Lords Sitting of 24 April 1996

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Blackburn.
The Earl of Clancarty The Earl of Clancarty—Sat first in Parliament after the death of his uncle and made the solemn Affirmation.

NATO: Enlargement
Lord Belhaven and Stenton Lord Belhaven and Stenton asked Her Majesty's Government:
What steps they are taking to expedite the admission of Poland and her central European neighbours (the Czech Republic, Hungary and Slovakia) to NATO in the light of Her Majesty the Queen's expressed support for Poland's wish to join the alliance in her address to the Polish Parliament on 26th March.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, we remain committed to NATO's enlargement, and are contributing actively to the Alliance's work to prepare for the admission of new members.
Lord Belhaven and Stenton: My Lords, I thank my noble friend the Minister for her Answer. However, would my noble friend care to comment on a recent report which states that President Yeltsin said that an agreement could be worked out to include the provision that no country may be accepted into NATO without Russia's agreement? Further, does my noble friend appreciate the fact that there is a sense of urgency so far as concerns those countries? Their rapid economic development and security could be endangered by continued delay and uncertainty in the matter.
Baroness Chalker of Wallasey: My Lords, I should tell my noble friend that we are aware of the Russians' concerns, but they are really misplaced. Neither NATO nor its enlargement pose any threat to Russia. On the contrary, we are convinced that, if properly handled, enlargement will contribute to efforts to enhance stability and security in Europe as a whole. We have told President Yeltsin that we take full account of Russian concerns. However, I do not believe that it would be right to allow Russia to exercise a veto over other sovereign nations' wish to join a defensive alliance which has provided the cornerstone of all our security for so long. Indeed, we have made that clear.
I should also tell my noble friend that, so far as concerns the economic development of such countries, we are very firmly behind them. All our work through the know-how fund, and in other ways, will help. But, obviously, as long as there is doubt about Russia's actions in the future, it will have an effect on the
1130
stability and the growth of those countries. That is why we should put the issue to rest as soon as we possibly can.
Lord Jenkins of Putney: My Lords, is the Minister sure that Russia does not consider the acceptance of former Warsaw Pact countries into NATO any threat to Russia?
Baroness Chalker of Wallasey: My Lords, I believe that Russia is making a grave mistake if she thinks that NATO is a threat to Russia. All along we have sought to convince them—and, to a large extent, this has been accepted by President Yeltsin—that Russia has an important contribution to make to European security. Indeed, in our discussions the Russians have been made well aware of the benefits of developing a strong NATO-Russian relationship in parallel with enlargement. That debate continues, but it is one that has broadly been accepted. One has to understand that they are going through a pre-election period in Russia.
Lord Gisborough: My Lords, while we all accept and know that NATO is no threat to Russia, is it not a fact that the introduction of NATO near to the Russian border could be an encouragement to some ultra politicians on one side or the other which could cause long-term damage to the West?
Baroness Chalker of Wallasey: My Lords, my noble friend is right in one sense. However, we have made it absolutely clear that, in working with Russia for that greater stability of which I spoke just now, NATO is likely to do nothing provocative. We have also made it quite clear that the Partnership for Peace, which is of great importance, gives a good opportunity for really close co-operation with NATO. Even though there are some nationalist forces which would pursue the line suggested by my noble friend, I believe that the majority of people know that that will not be so. Certainly NATO will not act provocatively.
Lord Mason of Barnsley: My Lords, I am sure that the Minister is aware of the importance of the attitude of NATO and the need to try to co-ordinate the eastern European countries into the NATO alliance. However, is the Minister also aware that the opposition to Mr. Yeltsin is very strong—indeed, I believe that it will continue—and that there is the likelihood of a change of government which might mean that there will be stronger opposition still?
Baroness Chalker of Wallasey: My Lords, I have always thought it extremely dangerous—as the noble Lord will know—to predict what is to happen in an election, certainly even three months away from it, let alone further ahead. In the next three months a number of things may change. It is quite evident from the substance of the discussion in Moscow over the weekend that Mr. Yeltsin's prospects are a good deal stronger now than they were a few weeks ago. I urge the noble Lord not to write him off. Although only three names are being bandied about in our press, there are other Russians who see the virtue of working much

1131
more closely with western Europe; who see the virtue of Partnership for Peace; and who are determined to work out the new relationship in a positive manner.
Baroness Blackstone: My Lords, can the Minister tell the House whether the Polish Government have made any commitments on the financial costs involved? Does she agree that this must be resolved before final steps can be taken to admit Poland to NATO given the pressure on the defence budgets of NATO members?
Baroness Chalker of Wallasey: My Lords, at present I do not believe that Poland has made any commitment on costs. We are, of course, aware of the problems. That is why there needs to be a steady and continuing effort to resolve the problems that exist. The problems that Poland would experience if she were not to have the opportunity to join NATO would be far greater than even the financial problems that we know of already.
The Earl of Lauderdale: My Lords, does not my noble friend agree that to many Russians the stretch of country from the Oder-Neisse line east and the Baltic states are as significant to them strategically as the Low Countries are to Britain?
Baroness Chalker of Wallasey: My Lords, my noble friend is absolutely right. They are strategically important but we view this not just in terms of what lies on one side or the other of the Oder-Neisse line but as regards the whole of the community in Europe. Given the choice that has been made by Poland and all the other nations in the area, including the new Länder in Germany, it is quite clear that people want to work out a peaceful way of living and working side by side. We who have the strength and experience of having done this in western Europe should be doing all we possibly can to assist this to happen for the sake of Poland and the other countries, and for peace in Europe as a whole.
Lord Campbell of Alloway: My Lords, is my noble friend aware of any opposition on the part of other members of the European Union to this application?
Baroness Chalker of Wallasey: No, my Lords, I am not. I shall make inquiries but I cannot help my noble friend at this moment.

Civil Service College
2.45 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
In view of present uncertainty, what are their proposals for the future of the Civil Service College.
Baroness Miller of Hendon: My Lords, Her Majesty's Government recognise that the Civil Service College has a continuing role in the provision of training and development courses self-evidently linked to the Civil Service. I am pleased to announce to my noble friend that the college is now developing a number of
1132
partnerships with the private sector which will enhance its status in the provision of courses for those in the public and private sectors.
Lord Peyton of Yeovil: My Lords, first, I am much obliged to my noble friend for her courtesy in this matter. I hope I may ask her whether she will deliver a message to her right honourable friends to the effect that, while a few windows open in such an institution can only do good, nevertheless it would seem more than a little eccentric to put the control of a college, the purpose of which is to train civil servants, in the hands of those who have no knowledge whatever of the running of that service.
Baroness Miller of Hendon: My Lords, I do not imagine that my noble friend would expect me to start delivering messages when the right honourable gentleman whom he might wish to receive the message can no doubt read Hansard himself. However, it is right to say that, as with other government agencies, we have considered a number of options. As I said before, we have made no proposals to change the position of the Civil Service College.
Lord Richard: My Lords, is the Minister aware that, when we on this side hear such phrases as "partnerships with the private sector" in relation to the Civil Service College, we become extraordinarily suspicious having regard to the experience we have of the way in which the Government have handled the creeping privatisation of the public services in recent years? The noble Baroness said that the Government have considered various options in relation to the Civil Service College. Can she give us an assurance that the option of privatisation has been ruled out?
Baroness Miller of Hendon: My Lords, I do not think the noble Lord should get too excited about what he has heard in the past: The noble Lord would not expect me to comment on any plan that the Government might have in the future. I repeat that we have made no proposals to make any change to the position of the Civil Service College in the public sector. However, I thought that the party of the noble Lord opposite was now quite interested in privatisation.
Lord Richard: My Lords, I am sorry to come back to this matter but it is important and it is the noble Baroness who has the official brief. Is privatisation of the Civil Service College ruled out or is it not?
Baroness Miller of Hendon: My Lords, I do not think it is appropriate to assume that I shall commit this Government or any successive government indefinitely in the future. I am quite sure that the noble Lord, Lord Richard, would not expect me to do that. He may shake his head but I am absolutely certain that he would not expect me to do that. I heard one of his noble friends suggesting that the party opposite would win the election, which of course it will not. How do we know what the party opposite will do in future?
Lord Allen of Abbeydale: My Lords, the Civil Service College has never quite fulfilled the high expectations we

1133
held out for it on the Fulton Committee but it performs a valuable service. I heard with interest the assurances, limited though they are, which the noble Baroness has just given.
Can the noble Baroness give us one further assurance? Has the question of converting the college into a trading fund—to use the modern jargon—been completely ruled out? It is a fate which overtook a comparable education institution, the Fire Service College, with not very happy consequences to date.
Baroness Miller of Hendon: My Lords, all I can say is that a number of options are being considered which will involve joint approaches with private sector organisations. Those discussions are at a sensitive stage; and I do not wish to risk prejudicing progress by being more specific.
Lord Beloff: My Lords, is the Minister aware that, at the height of the influence and fame of the Civil Service, there was no Civil Service College? Civil servants were thought to be adequately prepared by following proper courses at real universities. Would we not perhaps do better to go back to that arrangement?
Baroness Miller of Hendon: My Lords, my noble friend Lord Beloff is a great expert on this subject and no doubt his views will also be considered.
Lord Allen of Abbeydale: My Lords, when the final decision is taken, will the House be informed? Shall we be given an opportunity to debate the issue?
Baroness Miller of Hendon: My Lords, as noble Lords know, these matters are for the usual channels. The usual channels will have an opportunity to consider the matter if the noble Lord wishes to put it to them.
Baroness Farrington of Ribbleton: My Lords, will the Minister assure the House that, in determining a balance between public and private sector use of the Civil Service College, the needs of the Civil Service rather than financial revenue to the college will be paramount? Does the Minister also agree that the Government's commitment to the European Year of Lifelong Learning involves lifelong training? Initial training for civil servants at universities is excellent, but there is a need for updated training during the professional life of civil servants.
Baroness Miller of Hendon: My Lords, I can give that commitment. The college provides a wide range of courses. It does its very best to look after the civil servants who attend for the courses, and others too. Noble Lords should know that civil servants do not use the Civil Service College alone, as my noble friend Lord Beloff said. Something like 35 per cent. of senior management attend there for the courses. But, overall, only 5 per cent. of the Civil Service do so. The remainder of civil servants are trained in their own departments by other civil servants.
Lord Peyton of Yeovil: My Lords, while the last thing I would wish to do is to load my noble friend with unfriendly messages to her colleagues: nevertheless,
1134
perhaps I may ask her to give them some very friendly advice. Words such as "a number of options are being considered" are a very good way of stirring up suspicions which may not be necessary.
Baroness Miller of Hendon: My Lords, my right honourable friends in the other place are, as I am, always delighted to receive advice from the noble Lord.
Lord Ewing of Kirkford: My Lords, will the Minister dispel the theory that only those with a university education are suitable for entry to the Civil Service? Is the noble Baroness aware that, of the private secretaries that I had during my time as a government Minister, two had left school at 15 years of age and both were, and still are, outstanding civil servants?
Baroness Miller of Hendon: My Lords, that indicates the excellence of ordinary education; and I am delighted to hear that.

Government House, Hong Kong
2.54 p.m.
The Earl of Kinnoull The Earl of Kinnoull asked Her Majesty's Government:
What thought has been given to the use of Government House, Hong Kong, after 30th June 1997, and whether it would be suitable for use as a British cultural centre.
Baroness Chalker of Wallasey: My Lords, Government House is the property of the Hong Kong Government and as such will belong to the Government of the Hong Kong Special Administrative Region after the transfer of sovereignty. It will be for the Government of the Special Administrative Region to decide upon the future use of the building.
The Earl of Kinnoull: My Lords, I thank my noble friend for that reply. While it is not beyond the bounds of possibility to purchase or to lease this historic and recently listed building after June 1997, if the Special Administration has no appropriate use for it—for instance, as the chief executive headquarters—should not the concept of a British cultural centre, or some other use, be developed not only to mark the dynamic achievements of the recent past of the Hong Kong peoples but to add further to their confidence of continued British influence and interest in their future?
Baroness Chalker of Wallasey: My Lords, what my noble friend says is interesting. We do not own the building. Like all land in Hong Kong, it is owned by the Hong Kong Government. It is quite sensible that we should have a proper functional building for the future British Consulate-General and the British Council which we are planning and working on at present.
The future use of the building lies, as with all Government-owned property, entirely within the autonomy of the Hong Kong Government. I think that there will be many uses to which this wonderful

1135
building could be put. My noble friend may be interested to know that Government House has recently been declared a monument by the Antiquities and Monuments Office in Hong Kong with the firm intention that the building and the grounds be maintained, irrespective of the future use to which they may be put. The future use, therefore, is yet to be decided; but I am sure that it will be a good one.
Lord Wilson of Tillyorn: My Lords, as a past inhabitant of that historic building, perhaps the Minister will forgive me if I do not comment further on it. In terms of a cultural centre, does the noble Baroness agree that the British Council does a tremendous job in Hong Kong and deserves adequate funding in the future so that it can be one of the main platforms for a continuing association at cultural level between the United Kingdom and Hong Kong after next year?
Baroness Chalker of Wallasey: My Lords, I can assure the noble Lord that that will be the case. The British Council will have proper funding.
I am also assured that that building will be properly used. It is a great tribute to the history of Hong Kong and it should be preserved as such. The British Council may well be housed in a more modern building more suitable for teaching, and for the exhibitions which the British Council puts on. However, Government House will be protected.
Lord Bruce of Donington: My Lords, will the noble Baroness give the House a direct undertaking that the building concerned will not meet the same fate as County Hall?
Baroness Chalker of Wallasey: My Lords, I think it highly unlikely that that building will meet what the noble Lord, Lord Bruce of Donington, calls the same fate as County Hall for the simple reason that the Hong Kong Government have run that beautiful house in a way in which we only wish that the late Greater London Council had run County Hall.

Dyslexia
2.58 p.m.
Lord Addington Lord Addington asked Her Majesty's Government:
Whether dyslexia is classed as a disability within the meaning of the Disability Discrimination Act 1995; and, if so, what definition of dyslexia is used in this context.
The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, the Disability Discrimination Act defines disability as a physical or mental impairment which has a substantial and long-term adverse effect on a person's ability to carry out normal day-to-day activities. Anyone with dyslexia meeting this definition will be protected by the
1136
provisions of the legislation. Effects which are severe or serious would clearly satisfy the requirement that effects should be at least substantial.
Lord Addington: My Lords, I thank the Minister for that reply. I must declare an interest. I am dyslexic. Indeed, perhaps it may be said that I am one of the most "out" dyslexics in the country. Under the draft guidance inability to fill out a long and complicated form and inability to read well under pressure are not regarded as a disability. Does the Minister agree that this definition would exclude dyslexics? Dyslexics have problems with written symbols, especially under pressure and at speed. Would such an exclusion not mean that dyslexics by definition would be excluded from the benefits of the Act?
Lord Mackay of Ardbrecknish: No, my Lords, I do not believe that it would, by definition, mean that dyslexics would be excluded from the benefits of the Act. The Disability Discrimination Act gives a list of the ways in which an impairment should be taken to have an effect on normal day-to-day activities. One of those categories is memory or ability to concentrate, learn or understand. That is most likely to be the one in respect of which people with dyslexia can be brought within the definitions of the Act.
I assure the noble Lord that we shall examine the draft of the guidance which we intend to produce to ascertain whether extra guidance is needed on whether lesser degrees of dyslexia are covered. We will also look at the employment code of practice to see whether it should include examples relating to people with dyslexia.
Lord Ashley of Stoke: My Lords, does the Minister agree that there is room for interpretation in the definitions of the Act which he has just given to the House? It would be quite wrong to have a rigid demarcation of what is and what is not a disability, because it is not the label that counts so much as the consequence of the condition. Does the Minister agree that the best way of dealing with it would be to include all conditions which have a disabling effect? The strict terms of the Act would prevent any abuse of that kind of provision.
Lord Mackay of Ardbrecknish: My Lords, those who took an interest in the debate on the Bill will realise that it is a difficult issue. The kind of definition which the noble Lord, Lord Ashley, has just enunciated would probably encompass every one of us. It certainly encompasses me in its wider aspects. Sometimes I feel discriminated against, especially when the Opposition have a go at me.
Noble Lords: Never!
Lord Mackay of Ardbrecknish: My Lords, we must be sure that the definitions we make of disability and the people who are encompassed by the Act are clearly seen by the public to be disabled. Otherwise, the provisions will not have the helpful effect that we all hope for for disabled people.
Lord Renwick: My Lords, I am somewhat reassured by my noble friend's second answer. I declare an

1137
interest as a former chairman and current vice-president of the British Dyslexia Association. Does the Minister agree that we ought to show consistency with the Education Act 1993? Ministers in another place stated clearly then that a special educational need, whatever the cause, should have available a special educational provision. I hope that my noble friend's second answer will be followed through.
Lord Mackay of Ardbrecknish: My Lords, I assure my noble friend that we are taking the whole subject of the guidance and the employment code seriously. We understand the reliance which will be placed on them. However, with a disability of any kind there is a problem with the continuum of seriousness. Someone who is only mildly disabled, perhaps mildly deaf, is in a different position from someone who is seriously deaf. As I said in my reply to the noble Lord, Lord Ashley, we must define those who are seriously disabled and whose disablement, in the words of the Act, causes them
"substantial and long-term adverse effect".
We must be careful that we clearly define them and do not encompass people who are not disabled in the true meaning of the word.
Lord Merlyn-Rees: My Lords, the problem is that discrimination against dyslexics applies in education as well. Will the Minister agree that dyslexic teaching is a highly specialised part of special needs teaching? When a local authority school, an opted out school or any other school declares that it provides special needs teaching, does it mean that it has properly trained teachers for dealing with children who suffer from dyslexia?
Lord Mackay of Ardbrecknish: My Lords, one must differentiate between the various degrees of dyslexia. There will be children with mild dyslexia who will have little or no problem with learning in the same way, in the same class and with the same teacher as all other children. But when it comes to serious aspects of dyslexia and children who are adversely affected, special educational needs are there. The teachers who are trained to do special teaching are trained to do it across a wide range of the special difficulties which come to them. It would be totally impractical to have specialised teachers for each form of disability. Teachers trained in those specialties are trained across the broad spectrum.
Lord Campbell of Alloway: My Lords, is the Minister aware that the problem of the definition' of dyslexia is deep-seated? At one time the courts held that it could not be related to learning difficulty and constitute a special educational need application. Then the courts changed their view and now it can be. The definition that the Minister proposes seems eminently sound and sensible, with a substantial element attached. There is clearly a need for a code of guidance and further direction.
Lord Mackay of Ardbrecknish: My Lords, I thank my noble friend for his comments. We are considering whether the guidance should contain some examples which would indicate borderline cases where a person
1138
may fall on one side of the line as opposed to the other. They will be difficult issues, but I assure the House that they will be treated with considerable sympathy.
Baroness Hollis of Heigham: My Lords, first, we thank the Minister for clarifying the position today. It is helpful and takes us forward on the issue of dyslexia. We are delighted that the Government intend that severe dyslexia should be included in the definition of disability. May I assure the Minister that the noble Lord, Lord Addington, was absolutely right that the draft guidance and code of practice do not do what the Minister would like? They must therefore be changed. As they stand, they would exclude the cases which the Minister agrees should be helped.
Secondly, what other representations have been made to the Minister about the code and the guidance? What other areas and forms of disability are inappropriately covered by the Act? In what ways is the Minister minded to change the code and the guidance?
Lord Mackay of Ardbrecknish: My Lords, I am not entirely sure what the noble Baroness picked up from my answer. The definition of disability in the Disability Discrimination Act is broadly based in order to cover a whole range of disabilities. We believe that it will cover people with dyslexia if there is a substantial and long-term adverse effect on a person's ability to carry out normal day-to-day activities.
In regard to the consultation exercise, over 13,000 packs on the employment code of practice and the guidance on the definitions were sent out and over 700 responses received. I cannot give any detail on the over 700 responses. However, we and the Department for Education and Employment are treating all the responses seriously, including the one from the British Dyslexia Association.

Northern Ireland (Entry to Negotiations, etc) Bill
3.8 p.m.
Brought from the Commons earlier this day and printed pursuant to the Standing Order 48; read a first time.

Business of the House: Debates this Day
Lord Strathclyde: My Lords, on behalf of my noble friend the Leader of the House, I beg to move the Motion standing in his name on the Order Paper. In doing so, I should also like to say a word about today's debates standing in the names of my noble friends Lord Montagu of Beaulieu and Lord Willoughby de Broke. In the debate of my noble friend Lord Montagu, other than the mover, the Front Bench spokesmen and the Minister replying, speakers will be limited to nine minutes. In the debate of my noble friend Lord Willoughby, other than the mover and the Minister replying, speakers will be limited to 11 minutes. I should remind all noble Lords speaking in these

1139
debates that if any noble Lord were to speak at greater length, it would be met, I am sure, by the strongest disapproval of subsequent speakers in those debates.
Moved, That the debate on the Motion in the name of the Lord Montagu of Beaulieu set down for this day shall be limited to three and a half hours, and that in the name of Lord Willoughby de Broke set down for this day to two and a half hours.—(Lord Strathclyde.)
On Question, Motion agreed to.

