must be on the railways, and it is here that I should like to concentrate
The eminent transportation economist David Aschauer has stated that spending on the public rail network has twice the potential to increase productivity as spending on roads. That is a message which seems to have been heard loud and clear on the Continent. The conclusion comes from figures complied for the World Economic forum's 1994 competitiveness report. It gives a mixed picture, as my noble friend lord Ewing reminded us. We rank in the bottom half of the European Union on the quality of road and rail infrastructure, but in the upper half on air infrastructure and access to ports. In the attitude survey there was particular dissatisfaction with the rail infrastructure, which is not surprising. Britain's rail system is not in a happy state. Privatisation will not solve the problem. The study showed that the cost of running our railways compares well with other European countries. What is lacking is investment to stop the infrastructure crumbling away. So where is the logic in a privatisation plan which guarantees subsidy for investment in the infrastructure for only two years ahead but guarantees the subsidy to the train operators for up to seven years ahead? Surely the Government have got this the wrong way round. Nor is it apparent to anyone how the fragmentation of the system will help investment.

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The creation of 25 passenger train operating companies, some running as little as one line, with all the problems of co-ordination of timetables, tickets and travel to distant destinations will make the system more complex. Also, the number of people involved in shaping the new railway system is hardly conducive to investment. We have Mr. Salmon selling passenger franchises; Mr. Swift regulating the new railway companies; Mr. Horton running the track; and Sir Bob Reid working out his notice and looking after those parts of the railway yet to be privatised. Somewhere in this comes the Transport Secretary. Obviously, he has found it difficult to understand the new arrangement. Although he keeps repeating the promise of through ticketing, apparently he no longer has the power to enforce it. He can only provide "guidance".
All this fuels fears that the purpose of privatisation is merely a way of reducing state spending on railways. Investment has been predicated by the Secretary of State to continue at about £1 billion, but £850 million a year is required to keep the network in a steady state. In the present state of decline and uncertainty it is difficult to see even how that figure can be even remotely approached.
Gearing up for a serious programme of investment requires a long and continuous process of project preparation and tendering. In fact the early stages of the procurement process are almost non-existent. There is virtually no tendering for new rolling stock, and that is essential if /he age profile of the existing fleet is even going to be maintained. Manufacturers fear that there will be no new orders placed before 1997.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, infrastructure?
Lord Haskel: My Lords, I shall deal with infrastructure in a moment. Manufacturers fear that no new orders will be placed before 1997 at the earliest by which time the rolling stock supply industry will have disappeared. Even orders for basic track components are falling away—and this at a time when there is widespread concern about the state of the infrastructure and obvious arrears of maintenance. All that has grave implications for safety. How long can we carry on with the imposition of speed limits when maintenance is overdue? For too many years we have been satisfied with mediocrity on the railways.
The suspicion that the Government are not interested in investment in the railways is fuelled by their lack of interest even in schemes to get heavy goods vehicles off the road and to transport goods more efficiently to the European Union by rail, via the Channel Tunnel. The noble Lord, Lord Elibank, spoke about that in explaining the need to make better use of our existing network.
Perhaps I may give an example. Currently, three-quarters of the unit load traffic between Britain and the Continent is carried on semi-trailers by road. Common on the Continent is the service whereby the semi-trailers are loaded on to rail wagons known as "piggybacks". The major part of the journey is then done by rail. That has the effect of taking a lot of heavy traffic off the roads. Bridges and tunnels are generally
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lower and narrower in Britain than on the Continent and station platforms are closer to the tracks. The generally accepted view is that piggyback would be impossible in Britain.
However, with the support of DG7, under the pilot actions on combined transport programme, a study was carried out to see whether the service could be extended from the Channel Tunnel through the major industrial areas to Scotland. I have the report here. On the steering committee were local authorities, Eurotunnel, French Railways, British Rail and various transport organisations. I do not see the name "Department of Transport".
The study shows that adapting bridges and tunnels so that standard four-metre high road trailers can be carried on special rail wagons from Scotland to the Channel Tunnel should cost less than £100 million. That has the potential to take 400,000 long-distance lorry journeys off the road. Perhaps I may put that into context; it is about half the cost of widening the 12 kilometres of the M.25 motorway between junctions 12 and 15, which the Government were seriously studying.
I am sure that the project would not have been ignored by the Government if they had had a coherent transport framework covering all forms of transport and not favouring roads to the detriment of rail. It is their strategy of standing back that has resulted in the lack of investment. Many noble Lords have called on the Government to create a consensus but there is no framework in which that consensus can take place.
While the Government stand back, all that we shall have is vested interests shouting at each other. The one which shouts loudest wins. That is no way to encourage a strategic approach to the needs of industry for a transport infrastructure. The Government must accept that they have the major role of setting up the framework within which the strategic consensus can be reached. Perhaps the Minister will tell the House whether his department has any plans because industry must plan for the long term even though his department is unwilling to do so.
Investment in transport infrastructure is a long-term business and requires an act of faith. We on these Benches understand that. Since the mid-1980s we have had plans to seek a broad consensus on transport. More than two years ago we announced plans to enter into joint public and private financing arrangements to invest in the long-term improvement of our transport infrastructure to help make our industry become more competitive. Last week Tony Blair reiterated our commitment to that by stating that,
"the railways should be retained as a proper integrated public service".
6.55 p.m.
Lord Bruce of Donington: My Lords, I thank my noble friend Lord Ewing for raising this most important issue and, from my point of view, for setting it within its European context, in which I have an interest.
Your Lordships may have read an excellent feature in last Sunday's Observer in which the thoughts of Commissioner Kinnock were set out in detail. You will

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have noted that the whole spirit of my right honourable friend's approach to the matter was one of obtaining a consultative consensus before taking any premature action along any particular line. That is well in accord with the method of thinking that your Lordships might consider appropriate in respect of a problem of this kind. All manufacturing life depends essentially upon movement; upon moving goods and services from one place to another.
Commissioner Kinnock put forward proposals for the investment of approximately £300 billion in the European network during the next 15 years. It would be idle to suppose that we in this country will not be required to contribute an appropriate share. But one thing is absolutely certain: that the money when expended, whether by means of investment or grant, must be kept under far stricter control both in regard to the total and the apportionment between countries.
There is an overriding problem. All economists and most politicians on all sides appear to assume—and probably assume correctly—that economic activity will expand considerably, if at sustainable levels, during the next few years. Everyone talks of expansion. Doubtless we shall make our own limited—to avoid controversy—and sustainable contribution towards this. But undoubtedly it will need more movement of goods not only within the country but to and from this country.
Therefore, whatever strains we have talked about today—and there have been many notable contributions on that matter—one can safely assume that the stresses will increase rather than decrease and that the refurbishment of the infrastructure and its extension must take account not only of existing production but perhaps of future expanded production. Those are extremely important factors.
Moreover, I venture to suggest that it is not appropriate only to consider the main networks, to which most consideration has been given, in particular at the European level. Not only the finished product requires speedy export from and import into this country; the raw materials and self-assemblies which make up the finished goods must also be taken into account. In the main, those come from inside the country and do not necessarily need the existing main road and rail networks.
Moreover, there is also the question of the staff and the workers. Not only raw materials but also working people are vital to the process of production and they have to get to their place of work. It is not only a matter of the modernisation and expansion of the infrastructure upon main lines; it is also a matter of the interim part—the local infrastructure and the local means of travel. That has a particular impact on the environmental questions which have been so admirably dealt with in previous speeches in this debate. Not only do air pollution and noise pollution—which are part of the environmental factor—have to be taken into account, but also what we will call the general balance of life in the environment. That should be uncorrupted in the sense of its ordinary balance not being unduly disturbed
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so that people, when they are not at work or when they are going to work, can have a reasonable environment in which to do that. All these are important matters.
I venture to suggest to my noble friend that it is not even safe to consider the matter within its European context. One has to go a little wider than that. One has to consider —this is becoming increasingly evident now—that one of the most likely areas of the expansion of export of manufactures from this country is likely to be to the Pacific Rim itself and to the other developing countries. That gives an added emphasis to the remarks, that fell from the lips of my noble friend, Lord Dean of Beswick, when he referred to the deplorable shipping situation in which we find ourselves at the present time.
The Commission's idea of the importance of investment is roughly 60 per cent. rail, 30 per cent. road and 10 per cent. the rest, including air travel and canals. In this latter connection I would venture to draw your Lordships' attention to the fact that up to now, and for the past 20 or 30 years, it has been the practice of manufacturing industry to use the main trunk roads, and to some extent the railways, as their interim store both of raw materials going into their factories and in terms of assemblies and sub-assemblies which go to make up the finished product. Instead of having a build-up within the factory itself, and a consequent extension of the acreage which they occupy, owing to very high interest rates—which are no longer 2 per cent., as they were at one time—and indeed general land values and rentals, it has become cheaper to use the roads as a work-in-progress store rather than establish buffers within the factory walls and build up stocks. Therefore the roads are not only being used for transport purposes; they are being used as a store.
That in itself tends to produce some congestion factors because as congestion builds up the question of delivering straight onto the end of the factory line becomes more difficult and therefore increases the cost. In view of the fact that the build-up time has commenced and a flow of traffic can be ensured continuously, we may well consider whether a far greater use ought not to be made inside the United Kingdom and indeed elsewhere—I have in mind southern France as well—of the canal system. Although such a system is slow and the build-up takes a long time—perhaps 10 or 12 days—once the flow starts and continues, it represents an economy rather than when goods are caught up in congestion on roads or even on rail.
I am asking that we take a broad and general view of this. We have already rejected the fashionable assumption for which the noble Lord, Lord Lawson of Blaby, at one time was responsible, of assuming that manufactured goods really did not matter much any more and that it was the total export effort from the country that really mattered. Quite clearly that is no longer the case. I have no doubt that we will have a formal recantation of the matter in due course, particularly in the light of the Select Committee report of your Lordships' House on employment and overseas trade which has been referred to many times.

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One thing for certain is that the whole matter has to be considered at length and in public very quickly. All these factors ought to be discussed. It is for consideration whether a special Cabinet sub-committee ought not to be formed, comprising senior representatives from the Department of Transport, the DTI, the Treasury, the Department of the Environment and—if I may suggest, in deference to the emphasis given to the matter by the noble Lord, Lord Ewing—also the new Minister for Europe, Mr. Davis. His excellent feature in last week's European may attract a good deal of interest in view of the constructive manner with which he is dealing with the whole question of our relationships with Europe. But certainly we must have a public policy to cover all these matters, and it should be a matter for full public consultation—if necessary taking some time—accompanied eventually by a consultation paper, which can then be discussed free of any comparatively trivial considerations as to the value of further privatisations in any particular field. Let the national interest prevail within its European context and ultimately within its world context.
7.7 p.m.
Lord Ezra: My Lords, I always find it a matter of great interest to listen to what the noble Lord, Lord Bruce of Donington, has to say. I am a little apprehensive when he gets onto his favourite subject of Europe but I must say that on this occasion on the whole I thought he was relatively mild on the subject. Indeed, I even got the impression that he supports the views of his right honourable friend Mr. Kinnock who has set out how he saw the transport policy in the European Community. Perhaps we can discern a little change in that direction.
I reiterate the gratitude expressed by others to the noble Lord, Lord Ewing, for introducing the debate. I cannot think of anyone better qualified with his great knowledge of transport on the one hand and European affairs on the other. He painted a broad canvas for us which stimulated the wide-ranging and constructive debate that we have had so far. He referred in particular to the call which has been made by Dr. Mawhinney, the Secretary of State for Transport, that we should now engage in a national debate on transport. I fully agree with that. I think that is a very good idea and it is very timely. Unfortunately to engage in a debate of that sort as regards the whole country, you have to have some sort of framework. We cannot just meet casually and start talking about transport. Of course we do our best in this House. If Dr. Mawhinney wanted to pursue the question as regards this House he could see that over a period of years we have debated transport. In fact, we debated the report on transport of the committee of the noble Lord, Lord Elibank, in October.
However, I think Dr. Mawhinney was thinking beyond the confines of your Lordships' House. If we are to launch into a wide-ranging national debate on transport it has to be sparked off by the Government's own views on the subject, setting out the priorities and the options. So we need, as the noble Lord, Lord Ewing, rightly said, a Green Paper. It is worth recalling that the last Government White Paper on the subject of transport
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policy was published in 1977. There have been documents since then dealing with various aspects of transport, but as far as I can tell no document dealing with the whole area of transport policy. So it is about time we had one.
In order to help Mr. Mawhinney in his endeavour, I should like to suggest some of the issues that should be set out in the Green Paper which we might debate. We have been helped in that consideration by the very interesting document issued by the CBI, to which a number of noble Lords have referred. I have here a copy of the document which is entitled Missing Links—Setting National Transport Priorities. It compares transport performance within the UK with that in three of our European neighbours; namely, Germany, France and the Netherlands. The noble Lord, Lord Ewing, the noble Lord, Lord Dean of Beswick, and other noble Lords referred to the report.
Let us have a look at how we compare with those other countries and the issues which arise. I do not do so in any negative, critical way; I am merely trying to suggest what came out of the report and the policies that we ought to be looking at, although some may not apply here.
I should like to identify four issues which seem to me to be relevant to any debate on transport policy. The first is the question of past investment, to which a number of noble Lords have referred. It is unfortunate that when a comparison is made between our transport investment and that of our continental partners, particularly in the case of rail, we show up very badly, indeed dramatically so. The CBI report shows that in the period between 1985 and 1991 expenditure in France was 37 US dollars per capita; in Germany it was 27, in the Netherlands 25 and in the UK it was seven. It seems out of all comparison that we should have as little as 7 dollars per capita compared with expenditure in the region of 20 dollars in the other countries. Therefore, we have to do a great deal to catch up even before we can compete on level terms.
Next, we have to look at the question of a coherent strategy. We often talk about the need for a coherent policy. Can we or can we not have such a policy? Most noble Lords who have spoken in the debate have suggested that we ought to have a go at creating a coherent policy, however difficult that might be.
One must be struck by the way in which those other countries have gone about this. They have not looked at transport in isolation. They have not looked at different modes of transport in isolation. They have tried to bring together their forward views on transport within their overall economic and social objectives, particularly on a regional basis.
For example, in France they have a policy called the Aménagement du Territoire—which, although it is difficult to translate the term, means the development of the country's social and economic resources particularly with regard to the regions. That policy has been developed over a number of years and takes a forward look to the year 2015. They are trying to make sure that the transport network is developed in response to the economic and social needs of the different parts of France so as to arrive at reasonable solutions in that

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period. The sort of problem to which my noble friend Lord Thurso referred in the north of Scotland as a result of the closure of the Dounreay operation would automatically have been taken into account in the development of that policy. We lack a wide-ranging approach of that sort.
In Germany there is also emphasis on the integration of different modes of transport. An interesting aspect in Germany is the development of combined transport terminals, to which they are devoting nearly £2 billion out of state resources.
Next, I should like to talk about our lack of long-term thinking in this matter, which I have already touched on. Most of those other countries are thinking in terms of transport developments integrated with social, economic and regional requirements 15 to 20 years ahead. Should we not be doing the same and beginning to consider the problem in the same way?
Finally, I turn to the question of a consensual approach. A number of noble Lords who have spoken, including the noble Earl, Lord Caithness—whom I am delighted to see here speaking in the debate—emphasised the difficulty of reaching a consensus. The noble Lord, Lord Houghton, in his remarkable address full of his usual vigour, also expressed from his past experience how difficult it is to get agreement. That may be true, but we ought to work at it. The Government ought to set an example with a Green Paper and set out the economic, social, expenditure and environmental issues and then initiate a structured debate over a period of time. That is what those other countries have done.