Tourism
3.10 p.m.
Lord Montagu of Beaulieu Lord Montagu of Beaulieu rose to call attention to the contribution of tourism to the economy and employment and to the need for Her Majesty's Government to establish and co-ordinate long-term policies to ensure its continuing success; and to move for Papers.
The noble Lord said: My Lords, in moving this Motion, I welcome the fact that it will be debated concurrently with the one tabled by the noble Lord, Lord Elibank, whose Motion deals specifically with the report published last February by the Select Committee on European Affairs entitled Tourism in the European Community, the findings of which I freely endorse, as, I understand, do the Government.
Tourism has been debated in this House several times in recent years, reflecting the importance with which the subject is viewed by the House. Inevitably, this debate has attracted many expert speakers, including the two maiden speakers, my noble friend Lord Broughshane and the noble Lord, Lord Feldman, both of whom have special experience in the contribution that the arts make to tourism and whose views I am sure the House is anxious to hear.
First, I must declare my interests. It is over 40 years since I first became involved in tourism, when I first opened Beaulieu to the public and created the National Motor Museum. Since then, it has received over 20 million visitors. I have been president of the Southern Tourist Board since its inception, and am currently president of the Tourism Society. I have been involved with the British Tourist Authority since 1952, and was a founder member of the BTA Heritage Committee and the first president of the Historic Houses Association which it spawned. On my frequent overseas promotional trips on behalf of British tourism, I have been made well aware of the importance of the heritage to tourism—a fact borne out by all BTA research. Equally, it is necessary to state that tourism is also very important to Britain's heritage which, without the income it derives from tourism, would be in a very parlous condition today.
Throughout the past 30 years, when so many of our traditional industries have suffered decline, tourism, by contrast, has grown consistently in economic importance and the number of jobs it sustains in businesses—large and small—in cities, towns and the countryside throughout Britain. It seems a long time since anyone
1140
dared to describe employment in tourism and other service sector industries as "Mickey Mouse" jobs or even asserted that tourism was not an industry at all. Let me give the House a few facts, in the hope that it will excuse subsequent speakers from the need to repeat them too often.
Last year, British tourism earned some £37 billion, including foreign exchange earnings of £13 billion. Tourism now accounts for one-third of all our services sector and is our fifth largest export overall. It employs 1.7 million people—more than the construction industry and five times as many as the car industry. Tourism growth is a global phenomenon and has undoubtedly been one of the country's post-war success stories. Thirty years ago, our earnings from overseas visitors amounted to only £190 million, compared with today's £11.7 billion. Over the same period, with the growth of leisure time and affordable air travel, the number of overseas visitors has increased from just over 3 million to 23.6 million last year. Britain is currently fifth in the world in terms of tourism earnings.
In 1969, the growing importance of the industry was recognised in the Development of Tourism Act which created four statutory tourist boards: the British Tourist Authority, responsible for promoting Britain overseas, and the national boards of England, Scotland and Wales. There is, of course, in addition the Northern-Ireland Tourist Board, set up under separate legislation and ably chaired by the noble Lord, Lord Rathcavan. Unfortunately, he is unable to be with us today, but would have reported that one of the happy results of the recent more peaceful time in Northern Ireland is the substantial growth in tourism in that part of the United Kingdom.
The statutory tourist boards, together with the 13 regional tourist boards in England, the area tourist boards in Scotland and the tourism companies in Wales, have all played a crucial role in helping to co-ordinate and improve the performance of the industry, composed mainly as it is of very small businesses.
Tourism.is set to be the world's biggest industry by the year 2000, and is becoming increasingly competitive. This afternoon, I should like to look to the future rather than dwell on the past, and to discuss some of the developments I think are needed to ensure that tourism in this country reaches its full potential and continues to make such a large contribution to our economy.
I have been most encouraged that this Government have continued to recognised the importance of tourism, not least by maintaining funding for the tourist boards in the latest public spending round, but also by finding extra funds for the promotion of London. I must pay a sincere tribute to the present Secretary of State for National Heritage for the keen interest she has taken in the future fortunes of the industry. I know that she shares my awareness of the essential role that tourism plays in supporting the heritage, our museums, and the arts and culture which are vital areas of our national life.
I have just quoted some encouraging figures about the tourism industry. However, some figures are less impressive, and should give us all pause for thought.

1141
Between 1980 and 1990, international tourism to the UK grew at an annual rate of 5.7 per cent. That sounds good, until you compare it with the highest growth areas—East Asia and the Pacific—where the average annual growth was an amazing 15 per cent. The House will see the scale of competition we are up against and the relative success of our performance to date.
Important as international tourism is to the UK, which is what so many people think of when tourism is mentioned, domestic tourism is even more vital to this country and is many times bigger in terms of earnings and visitor nights than overseas business. Very few tourist operations can survive on income from overseas visitors alone, and we ignore the importance of domestic tourism at our peril. Over the past 10 years, the balance of spending by British residents on overseas and home holidays has completely reversed. In 1983, less than half the money spent by the British on holidays went on holidays abroad. By 1993, well over half the money flowed overseas, stimulated by the well-organised and more cheaply priced package holiday business. The situation has worsened further since then, and we are currently running a deficit averaging over £4 billion per year on the tourism trade account.
No longer can we rest on our laurels and assume that people will automatically wish to take their holidays here. Domestic and overseas visitors have to be better informed about Britain and persuaded that this country offers what they want in a holiday, at a price they can afford and which they think offers good value for money. The Government, the tourist boards and the tourism industry all have a part to play.
The Government will continue to have a crucial role in ensuring tourism's continuing success, both directly and through funding the tourist boards. Apart from setting the right economic climate for growth, I should like to see the Department of National Heritage acting as an active champion of tourism in Whitehall, making sure that tourism's needs are taken into account when other policy areas, such as transport and planning, are being discussed. So often the needs of tourism appear not to be adequately considered. I recall that the noble Lord, Lord Young of Graffham, when he had ministerial responsibility for tourism, set up an interdepartmental committee to ensure that tourism's interests were not neglected—but that seems to have fallen by the wayside in recent years. I should like to see it revived.
I shall also refer briefly to the work of the tourist boards. Overall, they do a good job, but there are some areas which need addressing. The British Tourist Authority, as usual, continues to do excellent work overseas, as I know from my visits abroad and experience of its work and reputation in all our major markets. Each year it picks up more accolades for its work—the BTA has been voted by the trade as the "top tourist office" in countries as far apart as Australia, the US and Ireland; and most recently it won the prestigious Best Tourist Office in Europe award at the International Travel trade fair in Berlin. The BTA produces excellent value for money for taxpayers. Independent research has shown that £757 million of our tourism earnings from overseas was a direct result of BTA activities; or, put another way, the return to the
1142
economy is £23 for every £1 of BTA's grant-in-aid from government. Without the BTA, the 200,000 or so small operators in the British tourism industry would find it almost impossible to promote what are, in effect, critical "export" markets, particularly in Japan and other fast-growing Near and Far East markets.
In the new markets, in the face of intense international competition, it is vital that our promotional efforts are co-ordinated under a British banner, as happens currently through the BTA. I should be very concerned if the Labour Party's proposals for Scottish and Welsh devolution resulted in further fragmentation of that effort and a consequent weakening of the British image overseas. It would be detrimental not only for Britain as a whole, but particularly for Scotland and Wales.
The current statutory tourist board structure is no longer ideal. While it works well in most activities most of the time, that is not always so, particularly as there is no means of achieving agreement on all vital matters.
Moreover, Britain's tourism actually has no undisputed leader. Despite the much welcomed commitment to tourism of the Secretary of State for National Heritage, and also my noble friend Lord Inglewood, she is only too well aware that no individual can speak for tourism for Britain as a whole, as the administration and budgets of tourism in Scotland, Wales and Northern Ireland are administered by their respective Secretaries of State.
The independence of the national boards can cause unnecessary differences in essential aspects of the industry, such as research and quality standards, when, to serve best the needs of British industry, greater co-ordination is essential.
I do not know how many noble Lords present are familiar with the fact that the grant-in-aid to the English Tourist Board, which also has to fund essential services carried out by English regional boards, has been cut quite savagely over recent-years from over £23 million in 1988–1989 to only £10 million in the last and current years. Perversely, the Scottish and Welsh Tourist Boards over the same period of time have had their budgets increased. It is difficult to see the logic of treating parts of Great Britain so differently. The problems of attracting visitors, stimulating investment and reducing seasonality are no different in, say, Cornwall or Northern England than they are in West Wales or rural Scotland.
The reduction in the ETB's grant-in-aid has inevitably resulted in cuts in its work; for example, the reduction in support for the Tourist Information Centre. Funding for the English regional tourist boards has also suffered. I am convinced that tourism can produce such great returns that the relatively small amounts of additional funding necessary to restore the cuts would pay handsome dividends in jobs and economic benefits.
However, I am concerned also that the structure of the English regional boards is no longer working as well as it used to. I am aware that the ETB and regional boards have been looking at the structure and remit of the regions and the division of responsibilities between regions and the centre. But they have not yet, as far as I know, come to any conclusions. Since the regional

1143
boards were established, local authority tourism activity has increased markedly. Most councils now have their own designated tourism officer. In the private sector there are many locally based marketing consortia. But they do not relate easily to the regional boards or their membership structure. We need a new system which will harness the strength of all those involved in tourism. Any changes must ensure more efficient and better co-ordinated central services. Although some favour a system of fewer larger boards—for instance, four boards covering the North, the Midlands, the South, and London—it is unlikely that such large areas would encourage the active participation of small independent businesses. It is unlikely that Brighton, Bournemouth, and Torquay, which are naturally in competition, would fit comfortably in such a large area. I should like to hear the Minister's views on that subject.
I must mention also the important role that local authorities play in tourism. They are responsible for planning, roads, signposting, and, in most cases, the funding and operation of tourist information centres—that excellent network upon which the visitor relies so heavily. I know it is of great concern to the tourist industry that local authority spending constraints have threatened TICs, either through shorter opening hours or sometimes closing down altogether. Such front-line services must be maintained at all costs. One of the keys to our continued success is the achievement of high standards in everything we offer—accommodation, service, attractions, the heritage and the environment. I should like briefly to mention four: accommodation, service, attractions, and heritage.
Accommodation classification and grading schemes are one example where, to date, it has not been possible to achieve a fully effective result in the board's efforts to raise standards. Sadly, there are too many establishments that do not measure up to the requirements of today's tourist. Some are in London, where in 1994 nearly half the overseas visitors considered that hotel accommodation represented bad value for money. Other substandard accommodation is to be found in seaside resorts, where the recent problems with DSS claimants in hotels is symptomatic of that problem. Some accommodation is undoubtedly surplus and unsuitable for economic refurbishment, but the Government, together with the tourist boards, should give attention to how those establishments can be eased out of the tourist market, and perhaps also their residents. However, before those desirable changes can be achieved, we need a co-ordinated approach from the national boards to their crown classification schemes and harmonisation with the motoring organisations' well-recognised stars rating system. In a recent survey for the Tourism Society, a majority of recipients favoured a statutory approach to the registration of accommodation—as already happens in Northern Ireland—coupled with a voluntary grading in order to help both improve standards and make it easier for the consumer to select the most appropriate accommodation. Will the Minister comment on the Tourism Society's proposals and let us know what he thinks?
Following the improvements of recent years, there are many establishments of all kinds—and I count Beaulieu as one of these—where the standards of service offered match those anywhere in the world. Much first-rate work has been done on training in the tourist industry—by individual companies, by hotel and training companies, by tourist boards through their Welcome Host initiative, and through the development of national vocational qualifications. Unfortunately, that is not enough. Regrettably, there are still too many people operating tourism businesses in Britain who appear not to consider training valuable and worth spending time and money on.
I do not have all the answers on training but I am sure that it is an area we should all—Government, educational establishments, everybody—take very seriously. Our industry will not flourish if our service standards fall below those of our competitors.
Heritage is one aspect of tourism in which our visitors have high expectations. It is known to be the principal feature that draws our overseas visitors. For many years now the BTA Heritage Committee has valiantly tried to co-ordinate the separate interests of historic buildings and so on. The time has come for that committee to be given a larger and independent role and recognition by government that it speaks for our heritage. It would make a major contribution to focusing heritage policy by evidencing problems and co-ordinating all our efforts. I seem to have run out of time, so I hope that the future speakers will cover all the points. I am sure the Government and I will look with great interest at what is said. I beg to move for Papers.
3.27 p.m.
Lord Elibank: My Lords, my first duty and pleasure is to thank the noble Lord, Lord Montagu of Beaulieu, for allowing us to add our Motion to his. I hope he will be rewarded by the breadth and variety of views that the speakers in the debate will furnish today.
I should also thank our specialist adviser, Mr. Graham Wason, and our clerk, Mr. Andrew Mylne, who both contributed very largely to the production of this report. Finally, like my noble friend Lord Montagu, I welcome our two maiden speakers to this debate and wish them well in their speeches. We look forward with keen interest to their views.
It may be helpful to the House if I said a few words about the background to our report. The Maastricht Treaty, in an addendum, ordered the Commission to produce a report on tourism, among other things, with a view to considering whether a special extra treaty should be added to the Maastricht Treaty. They were told to produce it by 1996, and they have done that with perhaps a year to spare. It will be a subject for debate at the Intergovernmental Conference, and for this reason, my committee decided it was a matter of some importance at this time.
The Commission's report, the Green Paper, ended up with four options which it left to associations and governments to make a choice from in their decision-making process. Those four options, which I shall outline only very briefly, were as follows. Option

1145
I was the status quo minus, with little or nothing done to add to the Tourism Unit's responsibility; Option 2 was the status quo plus, with a modest further action plan; Option 3 envisaged some addition to the Tourism Unit's responsibility and greater involvement with other units in the directorates; and Option 4 implied a good deal of intervention on the part of the Commission in the organisation of tourism within the Union. Option 4 implied, though it did not say specifically, that a new addition to the treaty would be the most adequate way to see the matter through.
So much for the background. Let me say a few words about tourism in Europe. The first thing to say about it is the size of the parameters. Tourism includes everything from the humblest bed-and-breakfast accommodation to large airlines, large hotel chains and travel agents. It also has many other facets. That makes it extremely difficult to get a grasp on tourism, even though every particular branch of the industry is represented by its own association. So statistics about tourism must be treated with a certain degree of caution.
The overwhelming feature of the tourism industry, as my noble friend Lord Montagu pointed out, is its buoyancy. For instance, tourism is a bigger earner in this country than the petroleum industry. It must be treated with a great deal of respect and interest. Tourism is also a notable employer of people, in an age in which unemployment is a key issue. Seven per cent. of the workforce in the United Kingdom is involved in tourism compared with six per cent. in Europe. That is a very substantial number of people. What is more, it is a benign employer. If people have energy, drive and initiative but perhaps rather mediocre academic qualifications, in the tourist industry they can enjoy a flourishing career. In the same way, there are certain areas in Europe—mostly rural areas—where little or no employment is possible. But where there is a monument or site of national or international interest, there is quite a substantial amount of employment around such a site, with guides, accommodation, transport facilities and so forth.
I pass on fairly rapidly to the main thrust of our report; namely, an investigation of the powers and responsibilities of the Tourism Unit in the Commission. It comprises something in the order of 20 people, including secretaries, and is notably under-powered for the work that it has to do. I suppose that it has two main responsibilities. One is a routine responsibility. to arrange seminars, collate statistics and disseminate information. It probably does that quite adequately. But by far its most important role is liaison with the other directorates. There, we felt, was a notable gap. Other directorates dispose of very substantial funds, such as structural funds and other types of money. That makes them very powerful spenders either in their own right or indirectly through governments. It is on that expenditure that tourism and the Tourism Unit should have a very marked impact; but at the moment it does not have one at all. So the unit needs to be bolstered in numbers, possibly increased modestly in budget and given a much greater standing in the European Community.
1146
We felt that the obvious way to do that would be to raise the status of the Tourism Unit to that of a directorate. In itself that would involve no increase in manpower but would make it much easier for the unit to deal on more or less equal terms with other directorates.
There are one or two other points which, because of time constraints, I can only mention briefly. One is the sustainability of tourism. The committee was considerably involved with that and perplexed. The problem with sustainability is that large coachloads of tourists slowly destroy almost any site that they visit over a period of years—maybe centuries. Nonetheless, it is very difficult to say to any potential tourist, "You must not go there." It is very difficult to control access in a way that is felt to be just and proper, but it is very necessary. It can only be done on an ad hoc basis, site by site. But the responsibility of national governments and national tourist boards is very great in that respect.
Our conclusion was that we could support the Government's view on most of the Green Paper; but we recommend boosting the powers and authority of the Tourism Unit to make it much more effective and to enable it to do the tasks that we feel should be undertaken.
3.36 p.m.
Lord Borrie: My Lords, in the course of giving evidence to the Select Committee chaired by the noble Lord, Lord Elibank, Mr Lyndon Harrison, a Member of the European Parliament, said that because tourism is associated with leisure, it is not normally considered a serious industry. He thought that that was a huge psychological problem, and I agree with him.
The noble Lord, Lord Montagu, is to be congratulated on initiating the debate and drawing attention to the major contribution that tourism in this country makes to our economy as a whole and indeed to employment. He has given the figures and, since he warned me and other speakers, I shall not—gladly I do not—repeat them. Tourism is. a serious industry and, as the noble Lord indicated, an industry which is very important in regard to small and medium-sized enterprises. We all know that that sector of employment across the economy as a whole is perhaps the major potential for new jobs in this country. That certainly applies to tourism.
Clearly, tourism is much more important in some regions of the country than in others. By way of example, I shall refer to Devon and Cornwall. In recent years that region has suffered considerable structural decline in many of its traditional industries, such as fishing and agriculture, as well as defence and tourism. Of all those industries, tourism offers genuine potential for revitalisation and regeneration for the future.
Unfortunately, although Devon and Cornwall have been designated Assistance Areas, which is an implicit recognition of their economic problems, Regional Selective Assistance for tourism is not made available. I am not sure what the point is of being designated an Assistance Area, if the very industry that is so likely to contribute to employment prospects in the future is ruled out for assistance purposes.

1147
I am a member of my party's Regional Policy Commission. In evidence to us, the West Country Development Corporation pointed out that in Cornwall tourism represents 24 per cent. of GDP and in Devonshire it is 14 per cent. That compares with the relatively modest 6 per cent. for Wales. Yet the Welsh Tourist Board generously contributes grants and loans. Devon and Cornwall receive nothing for tourism. That does not seem to me to make a lot of economic sense, nor is it equitable. Let me cite the all-party Trade and Industry Select Committee in another place, which last year said:
"If this is an appropriate use of public funds in Wales, we can see no reason why the same should not apply in England".
The West Country Development Corporation is concerned that the recommendation which the House of Commons Select Committee made last year calling for equity of treatment throughout the United Kingdom has been rejected by Her Majesty's Government in their official response to the Select Committee report. It is not alone in this concern. My commission has had evidence from East Sussex County Council, which told us that the case for assistance to combat long-term structural decline in the tourism industry in the coastal towns of Sussex is surely just as compelling as for other areas seeking assistance to cope with the decline in mining, shipbuilding or manufacturing industries. The fact that some industries produce visible outputs and others invisibles is surely not a sensible basis for discrimination.
So why did the Government reject the recommendation of the House of Commons Select Committee that the same grants and loans should be available for tourism projects in England and Scotland as in Wales? The Government's response was in two sentences. Sentence number one:
"The Government does not agree with the Committee's recommendation".
Sentence number two:
"Circumstances vary to such an extent throughout Great Britain that the Government does not accept the case for a uniform set of grants".
I do not read the House of Commons Select Committee recommendation as asking for uniformity; neither the word nor the notion appears in it. It was seeking more equity, more rationality, compared with the current disparate treatment of different regions of the United Kingdom.
The noble Lord, Lord Montagu, quoted the Development of Tourism Act 1969 as being a key Act in the development of tourism. Each of the national tourist boards has the legal power to improve tourist amenities and facilities under that legislation, but only the Welsh Tourist Board appears to have implemented this. All credit to the Welsh Tourist Board. But I wonder whether Her Majesty's Government, and the Minister today perhaps, would indicate whether there are plans to ensure a more rational, more equitable, less capricious dispensation of assistance to tourism and the tourism industry in our country, for the benefit, as is mentioned in the Motion, of the economy of the United Kingdom and the creation of jobs in our country.
1148
The Motion refers to the need for Her Majesty's Government to establish and co-ordinate long-term policies to ensure continuing success of tourism in this country. The Government must invest in and support the industry's own estimate of creating an extra 130,000 jobs by 1999 and up to 300,000 new jobs in the next 10 years.
Visitors to this country—the customers of the United Kingdom tourist industry—whether they come from abroad or not, will demand increasingly high standards. If those high standards are to be delivered, then the men and women who work in the industry will need to reach the highest standards of training. Government help to that end will surely have the pay-off of even better contributions to our UK economy than the tourist industry presently provides.
Investment, therefore, must include investment in people. As the Director-General of the CBI, Mr. Adair Turner, said recently:
"Improving economic performance will only be sustained by improving the quality of the workforce".
3.45 p.m.
Lord McNally: My Lords, I speak without the eminence in or experience of tourism displayed by the noble Lord, Lord Montagu of Beaulieu. However, I do so using my full geographical title of Lord McNally, of Blackpool.
Blackpool, my home town, gave me experience of what I call the sharp end of tourism. I once cooked 23 hundredweight of chips in a single afternoon; I spent a season serving coffee at the top of Blackpool Tower, an effort which gave me an article in the local paper headlined "Tower Top Tommy"; I appeared at the Tower Circus with Charlie Cairoli and in the Tower Ballroom with Reginald Dixon. I should say that I was selling ice cream while Charlie was throwing custard pies and Reginald was playing the organ. Nevertheless, it meant that I was brought up from childhood with the clear understanding that tourism was a real industry that provided jobs and created opportunity. I shall not, as the noble Lord, Lord Montagu, warned us, repeat all the statistics, but I do endorse them.
In general, the opinion abroad is that tourism is the poor relation of Whitehall—under-prioritised and undervalued, and a responsibility often given to a Minister because of the beauty of his name (Strathclyde, Ullswater, Inglewood) rather than for other reasons. We shall certainly be looking for signs that the Government will give tourism a high priority when the Minister replies.
Let me make five points. As I come from the north west, one point might seem slightly strange. I endorse everything that the noble Lord, Lord Montagu, said about support for tourism in London. London is our national flagship for tourism. It is by far the greatest magnet for overseas visitors, and it is essential that visitors to London come to a place that is safe, clean, has good transport and gives good value for money. Value for money is the same whether it be at the Ritz or a small hotel: it is whether you feel you have been well served and are happy and contented. I commend the work that London First has done in this respect.

1149
As to the natural environment—another of our great national assets referred to by the noble Lord, Lord Elibank—beware of the NIMBY factor in attacking tourism. There is a very good case to be made that it is the spur and impetus of tourism which in many cases has helped to improve the natural environment and to protect it because there has been a motive so to do.
There are three personal experiences of the tourist industry I would refer to. From each of those experiences I would draw lessons. My home town of Blackpool is one of our Victorian resorts. We underestimate the attraction and potential attraction of the traditional British seaside resort because, even with all the changes of recent years, Blackpool remains one of Europe's most successful resorts. It remains so by adapting to change and taste and by continuing to innovate. The town's motto is "Progress", and it is living up to that motto today by building the biggest big-dipper in Europe, just as our Victorian forefathers lived up to it by having the imagination to build a copy of the Eiffel Tower.
But those Victorian seaside resorts do need help, as the noble Lord, Lord Borrie, indicated. Many of them have big problems with seasonal unemployment and some of them have a more than average share of social problems which need to be resolved. Part of any strategy for tourism should he a recognition of the assets that we have in our seaside resorts.
Another experience I had was working on Merseyside and finding the real potential for tourism in the big cities. Liverpool is often a target for criticism, but I urge noble Lords to go out and look at the tourist opportunity in Liverpool. It combines architecture, the cultural assets of the city, the restoration of Albert Dock and the Maritime Museum and the reclamation of canals and waterways around the city. It is extremely interesting and valuable. What Liverpool has done with great success has been mirrored in many other cities. I was watching a television programme last night which pointed out that Sheffield now has more tourist visitors than Cambridge. Birmingham and Manchester and others are finding the value of tourism as a source of economic activity.
The town I now live in, St. Albans, is a small town with a great historical Roman and medieval heritage. Its local authority is taking the initiative in small but effective ways. It is improving the signage around the town; operating an anti-litter campaign; providing good contacts between the railway station and areas of visitor focus and ensuring that more publicity is given to it in London and other major centres of tourism.
It is clear that there is no single tourist industry. The efforts that a town like Blackpool has to make in refurbishing the tramways or improving the piers, or a St. Albans in ensuring that its history is understood and well visited, or a Liverpool in exploiting its industrial past and its architecture, are all different. Lord help us at the thought of some European directive being produced concerning those matters. As one who believes both in Europe and in subsidiarity, I also believe that tourism is very much a local initiative. However, it needs a framework
1150
within which to operate. It needs a partnership between government and the private sector. Again, one of the lessons I learnt in the areas I visited was how successfully the private sector has been able to respond when supported by the local authority or regional initiatives.
Tourism also needs cohesion—another word that is in the report and should be in the Minister's mind—of government policy. The Government should keep tourism in mind when looking at transport or environment policy and also in looking at taxation policy. Tourism also needs adequate promotion to make sure that people are aware of the great asset that we have in our tourist industry. If we discovered in the North Sea an asset similar to the one that we already have in tourism, the Government would be rushing to respond.
Finally, I fully endorse what the noble Lord, Lord Borne, said regarding commitment to training and quality. The heart of tourism is satisfied customers, and satisfied customers depend on quality. If we have cohesion in policy and the broad framework of government support, we have in Britain a tourist industry, both large and small, that is able to respond vigorously and give us both the jobs and the prosperity that flow from successful tourism.
3.55 p.m.
Lord Broughshane: My Lords, in venturing to address your Lordships for the first time I felt that I must wait until I could find something in which I had some personal interest and experience. As a new boy—if one can use that word for an octogenarian—I must crave the indulgence of the House for anything which is not strictly in accordance with its rules. However, I do not think your Lordships will find me guilty of lack of brevity.
Until I retired recently, I had the pleasure of working for almost 30 years at the-Royal Opera House, Covent Garden, which I feel your Lordships will agree can inevitably be classified as a major tourist attraction. In the course of my duties I was in a position to observe the large number of visitors from abroad who attended our performances. In talking to many of them, I became convinced that a main reason for their deciding to visit these islands was to go to our theatres, attend our operas, see our ballets and listen to our concerts, for all of which we are rightly internationally famous, despite the somewhat meagre financial assistance provided by the state, regardless of the colour of the government in power.
While I am unable to offer precise statistics, it is generally accepted that other countries—I have in mind France, Germany and Holland particularly—place the arts rather higher on the agenda of financial assistance than we do ourselves. They thus ensure substantial employment for their artists, musicians, singers and dancers and, what is more relevant to today's debate, make it possible for tickets for performances to he sold at prices more attractive to foreigners.
Anything that can be done to draw attention to the vital part played by the arts is infinitely worth while, not merely on the grounds of entertainment, which seems to

1151
have an unfortunate flavour in the minds of some people who think it is not quite right to be entertained—with which I totally disagree—and general education, but also in increasing revenue through the employment of the artists themselves (thus making it less likely that they will make a claim on the state) and for all those associated with them, their work in museums, theatres and concert halls, and also in attracting tourists, which is the main purpose of my speaking. I therefore heartily welcome and endorse the Motion proposed by the noble Lord, Lord Montagu of Beaulieu.
3.58 p.m.
Baroness Young: My Lords, it is my great privilege and pleasure to be the first to congratulate the noble Lord, Lord Broughshane, on his maiden speech. He comes to your Lordships' House with a most distinguished record from the Second World War, where he was in the RAF volunteer reserves and was awarded both the DSO and DFC. There are few these days who are privileged to wear both those decorations.
As the noble Lord said, he is a founder member of the Friends of Covent Garden. It was valuable to hear his point regarding the vital role of the arts in the whole of the tourist industry defined in its widest sense. I am sure that I speak for all of us in saying that we look forward to hearing him on many occasions in the future. Perhaps I may say also that we look forward to hearing the maiden speech of my noble friend Lord Feldman.
I thank too my noble friend Lord Montagu of Beaulieu for introducing this important debate this afternoon. As he rightly said, travel and tourism will be the world's largest industry by the turn of the century. It is therefore of great value that we should debate this issue today, for it is extremely important that the United Kingdom should share in its growth. I shall not repeat all the statistics which have been given, but they were very welcome.
I listened not only to my noble friend but to the noble Lord, Lord Borrie, about the importance of the tourist industry. It often appears as a most disparate collection of small businesses and enterprises, interspersed with some very large and very important enterprises. Therefore, it is not coherent as most industries are. As a consequence, I believe that it has often not been thought of as an industry at all, but it is and it has a major role to play in our lives today. I believe that this debate is a major contribution to the recognition of its importance.
Perhaps I may also say how much we value the speech of the noble Lord, Lord Elibank. I read his report with great interest. I believe that everyone will agree with the points which have been made and I shall return to those in a moment.
I should perhaps myself declare an interest—not that I have any financial interest at all in the tourist industry—but I have a relative in the tourist business.
There are three points that I would like to make. The first has already been referred to, and it concerns the importance of the tourist industry in the creation of jobs. We are all concerned about unemployment today, but
1152
here is a growth industry. It supports about 1.5 million jobs, which is 6 per cent. of the labour force, and about 187,000 people who are self-employed. It is a growth industry. I found it quite sad reading some articles and seeing a television programme which suggested that many young people still do not think of service industry work as offering proper jobs at all. They are seen as non-jobs in a candyfloss society. That could not be further from the truth. It is important that all of us tell young people that here are tremendous opportunities. After all, they may have the opportunity to visit Disneyland in Florida and enjoy it or go down to the local pub or to the local theatre.
Everybody involved in these organisations has in one way or another an interesting and worthwhile job and has a contribution to make. If one wants to go into the service industry the sky is the limit. One can get to the top. It is a worthwhile career. It is very dispiriting to find that attitude when industries are crying out for workers. I live in Oxford and we had the famous advertisement only a couple of weeks ago about 30 bus drivers who came from Australia. It is incredible that people here do not take the jobs that are on offer. That is the most important point to make.
Secondly, I would like to say something else about Oxford which illustrates one of the points that the noble Lord, Lord Elibank, made in his important report. Tourism is a vital part of the economy of central southern England. Over 12 million visitors stayed in the region in 1994 and spent around £1.6 billion. In Oxford itself the city attracted 1.5 million visitors, of whom about 40 per cent. were from overseas. Their expenditure of £60 million to £80 million is vital to the local economy and it supports employment for over 3,500 people. But—and this is the point which the tourism report makes—where there is successful tourism it can in a sense be almost counter-productive. So many people come to see something that the very thing they have come to see becomes spoilt. It therefore creates a problem that needs to be dealt with, because it is no use any of us complaining. We want to go to see tourist attractions in other places, so why should not tourists come to see our attractions?
The question is what can be done. One solution has been the very useful co-operation between the Southern Tourist Board and the city council to focus more on tourism and increase its economic benefits, while at the same time reducing its physical impact. The appointment of a new tourism manager employed by the Southern Tourist Board through a contract with the city council has been very helpful. It has encouraged visitors to stay longer and to spend more money in the city, as well as reducing the problems that they cause. A survey has shown that 40 per cent. of visitors spend less than three hours in Oxford before moving on. If they can be persuaded to stay over a longer period of time, it will make the situation much more satisfactory for everybody. The whole experience will be better because one will be better able to deal with the problems of too many cars, litter, environmental damage, overcrowding and so on. The management of all this is very important indeed. This project illustrates the vital role of the

1153
regional tourist boards in bringing together local authorities and the private sector to make matters better for everyone.
Thirdly, I wish briefly to say what the Government can and should do. I share the view of my noble friend Lord Montagu that it is somewhat bizarre that the money for the English Tourist Board has been cut, while that for Wales and Scotland has been increased. It is worth saying that on the day after St. George's Day. With the number of tourists that we have, I do not understand the reasons. I share the view in the report of the noble Lord, Lord Elibank, of the importance of co-operation between government departments. The Department of National Heritage and the DTI were mentioned, as were other departments. A very unhappy decision was the cancellation of CrossRail. It is valuable to have a railway link from Heathrow to Paddington. As someone who uses Paddington Station often, I can assure your Lordships that travelling on the Circle Line, or indeed by bus, is not one of the most pleasant experiences. When on top of that there are many young tourists carrying large backpacks, one sees that we need to have a properly co-ordinated transport policy so that we can see these things through.
I conclude by underlining some of the important points where government or regional tourist intervention can make this industry more effective. As has been said, it is important that accommodation should be properly classified and brought up to a reasonable standard. There should be proper co-ordination in the servicing of a network of tourist information centres. It is very important indeed that the standards of service, through training, should be improved. Nothing makes a greater impression on people than pleasant service; the converse is equally true. These are matters in which the Government can help. The case for the regional boards is a strong one and for their co-ordination with local authorities to help to make this vital industry more effective.
4.7 p.m.
Lord Gibson: My Lords, I should like to add my congratulations to the noble Lord, Lord Broughshane, for an admirable maiden speech. I have known him for more than 60 years. We worked together for part of that time at the Opera House. In the area of the arts, as in much else, he has already made a significant contribution. I hope that we shall hear him often in the future.
I wish to speak briefly and only about one relatively narrow point as regards tourism; namely, the need to protect our historic assets from over-use and from too great a pressure from tourism today so that they will be there for tourists of the future to enjoy. The noble Lord, Lord Elibank, has already made that point with great clarity and force. I would like to develop it a little further since it is an area in which I have had some experience before.
Before I do so, I heed the gentle warning of the noble Lord, Lord Montagu, that we should not give facts and figures that he has already given. He has made that unnecessary. One figure astonishes me. It was given to
1154
the ICOMOS conference in Bath last autumn. I was not there, but I read about it. In another 10 years tourism will account for 10 per cent.—I am not sure whether it was not 11 per cent.—of the world's GDP, providing over 300 million jobs. Those are impressive figures. They were not contradicted and, if they are anything like accurate, tourism is becoming the single most important generator of wealth and employment. It is very important, therefore, that we in Britain capture or retain a healthy share of this huge trade. In the battle to do so we start off with some wonderful assets, both natural and man-made—that goes without saying. Of course, we do not have everything. Much of the world's tourism consists of people lying around on beaches, and not many people come here to do that.
Our prime assets are our wonderfully gentle, civilised landscape and the buildings in our villages, our castles, our manor houses, our public houses and, above all, our churches. We have over 9,000 pre-Reformation churches. It is not always that easy to get into them, but you can get in if you try. They are the legacy of the relatively peaceful continuity of life on this island, which is unmatched anywhere else in the world. Even the weather, if not in itself an attraction, is only the price we pay for having the most beautiful gardens in the world to show our visitors from abroad. It is, therefore, with uniquely valuable assets that we face this ever-expanding tourist industry.
The problem is that those assets are extremely vulnerable, or many of them are, as are the ones with which I propose to concern myself for a moment or two. They are liable to be diminished by the pressure of the tourists themselves "loving them to death", as the phrase goes. If this pressure continues to grow at its present rate, there will be little for the tourists of tomorrow, and the prosperity and employment which we derive from tourism will be short-lived. We have to do more than we have yet done to develop what the noble Lord, Lord Elibank, referred to as "sustainable tourism".
Any business, whether in the tourist industry or not, must develop a means of preserving or renewing the assets on which its wealth depends. In most businesses assets can be replaced, but the most important tourist assets are not replaceable. That is the main reason why, for example, the National Trust and other owners of historic property often close their more fragile interiors in winter. Of course, there are also economic reasons for closing in winter, but furniture, pictures and other things need relief from pressure. In many a great house some of the contents are nowadays subject to more visitor pressure in one year than they may have previously had to endure in the past hundred years.
I remember years ago, when I was chairman of the National Trust, I was invited to dinner with the English Tourist Board and I was pressed to agree that our houses should be open all winter to accommodate the increasing number of winter tourists. When I explained the need to rest and conserve such things as furniture, tapestry, curtains and so on, one very formidable member of the tourist board at that time, who had better be nameless, lent forward and said: "But my dear Lord Gibson, if only you would be a little more enterprising, you would earn more money and you would be able to buy new

1155
curtains". I tried to explain that that was not what the National Trust was primarily about. Of course, no member of the ETB today would say such a thing. That was nearly 20 years ago.
The need for conservation and the broader need for sustainability in general is now much more widely accepted. The ETB has developed various excellent ideas to that end. But the whole idea of sustainability cannot be emphasised strongly enough and needs to be more widely accepted than it is at present. We are not there yet.
The point is, as the noble Lord, Lord Elibank, said—or it may have been the noble Lord, Lord Montagu—this is an industry of very small businesses and it is difficult to expect small operators to resist the temptation to maximise short-term profit and let the future take care of itself. It is only within the context of a strong lead from the Government in relation to the tourist boards that this can happen. It probably has to be done by regulation to a considerable extent but also, where appropriate, by giving incentives or imposing penalties in the form of charges to ensure that the long-term erosion of our assets is avoided.
To give an example, historic buildings need constant sympathetic repair. However, the effect of the present VAT system is that repair is subject to VAT and replacement is not. This has been said many times before, but it cannot be too strongly emphasised what a crazy absurdity this is. I do not know the answer to it. We all know the answers that are given and how difficult it is, but there must be some way of ceasing to encourage people to replace historic assets rather than to repair them. One cannot have a better example of the way in which we can expect a lead from the authorities to this end.
If there were no other arguments except the economic one supporting the expenditure of taxpayers' money on our historic assets—and not only our historic assets but also, as the noble Lord, Lord Broughshane, mentioned, our operas, our theatres and our concerts, in the form of public assistance and subsidy—it would be enough. Of course, the fact that there is a purely cultural argument ought to be enough by itself, but one is conscious that politicians—I am sure not in your Lordships' House, of course—do not always value culture as highly as economics. For instance, does it make sense, even in the light of its economic value, to allow such a huge backlog of repairs as has been allowed to develop at the Victoria and Albert Museum over the years?
To conclude, one is reluctant to underline the purely economic aspects of what should be accepted as a cultural case, but I believe that it is right in a debate on tourism to emphasise the economic values and to remind ourselves that safeguarding the future of our tourist assets is good business.
4.17 p.m.
Lord Feldman: My Lords, it would have taken me longer to summon up the courage to make my maiden speech in your Lordships' House, but I could not resist the clarion call of this debate and the opportunity to
1156
support the British tourist industry. It is for me a particular pleasure to speak in a debate initiated by my noble friend Lord Montagu who once again showed why he is so highly regarded in British and international tourism.
I, too, congratulate my fellow maiden speaker, the noble Lord, Lord Broughshane, on the work that he has done at the Royal Opera House, where I have spent many happy hours over many years and hope to continue to do so in the future.
I should declare an interest, in that I am a long-serving and happy member of the English Tourist Board and I am also the chairman of both the tourist-related London Arts Season and the Festival of Arts and Culture, launched under the auspices of the ETB, the British Tourist Authority and the London Tourist Board.
Tourism is a "many-splendoured thing". It draws upon a constellation of many of the things which I treasure in life, and I am sure that I am not alone in that in this House. Travel, scenic beauty, heritage, architecture, the arts, sports, music, food and wine—who can doubt the value of an industry based on such attractions? Nor are those pleasures the province of the few. They are now the opportunity of the many.
As has been said already, tourism has too often in the past been treated as a "candyfloss" industry, a pleasant confection, not a serious industry—a sort of Cinderella among the industries. I suggest that this particular Cinderella has had no fairy godmother to take her to the ball. Tourism has got there by dint of the value it offers and the pleasure it brings.
As suggested by my noble friend Lord Montagu, I have slaughtered the mass of statistics that I was going to give, save for one, which I think is important: four out of every 10 of the new jobs created in the past 12 months have come from tourism.
Leisure may be the product, but leisurely is not the pace of competition in the industry. Winning the tourist dollar, yen or mark requires an ever-stronger product as the competition expands. In this country, we cannot rely alone on the sun and our weather to bring tourists here, but we can rely on our cultural, artistic and historic heritage which is second to none.
However, it has to be marketed and presented. The London Arts Season was one such enterprise and is an interesting case study. At the ETB, we set out initially to increase visitors for the arts to London and from there to the regions. It took several years to achieve it, but it was worth it. How did we do it? We brought the directors of museums, galleries, opera houses, concert halls, theatres (large and fringe) together, over lunch or dinner. Interestingly, in many cases they had not even met one another before, so we all sat down and ate for victory.
We planned an arts season, putting together all of London's productions along with many new events which we promoted to the world. We enabled overseas tourists to book their travel, hotel and theatre with one telephone call, without having to rely on the artistic ability of the hotel porter. Significantly, we chose February and March, times when arts venues, hotels and