I conclude by saying that this is an extremely timely debate. We not only have the Secretary of State saying that he wants there to be a national debate, but we have had the opportunity of taking a first look at the subject in the House this afternoon. I very much hope that we shall hear from the noble Viscount, Lord Goschen, when he replies, that the concept of a debate launched by his right honourable friend is a serious proposition from the Government and that they will be taking the necessary steps to enable it to be initiated on the basis of a Green Paper or other document issued by the Government.
7.16 p.m.
Lord Clinton-Davis: My Lords, the House is indebted to my noble friend for having initiated this debate in a very impressive speech. The debate has been unusual in that in many respects there has been a remarkable example of consensuality. We have also heard a variety of different ideas. The noble Earl, Lord Caithness, who recently held ministerial office in the department, pleaded for more consistency on the part of the Government. He was right to do that. The concept of an integrated transport policy has always stuck in his gullet and continues to do so, but in that he seems to be in a very small minority these days.
We also heard a most eloquent plea on the part of my noble friend Lord Houghton about the transport of animals, an issue which concerns him deeply. He has warned us that we shall hear a great deal more from him on that subject. I look forward to that.
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It has been a timely debate because we have been able to focus on the CBI discussion document. I share the views of the noble Lord, Lord Ezra, that it is a very worthwhile document. I do not agree with every element of the points put forward. I believe that some of the remarks about the environment are not helpful. We have also been able to concentrate to some degree on the programme recently announced by Commissioner Neil Kinnock.
The common denominator in those two themes is, as my noble friend Lord Haskel pointed out, that the industries of Europe and the United Kingdom equally need efficient, safe, reliable and integrated transport systems, supported by a far more modern system of infrastructure. That is critical if we are to achieve the benefits of the largest internal market in the world and also expand our trade beyond that market, as my noble friend Lord Bruce pointed out. This is not just a European Union matter.
The interests of our industry and an effective transport system are, of course, inseparable. Our industries across the country need to be able to market and move their products across the European Union and beyond. Our people need to be able to rely on the quickest and most efficient way of transport causing, always, the least environmental damage, as my noble friend Lord Ewing underlined. My noble friend made another important point: that in the development of those policies there needs to be a far greater involvement with the environmental non-governmental organisations.
The purpose of the persuasive CBI document is, of course, to be constructive. In being constructive, it is necessary to underline the faults that have occurred in our own country so that their effects might possibly be mitigated; and we can wherever possible learn from the past and change course. It stresses the need for two important objectives—the strategic objective has been referred to during the course of the debate—recognising that transport is vital in terms of our whole economic effort.
However, it also refers to the need to foster a more consensual policy. I believe that it is worthwhile reporting that Brian Gould, when dealing with transport matters in another place quite some time ago, made precisely that plea on behalf of the Opposition. It was reiterated by my honourable friend, now Deputy Leader of the party. It was not reflected in the issue of rail privatisation. We did not even have the benefit of a Green Paper when a highly controversial policy was put forward. It was not dealt with in the days of the motorway madness of the 1980s.
The criticisms that have been made by the CBI replicate in many ways those which have been made by the Labour Party over a number of years. They are fierce, challenging and deserve serious consideration from the Government.
Of course it is right to say that the picture is not wholly bad. The Government have introduced the idea—it is not before time—of the Private Finance Initiative. It is fair to point out—the Minister must concede it—that that initiative followed the same ideas

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announced by the Labour Party some years before. But we still have a long way to go. Neither party can claim that the results of those considerations are perfect.
The trouble is that there is no real transport policy in this country. The different modes are viewed in isolation, not as being complementary. That is the thrust of successive transport commissioners, including myself, over many years. Vacillation on the part of the Government over the past 15 years has led to appalling delays in the provision of essential infrastructural projects. Britain is undoubtedly left in the slow lane compared with our neighbours—a point made forcefully by the noble Lord, Lord Ezra. We know that the high speed train travels across northern France at 186 miles an hour, whereas in the Kentish countryside the train has to move at an average speed of 50 miles per hour. It is no accident that that has occurred.
The noble Lord referred to the difference in investment in France, Germany, the Netherlands and, indeed, Belgium. Those countries have moved far faster than we have in this country. It has been a deliberate policy on their part. They realised long ago that we pay heavily for congestion on our roads. Some time ago the CBI estimated that the direct cost to our industry, much of it small and local, was of the order of £6 billion a year, to which one has to add the indirect cost of the accidents—the health care for the injured, the fatalities and consequential losses to industry, as well as the heavy environmental costs which such congestion involves. Those countries have given a much higher priority to transport and transport planning than we have done. In this country we do not have a transport policy but a road-building programme—or we did have until a few days ago.
Since 1981 the French have built three completely new lines for their high speed trains, Italy one and Germany two. In 1993 Spain ordered its first high speed train from Madrid to Seville. We are not beginning to compete at present. Investment in our railways is abysmally low compared with Europe. Indeed, there is more investment in much smaller countries such as the Netherlands and Switzerland. In 1991 France invested six times more, and Germany something like five times more, than we have done.
What we have in this country by way of a policy is, as my noble friend Lord Haskel argued so persuasively, a demented ideology of privatisation. We support the injection of private finance into transport. We were saying so years before the Government thought of it. But, like the CBI, we say—it is an important point—that that should be in the form of new money from private sources and not instead of the public sector contributions. Is that the view of the Government? Since the late 1980s the Government have insisted on private sector finance as a precondition of major investment in public transport. That has led to substantial delays in the construction of vital schemes; and that has led to further losses as regards British industry.
What industry needs is an assurance that the transport network will keep pace with economic growth. It needs a clearer vision for transport provision. It needs to be clear that if, as the Government assert, there is to be a greater use of rail for transport of goods, there are
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sensible policies in place to achieve that aspiration. Those policies do not exist at present. Industry needs to know that our airport planning strategies can be completed rather more quickly because we face fierce competition from Schipol, Charles de Gaulle, and the new Brussels airport. As my noble friend Lord Dean pointed out, industry needs a more viable merchant fleet in place of our sadly neglected and geriatric fleet—all clearly linked to our poor investment policy in shipping where the private sector has been largely left to its own devices.
It is simply not good enough that the United Kingdom ranks in the bottom half of European Union member states in the quality of rail and road infrastructure. It is better placed on air infrastructure and access to ports; but in all four modes the United Kingdom comes off worse than France, Germany or the Netherlands.
I turn from that to the policies emerging from the European Union. Like my noble friend Lord Bruce (perhaps a little unusually but nonetheless pleasing for that) I welcome the priorities that have been announced by Commissioner Kinnock over the past few days on the development of road, rail, sea and inland waterway systems which, as he put it, should be integrated—I emphasise "integrated"—competitive, environmentally sensitive and safe. During the course of this year, his services will be producing a document setting out plans for the creation of a Europe-wide system of air traffic control. That is long overdue, blighted as it has been over the years by the issue of so-called sovereignty. They will be producing a strategy paper to ensure the survival of the rapidly diminishing and ageing European maritime industry with specific proposals coming forward in 1996. They will be producing a new "Citizen's Network" to make transport systems more attractive to the travelling public. There is to be a crackdown against cowboy operations on the roads and sea lanes of Europe; new proposals will be forthcoming to make better use of inland waterways—a crucially important means of transport of goods in many countries of the European Union—and wider use o f coastal and short sea shipping, both of which are extremely valuable with regard to environmental protection.
Perhaps most important of all, there is the further development of the trans-European networks whose object is to draw the Continent together by rail, road, air, waterway and telecommunications by the year 2015. In principle, the member states have agreed with that concept. But all the detail, and notably the ways in which the projects are to be funded, remain to be filled in. As Neil Kinnock put it,
"Transport is critical for economic development, regional advance, and the whole concept of community and the environment. It is central to the creation of wealth and employment and to the reduction of isolation and congestion".