1157
'planes were in low season. In doing that, we showed the arts the benefits of tourism, and tourism the benefits of working with the arts. We gathered 60 major names as arts "ambassadors", and some of them travelled around the world promoting the season and the festival.
We launched the first season in 1994. Now, after three London Arts Seasons, we have brought £75 million to the economy of London. That led to a massive campaign by the British Tourist Authority, promoting all of Britain's arts to the world. The year-long British Festival of Arts and Culture in 1995 brought in an extra £150 million. I am pleased to see in his place the chief executive of the British Tourist Authority and a director of the London Arts Season. New relationships have been forged, and they grow stronger.
The arts have always been an important part of the UK tourism product, but there had never been a coherent overall tourism and arts strategy. Yet 50 per cent. of overseas visitors are drawn here by our arts and heritage. Our West End theatres sell 12 million tickets annually, one-third of which are sold to overseas visitors. More than 40 million overseas visitors go to our museums, galleries and historic properties every year. The tourism spend on the arts is approaching £3 billion per year.
Now arts and tourism have found one another, they stand to prosper together. One way in which they can prosper is through the establishment of a tourism and arts bureau in London to promote them both at home and abroad every month of the year.
When Mark Twain visited Bayreuth, he was asked on his return what he thought of it. He answered:
"Bayreuth is beautiful, and Wagner's music is not as bad as it sounds".
We need not fear a backhanded compliment for our arts, but visitors to Britain must be served equally well in other respects. The work of the Government and tourism bodies is rightly concerned with raising standards, especially in accommodation. That is essential if we are to compete in the tourism market. The Secretary of State has shown great interest in, and leadership for, tourism. In the Department of National Heritage, tourism is one of the areas to receive increased funding because of its enormous potential as a generator of wealth and jobs. However, perhaps I may say gently in Oliver Twist mode, "Please sir, can we have some more?"
So, where do we go in the future? The best way to predict the future is to create it. I should like us to create a British map of major and acceptable tourism opportunities. Government cannot do it alone, yet together with the private sector we can find, research, back and sell the big ideas and projects. In many other countries we see local and national government taking such a midwife role. In this country the Government will work for inward investment or a domestic project when it is a car plant or an electronics factory. It must be equally valuable for the Department of National Heritage to see the tourist industry through the necessary departmental hurdles of environment, transport, employment and funding to promote a big idea, a major project. I suggest that that is the way that we shall develop the map of opportunities for Britain.
1158
I think back to 1896 when Grandpa Thompson put up a few rides on Blackpool beach. Today, Blackpool Pleasure Beach, with its new roller-coaster, is the UK's leading visitor attraction with 7.5 million visitors per year. I also think back to 1841 when Thomas Cook showed great enterprise in chartering a train to take 570 people from Leicester to Loughborough for the day. Since then, tourism has been an industry marked out by enterprise and people of vision, whether small-scale or large. It is up to the industry, the statutory bodies and the Government to recognise that vision and to give it backing. Tourism has an immense amount to offer and we as a country have everything to gain if we work together to achieve it.
4.26 p.m.
The Earl of Glasgow: My Lords, it is my considerable privilege to be the one chosen to congratulate the noble Lord, Lord Feldman, on his excellent and perceptive maiden speech. I think I speak for the whole House when I say that I hope that we shall hear very much more from him, not only on tourism, but on the many other issues in which he is an expert. Perhaps I may add that I share practically all of the noble Lord's recreational interests, and I hope that we might have a game of tennis one day.
I should like to say something about tourism in Scotland. Most of us in the tourist industry are encouraged by the support for tourism that this Government, and particularly the Secretary of State for Scotland, have shown. At a time when other government agencies have had their budgets cut, the Scottish Tourist Board has received an extra £3 million. As the Government clearly understand, tourism is very important to the Scottish economy, particularly for those more remote places where there is no other industry to provide jobs. Last year the revenue from tourism increased in real terms in Scotland by 7 per cent., and at last it seems that more English people are taking their holidays in Scotland. Ironically, it was the Scottish market that fell last year. Attempts to reverse that trend are being headed by a new marketing campaign with the slogan,
"It's your country—try it".
It cannot be over-emphasised how important it is to all of us in the tourist industry that the Scottish Tourist Board and the BTA succeed in persuading more people to come to Scotland in the first place. To achieve that, they need money.
Another encouraging thing for Scotland is the Secretary of State's decision to make £3 million available to support the Scottish film industry. This is the first time for many years that any government have taken the Scottish film industry seriously. It has also helped to promote tourism in Scotland, as the successes of "Braveheart" and "Rob Roy" have already shown. The number of visitors to Stirling and Loch Lomond increased by a huge percentage last year as a direct result of those two films.
However, I must warn your Lordships that the Scottish film industry is not really "Braveheart" or "Rob Roy"; those are Hollywood films, shot in Scotland or in

1159
some cases, rather shamingly, shot partly in Ireland. No, the Scottish film industry is "Trainspotting" and "Small Faces", films now showing in several cinemas in London. Their subjects are drug addiction among down-and-outs, and gang warfare in Glasgow. However, I hope that your Lordships will not be put off by that because both films are outstanding, imaginative and entertaining. They are very good examples of the exceptional talent that already exists in the Scottish film industry.
My main concern for tourism in Scotland is one that I have expressed in the past. It stems from the way in which area tourist boards are formed in Scotland. It appears that for administrative purposes it is still deemed easier to create tourist boards around existing local authority boundaries, all of whom jealously try to promote their particular areas, if necessary at the expense of their neighbours. Tourists are not interested in boundaries. Therefore, tourist boards should not be concerned with boundaries. Tourists are attracted by specific holiday destinations which have established some kind of brand image for themselves: for instance, Edinburgh, Glasgow, Loch Lomond, the Cairngorms, the western Highlands and Burns country.
I find it frustrating that still it has not been possible to create a tourist board for the Firth of Clyde, now recognised as being the best sailing waters in Britain, because it falls within the boundaries of three different competing tourist board areas. At the beginning of this month, Scotland's 34 tourist boards were reduced to 14. Clearly, a small number of tourist boards makes sense. However, once again the territory of each has been dictated by the boundaries of the new unitary authorities. In most cases, old tourist boards have been grafted on to others to create new ones. Some of these boards seem somewhat cumbersome, at least in name. How about Argyll and the Isles, Loch Lomond, Stirling and the Trossachs Tourist Board?
There are already signs that the new unitary authorities will have difficulty in providing the necessary funds to enable the new tourist boards to promote themselves effectively. There is already talk about the need to close many existing tourist information centres all over Scotland, as the noble Lord, Lord Montagu, has also mentioned. TICs—also mentioned by the noble Lord—are the crucial link between the tourist industry and the visiting public. They are vital if tourism is to succeed in all parts. of Britain. However, the new tourist boards in Scotland have only just been formed and they must be given a chance. Most of us are hopeful for the future of tourism in Scotland. We hope that we shall continue to get the necessary government support.
4.32 p.m.
Baroness Seccombe: My Lords, I begin by adding my thanks to my noble friend Lord Montagu of Beaulieu for initiating this debate, thus providing the opportunity to discuss a subject that is very close to my heart. I believe that tourism is one of our most important
1160
industries. It is often undervalued and not given true recognition for the contribution that it makes to the wealth of this country.
My first contact with the tourist industry was when I joined the Heart of England Tourist Board in 1977 as a representative of West Midlands County Council. Two years later, I was appointed chairman of the marketing sub-committee. It was in that capacity that my sub-committee and I developed enthusiastically compelling reasons why visitors from home and abroad should come to our region. This was at a time when the perception of the word "tourist" was beginning to change. Previously, tourists were thought to be, almost without exception, visitors from overseas and, in addition, maybe some schoolchildren.
My sub-committee and I had a real desire to open up and publicise the glorious villages and sites of interest in the region. Too often the tourist route was from London to Stratford-on-Avon and return via Broadway. Little thought appeared to be given to detours to other centres which lay only a few miles from the main route. At about that time the concept of two-holiday families emerged. The family would have a week or so in the sun and, later in the year, spend a few days getting to know our wonderful country a little better. Weekend breaks came on the scene and special offers abounded. One also saw the development of bed and breakfast accommodation at all levels, from the very lavish, which catered for the top end of the market, to more modest facilities, which were ideal for families. The situation was particularly attractive to women, who responded to the demand. They created employment for themselves by working at home, often looking after children at the same time. I endorse the words of my noble friend Lady Young. I found it all extremely exciting and stimulating. I have followed the developments and initiatives that have taken place since then. I believe that the regional board have done an excellent job. They have a wealth of expertise in many different fields.
I should like to refer to two very mundane issues of which sight must never be lost. I refer first to signposting. I understand that since the beginning of the year county councils have been responsible for signposting. We do not wish to scar the countryside with huge signs. However, I should like to see discreet and sensitively placed signs which indicate directions in a clear way. Sadly, I was born without an inbuilt compass and have no sense of direction. Unless the sun is shining, I have no idea whether I am facing north, south, east or west. In the majority of cases, signposting is first-class and very effective. However, I have found myself in a situation where, in looking for a particular venue at a T-junction, I have no idea which way to go. It is extremely irritating and time-consuming. I should like to see the tourist industry give special guidance to new entrants. I understand that people who come through the Channel Tunnel and wish to make for central London find the situation quite difficult. I hope that special efforts will be made in that respect.
My second point concerns litter. I realise that there have been countless campaigns but with limited success. However, I draw attention to the huge success of Regional Britain in Bloom. There have been record

1161
entries. Each year the absence of litter is a major element in coming to a decision as to the winner. I hate to say it, but we are a dirty nation. I am sure that we can all recount stories about the car driver in front who, while waiting at traffic lights, decides to rid his car of rubbish. He opens the window and tips out cigarette packets, sweet papers and so on. The occupants seem to be unaware of the anti-social action of the driver and its distasteful effect on others. The other day I walked past a probation office. The garden surrounding the building had been attractively laid out with shrubs, but it looked dreadful. Empty cans, bottles, crisp packets and so on lay where thoughtless persons had thrown them. This may not be the right time or place to say it, but I cannot believe that young people on community service cannot clear it up. They will be doing a real service to the community while at the same time learning how anti-social is the dumping of rubbish. There are those who say that it is degrading for offenders to do this kind of work. I do not accept that. I find it degrading that we as a society do not act to clear rubbish. We have a magical countryside, and for it to be scarred in this way is a tragedy.
I understand that the BTA has calculated that for every pound invested in tourism, there is a return of £23. Regional boards have great expertise in pump-priming; but there must be co-ordination by the public and private sectors with a partnership between local authority and commercial members. Tourism is a growing industry. It must be planned and managed with sensitivity and care for the environment. It must not be offensive to local residents who, it is hoped, appreciate that visitors bring extra finance to local communities. I believe that we all have a part to play. We are privileged to be surrounded by beautiful and fascinating places. But I believe that it is the responsibility of this generation to ensure that the legacy to our children is the continuance of a green and pleasant land.
4.39 p.m.
Lord Methuen: My Lords, I, too, should like to thank the noble Lord, Lord Montagu of Beaulieu, for introducing today's debate on tourism and for the opportunity that it gives us to debate the report of your Lordships' Select Committee on Tourism and the Community. It was a great pleasure to be a member of the sub-committee which produced the report under the able chairmanship of the noble Lord, Lord Elibank. I should also declare an interest indirectly in so far as my family has owned a stately home in North Wiltshire. However, I no longer have any pecuniary interest in it, although the home has been open to the public for about 150 years.
The statistics on tourism have been ably stated by several pervious speakers, so I shall not repeat them. However, in Europe, though the absolute numbers of tourists are increasing, the industry has a declining share of the total world-wide tourism market. That can be seen in the increasing number of people going to North America, the Caribbean and Asian destinations due to the decrease in real terms of travel costs and the active promotion of those destinations by such organisations as the Pacific and Asia Tourism Association (PATA).
1162
Within Europe, one should be careful of tourist statistics because they are confused by the fact that they do not differentiate between business and true holiday visitors.
The wide diversity of the tourist industry has already been mentioned in the debate, so I shall not go through it. But, of course, the small and medium-sized enterprises incorporating bed-and-breakfast establishments cover many thousands of such enterprises in the United Kingdom. In many cases it is the sole employment available in the area. It is seasonal and offers only part-time employment with low wages. One of my noble friends has aptly described such low paid employment as the "working poor".
I live in the Peak National Park and am very well aware of the environmental problems caused by uncontrolled tourism, particularly to the fragile eco-systems of the high moors, and the traffic jams in our small communities; we are also beset by that other national park problem of extensive quarrying operations. These are problems common to many of our national parks, but the latter often offer the only significant alternative employment available in those areas and must be subject to sensitive planning control. We should encourage the increased use of public transport in those areas, particularly by means of park-and-ride schemes, where a single fee covers both parking and transport.
One of the considerations during the preparation of the report on tourism was the question of the promulgation of the whole of Europe as a tourist destination, rather than the individual countries. In my opinion, that has only limited application in specific target areas of the Far East and perhaps the United States. The United Kingdom is better served by having its own tourist offices overseas as at present. The Northern European countries are always likely to see an exodus to warmer climes during the summer, and hence Britain must exploit her unique scenic and cultural heritage to attract visitors, while protecting those assets from over-exploitation. We must also encourage the foreign visitor to see more than just London, Stratford-upon-Avon and Oxford and Cambridge.
As the noble Lord, Lord Elibank, said, we also considered the involvement of the European Union Directorate General XXIII which is responsible for tourism. The Tourism Unit undoubtedly needs strengthening so that it can play a more effective role in co-ordinating with those other Directorates General whose activities affect tourism in the areas of the environment, transport and likewise. I believe that Directorate General XXIII has a role to play in the setting of standards in such areas as fire safety, and other environmental roles, and in a European-wide standard for hotel classification.
My wife is Austrian and she often emphasises to me that we very much need to pay more regard to the expectations of overseas visitors with regard to accommodation standards and cleanliness. While we ourselves may be prepared to put up with such deficiencies, foreign visitors are unfavourably impressed by those shortcomings. Further, in all areas, local authorities should be encouraged to pay more attention to clearing roadside litter; indeed, that matter has

1163
already been raised elsewhere. It is a real problem and one that is not due primarily to tourists. I believe that lorry drivers are also to blame, especially on the route that I have in mind. We should also persuade farmers to remove disused and rusting farm machinery which is another eye-sore to be found in the Peak District.
One should remember that every contented visitor will help to sell to his friends the places that he has visited. It has been found that visitors will pay for good service and for facilities such as local tourist maps, well-maintained and marked footpaths and roads, guided walks and cycle hire. The availability of passports giving entrance to multiple tourist attractions in the area is also beneficial, although I do not know to what extent that occurs. Local authorities might also be permitted to raise a modest local tourist tax from those staying in accommodation in the area, the amount being dependent on the class of accommodation and locality, and used for the provision of local tourist facilities, information centres and promotion of the area. Such taxes are seen overseas and might amount to only £1.50 or £2 per person per night.
I am sure that the noble Earl, Lord Glasgow, will be pleased to hear that I am visiting Scotland this year and will be riding across it from one side to the other, thus supporting his area.
4.46 p.m.
Viscount Astor: My Lords, I should like to start by declaring an interest in that I have been involved in the hotel business for over 10 years, apart from a break in government, and I am also a director of a company which is launching a major new tourist attraction in central London this summer. I should like, first, to look at the industry in this country. It is a fascinating industry. It is an industry that is diverse (one of its strengths) and it is one that is fragmented (one of its weaknesses). It has a multitude of organisations, all of which claim to represent it and all of which seem to have slightly different views.
The crucial question is what should the role of government be. I believe that the industry is successful not because of government policies but largely in spite of government policies. It is successful due to the hard work and investment by all those involved in the industry. The most important thing that government can do is to create the right economic climate that encourages the industry to invest in its product so that it can remain competitive and offer the product that the consumer wants. One of the most interesting lines in the report is to be found on page 28 where Mr. Robert Moreland, when discussing the success in America, said:
"While successes were largely attributable to business initiative rather than governmental action, government had a role in providing a friendly environment for business to operate in, with legislation that was permissive rather than prescriptive".
I believe that that sums up very well what the role of government should be.
This Government have delivered. We now have in this country real economic growth without inflation, a competitive exchange rate and economic policies that
1164
encourage investment. Although I believe that government spending can have an impact, I profoundly disagree with those who just call for more and more money to be spent. That is not the answer. The Government must fund the BTA and other agencies. I believe that the authority does a very good job marketing overseas. One of the main reasons is that it raises money from the industry and then helps the industry to market its product through the BTA offices around the world.
Marketing campaigns must be industry led. We must not be afraid to add government money to those who are prepared to spend it. There is a terrible tendency in government to be afraid of backing success. But I believe that those are the people whom we should be backing. Of course the BTA could do with more money; indeed, we could all do with more money. However, the BTA is well funded by government. It will receive £35 million this year. What we must look at is how that compares with what others spend.
Of course, the biggest spender is the industry itself which is estimated to spend over £250 million a year. That figure may be a serious underestimate. Out of money spent abroad one of the biggest spenders are the airlines, which is why I have to say that in the incredibly competitive world of airline fares the introduction of the departure tax was, I am afraid, so particularly damaging to the tourism industry.
The next biggest spenders are local authorities, which probably spend about £70 million a year in promotion. Some spend well and some spend badly. I believe that the BTA and the ETB have an important role to play here in improving the quality of the spend. They must also work with other government agencies—the DTI being the most important other government department. They must work with the British Council, which has a budget four times as large as that of the BTA and which often, I am afraid, in the past has seemed to shy away from collaborating.
I know that there have always been complaints in the past that the Government are constantly reviewing their tourism policy. I believe that is a good thing because it is a constantly evolving industry. What matters is that the reviews are outward looking and not inward looking. I hope that there will be time in the next legislative programme to merge the BTA and the ETB. It would save money and make sense. It would not be necessary if Scotland had not marketed itself abroad on its own, but now it has done so and it has that power, it shows no signs of wanting to give it up.
The role of the ETB has narrowed in recent years. I think that is right. The local tourist boards are closest to their industry. They are commercially operated and must be helped. There is scope for them to co-ordinate better between themselves and they obviously must recruit more members. I believe the single most important thing the ETB can do is to make the crown classification scheme work. There is a major goal here if we can merge this scheme with the AA and RAC schemes and produce a nationwide scheme which is understandable and affordable. I do not believe it should

1165
be a statutory scheme. I think that it should be voluntary and run by the local tourist boards, which, after all, are non-statutory bodies.
Consumers are confused. I do not think, as has been suggested, that we should try to have an all-EC scheme. There are too many in Europe and they are all different. We could spend years trying to negotiate an EC-wide scheme. We must concentrate on what we need here. Can my noble friend say what progress has been made in that regard? Progress has also been made in London, which for many years, rather strangely, had one of the weaker tourist boards. However, under the leadership of Sir John Egan, it has rapidly improved. The Government have offered more money to be matched by the industry. Can my noble friend say how much of that has been spent so far?
I was the first to welcome the Government's deregulation initiative when it was announced. There are far too many unnecessary regulations and they multiply every day. That is strangling the industry, particularly the smaller operator. I hope that the Government will redouble their efforts, as I am afraid that progress is painfully slow in this area.
I shall speak briefly about what the Commission has to offer, and I shall also speak briefly on the report which is before your Lordships. As is the case with most matters which concern the EC, there are some good aspects and some bad aspects. I am a natural sceptic and start from the view that EC competence usually means incompetence. I am afraid that I judge it guilty until proven innocent. One has only to consider some of the suggestions that have arisen, for example as regards European advertising. I shudder to imagine EC-funded European slogans. I hope that marketing will be left to the industry and that the EC will work with the industry and support it but not impose itself on the industry.
On the plus side, elevating the tourism unit to the status of a directorate is a good idea. It could promote the cause of tourism and have more influence, especially if we are to deal with matters such as the distance selling directive, or whatever new wheeze is thought up in the future. But please let there be no provisions on capital spending; that must be a matter for the industry. However, that does not mean not helping with infrastructure. If any of your Lordships need convincing, they should look at the awful monstrosities built at the time of a socialist government in Greece. They are ghastly and also a commercial disaster.
While on the subject of socialists, I must inform noble Lords opposite that acceptance of the social chapter would seriously damage the tourism industry in this country. If noble Lords opposite do not believe me, they should talk to a French hotelier, over half of whose wages bill goes in taxes to the state.
Some of those in the tourism industry in our country often contend that compared with our European neighbours we have the highest rate of VAT. I know the Government have been studying this matter and I wonder whether my noble friend can say whether they have reached any conclusions on how we compare with our neighbours. This is a useful debate which adds to our understanding of the industry. I am sure that the
1166
Government will take careful note of it so they can formulate their policies to continue to support this important industry.
4.55 p.m.
Lord Bancroft: My Lords, I speak narrowly to the report of the European Communities Committee and pay more than the usual obeisance or tribute to the noble Lord, Lord Elibank, who chaired the committee, and to the many helpful witnesses including, notably, the noble Lord, Lord Inglewood, the Minister. I follow hot on the heels of a fellow member of the committee, the noble Lord, Lord Methuen, and, like King Wenceslas' page, I must mark his footsteps well.
I confine myself even more narrowly to a sexless aspect of tourism; namely, organisation. Other noble Lords—notably the noble Lord, Lord Montagu of Beaulieu—have spoken eloquently of the quite staggering statistics. That makes it the more essential that the Government on the one hand and the Commission on the other organise themselves efficiently. First, I shall discuss the Government. I take it as read that the prosperity of the industry rests primarily with the thousands of corporations and individuals who comprise it. As the noble Viscount, Lord Astor, implied, with a happy combination of cruelty and truth, the Government's role should be confined to that of facilitator.
The Department of National Heritage is the chosen instrument—what we are allowed, by a further happy spin of history's wheel, to call once again a sponsoring department. There is a respectable case for arguing that that role could be better performed by the Department of Trade and Industry. It is there indeed that sponsorship used to lie. We discussed this in the committee. The arguments are finely balanced. However, experience compels me to the view that unless the perceived benefits of change are massively greater than the penalties, it is better to put one's hands in one's pockets and mooch away.
Governments over the years—as we all know—have bickered incessantly over the machinery of central government, the machinery of local government, the machinery of taxation and the organisation of industry. The results have either been dismally visible and short lasting or mercifully imperceptible. I have long carried with me the biting quotation by Abbot Bower on the legislative enthusiasm of King James I of Scotland in the Parliament of 1426,
"to enact new laws with facility, and to change the old with facility, is marvellous damaging to good order".
He was quoting Aristotle. We are heirs to a long inheritance. I am therefore content to accept that so long as we have a DNH the responsibility for the tourism industry should continue to rest there.
As to the machinery in the Commission for sponsoring the industry, I of course support the committee's view that there should be no new treaty title for tourism, and no setting up of a separate tourism agency. I also strongly agree with the noble Lord, Lord Elibank, that the existing tourism unit should he given the status of a directorate within DG XXIII, with a judiciously small increase in staff.