As the noble Lord, Lord Ezra, said, 60 per cent. of the emphasis is on rail projects of one kind or another. Three of the priority projects directly benefit the United Kingdom: the upgrading of the west coast rail line; the high-speed rail link joining the Channel Tunnel to London; and the upgrading of road connections between Felixstowe and Holyhead. All are centrally connected with the development of our links with the European Union.

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So where do the Government stand on those issues? Are they to be a passive onlooker, wary of proceeding unless a precondition for the development of the schemes is the availability of private capital, wholly or substantially? Will they seek to maximise the flow of funds to the United Kingdom while frustrating the overall European Union infrastructure programme, saying that the budget is out of kilter so far as the rest are concerned? Or are they to be a government who will do their level best to bring these bold concepts to fruition? The entire TENs concept is boosted by the fact that my right honourable friend the commissioner chairs the Commission working group of eight commissioners, working on the plans for co-ordinating the efforts of the member states as they begin to undertake their own part of the trans-European network plans.
Of course it will be costly. There needs to be a marriage of public and private sector finance. We should consider the BOT proposals that were dealt with in the speech in the noble Earl, Lord Caithness, the "build, operate and transfer" ideas which are gaining a great deal of currency so far as the public and private sectors are concerned. The European Investment Bank has a vital role. Our minds must not be closed to any sensible means for producing that marriage between the public and private sectors.
These are not, in my view, to be seen as job creation schemes, although they will undoubtedly have a beneficial effect on job creation. Rather they are medium-term projects designed to enhance the competitiveness of the European Union, including Britain. So far, I regret to say, the Government have displayed little real sense of understanding or involvement in what these schemes mean. The next Government—a Labour
government—will.
7.32 p.m.
Viscount Goschen: My Lords, I welcome this debate, initiated by the noble Lord, Lord Ewing of Kirkford, as an important opportunity to discuss the vital importance of transport infrastructure. I also welcome the fact that the noble Lord chose to open his remarks with a quote from my right honourable friend the Secretary of State calling for a wider national transport debate. I believe that that quote, which he put on the record, sets the scene very clearly indeed.
In deciding our transport policy the Government fully recognise the important—I would say vital—contribution of transport infrastructure to industrial competitiveness. But equally we must recognise the profound impact of transport on the environment. Growth in demand for transport services has increased the pressure on our infrastructure and forecasts of future growth in demand present a very serious challenge. Increasing public concern about the wider costs imposed by transport, particularly on the environment, are reflected in the increasing difficulty in getting major transport projects agreed. Our aim is to continue to improve the quality of and range of provision. But we must recognise that there is a balance to be struck between the environmental, economic and social consequences of transport.
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This is not just a matter for the public sector; private finance and expertise is playing an increasing role in the delivery of transport infrastructure. I am very pleased to be able to welcome the remarks of the noble Lord, Lord Clinton-Davis, in support of the private finance initiative. Privatisation has been a major success in the transport sector. The privatisation of transport operations and the private finance initiative have enabled us to speed up progress on major schemes and to provide new services more quickly.
Public transport can play a valuable role in safeguarding the environment and our spending plans for the next few years focus on public transport and more efficient use of the existing road network. For example, we are funding 37 packages of measures proposed by local authorities outside London to encourage public transport and to offer attractive alternatives to car use. However, it is not simply a matter of switching public support from road to rail. Investing in rail, bus, trams and light rail can have a tremendous impact in certain areas, but it is important to say that research and practical experience has demonstrated that improved public transport is not enough in itself to solve the problems of traffic growth.
Over 90 per cent. of surface freight travels by road and we need an efficient trunk road system to enable industry and commerce to deliver the goods and services on which we all depend. The Government have a comprehensive programme in hand to improve these strategic links, focusing on removing congestion and providing urgently needed by-passes.
The level of continued investment is a practical demonstration of our commitment to the road programme and the many benefits it brings. More than £20 billion has been spent on motorways and trunk roads since 1979 and over the next few years public spending on these roads will remain on average higher in real terms than it was in the 1980s. This will also be supplemented by the imaginative use of private finance, such as the development of design, build, finance and operate (DBFO) schemes. We have already invited bids for the first four of these schemes and we are considering the suitability of another four.
However, our concern is not only with the economic benefits of better roads. The major new construction programme was reviewed last year. The prioritised programme that resulted seeks a sensible balance between the different economic and environmental considerations. We are now concentrating resources on making the best use of the existing road network. We know that a congested road network is more than a nuisance to truck operators. It costs them, and their customers, money. It costs businessmen money when they are stuck in traffic jams, which cause tremendous inconvenience to the general public. There are also other problems associated with congestion. It adds to pollution. That is why we are working hard to remove congestion, which can also create problems related to safety and cause pollution blackspots. It is important to make it very clear that the days of making very largescale additions to the network are gone.

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Some people have suggested that the trunk road programme should be halted in the light of the report on transport and the environment by the Royal Commission on Environmental Pollution. We are examining the Royal Commission's arguments and assessing the costs of its proposals. There may indeed be some very hard choices to make.
The Standing Advisory Committee on Trunk Road Assessment's report on traffic generation has led to similar demands. In the light of that report, trunk road schemes will undergo extra assessment in the planning stages to judge whether or not the effect of induced traffic is likely to be significant. There will be a programme of research to improve traffic modelling techniques still further. But I do not believe that there is justification for halting the trunk road programme. The main factor that determines the level of traffic is normal economic growth.
The answer lies in focusing on schemes that assist economic growth, help to conserve the environment and deal with local congestion and accident black spots. It lies also in making much more effective use of the existing trunk road network. It means using ingenuity and the latest techniques and technology, making the most of past investment, and ensuring that environmental effects are kept at acceptable levels.
I believe it to be widely acknowledged that the United Kingdom has a very efficient rail network in comparison with its international counterparts. The Government invest a substantial amount in the railways, and that will continue. One focuses on the investment figures for the railway infrastructure over the past few years. The point has been made from all sides of the House. Investment has been at record levels in recent years. The 1992–93 total of £1.5 billion was the highest in real terms since 1961. Over the past five years over £6 billion of investment in today's prices has taken place. Investment will continue at over £1 billion this year. It is expected to be about £1 billion next year, of which 75 per cent. will be publicly funded.
These high levels of investment have resulted in major infrastructure improvements. Since 1979 224 stations have been opened or reopened, bringing passenger rail services back to areas which lost them in the cuts of the 1960s. So far £1,500 million in today's prices has been invested to ensure that the infrastructure is in place to run international services through the Channel Tunnel. This includes Waterloo international station that is designed to handle 6,000 passengers an hour. Current infrastructure investment projects include the Heathrow Express rail link, a major programme of resignalling of the London, Tilbury and Southend line to improve punctuality on this low-performing route, and the resignalling of Kent Coast lines as preparation for Channel Tunnel services.
British Rail privatisation and liberalisation will bring considerable benefits to industry and the travelling public. The advantages of privatisation have been demonstrated both in the transport sector and elsewhere. We now want railway customers to take similar advantage of these benefits. Railtrack has responsibility for rail infrastructure, and the privatisation of Railtrack is a key part of the privatisation programme. The
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Government believe that by making Railtrack more accountable to its customers, that is, the train operators, passengers will receive a higher quality service more attuned to their needs.
My noble friend Lord Mountevans asked about the role of the regulator in ensuring that access charges would be used properly for maintenance and renewals. In the access agreements that the regulator will approve, Railtrack will contract with the train operator to provide a specified level of service for a charge which the regulator will also approve. The level of access charges approved will provide sufficient revenue to cover Railtrack's operating costs and fund renewal investment. As a condition of its licence, Railtrack will he required to produce a 10-year investment plan which will also have to be approved by the regulator.