1167
In her otherwise surprisingly helpful response, the Secretary of State disagrees. She says flatly that,
"it would not affect the unit's ability to do the job effectively".
How does she know? What evidence does she have to support her view in the face of the evidence the other way? Her reply is headed, "London SW1". We were not privileged to see the envelope in which it came, but it must have been postmarked "Delphi".
As the noble Lord, Lord Elibank, reminded us, we are dealing with an industry which accounts for about 5.5 per cent. of Community gross domestic product and 6 per cent. of Community jobs. The tourism unit's role is to provide a degree of horizontal co-ordination within a Commission which is organised on vertical functional lines in the classic tradition of Lord Haldane. The unit has half a dozen permanent staff and a handful of supporters.
I do not share the delusion that enhancement of status or rank is ever of itself a solution to problems. That seems to me as moonstruck an approach as that of an adolescent rhinoceros in love. However, there are occasions in any organisation, private or public, national or international, when status can assist in a co-ordinating role. I was glad to have the support of the noble Viscount, Lord Astor, on this point. One may innocently inquire why else does one have a First Secretary of State, and a Deputy Prime Minister? I submit that we have a further example here. I take the liberty of hoping that in his usual courteous and helpful way the Minister will invite the Secretary of State to re-read our report and the relevant evidence at her leisure.
5.2 p.m.
Lord Shuttleworth: My Lords, I should like to join with others in thanking my noble friend Lord Montagu for initiating this debate about tourism's contribution to the economy and employment.
I want to talk about tourism in the countryside; and I must, therefore, declare my interest as chairman of the Rural Development Commission, the government agency responsible for the economic and social well-being of the people who live and work in rural England.
I and others have long argued that the best way of ensuring that the countryside is properly looked after is to ensure that there is a prosperous and broadly based rural economy. Despite the economic buoyancy of most rural areas in recent years, we are all too often reminded, as we have been over the past five weeks, of the fragility of some sectors in that economy.
How important has been the growth in rural tourism, my Lords. At the risk of incurring the wrath of my noble friend Lord Montagu, I give two statistics. Rural tourism involves visitor expenditure in excess of £8 billion; it supports more than 300,000 jobs in rural England. As the noble Lord, Lord Borrie, reminded us, the tourism industry believes that across the UK in the next 10 years a further 300,000 new jobs will be created, hopefully with a pro rata share for the countryside.
1168
The general growth in rural tourism masks some continuing problems, as several noble Lords have said. There is a need to think carefully about the future of some of our coastal holiday towns—perhaps I should exclude Blackpool—following the decline in traditional seaside holidays. There is also a need to relieve the pressure placed on particularly popular areas such as the Lake District, the Peak Park and the Cotswolds. We must accept that, without proper planning and management, tourism will bring traffic congestion, parking problems, litter and environmental problems. Rural tourism, while benefiting the economy, must also respect the environment upon which much of it relies.
In the very short time available to me, I want to make three points, all confirmed by recent research and reports produced by the Rural Development Commission. First, the benefits of rural tourism are much more widely distributed through all sections of a rural community than might be apparent at first sight. Benefits do not just flow to tourist businesses but beyond, to support for a range of rural services much needed in the countryside. In many cases, and throughout rural England, essential services like village shops, bus services and post offices which form a lifeline for rural communities stay in business with the help of the additional trade brought by tourism. We published some research demonstrating that only two months ago. This particular benefit from tourism is often overlooked—not least by the beneficiaries.
Secondly, the tourism industry itself can do much to contribute to the environment in which it operates. With the Department of National Heritage, the Countryside Commission and the ETB, the Rural Development Commission produced an advisory report, Sustainable Rural Tourism—Opportunities for Local Action, which my noble friend the Minister who is to reply to the debate launched last autumn. It provides .examples of good practice and looks in some detail at a range of techniques that are available to seek the right balance between visitor, place and host community in the countryside.
The Minister will recall that at that launch we heard from a South Devon hotelier about the pilot of a green tourism audit kit in which over 200 local tourism businesses took part. That showed that businesses, from small-scale bed and breakfast through to large hotels and tourism attractions, can adopt policies which positively benefit their business, their visitors and their environment.
Last week I visited Exmoor National Park and saw the way in which the park authority and the tourism industry work together in encouraging tourism that respects the environment yet enables tourism businesses to thrive. Together they produce the local accommodation guide; and together through the Rural Development Commission's brokerage they have created an Exmoor Producers' Association.
The products made by 60 local businesses enable hoteliers and restaurateurs to source food and other products locally thereby adding value to their menus and accommodation. The association provides tourists with a wide selection of souvenirs and gifts made locally,

1169
including household products from chairs to charcoal made from the woodlands of Exmoor. This reinforces the conservation and public enjoyment messages of the national park to visitors to Exmoor.
The final point to which I wish to turn today is the hope that I expressed earlier that rural England will play its full part in the future growth of the industry. A successful rural economy is an evolving economy where businesses and earnings are reflective of changing markets. Tourism is a particularly strong example of an industry which faces constant change in customers' needs and demands. But change in the countryside is often very difficult to achieve, in particular when it involves development. I have used the words "sustainable tourism" sparingly today. Too often—I cast no aspersion on noble Lords who may have used the phrase in the debate today—it is a phrase prayed in aid by those who oppose suitable tourism development in rural areas. Proper concerns about tourism must be addressed and, if possible, relieved rather than concealed behind the more vociferous NIMBY element, for the industry, with the economic and environmental benefits it brings to the countryside, needs to adapt and change if it is to remain successful.
I hope that no one—and I assure the House least of all me—wants to despoil the countryside. But in that context we should not automatically assume that no large-scale tourism projects can have a place in rural areas. I use as an example holiday villages, which have demonstrated that they can be well planned, well managed and sited in locations which gain environmentally as well as economically from their presence, as I have seen for myself. Our research found an average of £10 million expenditure in the local area during construction of each village and over 450 permanent jobs came from each development, with demonstrable economic and environmental benefit.
That persuades me that unless there are very strong environmental concerns associated with the site or the access to it, there is a conclusive argument for supporting the commercial activities of some of the UK's leading tourism companies that have created this innovative and popular tourism product.
So tourism is one of the industries which can offer the economic diversity and breadth so necessary for a strong, resilient rural economy. It has been successful in recent years in contributing positively to the countryside. Pressures and problems exist and must be addressed so that rural England can continue to benefit from tourism.
5.11 p.m.
The Marquess of Hertford: My Lords, like many other Members of your Lordships' House, I declare an interest in that my home is supported largely, though I am sorry to say not entirely, by the proceeds of tourism. I was for 18 years president of what was then the West Midland Tourist Board. It was called that until some idiot went and created an entirely new county somewhere near Birmingham and called it West Midlands. We now have what I find a slightly embarrassing title of the Heart of England Tourist Board. It sounds slightly bogus to me.
1170
Some years ago the British Tourist Authority sent me on a three-week tour of North America to sell a ticket priced at about 10 dollars, which gave access to about 100 historic houses. I cannot imagine that many people would want to spend an entire holiday visiting 100 different historic houses. It was an interesting and enlightening experience, I only spent about one night in each place, so I visited a large number of cities in Canada and America. The two English people whom I met wherever I went were the British Tourist Authority representative and the local British consul. I am not in any way running down the consular service, but my impression was that the British Tourist Authority representatives made a far better job of promoting British interests than the consular service. That impression was confirmed by an American journalist in New York who remarked to me that if America had any organisation remotely as efficient as the BTA, no Americans would leave America because they have so much there. Luckily, they do not know it.
However, one must not become over-confident about the efforts of the British Tourist Authority because I believe that almost 90 per cent. of Americans do not possess a passport. That therefore gives considerable scope for greater promotion. For that reason, I wish to give warm support to the recommendation that the Government should give more help to the British Tourist Authority. I know that that means more money, but the money would be well spent. It would also obviously be desirable in a perfect world that the local tourist boards should receive a little more support than they do. I must emphasise the fact that the British Tourist Authority, in all its offices around the world, does a wonderful job of promoting British tourism. It needs more support.
5.14 p.m.
Viscount Thurso: My Lords, I too wish to begin by congratulating the noble Lord, Lord Montagu, on giving us the opportunity to debate the importance of tourism to the economy. I also wish to congratulate the noble Lord, Lord Elibank, and the members of his committee on the excellent work they did in producing their report.
I believe that the cobbler should stick to his last, and therefore, as a hotelier, I shall stick to giving a particularly partisan view of tourism as seen by a hotelier. At the same time, I shall declare my interests as a director of a number of hotel companies and sitting on the board of a number of industry bodies.
Different organisations produce different statistics as to the value of tourism. However, it is clear that there is common consent that tourism is a great revenue generator and job producer, hence an industry of national importance. I believe that the definition used by the noble Lord, Lord Montagu, is a rather narrow one, but it is the one that the Government used in the 1996 heritage report. Whatever definition one uses, the industry is of sufficient size and importance that it is now vital for the Government to establish and co-ordinate long-term policies for its continuing success.
In order to achieve that, there is an urgent need, in my view, for the Government to conduct a full and comprehensive review of the industry so that proper

1171
policies might be pursued. In the Department of National Heritage's 1996 report, page 23, there is an indication of a study. Perhaps the Government and the Minister would consider the possibility of widening the study to a full review. I wish to suggest a number of points which might be taken into account.
First, it is important to understand the difference between leisure visitors and economic visitors. Currently, the existing figures do not differentiate between the two sources of visitors. I think that the figures include both. I find it both fascinating and revealing that there is no reference to economic tourists, if I may call them that, in the department's annual report, in the Select Committee report or in the excellent debate in your Lordships' House last year initiated by the noble, Lord Bradford. Yet in London, most three, four and five-star hoteliers depend on the corporate sector for anything up to 80 per cent. of their business.
At the Hotel General Managers' Conference which I chaired, Mr. Alan Hopper of Pannell Kerr Forster showed a graph comparing London hotel occupancy over the past 10 years to GDP. His clear conclusion was that hotel occupancy followed the general health of the economy, underlining the prime importance of business visitors.
Not only is this important to understand in relation to foreign visitors but it is a huge influence in the domestic market. Any hotel which is situated in an area of reasonable economic activity can compete for corporate accounts which are often the mainstay of those businesses. That kind of economic tourism is in many ways of even more value than leisure tourism, since it is far more dependable and less seasonal. It is therefore vital that we have a proper and correct understanding of its importance and size.
Secondly, we must establish a clear understanding of what we expect all tourism to achieve before we can establish how to achieve it. It may be a statement of the obvious, but I believe it bears repeating that tourism is an economic activity designed to produce profits for its participants and for the economy as a whole. I would therefore define the objective of tourism as being to create the maximum economic benefit with the minimum disruption to the local population and at the minimum cost to the local exchequer.
Tourism, as with any industry—as a number of noble Lords have pointed out—has its undesirable by-products. Those of us who work in the industry must be conscious of them. Without a real economic benefit, the disruption, cost and damage which tourism can bring is unacceptable. UK Tourism plc must therefore have a clear corporate vision to enable the maximum yield from the minimum costs and disruption.
Thirdly, we need to develop new methods for measuring the industry, based on yield and not volume. The industry has traditionally been measured by visitor numbers with little or no thought given to spend or cost per visitor. If we can measure tourism in terms of yield—that is to say spend less cost—we will have a far clearer picture of what is actually profitable. In addition, it would be valuable to apply that criterion to the
1172
creation of jobs. While it is important to create jobs, it is perhaps more important to create jobs that are sustainable and offer a reasonable wage. As a hotelier, I do not want to be accused of adding to the "working poor"; I want to offer reasonable terms of employment and pay, and good career prospects. It should be part of our long-term policy for tourism that the jobs we create are sustainable, with good prospects, and not simply part-time or casual.
Fourthly, we must address the issue of quality in the provision of tourism services. The government paper, Competing with the Best, is certainly a great help, and the Government should be congratulated on its production. However, it ducks one of the main issues. In an industry as fragmented as ours, voluntary classification systems simply do not work, and never will. The crown system is a confusing failure, regarded by most hoteliers as irrelevant. We need a compulsory system, whether it is statutory, as in France, or through self-regulation by an industry body such as the BHA. We shall make no progress until the classification system is universal, simple and has teeth.
For these and other reasons I urge the Government to conduct a full and complete review, in consultation with the industry, which will enable the development and prosecution of a long-term policy for the industry.
For many years the Government's attitude towards the tourism industry and the hotel industry in particular has been regarded as one of such indifference that most hoteliers have given up on government bodies. Indeed, the industry's view was that the Government's attitude was rather like that of Wellington at Waterloo. Commenting on the French, he said: "They came on in the same old way and we defeated them in the same old way". However, that attitude has now changed. I congratulate both the Secretary of State and her predecessor on the initiatives they have undertaken for consultation with the industry. In particular, the appointment of a secondee from the industry to the Department of National Heritage, Mr. Roy Tutty, has proved inspirational. I was delighted to learn recently that his secondment has been extended, since he has built a very strong bridge, previously lacking, between the industry and government.
For the first time for a very long time, the industry is beginning to feel that its voice might be being heard in government. I therefore urge the Government to capitalise on that good will by undertaking a full review so that we may establish long-term policies for the continuing success of the industry.
I have a final word on funding. Here I shall disagree rather violently with my former boss, the noble Viscount, Lord Astor, who was somewhat more generous with funding at Cliveden. On 29th March 1994, the DTI issued a press release announcing a grant of £9.4 million for Jaguar Cars which it said would sustain (its word) 900 jobs. That values each existing job at being worth £11,000. Last year, the Department of National Heritage spent £44 million on tourism. Using its figure of 1.5 million jobs, that works out at £29 per job.

1173
We do not ask for much. We merely ask to be regarded on the same level as other industries. I very much hope that if the Government can undertake the review to which I referred, it will give them the ammunition to talk to other departments, and, it is to be hoped, make them realise the value of tourism to our economy.
5.23 p.m.
Lord Mountevans: My Lords, I declare an interest. I also declare my gratitude to my noble friend Lord Montagu for giving us this opportunity for debate. I also congratulate the Select Committee on its excellent report which covers the issues very well and makes recommendations that are broadly acceptable both to the industry and, I hope, to Her Majesty's Government. This latter is particularly important; the IGC White Paper suggests that tourism will probably be an item on the agenda at the forthcoming conference. I am aware of the existence of a tourism chapter in draft. When the conference comes to consider the subject, I hope that it will decide that the draft tourism chapter may long be left to gather dust.
My noble friend Lord Elibank detailed the committee's conclusions. I shall comment on some of them. I welcome the recommendation that the way ahead is through existing treaty provision and not through a new tourism title. I should oppose a new title and enhanced central powers: first, because I believe there would be too many political masters for a workable policy to emerge; secondly, because there would be too much bureaucracy—like political masters, bureaucracy is a brake on the fast-moving activity that tourism requires—and, thirdly, because I believe that tourism is a matter for subsidiarity. Individual countries must be left in command of their own detailed tourism policy as well as its execution.
There is also a concern, which some noble Lords may share, about the possibility of fraud. In his evidence to your Lordships' committee, Mr. Edward McMillan-Scott, the MEP, made much of that. Subsequently some noble Lords may have noticed a press report that two members of the staff of DG XXIII had been arrested and remanded in custody, no less, on fraud allegations.
I turn now to the committee's recommendation that the Commission should do some marketing to complement individual or joint efforts of the national tourist offices of individual countries. I am not sure that I should say that all marketing funds are welcome, but I believe that any Commission activity should be through the European Tourism Commission or through the national tourist offices rather than being complementary to their work.
I believe that the national tourist offices have the skills—some more than others. Certainly, I do not believe that the Commission has them. I was somewhat surprised that, in evidence, the BTA was criticised by Mr. Brackenbury for not working with the private sector, when that is far from the truth.
When in earlier days I controlled a marketing budget with a spend of some £6 million, it was funded one-quarter grant-in-aid and three-quarters funding from
1174
the industry. That that was the way ahead was confirmed by all the awards that the British Tourist Authority has won over the years in different market-places for being the most competent and the best national tourist office. My noble friend Lord Montagu mentioned some of the awards in passing. I have a list of over a dozen. The easiest thing one can say about them is that the BTA's trophy cabinet is rather fuller than that of any English football team.
I turn now to speed of action, which I believe is absolutely paramount, whether it is to build a brand or to react to circumstances, positive or negative. I cannot see the Commission showing the requisite pace, given the political and bureaucratic constraints that I detailed earlier. Rather, we must look for the vigorous response referred to by the noble Lord, Lord McNally, or, as my noble friend Lord Feldman put it in his excellent speech, "Leisurely is not the pace".
From the purely British point of view, our strengths are already established—be that a legacy from the days of the colonies, such as a common language and common heritage; be it in the well-established icons that we have; be it as a result of the work that the British Tourist Authority has already done. We have an extremely well established product. I believe that our own success would be diluted were we to get into pan-European promotions. One witness implied that, in the American market, we were still in the days of, "Today it's Thursday, so it must be Belgium". The truth is that the American market has come much further than that. Americans now know exactly what they want, and we must remind them constantly that we have it.
Two carrier facts might serve to illustrate our strengths. North America-to-Europe is the most competitive long-haul aviation ground in the world. We have 37 per cent. of it. Imagine that figure being diluted to the advantage of France, Germany, Switzerland or anybody else! Similarly, many years ago British Rail took the view—rightly, as it turned out—that rather than join the pan-European promotion for the Eurail pass, it would make very much more money by simply selling BritRail passes. That has always proved to be the case.
The best role for the Commission is as a mirror of what my noble friend Lord Montagu described as the role of the Department of National Heritage, which is actively to champion the role of tourism to other directorates. It might well seek to enhance standards. It might well seek to ensure commonality of statistics. But its principal remit must be to keep tourism's profile high. The Commission as a whole must ensure that DG 23 has the resources to keep the importance of our industry in front of the other directorates. Not least, as was mentioned by several previous speakers, it must ensure that other directorates are aware—I know that DNH does this to other departments over here—of the impact which proposed policies have on tourism growth. And growth is what we need—growth primed and led by the British Tourist Authority and the national tourist boards.
While I am grateful to my noble friend the Minister, and to my noble friend Lord Astor for their success in fighting the budget corner, I do recall the Written

1175
Answer which was given last autumn to my noble friend Lord Bradford, which illustrated that grant-in-aid to the five main boards had risen in cash terms by perhaps only £100,000 between 1979 and 1995. Given the ravages of inflation and exchange rates, that is not a figure of which to be very proud. We must back success, as several noble Lords have said, and, as my noble friend Lord Feldman did in his excellent maiden speech, like Oliver Twist I cry out for more.
5.30 p.m.
The Earl of Bradford: My Lords, first, I must declare my close interest in tourism and its effective promotion as owner of Porters Restaurant, Covent Garden, president of the Master Chefs of Great Britain, a committee member of the Restaurateurs Association of Great Britain, chairman of Weston Park Enterprises and president of the Wrekin Tourism Association. I should also apologise to your Lordships for the fact that I have not been able to attend for all of the debate on this important subject.
I am delighted that the Select Committee report has highlighted the need to allocate more resources to the British Tourist Authority. Unfortunately Her Majesty's Government, and in particular the Treasury, have simply not realised that money spent on tourism promotion is an investment that pays dividends directly and quickly.
As just been mentioned by my noble friend Lord Mountevans, the grant for tourism promotion has remained the same in real terms for the past 15 years, which, in fact, equates to a reduction, as many of the British Tourist Authority's costs are in foreign currencies. Therefore the decline in the value of the pound has had a major effect. Against a basket of European currencies, it has gone down by 23 per cent. since 1990, though Europe now provides nearly 60 per cent. of all the inbound tourism spend to Britain.
Since 1979 our performance has slipped gently backwards in comparison with almost every other country in Europe. Our share of world tourism, for instance, has declined from six per cent. in 1987 to only 4.3 per cent. six years later, while we are third from bottom in the European league table of tourism growth between 1980 and 1992.
The crazy thing is that money spent on tourism promotion produces very real and tangible returns. It yields a direct financial profit to the Treasury. It is estimated that every extra pound spent on tourism promotion produces over £4 in additional tax revenue—a money-making scheme if there ever was one, with no catches, definitely not a Barlow Clowes. More than that, it affects the balance of payments, where a surplus of £500 million in 1985 has been turned into a deficit of £4.5 billion in 1995. Equally important, it creates jobs—one new job for every £28,500 of increased tourism spend. That missing £5 billion in the balance of payments would have provided for 175,000 new jobs.
All those facts were highlighted in your Lordships' House in the debate of 25th October last year. It was followed shortly after by the announcement of the government grant for 1996—a pitiful increase of
1176
£1 million and in real terms a decrease. That will certainly not turn the tide in our favour, however carefully the money is managed.
The noble Viscount, Lord Thurso, drew our attention to the quality of tourism. It should be appreciated that unfortunately the quality of the tourists visiting these shores has tended to decline—not, I hasten to add, in their appearance or background, but in terms of the amount of money they spend here. Too many coaches of daytrippers clog up the streets and squares of London. Those tourists are obviously included in the overall figures, despite the fact that they spend very little here.
We need to attract the well-heeled, high-spending tourist, particularly the business tourist, thereby putting less of a strain on our country's infrastructure which already often creaks under the increased burden.
Great strides have been made by the British Tourist Authority under the chairmanship of Adele Biss. Many in the tourism industry find it strange and sad that her contract has not been renewed for a further period, and also regret the manner in which it has been handled. Her quiet but effective stewardship of the British Tourist Authority won her many friends in what is a notoriously critical industry. Her professionalism and commitment to quality achieved much in raising the overall number of visitors and the profile of Britain as a destination, despite the lack of sufficient government grant. Her appointment of Anthony Sell as chief executive has proved to be an excellent and inspired choice, and, as a result, I am sure that her work will not have been in vain. We all hope that her replacement will be of equivalently high calibre, but she will be a very hard act to follow. On behalf of all those in the industry, I should like to wish her well in the future.
5.36 p.m.
Lord Palmer: My Lords, I do apologise, most sincerely, for speaking in the gap, but I would just like to seek reassurance from the Minister on one particular Scottish point of which I have already given him notice. I must declare an interest as Chairman of the Historic Houses Association for Scotland. The Scottish Tourist Board has recently introduced a grading and quality assurance scheme for visitor attractions, and at the moment this scheme is voluntary. There are rumours that, say, next year this scheme will be compulsory at a charge of £90 per visitor attraction. Many of my members feel they do not want their homes—and here I emphasise their homes—visited, inspected and graded. Can the Minister just assure me that if my members do not join this scheme, they will not be asked to withdraw their membership from their local tourist board? Once again I do apologise for intervening.
5.37 p.m.
Lord Thomson of Monifieth: My Lords, I join with everyone who has spoken in thanking the noble Lord, Lord Montagu of Beaulieu, for initiating this debate, and for doing so with that very special degree of authority he has in all aspects of the tourist industry. I do not think there have been many debates which have enjoyed

1177
two such expert maiden speeches as we have had this evening from the noble Lord, Lord Broughshane, and the noble Lord, Lord Feldman.
Like everyone else who has spoken, with the exception of the noble Lord, Lord Bancroft, perhaps, I declare an interest—I am bound to say, as a member of the Nolan Committee, that I think the noble and learned Lord, Lord Nolan, would be proud of the ringing declarations of interest that have come from all quarters during this debate—as chairman of the trustees of the charitable foundation that is responsible for maintaining Leeds Castle in Kent and making it available for the enjoyment of visitors from all over the world. As a plebeian Scot, I never thought I might in my declining years become a nominal laird of an English castle, all the more so since the most distinguished inhabitant it ever had—and I use the adjective advisedly—was King Edward I, the Hammer of the Scots, the villain of "Braveheart", referred to by my noble friend Lord Glasgow.
Therefore I want to start on a parochial note, simply using my experience at Leeds Castle as a typical case study of a small to medium-sized tourist business—that is what the Leeds Castle Foundation is these days—and how it can contribute to the national economy. I concentrate on what, if I were an economist, I would probably call the micro-aspects of the economic side of tourism and not the macro-aspects which, if I may say so, I thought were analysed splendidly by my noble friend Lord Thurso. I learnt some of the jargon and I was glad that my noble friend drew attention to the fact that counting heads is not wholly satisfactory for determining success of the tourist business and its contribution to our economy. I have learnt that one needs to pay attention to the per capita spend. It is very important to keep looking at that matter.
Leeds Castle is in a rural area where there has been considerable unemployment from other sources over recent years. Traditional agricultural employment has declined but we have been able to provide altogether 300 full-time and part-time jobs. Many of them are flexible jobs, attractive to both married and single women (which is very important these days) and we try particularly, being conscious of ageism in employment matters, to offer opportunities in part-time posts to people of 50 or 60 years of age.
We take training very seriously. The noble Lord, Lord Borrie, emphasised the importance of training. We do our best to train people. In my years on the Continent, I was often struck by the fact that waiters, chefs and those behind hotel desks were part of a proud profession, with a pride that I did not always find in this country in those days. That may be built up—I think it is—and the sooner it is, the better for all of us.
The local services around such places as Leeds Castle—the pubs, the restaurants, shops, garages, local small theatres and even the local churches—all benefit from the tourists who are attracted to the area. At Leeds Castle, like many other historic houses which have been mentioned during the debate, there is an interesting mix of visitors. Out of about half a million visitors, 50 per cent. come from overseas. So we make our own
1178
modest contribution to the nation's foreign currency earnings. Like other historic houses, we provide an important means of preserving the more skilled and, in some ways, more traditional crafts in the building industry. In all those ways the tourism industry, which, as has been said, is primarily an industry of small businesses, does a great deal to support the economy of the country.
I turn from that rather parochial analysis of one small tourist business to the issues raised by the report on the European dimension of tourism in the report of the Select Committee. I join with other speakers in paying tribute to the noble Lord, Lord Elibank, and his colleagues for another interesting report from your Lordships' Select Committee. In some ways, the few sentences on the opening page of the committee's Opinion about the British tourist industry fairly well summarise the issues that should concern the Government. It says that:
"The significance of the tourism industry … is not sufficiently appreciated".
That has come out again and again from the speeches this evening. It says that:
"tourism is not regarded as an industrial 'heavyweight', despite the fact that it stands out as one of the few substantial sectors with real potential for growth".
It mentions figures recently given about the relative costs of providing jobs in the motor industry, and tourism is a vivid example of that. Finally, the committee said to the Government, through the report:
"While the industry itself must bear the main responsibility … the Government could and should do more to promote the United Kingdom as a tourist destination. A priority should be to give more resources to the British Tourist Authority … British tourism could be better promoted at all levels of government, and particularly overseas".
The committee makes the very useful and practical suggestion that:
"Tourism officials should be more involved in the planning of overseas visits by Ministers and in other diplomatic activities".
It calls on the Department of National Heritage to work closely with other departments.
I believe that there would be great advantage for all those associated with the tourism industry if there were more continuity in the Department of National Heritage on the tourist side of its activity and if senior civil servants stayed longer in post. Also it would help if the Minister of Tourism in the Department of National Heritage was a more high profile figure and ready to promote the interests of the industry.
I strongly support the remarks of the noble Viscount, Lord Astor, about making the crown classification system work a great deal better. I was very interested in the comments of the noble Lord, Lord Borrie, who made the case for a more rational and equitable regional policy in relation to government help towards tourism. I was in some embarrassment about it because, speaking as a Scot, I am happy to learn from my noble friend Lord Glasgow that the Scottish allocation of tourist funds has increased quite significantly while the English Tourist Board has suffered in real terms. Perhaps I may

1179
say to the Minister that there is a simple answer, which is to ensure that the poor old English do as well as the Scots in terms of government support in these matters.
Let me say a word about the European dimension. Noble Lords will know that I am a Euro-enthusiast. However, I felt that the report gave a well balanced verdict, with which I agree wholeheartedly. Certainly, I should not like to see a tourist Title added to the Treaty of Maastricht. Tourism is primarily a subject for subsidiarity. That does not mean to say that there is not a role for the Commission in a modest way to complement the activities of national tourist authorities.
I was amused and fascinated by the careful language in ministerial letters from the Secretary of State which the noble Lord, Lord Bancroft, always studies. The Minister, who is not in any way a Euro-sceptic, said:
"We could accept the principle of promoting Europe".
I warn her that those are very dangerous words for a member of the Government in the present sensitive circumstances. However, she went on very quickly indeed to say that:
"the European Commission's involvement does not seem to me to be necessary".
I hope that the Government will reconsider that rather mild recommendation from the Select Committee and at least allow tourism to enjoy the status of a director, even with no additional staff and no additional money, within DGXXIII.
5.48 p.m.
Lord Graham of Edmonton: My Lords, let me begin with a triple "thank-you": first, to the noble Lord, Lord Montagu of Beaulieu, for a splendid start, and secondly and thirdly to the two maiden speakers. Both the noble Lords, Lord Broughshane and Lord Feldman, showed us what this House most appreciates; namely, that noble Lords know what they are talking about. Their speeches were much appreciated and we hope to hear often from them in the future.
Tourism is far from being the most political or partisan of industries or departments. It will remain so during this debate. Yet it has been demonstrated during this excellent debate that, if the politics are muted, the strength or weakness of political will looms large. That perhaps marks a difference. "It ain't what you do, it's the way that you do it" seems to me to be an apt theme song for our debate here today. It has been ably argued by many noble Lords today that the dimension of Europe looms large over tourism, as indeed it does over much of the financial, commercial, industrial, agricultural, artistic, environmental and sporting life, in general, in countries which make up the European Community.
The report presented as part of this debate is timely and welcome, and Lord Elibank and his committee have my gratitude for such a splendid, solid piece of work. There are many in the industry both inside and outside the House, who will value the contribution that has been made.
1180
My abiding impression from reading the report is that the committee has grasped a fundamental truth which has eluded the policy makers within the Government, and that is that the stature of tourism is all too often these days seen by the way it is perceived in the pecking order of government thinking. No matter how the tourism industry in its manifest form strives—and survives—and can be seen to prosper, when it is placed in one department of state or another and given a low profile, the signal that goes out to the world is that Britain does not take tourism seriously. That is a point that has been made by more than one speaker and lastly by the noble Lord, Lord Thomson.
That is why the committee had two things to say on this. First, in paragraph 100, it said:
"We do not believe that tourism is adequately represented within the Commission by the existing tourism unit. We therefore believe that the Commission should elevate the tourism unit to the status of a directorate within DGXXIII with an increase in staff and resources".
That was a cry for up-rating tourism within the Community. Then, nearer home, in paragraph 95—something which is spot on and which has been echoed throughout the debate—it said:
"While the industry itself must bear the main responsibility, we believe that the Government could and should do more to promote the United Kingdom as a tourist destination. A priority should be to give more resources to the British tourist industry. We believe that the current division of resources between the BTA and the national tourist boards is inefficient and contributes to the United Kingdom's lack of visibility in overseas markets".
Then, in paragraph 96, the report from the noble Lord, Lord Elibank, goes on to say:
"British tourism could be better promoted at all levels of government—and particularly overseas".
That is not an astringent criticism but the unanimous voice that has been expressed here and in many other places outside the House.
If the Government are listening to a committee of this House, what will be the response to this reasonable plea? Can we expect the Minister to respond to what are sensible and cogent criticisms?
I would remind the Minister that it was a Labour Government in 1969 which introduced the Development of Tourism Act which created the tourist boards. We remain convinced about the importance of their activities in promoting the tourist industry. With the areas of transport, energy, environment, consumer affairs and the economy all impinging on tourism, it is clear that more consideration needs to be given to this important area which, at the moment, is treated by the Government with little coherence—another point made by the noble Lord, Lord Thomson.
The noble Lord, Lord Borrie, quite rightly pointed out the inconsistencies which pockmark what passes for policy or strategy in funding tourism. A disaggregated industry like tourism needs government support and direction if it is to achieve its full potential. Recent cutbacks in British Tourist Authority and English Tourist Board funding—and I applaud their work—expose a short-sightedness from the Government. They have forgotten about or choose to ignore the importance of tourism.

1181
We have been told that Britain's tourism industry is worth over £36 billion a year. It provides 1.5 million jobs; 7 per cent. of all employment; and it is worth 5 per cent. of GDP. Britain must take greater advantage of the economic potential in the tourist industry. It will be the world's largest industry by the year 2000; yet Britain, by current predictions, will slip from fifth to eighth place in the world tourism league by the year 2000. If Britain had simply retained its share of the world tourism market over the past 10 years, over 200,000 more jobs would have been created.
Britain has a £4.5 billion deficit on its tourism balance of payments. That is why the recent cuts to the British Tourist Authority—and especially the English Tourist Board—seem so senseless. This short-term, budget-cutting measure will cost much more in the long term.
Our aim should be the creation of a clear, coherent government strategy. There are key issues which the Government should have on their agenda. First, coherence of policy-making across the many departments of government should be a primary objective. Secondly, a review of the existing policy framework and the methods for delivering it is needed—a review inclusive of the various opinions within industry.
Last week I attended a conference opened by the Leader of the Opposition, Tony Blair—an indication that Labour takes the future of tourism seriously. It was well-attended by many in the tourist industry. They did not moan—they will survive—but many voices called for stronger leadership from the Government. Despite survival, those voices also called for a radical review of structures; but mostly there was a cry for the Government to involve the industry much more in shaping those structures.
The charge they made is that the Government do not take seriously enough both the potential as well as the contribution that the industry makes. Why not? We should be determined that Government and industry work together, to market more effectively UK plc and to enhance our chances of improving our share of the continuing growth in global tourism. These are challenging, fundamental issues, and we should be focusing on them now.
At that same conference organised by the Labour Party, a representative from Touche Ross alluded to a study that in 1993 it had carried out on tourism policy in EU member states called Success Factors in European Tourism Policy. They identified a number of features which the most successful countries—Ireland, Portugal and France—had in common. I commend and recommend those features to the Minister and the Government.
First, those countries all had a clear, coherent government strategy for developing tourism. This Government do not. Secondly, they had a coherent central co-ordination of all policies affecting tourism, such as transport, cultural development and regional policy. This Government do not. In all three countries the government led private sector activity and acted as a catalyst for it rather than seeking merely to co-ordinate
1182
private sector initiatives. Thirdly, and most importantly, all three governments offered fiscal incentives to the private sector in the form of reduced VAT rates for small hotels and accelerated capital allowances. The revival of Ireland's tourism—in which overseas visitor expenditure grew at 10.8 per cent. per annum between 1980 and 1992, compared to the UK growth of 5.7 per cent.—coincided with the Irish Government's decision to cut VAT on hotels from 20 per cent. to 10 per cent. in 1983–84.
The British tourist industry is resilient, vibrant and successful; but it is capable of even greater things given a proper lead, which can only come from a Government with vision as well as a penchant for making a fast buck.
5.59 p.m.
Lord Inglewood: My Lords, I am grateful to my noble friend Lord Montagu for tabling today's debate and thus giving me for the second time in just seven months an opportunity to discuss tourism, which is a very important subject. If it is of help to the noble Lord, Lord Bancroft, I come not from SW1 nor from Delphi but, hotfoot, straight from the European Council in Bologna.
I am also grateful to my noble friend Lord Elibank for moving that this House take note of the Report of the European Community Select Committee on Tourism and the Community to which I shall return later.
I am sure that I speak for the whole House in welcoming my noble friend Lord Feldman and the noble Lord, Lord Broughshane, and congratulating them on their maiden speeches. Each pointed to the cross linkages between the arts, tourism and the heritage. They made a memorable contribution to our debate this afternoon and we look forward to hearing more from them in the months and years ahead.
Overall we have had a wideranging discussion which speaks a lot for those who moved the debate. Inevitably I cannot answer all the points that were raised. Instead I shall try to focus on some of the main themes which ran through what we heard this afternoon.
The terms of the question of my noble friend are very relevant to Britain today—
"To call attention to the contribution of tourism to the economy and employment".
Tourism makes a huge contribution, and it should not be necessary to call attention to its importance; it should be self-evident and generally understood. Indeed, I suspect from listening to the debate this evening that that is becoming the case. But it cannot be denied that until now the industry's contribution has been too easily overlooked and undervalued.
As was recognised by all speakers, the economic importance of tourism is now at last being properly recognised and, without making a party point, we politicians are recognising it also. The CBI has moved tourism up near the top of its agenda and last November tourism was debated for the first time ever at a CBI national conference. My right honourable friend the Secretary of State for National Heritage—one of the industry's most fervent champions—gave a well received speech. Having heard the remarks of the noble

1183
Lord, Lord Graham, I might suggest that Tony Meher look at the Secretary of State as a suitable role model for an aspirant for her job and not as a predecessor whose record should be downgraded.
Much of the greater recognition that tourism is now receiving stems from the creation of the Department of National Heritage. Since 1992 the industry has had a more focused advocate in Whitehall than every before—a Cabinet Minister nearly all of whose responsibilities (the built heritage, the arts, museums and galleries, sports and recreation) have mutually beneficial linkages with tourism. That was a point made by the two maiden speakers, and, as my noble friend Lord Shuttleworth pointed out, has a wider significance, not least in the countryside in general, which was well illustrated by the remarks of the noble Lord, Lord Thomson of Monifieth.
This is the second tourism debate in your Lordships' House in seven months, and there have been four tourism debates in another place during the current Parliament where there were none at all during the previous Parliament. That shows the success of the DNH in bringing tourism to the forefront of consideration by the Government and the wider world.
In his opening remarks my noble friend Lord Montagu suggested that we should not repeat the statistics. I gladly follow his advice in that respect. That is not to say that those statistics are not important; they are at the heart of what we are all discussing this afternoon. However, I do not want to be repetitious.
My noble friend's question goes on to refer to the,
"need for Her Majesty's Government to establish and co-ordinate long-term policies to ensure its continuing success".
The Government fully recognise that need and are responding actively. We are determined to do all we can to enable the industry to improve its competitive position to win a growing share of the world market, and, let us be clear, it must achieve that at the same time as ensuring that we add value. More numbers should not be an end in themselves. I was interested that that seemed to be a view widely held across the Chamber.
We must maximise the contribution that the industry can make to our economy. As my noble friend Lady Seccombe pointed out, that must involve responding to changing fashions and demand in the market. But we in government cannot ensure success; we cannot deliver the tourism product; only the industry can do that. However, we shall continue in our efforts to create the right conditions for that success. There is a whole range of policies that contribute to creating the right conditions, which is a point emphasised by my noble friend and predecessor Lord Astor; for example, our commitment to a low inflation and a low tax economy makes the right climate for growth and investment; our resistance to inappropriate and unnecessary labour market regulations such as the European Union's Social Chapter and the statutory minimum wage which models social policy, labour relations policy and economic policy to the detriment of each. Those ensure that the best job creation record of the major European economies is ours.
1184
We introduced a new initiative to assist small firms, of which this industry is largely composed, as a number of speakers mentioned. A network of business links has been set up. My right honourable friend the Prime Minister recently announced a package of measures, including the streamlining of the tax and national insurance systems and the simplification of government business support schemes.
Further progress on deregulation is under way, which will bring new benefits to tourism businesses, adding to those flowing from the reform of food hygiene legislation and the relaxation of liquor licensing and Sunday trading laws. The National Lottery is helping to fund magnificent new projects which, among other things, will strengthen our appeal as a tourism destination. I am referring to the new Tate Gallery at Bankside and the Earth Centre in Doncaster.
Within Whitehall, my department's role is to represent the interests of tourism and to ensure that other departments take those interests into account when framing their policies which impinge on the industry. That is what my noble friend Lord Montagu asked for; we are doing that. The European Select Committee referred to that in its report on the involvement of the Community in tourism. The committee calls on the Government to ensure that the Department of National Heritage works closely with other departments, and, in particular, the Department of Trade and Industry. We are doing that.
Let me give some examples of the effectiveness of our active sponsorship. Responding to calls from smaller operators, we worked closely with the Department of Transport in drawing up the new regulations and guidance on white-on-brown tourist road signs, which remove arbitrary qualifying criteria. Our intervention contributed to the liberalisation of air services between the United States and this country's regional airports. We have effectively opposed harmful proposals in the European. Community's draft distance selling directive. My right honourable friends the Secretaries of State for Scotland, Wales and Northern Ireland, sponsor tourist boards and the National Heritage Department works closely with their departments.
We seek to champion tourism's interests more effectively within Whitehall by improving communications with industry's representatives and our colleagues in government. But, to state the obvious, government is about balancing different interests and priorities. While tourism's growing economic importance gives it even greater weight in policy discussions, it is inevitable that many changes that the industry would like to see may not come about because other matters, we conclude on balance, take precedence. But let nobody be in any doubt: we will put the view of tourism as forcefully as we can.
As well as working within Whitehall, we seek to provide a strategic overview to help the industry plan its future, and we fund limited intervention to help the market work better. In carrying out that role we work with and through the statutory tourist boards which play a vital role in assisting the development of the tourism product and promoting it both at home and overseas.