Privatisation will also lead to a more focused and commercial approach to investment as Railtrack is given every incentive to increase substantially its efficiency in the management and operation of its infrastructure. Privatisation will enable Railtrack to explore more widely sources of private finance to fund infrastructure investment schemes, freed from the inevitable constraints of public sector funding. We are committed to continuing to pay subsidy to support socially necessary but loss-making passenger services. In deciding on infrastructure investment priorities, Railtrack will be expected to take commercially-driven decisions based on its ability to secure contributions from train operators and whether it can make a real return on investment.
Private ownership and competition should also reduce operating costs through improved efficiency. We believe that this will be important in helping to attract freight away from road to rail, which is a theme that has run through the debate from all sides of the House. We want to see rail used for as much of the journey as possible. This was very much the sentiment expressed by the noble Viscount, Lord Thurso. Seventy per cent. of the international freight market is located to the north and west of London. The existing international service will keep these loads off the road until they reach their regional terminals. By the end of 1996 that will reduce lorry movements by up to 1 million per year. We are keen to encourage railways to offer new services if they sensibly can. So is the Commission.
The noble Lord, Lord Haskel, raised the issue of piggyback services. We have offered our support to the application of the Piggyback Consortium to research the possibility of providing special wagons and improving the infrastructure to carry lorry semi-trailers by rail. That is a private initiative. It would have been much harder to do in the old public sector railway. The consortium believes that this kind of move will help to get even more freight off the roads and onto the rail network.
I turn to the Channel Tunnel rail link. I believe this to be an excellent example of a project where the public and private sectors can work successfully together. The project will benefit from private sector initiative and management skills. The line would be built sooner than if it had to rely on 100 per cent. public finding. The Government are prepared to make a substantial

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contribution to it and shoulder their fair share of the risks associated with the project. The high level of private sector interest in the project is testimony to the success of the Government's Private Finance Initiative.
I turn to the important issue of air transport. This subject was dealt with by many noble Lords who spoke this evening, notably by my noble friends Lord Caithness and Lord Mountevans. It is important to recognise in this debate—which perhaps has cast a little more gloom than one may otherwise have expected—that air transport is an industry in which the United Kingdom plays a leading role. The quality of our airports makes the United Kingdom a world centre for commerce and tourism. There has been a colossal expansion in air traffic. Air travel has expanded over the past 30 years. The expected growth provides an opportunity for economic benefits as well as environmental challenges. The Government are firmly committed to enabling the development of additional airport capacity where it makes economic, social and environmental sense. The economic benefits to business and industry are clear, as are the increased opportunities for leisure travel.
It has been said this evening that the Government have recently announced their response to the working group on the Runway Capacity to serve the South-East report, known as RUCATSE. RUCATSE's analysis shows a strong case for additional runway capacity in the South-East, but more work is needed to inform decisions on any proposals that operators may bring forward for that additional capacity. I believe that that announcement, making clear that certain options should not be considered but calling for further work, has been widely welcomed as a sensitive and sensible approach to what is an extremely difficult and complex problem. It is one that we must get right for the benefit of the entire country.
During the course of the debate we touched briefly on the subject of regional airports. The noble Lord, Lord Dean of Beswick, mentioned Manchester and the proposal for a second runway. My right honourable friend the Secretary of State for Transport has a quasi-judicial role in this process and it would therefore not be appropriate for me to comment specifically on that proposal.
However, in general we welcome the growth of regional airports and recognise the benefits of liberalising services to and from the regions. Last October my right honourable friend announced the biggest liberalisation of transatlantic air services, allowing all US airlines to have open access to UK regional airports. However, even on the most optimistic assumptions, regional growth will only have a limited effect on demand for additional capacity in the south-east. Smaller airports can also play a valuable role —for example, in serving business aviation.
I turn to ports, which are vital to the health of the United Kingdom economy. Over 90 per cent. of UK overseas trade is carried through UK ports. The Government wish to see a strong ports industry, with our ports competing with one another and with ports overseas on a fair basis.
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In recent years changes to working practices and access to private finance have led to substantial improvements in the efficiency of our ports. We want them to take a fully commercial approach in relation to their operations and developments. For new infrastructure they must shape their plans in the context of our intention to safeguard areas which are environmentally important and to avoid environmental damage. We wish to avoid grant aid, whether from the United Kingdom or Europe, which would distort competition between ports.
On a wider note, much has been made of comparisons' with our European partners. Many noble Lords, including the noble Lord, Lord Ezra, drew what I would call a pessimistic comparison and touched on the CBI report. It is worth mentioning that the CBI report showed that in a number of respects the UK performs well compared with other countries. It highlighted the strong performance of the UK civil aviation industry, the high efficiency of our rail network, the substantial recent improvements in the efficiency of our ports and the competitiveness in our distribution and logistic service.
The noble Lord, Lord Ezra, also drew comparisons in terms of investment. However, we must look at efficiency and competitiveness also. Other European governments may give more taxpayers' money to subsidise their railways but British Rail is one of the most efficient, ranking second only to the Netherlands in terms of train kilometres per employee. Therefore, BR is able to run an efficient railway at a much lower cost. For instance, I do not think it is widely known that InterCity has a better reliability and punctuality record than the TGV, the Italian railways and the German railways. It is important to bring out those points to put the situation fully in context.
Let me turn to the European issue. We are fully committed to the principle of the trans-European networks (known as TENs). We believe that they have a substantial role to play in strengthening the internal market and thereby the competitiveness of European business. The Commission's proposals for guidelines in three sectors—telecommunications and energy as well as transport—are now under consideration in Brussels. The current proposals for transport cover road, rail, combined transport, inland waterways, airports, ports and shipping navigation and air traffic control systems. The first part of the proposal deals with the general principles: the objectives, scope and priorities of the network for the selection of projects of common interest.
Those guidelines, when agreed, will designate projects of common interest. But while work has continued on the guidelines, the Christophersen group of personal representatives of heads of state and government, established by the European Council in December 1993, has been working to identify priority projects in transport and energy. In its final report to the Essen European Council in December, the group identified a list of 14 top priority projects in the transport sector. The transport projects were endorsed by the European Council and the member states were asked to make every effort to ensure that the projects were begun during 1996 at the latest. There are four

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projects of UK interest in that top priority list: the proposed new Channel 'Tunnel Rail Link; the West Coast mainline improvement; the upgrading of the railway link from Larne via Belfast through to the Republic of Ireland; and the Holyhead to Felixstowe road corridor (now referred to as the Ireland-UK-Benelux road link). We are pleased to have secured the inclusion of four important UK projects in the top priority list.
The clearest message that has emerged from the debate this evening is that there are no clear answers to the very complex problems that have been put forward. That is illustrated by the different approaches taken by noble Lords. Different emphases have been placed on road and rail transport, regional links, maritime priorities and so forth. Anyone who believes that there are simple answers to any of those problems cannot have considered the issues fully. The noble Lord, Lord Houghton of Sowerby, told the House that there was not much comfort in having to rely merely on the word "integrated". I believe that he was right to say that.
The Government's aim is to establish an efficient and competitive transport market to serve the interests of the economy and the community, taking due account of safety and environmental issues. We have set out our objectives in our sustainable development strategy; in the White Paper on competitiveness, and in our spending plans for future years. Future growth will present us with some difficult decisions. As has been said, my right honourable friend has called for a wider national debate on transport. Only then can we hope to meet the challenges that face us. I welcome all the contributions that have been made by noble Lords this evening.
Lord Ezra: My Lords, before the noble Viscount sits down, perhaps I may mention his reference to his right honourable friend's call for a wider debate. Is it intended to introduce that with a Green Paper?
Viscount Goschen: My Lords, my right honourable friend hopes to start off the wider national transport debate with a series of speeches. He has already met a number of important groups, including environmental groups, which seek to influence government policy on this issue. We shall have to see how the call for a debate develops. Decisions will then be made on whether any further action, such as the paper to which the noble Lord referred, needs to be taken.
7.57 p.m.
Lord Ewing of Kirkford: My Lords, perhaps I may say, with your Lordships' indulgence and permission and with great respect to the noble Viscount, that I hope when the debate develops that we will have much more open thinking than we have heard from the brief that has just been delivered in response to the debate. He came dangerously near to defending the status quo. The status quo is simply not good enough. We have to move
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forward. We have to develop our networks. Quite frankly, the brief was written for a debate which did not take place. The whole debate is still to take place.
Viscount Goschen: My Lords, when the noble Lord reads Hansard I think he will see that that is not the case. I put particular emphasis on the changes that have to be made and on the very severe problems that we shall have to face in catering for increased demand. I certainly did not endorse the status quo. I said that these challenges were difficult. They were complex problems which required very sensible and well thought out answers.
Lord Ewing of Kirkford: My Lords. I appreciate that the challenges are difficult. We need an open debate. Let me say to my noble friend Lord Houghton of Sowerby that I was worried about his pessimistic approach to obtaining consensus. One of my abiding memories of him dates from when I came to Parliament as a Member of the other House. In his role as chairman of the Parliamentary Labour Party he was able to hold the delicate balance between the late George Brown and the late Manny Shinwell in the great debates that were taking place in the Labour Party about whether or not we should join the EEC. If anyone can achieve consensus, it is my noble friend Lord Houghton.
I am grateful to all noble Lords who have taken part in the debate and to the Minister for his kindness and courtesy. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Letchworth Garden City Heritage Foundation Bill
8 p.m.
Lord Stewartby: My Lords, I beg to move that this Bill be now read a second time.
Put simply, the purpose of this Bill is to move the Letchworth Garden City Corporation from the status of a non-departmental body in the public sector to a charitable foundation answerable to the Registrar of Friendly Societies under the Industrial and Provident Societies Act. At this stage I should mention that extensive rules under the registrar will be required and I have placed in the Library a copy of what is described as the 19th draft of the Heritage Foundation rules together with the proposed policy statement by members of the board.
Perhaps I can begin by explaining briefly a little of the history and background of Letchworth Garden City. Letchworth itself is unique in that it was the first garden city established not only in this country, but indeed anywhere in the world. It was the brainchild of Ebenezer Howard and it came into being in 1903. Howard established it in accordance with three main principles which he developed the year before in his hook entitled Garden Cities of Tomorrow. Those principles, which continue to guide the running of the estate are as follows. First, that the best of town and country living is achieved by establishing a town in a rural environment so that its inhabitants can live near their place of work and can have easy access to the

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countryside and the farmlands producing their food. Secondly, that the increasing value of land over time resulting from the growing prosperity of the garden city should accrue for the benefit of the community. Thirdly, that the garden city estate should as far as possible be maintained as an entity.
I have two personal reasons for taking pleasure in being able to move a Second Reading of this Bill. The first is that for a number of years I represented the constituency of North Hertfordshire, in which Letchworth is situated, and came to admire the town and its inhabitants and what the corporation, following the precepts of Ebenezer Howard, had been able to achieve for them. The second is perhaps even more of a personal one, in that many of Howard's ideas were adapted for the village of Stewartby, named after my great-grandfather and built to accommodate employees of the company which he founded.
Originally, Ebenezer Howard raised the capital for his venture through a company entitled First Garden City Limited. But in the 1960s a property company started buying up shares in First Garden City Limited with a view to exploiting its assets. In order to prevent that the then urban district council promoted a Private Bill which became the Letchworth Garden City Act 1962.
The reason for the present Bill before your Lordships' House is a recognition that the present status of Letchworth. Garden City Corporation as a public sector body is anomalous. It arises from two factors. The first is that in order to guarantee the finances of the garden city corporation in its earliest stages, a guarantee was provided for recourse to Hertfordshire County Council in case the corporation fell short of funds. The second reason is that the Secretary of State currently appoints the majority of the corporation's board members, but he plays no part in the corporation's affairs and for many years the corporation has been in no way dependent upon public funds. Therefore the designation of the corporation as a public sector body is no longer appropriate. In effect Letchworth Garden City is already a charitable foundation and the purpose of this Bill is to convert it into one by law.
The Bill seeks to allow the new foundation to do all things that the corporation currently does—to protect the assets of the garden city estate; to ensure that the foundation has available to it the knowledge and experience necessary to run a complex undertaking; to protect the garden city's present tax-exempt status and to provide an effective operational structure that will stand the test of time.
There has been extensive consultation since those proposals were first brought forward in September 1992 and the corporation conducted them in a most conscientious fashion. Also, thorough consideration was given to the proposals in another place, taking into account many views and representations that were made. Indeed, significant changes were introduced as a result of the Committee stage. For example, an important addition to the Bill—the provision of an ombudsman for Letchworth—was made at the request of the Committee
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in the other place, as was the inclusion in the draft rules of a provision—Rule 70—for the principles of the Citizens Charter to apply.
The consultation process also strongly influenced the proposed arrangements for the nomination of governors and for other matters such as the provision for an annual town meeting open to all citizens of Letchworth; the right of the county council and district council governors to places on the board of management and so forth.
Perhaps I should say a word about the procedure for the nomination and appointment of governors because their role is crucial in the future of the garden city. The structure which was finally decided upon after extensive consultation includes a system of nomination by clubs, societies and voluntary bodies in the town whose activities correspond in particular to one or more of the stated charitable objects of the foundation. Those objects are set out in the Bill, in Clause 3, Schedule 1, and also in the rules. They are of fundamental importance. They identify the core activity of the foundation and are as follows. First, the preservation of buildings and other environmental features of beauty or historic interest within the garden city; secondly, providing or assisting in the provision of facilities for recreation and leisure; thirdly, promoting the advancement of education and learning within Letchworth Garden City; fourthly, promoting the relief of poverty and sickness within Letchworth Garden City; and, finally, supporting other charitable organisations and purposes within Letchworth for the benefit of the local community.
The corporation board were mindful of the need to identify closely with those objects. They were also conscious of the importance of having a sufficiently high number of governors to provide the expertise and experience necessary and to reflect the width and variety of interests found in Letchworth, but without having so many that their individual contributions were unduly diluted. That led to a proposal for a maximum of 30 governors, the majority of whom will be nominated by clubs, societies and voluntary bodies within the town together with the two local authorities with an interest in Letchworth. The remaining 14 will be appointed by the board of management with a majority drawn from residents of Letchworth. The intention is that the clubs and societies will put forward nominations who then come together in selection meetings corresponding to the objects of the foundation and that each selection meeting will nominate two governors. The board of management has no control or influence over which persons are nominated as governors and will be bound to appoint those nominated. The two local authorities—Hertfordshire County Council and North Hertfordshire District Council—as governors each have the right to a nominee, and the rules provide that the local authority nominees each have a place on the board of management.
The board of management will also use its powers of appointment of general governors to ensure that the knowledge and coverage necessary to the running of the foundation are available to it; that there is an adequate representation of, for example, the local business community and professional interests; and that those have a voice as well as the broad spectrum of residential

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interests in the town—freeholders, leaseholders and tenants alike—and that all those interests should be well represented.
The system has been very carefully devised to ensure a proper emphasis on the objects of the foundation, the effective running of the organisation and accountability to the town at large, both through the clubs and societies and through the general governors.
All in all, the framework I have described should provide a suitable basis for taking the Letchworth estate forward into the 20th century in conformity with the enlightened principles established by its founders more than 90 years ago. I hope therefore that the Bill will commend itself to your Lordships, accordingly.
Moved, That the Bill be now read a second time.—(Lord Stewartby.)
8.11 p.m.
Baroness Hamwee: My Lords, there is only one issue that I should like to raise this evening. It is a matter to which the noble Lord, Lord Stewartby, referred, but is not provided on the face of the Bill. That is the composition of the governing body to take over when the Letchworth Garden City Corporation becomes the Letchworth Heritage Foundation.