1185
That is why we were so determined to maintain the planned budget for the English Tourist Board and increase the budget to the BTA, even in the difficult public expenditure round last autumn. I hope that that goes at least some way to answering the point made by my noble friend Lord Hertford.
Increasing funding for the BTA was something which the European Select Committee recommended. The ETB and BTA will together receive £45.5 million in 1996–97, which is an increase of £1 million over that for 1995–96, and that at a time when most other Department of National Heritage bodies are facing reduced resources.
My noble friend Lord Bradford mentioned the name of Adele Biss. I should like to take this opportunity to pay tribute to the chairman of the English Tourist Board and British Tourist Authority, Ms. Biss, whose three-year term of office will expire at the end of May. She has made a valuable contribution towards strengthening the effectiveness of the statutory tourist boards during her time as chairman. Her strategic and analytical thinking set in place a sound framework for the future. She has overseen a major restructuring of the BTA, which has meant that its managers throughout the world are able to respond more quickly to market demands. She has also concentrated the energies of the ETB on improving the product and working more effectively with the non-statutory regional tourist boards. Her successor will have those very solid achievements to build on.
Lord Graham of Edmonton: My Lords, if the record is so good, can the noble Lord tell us why she was not reappointed?
Lord Inglewood: My Lords, the chairman brought very particular and very valuable skills, which were very well employed, to the term of office that she held at the two tourist boards. We feel that different qualities may be those which will most effectively carry forward the industry in the future. It is those which we are looking to.
My department worked with the BTA and the ETB on a strategic overview of tourism which, as your Lordships will know, led to the publication last March of Tourism: Competing with the Best. Competing with the Best set out an initial programme of work, in partnership with the industry, to make British tourism more competitive. We are delighted with the very positive response which Competing with the Best has had and we are continuing to work with the tourist boards and the industry to follow it up. One of the key tasks identified was the need for better targeted overseas marketing as a means of increasing suppliers' access to markets with growth potential, including more emphasis on the promotion of London. Other priorities include strengthening the crown classification scheme, and a benchmarking project aimed at assisting accommodation providers to establish best practice. Good progress is being made.
My noble friend Lord Montagu and the noble Lord, Lord McNally, raised the question of London. Of course, Britain's greatest asset in attracting overseas
1186
visitors is our capital city. Over half of all trips to Britain include a stay in, or visit to, London and around 40 per cent. of overseas visitor nights are spent there. We must remember that London is in competition with all the major cities in the world. That is why we have provided additional money for the development of new promotional initiatives for London in overseas markets. In January this year, my right honourable friend the Secretary of State, launched the new marque that will raise awareness of London as a modem "world" city with a great diversity of attractions.
London is the key to our continuing success in the world market. The new money we have provided will be matched by private sector funds to produce a new promotional push linked by the new marque. This will increase interest in London abroad and, as the main gateway to Britain, to the rest of the country. We want to encourage those who have already been to London to return and explore further afield, and to attract first-time visitors who will want to come back and see more of what our country has to offer. To do that we have to keep the image of London attractive and in the minds of potential visitors for if we do not, it will be a disaster for the capital and the rest of the nation.
London is the gateway, but, of course, Britain has so much more to offer. The British Tourist Authority is working with the regional tourist boards and others, to improve its already substantial overseas promotion of the whole of Britain, which, quite rightly, as has been mentioned this afternoon, has received many deserved accolades. What we need to do is to develop recognisable themes which will bring home to potential visitors what each region has to offer.
That is exactly what the BTA is doing in setting up regional consortia to provide a co-ordinated marketing effort which will maximise resources and create an identifiable theme specific to each part of the country. In that way, every part of Britain will he able to benefit from strategic and targeted marketing aimed specifically at the visitors who are most likely to act on information and make a visit. Developing a stronger image for the regions and reinforcing the message with specific marketing will also make it easier to encourage those visiting London to take a trip elsewhere in Britain.
The European Communities Committee's report suggested that all the promotion of the United Kingdom overseas would be more efficient if funding were concentrated in the BTA rather than having any separate provision for that work with the boards in Scotland, Wales and Northern Ireland. I was reassured in this context by the remarks from the noble Earl, Lord Glasgow, about the success of tourism in Scotland. In the Government's response my right honourable friend the National Heritage Secretary has noted that the boards do in fact work very closely together, and have developed complementary branding for their marketing in much the same way as I was describing the brands which the English regions are developing. We are content that so long as the boards continue to work closely and constructively together those arrangements work satisfactorily for all parties concerned.

1187
The noble Lord, Lord Borrie, raised the matter of differential spending on tourism across the country. As the noble Lord knows, the home countries' Secretaries of State have discretion to spend public money in their areas of responsibility. That is not capriciousness, but a proper way of matching public expenditure—that is to say, everyone else's money—with the varying and different problems which face different parts of the country.
The noble Lord also raised the subject of regional selective assistance. Tourism projects are eligible for regional selective assistance grants. However, applicants for that assistance must not only meet the terms of the rules, in particular they must meet fairly stringent additionality criteria. They must not simply use subsidy to displace economic activity from elsewhere.
A second set of measures arising from Competing with the Best has to do with the quality and value for money of accommodation. Accommodation is the largest element of tourists' expenditure, and so a crucial factor in deciding what destination to visit. It is worrying, therefore, that research has shown that not enough of our overseas visitors are satisfied with the quality and value for money that they receive. Although the ETB's crown accommodation classification and grading scheme has gone some way towards raising standards, it has not yet reached its full potential.
Last year, my department asked the ETB to review the scheme to make it the guarantor of quality accommodation. The problem is that, viewed objectively, the operation of the existing classification schemes seems as likely to confuse as to assist visitors. That cannot possibly be in the country's best interests, as my noble friend Lord Astor pointed out. We must ensure the classification scheme arrangements convey clear messages to visitors. The English Tourist Board will shortly be presenting its proposals for a revised and strengthened crown scheme. We intend to consult the industry on those proposals before any decisions are made.
We are now adding further work to that which has already flowed from Competing with the Best. As has already been mentioned by a number of speakers, tourism is an industry which is very much dependent on people. We wish to study the role and the part played by people in the industry to see how they are employed, how they see and plan for their future, and how they see the industry itself developing. It is for that reason that the next initiative in the Competing with the Best scheme is going to be an examination of this part of the industry because we agree with my noble friend Lady Young and the noble Lord, Lord Borrie, on the importance of training. It is interesting to note the point made by the noble Lord, Lord Thomson of Monifieth, about the need for the status of those in the industry to be recognised as being real, wealth-creating jobs. I wish also to underscore the point made by my noble friend Lady Young, that this is an industry with very considerable potential for those in it, and it is one which is not dominated by qualifications.
1188
I have already touched on the Motion tabled by my noble friend Lord Elibank on several points. I now wish to say a little more about the inquiry and the report from the Communities Select Committee, I congratulate the committee on its work, and I welcome the report, with which I am very pleased that in so many respects we can concur.
The Commission's Green Paper on tourism which provoked the inquiry had as its main object consideration of the future involvement in tourism the Community might have. Much of the Community's work affects tourism. The Green Paper looked at four possible options for future involvement, and we believe what lay behind all that was the desire in some quarters for a full competence in tourism. This House's Select Committee did not believe that a new title for tourism was necessary, and the Government agree. That view was most interestingly endorsed by that well-known European enthusiast—but I would not like to take it too far—the noble Lord, Lord Thomson. I am sure that is very important evidence.
We believe that there would be real dangers to the tourism industry in greater regulation. Given that there was little indication in the Green Paper of what such a competence would be used for, we are not prepared to take such a risk. We do not, anyway, see the need for it. What we would like to see—and this is borne out by the committee—is a better sponsorship of the tourism industry within the Commission along the lines of our own department's activities here in Whitehall. Tourism has not received the status and recognition it deserves within the European institutions. That does not mean to say that I want to see more intervention in tourism. The Government agree with the committee in believing that what is necessary is for all parts of the Commission to be better informed about the consequences for tourism of policies and actions across the range of the Community's activities. That is the role which we see for the tourism unit in the Commission.
We do not go so far as the committee in believing that the tourism unit necessarily needs a higher status or more resources to achieve that. We should like to see the unit focus its attention on that sponsorship role, with less, if any, need to administer small-scale projects in which it has been involved in the past, and which in our impression have made very little impact.
In tabling today's debate, my noble friend Lord Montagu called upon Her Majesty's Government to,
"establish and co-ordinate long-term policies to ensure (tourism's) long-term success".
The report which my noble friend Lord Elibank's Motion invites your Lordships' House to note makes a similar plea both from the point of view of domestic policies and at the European level.
The measures enshrined in the Government's tourism strategy are designed to help the industry in the immediate future and to bring long-term benefits to tourism, heritage, environment and the arts, whose futures are all so closely interlocked. We shall continue to pursue those policies vigorously. We shall continue to support the tourist boards. We shall seek to enhance our Whitehall lobbying role, working with other

1189
departments to foster a constructive approach to the industry across the whole gamut of policy-making. Similarly, we shall work in Europe to encourage the tourism unit to focus its attention on ensuring that, within the European Commission, the impact of policies and actions on the industry is taken fully into account. All that will help to fulfil this Government's ultimate aim of sharpening up the competitive edge of the British tourism industry and seeing that it enters the new millennium in excellent shape and able to fulfil the major part which it should be able to give to the economic well being of society as a whole.
6.21 p.m.
Lord Montagu of Beaulieu: My Lords, my first duty is to thank all the speakers who have supported this debate this afternoon and particularly to add my congratulations to the maiden speakers. I thank the Minister for his reply. Many points have been raised and it is unreasonable to expect the Minister to answer them all in a short 20-minute speech. Perhaps he might like to write to some of the speakers about some of the points that they raised.
It has been a constructive debate and, generally speaking, free of party rancour. A lot has been said about our heritage and tourism, and I should like to flag up one final word of warning on that. Too often we take our historic heritage for granted, assuming that because the heritage has been there for centuries it will survive forever. However, increasingly, its survival depends on tourist income. Few heritage sites are actually profitable, and most cling precariously to viability.
There has been a tremendous growth in the number and range of new competitive attractions over the past 20 years. In fact, more than 60 per cent. of them first opened to the public during that period. Many of them are entirely commercial, such as the new theme parks that are designed for family fun. Family days out are no longer so readily taken at historic houses and museums as they once were. The competition for visitors comes not only from other attractions, but also from Sunday shopping and Sunday sport, while some available "disposable income" is channelled into the lottery. I recognise and welcome the lottery as a great source of support for some parts of the heritage, but I am anxious to see more of that investment going to the tourist potential of our existing historic assets rather than into new millennium dreams, often with pseudo-historic themes, that will attract visitors away from our genuine existing sites.
Let us not forget that the maintenance of our heritage sites must continue and, if they are not viable, one way or another the cost will come back to the public purse. In heritage circles it is still a matter of great concern that the majority of our most valuable and vulnerable historic sites are not eligible for lottery assistance because they are in private ownership, although they are of course still eligible for English Heritage grants.
I welcome the recent statement by the Secretary of State with regard to preservation trusts, but some properties cannot go down that road owing to existing
1190
family trust arrangements. I trust that the Secretary of State will continue to strive to find a solution to this problem.
Without doubt, however, we must expect Britain to be increasingly challenged as the world's favourite heritage destination for overseas visitors; consider the rich and as yet unvisited heritage of Eastern Europe, which is a slumbering giant about to awake and compete keenly for visitors.
Tourism, although it is a fragmented industry, has great potential to he even more successful than it has been up to now, providing wealth for our country and jobs for our people. However, we shall not remain successful in this ever more competitive world unless we invest our energies and the minimum but adequate public funding to make this happen. It needs long-term commitment and co-ordinated action.
I trust that the Government will continue their commitment to the industry. Of course we must have reviews, but in recent years we have had reviews of reviews of reviews. I say, "Give us the tools and let us get on with the job". I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Tourism and the Community: ECC Report
6.24 p.m.
Lord Elibank: My Lords, I beg to move the Motion standing in my name on the Order Paper.
In view of the excellent debate we have already had, I shall not detain your Lordships. I too would like to thank all speakers in the debate, particularly those who made kindly reference to our report; and I congratulate the two maiden speakers on very interesting speeches.
Moved, That this House take note of the Report of the European Communities Committee on Tourism and the Community (Sixth Report, HL Paper 39).—(Lord Elibank.)
On Question, Motion agreed to.

Hong Kong
6.25 p.m.
Lord Willoughby de Broke Lord Willoughby de Broke rose to call attention to the situation in Hong Kong;and to move for Papers.
The noble Lord said: My Lords, very nearly two years have gone by since we last debated Hong Kong in this House and, if my shaky arithmetic is correct, there now remain only 432 days until Hong Kong reverts to China. During those two years much has been achieved. The Court of Final Appeal has been established. Airport financing arrangements have been agreed with China, which has at least agreed to the building of the container terminal 9, so vital to maintain Hong Kong's position as the number one container port in the world.
Last autumn Hong Kong chose its first wholly elected Legislative Council and more recently the Preparatory Committee was established. During the visit of my right honourable friend the Prime Minister to Hong Kong in March of this year, he announced that Britain will give visa-free access to this country to all Hong Kong SAR passport holders after 1997. This decision was warmly welcomed in Hong Kong, and it was made during a remarkable speech to which I shall refer later.
Much progress has been made, but there have been and remain differences between our position and that of China. To some extent this has been the case since the Joint Declaration was first signed and, more particularly, since the desperate events in Tiananmen Square, which so grievously changed the Britain/China/Hong Kong negotiating climate. These difficulties and differences have caused Hong Kong to be written off on several occasions since 1984. I remember headlines such as: "The bell is tolling for Hong Kong" and "Hong Kong: will the last person to leave please switch out the lights?"—repeated predictions of a flight of people, of companies and of capital.
I will not weary your Lordships with a litany of statistics, but it is worth looking at what has happened as against what everyone said was going to happen. Hong Kong is now the world's eighth largest trading economy. Hong Kong produces 25 per cent. of the gross domestic product of the whole of China—this from an area about the size of the Isle of Wight. Hong Kong now has a higher output per head than Britain. Hong Kong has 52 billion US dollars of foreign exchange reserves, and if you look for a public sector borrowing requirement you will look in vain because there ain't no such animal in Hong Kong. In 1984 that sometimes erratic barometer of Hong Kong confidence, the Hang Seng Index, stood around 1,000. Today it stands at around 11,000. No lights are going out in Hong Kong—and if you are touched for the price of lunch by a down-at-heel gentleman with frayed suit and soup stains on his tie, it is probably because he was unwise enough to bet against Hong Kong.
So what are the ingredients that have made Hong Kong so special? The unique blend of know-how, energy and commercial acumen of the people who work there, harnessed to our contribution to Hong Kong's success story; the rule of law and an impartial judiciary, a dedicated and able civil service and a top-notch police force. To these add a free economy, a free press, freedom of worship and freedom of assembly. These, I suggest, are the strands which make up Hong Kong's astonishing success story. I suggest that they are indivisible; you cannot pick and choose the bits you want and the bits you do not want. I make that point because there are worrying signs that China does not really understand what makes Hong Kong tick. Am I alone in finding it mildly surprising that none of the top Chinese leaders has ever visited Hong Kong?
On the business front, Chinese officials seem to want to interfere in what are purely economic and commercial matters. Examples are the current row over mobile telephone licensing, the damaging delay caused to the progress of container terminal 9 by allowing the political
1192
agenda to blur what should be a commercial decision and the astonishing demand that China be involved in framing Hong Kong's 1997 budget.
SAR stands for special autonomous region—and Hong Kong will have to defend vigorously that autonomy which it has been promised by Britain and China. That means that Hong Kong businessmen who have done so very well out of that territory will have to speak up for its rights, which in the end are their rights. In support of that, I quote from a recent article in the Financial Times, written by one of Hong Kong's most respected business leaders. It states:
"We owe this to the community that has allowed us to prosper over the years, and we owe it to ourselves and our shareholders. If these issues go wrong the business opportunities in Hong Kong and the region will be far fewer than we hope now".
Those words should be stuck on the shaving mirror of every chairman and chief executive in Hong Kong.
China is going through a bad patch. Its attempted intimidation of Taiwan backfired badly—and simply put more votes into the freedom and democracy ballot boxes. Heavy-handed interference in Hong Kong's administrative and political process is bound to be equally counter-productive, which brings me to the declared intention of the Chinese Government to abolish the present Legislative Council and replace it with something called the "Provisional Council". This Legislative Council, the first to be wholly elected in Hong Kong, was elected in open and fair elections in which nearly 1 million people turned out to vote. It is fully consistent with both the Joint Declaration and the Basic Law. The Legislative Council was properly elected, properly constituted and must be allowed to run its agreed term through to 1999.
I have looked carefully at both the Joint Declaration and the Basic Law and I can find no reference anywhere to any such thing as a "Provisional" Legislative Council. It is clearly unconstitutional. How provisional is "provisional"? One month? Six months? One year? Two years? And what functions will it perform? What possible legitimacy can that body have to enact laws that will affect Hong Kong's freedoms? Its proposed electoral process is a sham. The present LegCo was elected by nearly 1 million voters in open and fair elections. The provisional LegCo is, it is proposed, to be elected in a smoke-filled room by a handpicked 400, who themselves will be chosen by Chinese nominated members of the Preparatory Committee. Significantly, not a single democrat or independent who won a popular mandate in the election has been invited to sit on the Preparatory Committee. If that is "Hong Kong people ruling Hong Kong", I will eat my Peer's robes.
China had also announced that it intended to install that sham LegCo even before the handover and was to require Hong Kong's civil servants to co-operate with it or risk losing their jobs when China takes over. I understand that recent discussions between my right honourable friend the Foreign Secretary and his Chinese opposite number have established clearly that the Hong Kong Civil Service is to remain politically impartial and will serve the Hong Kong Government up to 1st July 1997 and the SAR Government thereafter. That is of course most welcome, but China should be aware that