To find how the governors of the new body will be chosen, one has to look at the rules of the heritage foundation. As the noble Lord has mentioned, these are now in their 19th draft; but, after all, I recognise that solicitors do have to be kept in business. According to the rules as in draft —and also the proposed policy statement which I understand has been drawn up by the present board of management—the foundation is to have a board of management consisting, in the first instance, of seven founder governors. As the noble Lord has said, these will include two councillors from the county and district councils. The board may then appoint up to 30 governors—14 general governors, of whom half must reside in Letchworth, and 16 nominated governors selected, as we have heard, by clubs, societies and voluntary bodies with interests inside Letchworth. That sounds appropriate and is good so far as it goes; but I suggest that it does not go far enough.
The categories for nomination are listed in Rule 10. There are many groups which are barred from eligibility—to mention just two, residents associations and churches—unless of course the board considers that they fall within the terms of paragraph (gg) of Rule 10(b) (i), which provides a sort of catchall for representatives of:
"any other interest which is in the opinion of the board from time to time of significance within Letchworth Garden City in relation to the objects of the foundation".
On reading the equivalent provision in the policy statement —and this has only just occurred to me—I wonder whether it is quite the same. Paragraph 6(g) states:
"other charitable interests which the board considers to be of significance within Letchworth".
In other words, the distinction is that in the policy statement the interests have to be charitable ones. I am not asking the noble Lord to respond to this now—as I say, I have only just thought of this point—but it may
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be that because the objects referred to in the rules must be charitable objects, that translates in the policy statement into charitable interests. However, it seems to me that they are not quite equivalent. I am not sure that resident associations, for instance, will fall into this category because they may not be charitable interests.
The only echo of any sort of democracy is the indirect appointment of the two councillors on the board of management.
In May 1993, the local Liberal Democrats in Letchworth distributed forms to local residents in order to gauge public opinion. I understand that 85 per cent. of those who responded opted for the proposal that residents of Letchworth be elected by ballot from valid nominations; that they would be able to elect a majority and the remainder would be chosen by the present governors.
I understand that at this stage calling for governors to be elected may not be a practical proposition—and I am sorry that the matter was not pursued earlier—but I wonder whether there would be more confidence in the process if the list of clubs and societies was widened to include, perhaps, residents associations. Or, alternatively, paragraph (gg) could be made in some way more objective so that long-standing Letchworth residents—who are perhaps not members of the local cricket club, but are nevertheless good citizens of the town who deserve to have their interests reflected directly in the workings of the board of management—could feel that they had a stake in the selection of the governors of their own city.
8.16 p.m.
Lord Graham of Edmonton: My Lords, I apologise for the absence of my noble friend Lord Williams.
I know Letchworth and endorse what has been said about it being a lovely place. It has a place in the history of garden cities, including Welwyn Garden City and many others. The work of Ebenezer Howard is well known to those of us who have followed the attempts of benefactors of his kind this century.
I have had an opportunity of looking at the Bill, and I saw nothing wrong with it until I heard the noble Baroness, Lady Hamwee. She did not say that there was anything wrong with it, but she was clearly very well briefed. I understand why when the noble Baroness told us towards the end of her remarks where her brief came from.
This is the opportunity for matters to be: raised and questions to be asked. I have scribbled down a note to ask the noble Lord, Lord Stewartby, why we should bring about what, quite frankly—by any stretch of the imagination—is a major change in the legal nexus for a city. He went some way to reassuring me, but I should like him to satisfy me that the purposes behind it are wholly altruistic.
I understand that when one does something like this the ravages of a predator need to be taken head on—a possibility that might have emerged 30 years ago. I am delighted that the quick action taken against what might have been in the offing has been sufficient to deny a

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speculator, a developer or a group of people on the make from taking advantage of something over which local people and the community, through the law, have built.
I would ask the noble Lord to say a little more about consultations. I have scribbled down here "consultation and the results", and we have heard from the noble Baroness, Lady Hamwee, that there was a form of consultation by asking the people. It is an eminently sensible way of getting answers to ask the people what they think.
Will the noble Lord tell us that everything that I have heard is in the best interests of Letchworth? There must have been a body of opinion that objected to what was being done or, if not to what was being done, to how it was being done.
I should be grateful if the noble Lord, Lord Stewartby, could advise the House whether there has been what one would call opposition, dissatisfaction or unease in any shape or form. I would not want to quantify it because something of this kind could have got to this stage only if the noble Lord, who has my greatest respect regarding his service for his community and for his party, felt comfortable and able to bring it forward. However, I should like to know a little more about that.
I am delighted that the vehicle to be used is the industrial and provident society. As a good Co-op man, I am very familiar with the history of the industrial and provident societies and the manner in which they have been a vehicle for so much good work which provides opportunities for what is proposed here and a range of other community and communal activities, not least the establishment of co-operatives and the expansion of the co-operative idea.
Can the noble Lord say a little about the Letchworth commissioner? I plead ignorance. When I made my notes I wrote "ombudsman?" The noble Lord, Lord Stewartby, went some way to clarify the point. Is there a comparable person or position in post now before the Act comes into being? In other words, is this a renewal of something that is in existence? I am not frightened by the term "commissioner" because the ombudsmen are called commissioners for local government.
Perhaps I may raise a point which was also made by the noble Baroness, Lady Hamwee, who has great knowledge in this area. Why on the face of the Bill was not an opportunity found to spell out in schedules to the Bill not the nitty-gritty—that has to be worked out—but the structure proposed? Schedules to a Bill are provided in order to take off the face of the Bill a lot of detail which explains things. A schedule seems to be a sensible way of producing the democratic structure. Why was not such a schedule added to the Bill so that amendments to it might be moved at a later stage if one felt that what was proposed needed to be altered?
The noble Lord, Lord Stewartby, is lucky to have the opportunity on behalf of the people among whom he has lived, and whom he has served with distinction for so
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long, to bring the Bill before the House. I can see it quickly being passed by us. I hope it will then be a useful vehicle to enhance the beauty of Letchworth.
8.23 p.m.
The Earl of Lindsay: My Lords, it may assist if I intervene briefly to indicate the Government's view on this Bill, which has been so ably and conscientiously moved by my noble friend Lord Stewartby.
The Government recognise the need to safeguard the special nature of Letchworth as the first garden city and. to preserve its heritage, while also guarding against a repetition of events which led up to the Letchworth Garden City Corporation Act 1962. We are content with the Bill's proposals to create the Letchworth Garden City Heritage Foundation, thereby ending the corporation's anomalous treatment as a non-departmental public body. In addition, we see no reason why the proposal to create an industrial and provident society, with charitable status, should not provide an adequate safeguard to ensure that the affairs of the heritage foundation are conducted efficiently and effectively, and with due regard to financial propriety and regularity.
I therefore recommend to the House that the Bill be given a Second Reading and be allowed to proceed in the usual way to Committee for detailed consideration.
8.24 p.m.
Lord Stewartby: My Lords, with permission, perhaps I may respond briefly to those who have taken part in the debate. First, I thank my noble friend the Minister for his expression of support on behalf of the Government for a Bill which will enable Letchworth to have a second successful century of existence, retaining the original principles of the founder.
The noble Baroness, Lady Hamwee, raised the question of the composition of the governors and their method of appointment. She also asked whether an open franchise for citizens of Letchworth would be appropriate. Perhaps I may comment first on that point. It was very carefully considered but it was felt for two or three reasons that it would be less appropriate than the form now proposed. There have been over past years attempts to politicise the garden city corporation. They have always been strongly resisted. However, it was felt that if a significant number of places on the board were open to public election, even if that did not happen for the time being, there was a risk that at some time political influences might come to play an undue part in the affairs of the corporation and indeed might at times produce conflict between the foundation, as I should now call it, and one of the local authority bodies in whose area it lies. There was also a wider question as to how appropriate it would be for governors, who are in effect charitable trustees, to be elected by that kind of public means.
The system which has been recommended is an attempt to ensure two things: first, that the majority of governors shall be residents of Letchworth; and secondly, that they shall, as broadly as possible, represent the interests in the town which reflect the

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founder's original objectives but giving the hoard of management the opportunity to call on others to fill in the gaps. Those nominated by the voluntary bodies, clubs, societies and so on will provide a cross-section of a number of interests of Letchworth residents but they will not necessarily take into account the kind of things which the noble Baroness has sensibly raised, such as the leaseholders, residents generally, and so on.
I shall not try to give a legal answer to the very interesting point the noble Baroness raised by comparing paragraphs in the draft rules with paragraphs in the statement of policy but they are perfectly fair questions. I shall ensure that either through me, or directly, she gets a proper reply to the questions she asked. However, I can assure her that the idea behind the structure is to enable the board of management to be answerable to a group of governors who not only embody the direct charitable purposes of the original garden city concept but who are also equipped to deal with matters such as architecture, agriculture, local businesses, professionals, and so on, so that there is the proper mix.
From my own experience I can say that in the 1970s and 1980s there were distinguished persons on the board such as a local doctor, a local businessman, and so on, who contributed very much. Clearly, they would not be nominated, except by accident if they happened to be a doctor or a businessman, by the particular clubs. It will be important to ensure that the board contains the whole range of necessary experience.
Lord Graham of Edmonton: My Lords, if there is a query about the future, how was the present management or board on which the doctor and businessman were invited to serve peopled, and who had the power to do it?
Lord Stewartby: My Lords, I mentioned very briefly in passing that the majority of the board was appointed by the Secretary of State, but it was a small board. The members were appointed after extensive local consultation in order to get the appropriate range of skills. It was a very small board and therefore one did not have the opportunity of bringing in as many people as generally seems desirable.
I turn to the points made by the noble Lord, Lord Graham. I thank him for his very kind personal comments which I appreciate. He first asked about the consultation process. That was initiated with the proposals put forward in 1992 with public meetings and representations invited in Letchworth. In addition to those which were made at the time various representations were made to the committee on the Bill in another place and petitions were lodged and so on. The committee proceedings in another place went through the whole process from start to finish. Those who had made representations to the corporation in the consultation process frequently made further representations so that they could be considered by others. I believe that it is open to anyone to make such representations to the committee of your Lordships' House. If there are matters which are still unresolved those representations will be made and it will be in order to do so.
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Various objections have been raised on this; for example, there was a proposal to include specific provisions about future land use which would be exceedingly difficult to formulate. There are certain general principles already embodied in the preservation of the estate but to specify which pieces of land can be used for which purposes indefinitely would probably be impractical.
Other objectors were concerned about the accountability of the board. From what I have said I hope that the noble Lord will have gathered that the new structure provides very much wider accountability to the interests in the town and it is something which I would have welcomed in my time, but it was not within the constitutional structure at that stage.
The noble Lord also asked about the commissioner. The Letchworth ombudsman will have powers broadly analogous to those of a local government ombudsman under the Local Government Act 1974. He will be concerned with maladministration in the foundation but not with contractual or commercial transactions. He will be totally independent of the foundation and will be appointed by the president of the new society. He must also be somebody with no previous interest in the foundation or the town. That is an innovation. Because the garden city has not been a local authority it has not partaken of the legislation which applies to local authorities. It is therefore a move in line with up-to-date arrangements for local authorities.
The noble Lord asked why the change was being made and why it was necessary. I go back to the point that the current constitution is anomalous in many respects. I have already explained that I do not believe that it provides wide enough accountability. But, purely in constitutional terms, to have what is technically a public body, and therefore in the public sector, for what is in substance a charitable foundation creates a great many difficulties. For example, its expenditure has to be vetted by the Government not because there is anything improper about it but merely because technically it is part of the public sector. As I said, the public sector status derives from the fact that the Secretary of State has been appointing the majority of the board and the residual funding guarantee from the county council in case, in the early stages, the corporation had not got enough resources of its own. It is now very prosperous; the town has been successful and the estate is more valuable. It has a good revenue, so that provision no longer applies.
Lord Graham of Edmonton: My Lords, as regards Schedule 1 paragraph 1(d) and the objects of the foundation, can the noble Lord tell us what is meant by,
"promoting the relief of poverty and sickness within Letchworth Garden City"?
The mind boggles because one imagines that there is not a community in the country which would not like a group of good people promoting the relief of poverty and sickness within their community. What is in the minds of those promoting this provision and what is the manner in which they would do that?
Lord Stewartby: My Lords, one area is housing. The essence of the garden city is the garden city estate.

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There is a great deal of public housing which is not local authority housing. Nevertheless it is owned by the garden city. It has enabled the provision of better housing in many cases. In other areas such as health and so on, there is a hospice in Letchworth and various worthy causes of that kind which can receive support from the garden city.
I do not want to wear your Lordships' patience any longer with the details because I believe that they should be very thoroughly considered by the committee. A great deal of what we are discussing is very technical. Anyone like the noble Baroness who has looked at the 19th draft of the rules will know that there is a great deal of detail to be looked at. I strongly support the general principle. It will create greater accountability in the first garden city. It will also provide a structure which recognises the actuality of the fact that this is a charitable foundation which we all hope can continue the original aspirations of its founder.
On Question, Bill read a second time, and committed to a Select Committee.
Electricity Generation Lands (Rateable Values) (Scotland) Order 1995
Electricity Generators (Rateable Values)(Scotland) Order 1995
Mines and Quarries (Rateable Values)(Scotland) Order 1995
Electricity Generators (Aluminium)(Rateable Values) (Scotland) Order 1995
Electricity Distribution Lands (Rateable Values) (Scotland) Order 1995
Water Undertakings (Rateable Values)(Scotland) Order 1995
Formula Valuation (Revocations)(Scotland) Order 1995
Docks and Harbours (Rateable Values)(Scotland) Amendment Order 1995
Electricity Transmission Lands (Rateable Values) (Scotland) Order 1995
British Gas plc (Rateable Values)(Scotland) Order 1995
8.37 p.m.
The Earl of Lindsay The Earl of Lindsay rose to move, That the draft orders laid before the House on 18th and 23rd January be approved [6th Report from the Joint Committee].
The noble Earl said: My Lords, the 10 draft orders before the House tonight relate to the implementation of the forthcoming rating revaluation in Scotland. These all follow a well-precendented pattern and, in introducing them, I will therefore touch only briefly on their detailed provisions.
The coming revaluation is being conducted on a fully harmonised basis north and south of the Border with assessors and the Valuation Office Agency working closely together to approach subjects on a similar basis. This allows special ad hoc provisions that attempted to; iron out previous differences to be removed. Also, the emerging outcome of the revaluation has allowed the Secretary of State for Scotland to fix the new rate poundage at the English level, and rates burdens should, therefore, now be fully harmonised. Together, these allow the abolition of industrial derating and the revocation of special orders relating to petrochemical plants and caravan sites. It is with these matters that the revocations and the mines and quarries order are concerned.
For the utility undertakings concerned, the remaining orders roll forward the prescription of rateable values for these major undertakings and others in direct competition with them, such as independent electricity generators. Here, the general level of values has been rolled forward on a fairly static basis to reflect the emerging outcome of the revaluation throughout Great Britain. The valuations are on the same basis as those for England and Wales which are contained in equivalent orders that have already been approved. The arrangements for annual adjustment and apportionment to rating areas which are incorporated in these orders reflect the well-established arrangements that have operated successfully, with the approval of the House, in previous years. I commend these orders to the House, and I beg to move.
Moved, That the draft orders laid before the House on 18th and 23rd January be approved [6th Report from the Joint Committee].—(The Earl of Lindsay.)
Lord Graham of Edmonton: My Lords, my noble friend Lord Carmichael apologises for not being here. He has asked me to say that there is nothing exceptional in what has been done and the orders meet with the approval of this side of the House.
On Question, Motion agreed to.
House adjourned at twenty-one minutes before nine o'clock.