1193
that episode has caused needless worry to civil servants in Hong Kong who will have a difficult enough task in any case in the run-up to 1997 and the years beyond.
When my noble friend replies, I hope that he will be able to underline the Government's commitment to pursue those matters with the Chinese Government and to remind them of the commitments that they made in the Joint Declaration. Can he confirm that my right honourable friend the Deputy Prime Minister will also be voicing our concerns on this matter during his forthcoming trade mission to China?
One other matter which needs to be resolved is the question of human rights in Hong Kong after 1997. There is provision in the Joint Declaration and the Basic Law for the International Covenant on Civil and Political Rights and the International Covenant on Economic Cultural and Social Rights to apply after the transfer of sovereignty. However, China is not a signatory to either of those covenants. Can my noble friend clarify the position and tell the House what progress has been made on enabling Hong Kong to report on the implementation of those covenants, as required by the United Nations Human Rights Committee? Would not the simplest method be for China to accede to those covenants?
The matters to which I have referred are naturally having an effect on confidence in Hong Kong and by the same token are affecting China's own considerable interests in the most successful city state since Venice.
Chinese wisdom is often encapsulated in parables. I should like to add my own contribution to that canon. When I was a small boy, about five or six years-old, I used to go to stay with my grandmother. I greatly enjoyed it since she used to spoil me horribly. On one of those visits I was confined to bed with some deeply unattractive childhood illness. In my bedroom on the mantlepiece was a very nice carriage clock, with a satisfactory tick and an even more satisfactory chime. Bored one day—and not knowing my limitations as well as I know them now—I decided to investigate the clock to see what made it tick and what made it chime. I soon had screws, springs and cogs all over the floor. My curiosity satisfied, I thought I had better put it back together again before my grandmother came upstairs to visit me. All was well after I had reassembled it, so I thought, but it was then that I noticed a number of cogs, springs and wheels all over the floor, grinning up at me. I had then with my grandmother what the Foreign Office calls "full and frank discussions". The clock Was never quite the same.
I shall not labour the point, but it is crucial to Hong Kong's future and to the future of all who have invested so much in it that the undertakings in the Joint Declaration be properly observed: "one country two systems" and "Hong Kong people ruling Hong Kong". For those reasons alone, although there are others, the speech made by my right honourable friend the Prime Minister in Hong Kong on 4th March, to which I have already referred, was an extremely important statement of Britain's position on Hong Kong. I should like to quote two key sentences from it:
1194
"We in Britain will have continuing responsibilities to the people of Hong Kong; not just a moral responsibility as the former colonial power and as a staunch friend of Hong Kong, but a specific responsibility as a signatory to the Joint Declaration. We shall watch over the implementation of the Treaty …we shall ensure that others are watching too—Hong Kong will never have to walk alone".
How I welcome that clear and unmistakable statement of our position. It should be the bedrock of our policy on Hong Kong, and I very much hope that other noble Lords who are to speak in this debate will support that unambiguous backing for Hong Kong from my right honourable friend the Prime Minister.
There are two other points in that speech on which I should like to touch briefly. I refer first to the decision to grant a very small number of Hong Kong war widows full British citizenship. That is something that has concerned Members of this House and another place for some time and I know that that decision has been warmly welcomed in Hong Kong. I understand that the mechanics of getting a Private Member's Bill through Parliament are being discussed, and the intention is that that will happen during this Session of Parliament. Can my noble friend please confirm that that is indeed the case? Perhaps he can tell us the exact state of play.
The other passport matter referred to in that speech related to the non-Chinese ethnic minorities in Hong Kong. Again, the subject is familiar to your Lordships. In July 1993 the Motion of the late Lord Bonham-Carter to give those 4,000 or so people full British citizenship was supported by all noble Lords who spoke in that debate, including several noble Lords who are here tonight, and was carried when the matter was put to a vote.
In his speech my right honourable friend the Prime Minister made a concession to their case by strengthening the form of words which the Government see as their protection, from,
"Her Majesty's Government will look with particular and considerable sympathy at their case should they come under pressure to leave Hong Kong",
to,
"Her Majesty's Government will guarantee admission and settlement should they come under pressure to leave Hong Kong".
With the greatest possible respect, that is just moving the furniture around and it really is not good enough. Who is going to define "pressure"? That will be a subjective judgment, depending on whether you define it in Hong Kong or from a ministerial office in Whitehall. My right honourable friend the Prime Minister has implicitly admitted in his speech that the ethnic minorities have a problem—and that problem is not answered by what is essentially an asylum solution. The ethnic minorities will have a right of abode in Hong Kong, but no nationality; a travel document (the BNO passport), but no citizenship. I hope that the Government will rethink their position and restore British citizenship to those people, many of whom had it removed from them during amendments to the Immigration Act. If that happens, I will happily give the Prime Minister's speech alpha plus instead of alpha straight.
As my right honourable friend the Prime Minister stated so clearly, we have a legal and moral obligation to Hong Kong, not only in the run-up to July 1997 but

1195
during the next 50 years. I have spoken about our duty to Hong Kong. Let us also remember that Britain has huge interests in Hong Kong's future as the investment and enterprise centre of South-East Asia. Thousands of British companies do billions of pounds' worth of business in Hong Kong, and from Hong Kong into the markets of the whole Pacific Rim. We must not behave as though this is just another colonial mopping-up exercise in which the main objective is a dignified withdrawal. Hong Kong's and Britain's interests are the same and are best served by a strong defence of the way Hong Kong works.
The Governor, Chris Patten, has strongly defended Hong Kong's rights. For his pains, he has been subjected to a shameful campaign of personal abuse and calculated discourtesy from the Chinese Government for going too far. He has been attacked by democrats in Hong Kong for not going far enough, and he has been subjected to flanking fire from big business both in Hong Kong and in this country. Yet he and his policies still enjoy over 70 per cent. approval rating in Hong Kong, so he must be doing something right. What he has done—which I believe history will recognise—is make people in Hong Kong aware that they have a say in their destiny. He has helped to make them aware of what is important and what is worth fighting for. Above all, he has made it much more difficult for the candles of freedom to be extinguished. I believe that those lights of enterprise and freedom will continue to burn. I will not be betting against Hong Kong. I beg to move for Papers.
6.41 p.m.
Lord Dubs: My Lords, I should like to congratulate the noble Lord, Lord Willoughby de Broke, upon securing this debate. I am in agreement with many of the comments that he made. I am also conscious that many noble Lords who will speak later in the debate have far more knowledge and experience of Hong Kong than I have, but I have the privilege of taking part in the discussion today. This may well be the last debate in this House before 1st July 1997.
Last October I had the opportunity to visit Hong Kong. I have been to Hong Kong a number of times. I am always confirmed in my belief when I speak to Americans that Hong Kong is the one place in the world which makes Manhattan seem slow. Everybody I have met in Hong Kong has been consistently helpful and anxious to ensure that I have access to what I wish, to see and know. I also thank the Hong Kong Government Office in London for its continuing helpfulness to Members of this House and another place. I thank the office of the Hong Kong Legislative Council in London, too, for its unfailing helpfulness.
With the wisdom of hindsight, I suppose one would say that democracy should have been in place before negotiations with China took place at all. That is a sad comment, but I am sure that everybody is in agreement with it. However, it is now history. I am impressed by Chris Patten in his role as Governor of Hong Kong. I regret that he is under attack from so many quarters, including at least one ex-Foreign Office official. The
1196
more Chris Patten is undermined by people here who should not undermine him, the weaker his position will be in speaking up for the rights of people in Hong Kong in the next year or so before Hong Kong passes to China.
I spent some time travelling on Hong Kong's excellent public transport system. I stopped people to ask them what they thought of Chris Patten. Without fail, people in the markets said that they liked him. I would have thought that his approval rating in Hong Kong was higher than that of most politicians in countries all over the world. The key point is that China must realise that the world is watching what it does in Hong Kong. China's attitude to human rights will be viewed very much in relation to what China is doing and will do in Hong Kong.
There are positive aspects. I refer to China's enormous investment in Hong Kong itself and the autonomous zone on the mainland opposite, to its decision in relation to the Court of Appeal, on which the noble Lord, Lord Willoughby de Broke, has commented, to its agreement on the financing of the airport and to the fact that China has climbed down on its demand for loyalty tests for Hong Kong civil servants. The fact is that the economy of Hong Kong is extremely successful. Some years ago, a British Government Minister said to me that it was a pity that we could not run our economy as successfully as Hong Kong ran theirs.
One word characterises anxieties about Hong Kong: confidence. Confidence is crucial both for the people of Hong Kong and for those outside who will want to continue to trade with Hong Kong after 1st July next year. Without confidence, I suggest that Hong Kong will stop functioning in the way it now does. On a previous visit to Hong Kong I spoke to a Hong Kong businessman who was engaged in a good deal of activity in Canton and the surrounding area. He had spoken to Chinese businessmen from Canton who had told him that they and Hong Kong could do business together provided there was not undue interference from people in Beijing who did not understand how they functioned. The danger is that, if confidence evaporates, Hong Kong will turn out to amount to little more than Shanghai.
I refer to a number of issues that damage confidence both in Hong Kong and here as we look to Hong Kong. I refer first to the decision to set up a provisional LegCo. The proper LegCo now in place in Hong Kong is the first fully democratically elected body. It was elected in September 1995. We have an obligation to support those elected people at a difficult time. They are being undermined by suggestions that a provisional body should be set up. What will the British Government do about it? John Major has said:
"If there were to be any suggestion of a breach of the Joint Declaration we would have a duty to pursue every legal and other avenue available to us".
It is beyond doubt that they are breaching the Joint Declaration by trying to set up a provisional LegCo. Therefore, I regret that, in referring to a possible breach of the Joint Declaration, the Foreign Secretary said in a letter to Christine Loh—one of the many eminent members of LegCo:

1197
"I see no benefit in speculating now on precisely what we would do in such circumstances".
But those circumstances have arrived as of this moment. The suggestion that a provisional LegCo should be established in competition with the proper LegCo is already a breach of the Joint Declaration. It is up to the Government and the country to act on the commitment that the Prime Minister gave. He said that we would use every legal and other avenue available to us. I ask the Government to start to do that now.
The next matter of concern is the possibility of corruption. It is a tribute to the effectiveness of the administration that there is very little corruption in Hong Kong. There is a danger that, unless China treats this as a specific issue, corruption will creep into Hong Kong from the mainland. That would be disastrous for confidence in Hong Kong and for the wellbeing and efficient functioning of Hong Kong.
When the Prime Minister visited Hong Kong in March of this year, he gave a number of undertakings, some of which the noble Lord, Lord Willoughby de Broke, has already mentioned. He gave an undertaking about visa-free access to Hong Kong's Special Administrative Region passport holders, which was a very good thing. He also gave a commitment to ethnic minorities, but it was qualified (as the noble Lord, Lord Willoughby de Broke, has said) by "if they were to come under pressure to leave". That has left very unhappy the ethnic minorities in Hong Kong—some 4,000 or 5,000 people—without guaranteed citizenship rights of China from July of next year. I urge the Government to look again at this matter to see whether they can do a bit more for those people.
I turn to war widows. It is good that the Prime Minister has made a commitment in this respect. However, what kind of commitment is it when the Prime Minister suggests that a Private Member's Bill will do it? The Prime Minister is in charge of the Government. For heaven's sake, why do we do not have a government Bill to deal with the matter of 20 or 30 war widows which has been an anomaly and a disgrace to us as a country? We want a government Bill, not a Private Member's Bill.
I turn to the question of human rights. At present, Hong Kong has a reporting right under the Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights. I am certain that there will be overwhelming support in this House for the idea that reporting should continue. It is urgent that the Government should exercise the maximum pressure and influence on the Government of China to ensure that, after Hong Kong goes over to China, such reporting will continue. Of course, the Chinese Government does not report as regards its own position.
I turn now to the situation of the Vietnamese boat people, which is worthy of a debate in itself. It is a pity that, every time the Vietnamese boat people who are in Hong Kong are persuaded to start volunteering to return to Vietnam under the scheme of the United Nations High Commissioner for Refugees, there is an occasional American politician who puts forward arguments which suggest to people that, because they might end up in the United States, or wherever, they should not volunteer
1198
to go back. It is very irresponsible of some American politicians to do that at intervals—and I shall not repeat their names—when they do not have the ability to say to those people, "We will take you into the United States", and when they are simply causing further agony and torment to people who left Vietnam in the belief that they would reach a Western country. When they realise that they cannot do so and they volunteer to go back, we have the semblance of a solution to a very difficult problem in human terms which has made the Vietnamese boat people its victims. American politicians should not play dirty politics with the future of those people.
There is one single step, apart from abolishing the idea of the provisional LegCo, which China could take to give Hong Kong proper confidence; that is, that when considering appointing the person to be Chief Executive in Hong Kong those concerned should appoint the present one, Anson Chan. She has done an outstandingly good job by all accounts and she is a first-class administrator. If she were to be appointed, at one stroke of the pen confidence in Hong Kong would rise enormously. Indeed, Hong Kong is lucky to have such a capable woman as its Chief Executive, along with the many other outstandingly capable women members of LegCo, whose position is, of course, endangered by the provisional LegCo suggestion.
I very much hope that the hand-over ceremony will not become a messy business and that there will be a proper agreement between China and our Government to have a ceremony which is worthy of Hong Kong, its people and its future. One country, two systems must mean more than economic policy: it must also mean justice, politics and administration as being two systems under one country. I contend that in the remaining months before the Union Jack is hauled down for the last time Britain still has an enormous responsibility to do the right thing by the people of Hong Kong. We must do our best to give Hong Kong a successful, prosperous and democratic future.
6.52 p.m.
Lord Wilson of Tillyorn: My Lords, I, too, very much welcome the opportunity to debate Hong Kong, even briefly. I am grateful to the noble Lord, Lord Willoughby de Broke, for providing us with the chance to do so. It is a remarkable fact, as the noble Lord just pointed out, that more time has elapsed since we last debated the issue than now remains before the transfer of sovereignty next year. Yet, Hong Kong remains one of the key economic factors in the world and one of our most important overseas responsibilities. From every point of view—and, most notably, from the point of view of the people of Hong Kong—it is of the utmost importance that we should handle the remaining period with the greatest care and skill.
Perhaps the reason that we debate the issue relatively seldom is that it is a complex one. The detail matters. The history of how we got to where we are today matters. History itself matters, from the 19th century onwards. The detail of the negotiations for the Joint Declaration and in the Joint Declaration itself matters. Indeed, all these things matter. They are realities which

1199
cannot be compressed into a sound bite, a headline or even into one of those short news stories whether they be about turning out the lights or anything else.
Given the fact that our time is limited, I should like to concentrate on just a few points. First, Hong Kong remains a success story; indeed, remarkably so, as the noble Lord, Lord Willoughby de Broke, pointed out. I, too, had a chance to see that for myself briefly in January. One sees the new airport literally rising out of the sea. It was very good to hear that the Prime Minister was rolling out some of the first tarmac for the runway on his recent visit. Who would have imagined that 12 years ago, when we were in the final tense stages of negotiating the Joint Declaration?
Moreover, to add to the noble Lord's statistics, GDP growth has been at an average of over 5 per cent. per year in real terms for five years and per capita GDP is now higher than in Britain and in many other countries in the European Union. If one puts together Hong Kong's general reserves as well as the Exchange Fund, that reveals the remarkable figure of some 75 billion US dollars. One can then add to that, in July of next year, the Land Fund, which will go to the SAR Government, and which will then be something like 18 billion US dollars. Above all, one gets in Hong Kong this sense of buzz and of dynamism which has made it so successful. Who would have imagined all of that 12 years ago?
Much of what has been achieved is attributable to the skill and the dedication of the Hong Kong Civil Service. Of course businessmen, both foreign and local, have played a crucial role; but the framework and the continuity are provided by Hong Kong's Civil Service—and a very good bunch of people they are. For example, it is very good to see local civil servants like Anson Chan, as Chief Secretary, or Donald Tsung, as Financial Secretary, taking up their posts with such skill, dedication and determination.
I believe we would all agree that it is essential that such a very effective Civil Service should go on serving the people of Hong Kong, after July 1997 as well as in the period up until that time; and that it should be impartial in doing so. It was encouraging to see the Chinese Foreign Minister Mr. Qian Qichen, in his recent discussions with the Foreign Secretary, confirming his hope that all civil servants, as in the Joint Declaration, would stay on after July 1997.
However, the issue goes deeper than just staying on. The Civil Service must be impartial, and it must know that it is not under threat. Its members must not be put in a position by the Chinese, or by ourselves, where they appear to be being forced to take sides in matters which are diplomatic disputes between Britain and China. They should be in an atmosphere where they know that they are being encouraged to go on serving after July 1997.
One area of potential and unenviable difficulty for civil servants will be in relation to a Provisional Legislative Council. Much has been said on the subject—indeed, both noble Lords have already referred to it—and much no doubt will be said in the months to come. I believe that we need to face reality. The reality is that, for better or for worse, the Legislative Council,
1200
as it now exists, will cease to exist at the beginning of July 1997. That is not a new revelation. It has been apparent since the arrangements for the present Legislative Council were first put in place without our being able to reach agreement with China. It was also apparent, and the point was made, when we debated the subject two years ago.
If there is a Provisional Legislative Council, then two things will follow. First, the sooner that a new elected Council under the Basic Law is established the better. It would be advantageous if that were to happen before the end of 1997 rather than within a period of a year, which is what is now being said. Secondly, that Council needs to be efficient, effective, and in keeping with Hong Kong's legal and policy traditions from day one. Surely both of those things mean that, before they have any authority at all, members of that Council need advice from those who have experience—and that is likely to include people in the Civil Service. As a matter of policy we may have set our faces against the existence of a Provisional Legislative Council. However, as a matter of pragmatism, we need to deal with the reality that it is going to exist.
The relationship with China is never an easy one. We come to so many issues from different points of view. Our traditions and our histories' are different. Sometimes, looking back on history, it seems as though neither the Chinese nor ourselves have learnt from the mistakes of the past. But now we have a common goal, and that is the continued success of Hong Kong and its people after the transfer of sovereignty in 1997. Building that sense of a common objective will require restraint and sensitivity from both sides. Putting our points quietly and, if necessary forcefully in private tends to produce better results than shouting from the rooftops.
The Chinese on their side need to understand the diversity of Hong Kong, which is its strength, and deal with those diverse elements rather than shunning them, however uncomfortable they may sometimes find the process to be. What matters is that we have a Joint Declaration. We need to do everything possible in the coming months to build up that sense of "joint". We have an historical obligation to do so. We have a treaty commitment to do it; and, above all, we have a responsibility to the people of Hong Kong to do it.
7.1 p.m.
Baroness Thatcher: My Lords, I, too, am grateful to my noble friend for initiating this debate and I am happy to follow the noble Lord, Lord Wilson, who as governor, and like his successor, showed great leadership qualities in Hong Kong over a difficult period.
When I look back over the 12 years since Mr Deng Xiaoping and I agreed the Joint Declaration on Hong Kong's future, I am enormously encouraged by how well Hong Kong has done. The doomsayers who predicted decline, or even disaster, as 1997 drew closer underestimated the resilience and irrepressible energy of Hong Kong's people. Hong Kong today is a city in its prime, a thriving centre of enterprise, perhaps the most entrepreneurial community in the world. Its people have

1201
built their economy into one of the world's leading centres of trade and financial services, and at the same time steadily made their way of life and governance more open and democratic.
When I was last in Hong Kong in January, I visited the remarkable new Tsing Ma Bridge, which will be the world's largest single-span suspension bridge, leading to the spectacular new airport. These are not new projects devised and carried out by people who are depressed and frightened about what lies ahead. Rather, they exude optimism about the future and confidence that the talents and initiative of Hong Kong's people will continue to have full rein after 1997.
That confidence is visibly shared by the world's business community which continues to invest in Hong Kong, to establish offices and regional headquarters there and to plan for the further expansion of its business. I understand that in the past 12 months alone the number of British people living and working in Hong Kong has actually risen by 11,000.
So looking forward, there are good grounds to expect that Hong Kong will flourish after 1997, as we envisaged when we negotiated and signed the Joint Declaration. I certainly believe that it will. China has the greatest interest of all in seeing Hong Kong prosper. After all, why else did China agree in the Joint Declaration that Hong Kong's way of life and free market system based on a rule of law should continue unchanged for 50 years after 1997, if it was not because it wants Hong Kong to continue to do well?
Of course the years since 1984 have provided their share of difficulties and problems. These things never go without a hitch. China obviously had problems in coming to terms with the practical implications of one country, two systems, especially as Hong Kong's way of life and degree of personal and political freedom are very different from China's own. These differences—and they are profound—have led China to misjudge the effect of some of its actions both on opinion in Hong Kong and on international opinion generally. That is particularly true of China's unfortunate, and I believe unjustifiable intention, to dismantle Hong. Kong's elected Legislative Council. All speakers have raised that point. That would not be consistent with the Joint Declaration. To turn back the clock on democracy in Hong Kong—modest as that democracy is—gives Hong Kong and the world precisely the wrong signal about China's future intentions.
The best possible start for China in 1997 would 'be to keep the present members of the elected legislature unchanged until the due time of the next elections. Magnanimity is not seldom the truest wisdom, and I think it is better than pragmatism.
Some of China's statements have also destabilised Hong Kong's outstanding Civil Service, whose continued willingness to serve the new sovereign power as loyally and effectively as it has served the British sovereign power is absolutely crucial to Hong Kong's future success. I am glad to see that the Chinese Foreign Minister reassured our own Foreign Secretary on this point when they met at the weekend.
1202
I hope too that our Chinese friends will consult not only those in Hong Kong who share their views but also those who think differently. Hong Kong is not a monochrome city where everyone holds the same opinions: it would never have been so successful if it were. In its own interest China should hear the widest possible range of views before reaching its decisions. The world will view the manner in which China resumes sovereignty over Hong Kong as a crucial test of how she intends to behave internationally. It is thus an opportunity for her, and I urge China to act in a way that shows that the fears which exist about her actions and intentions are misplaced.
I believe that the Government, with the Opposition's support, have carried out honourably their duty to work for a smooth transition. Moreover, as the Prime Minister has said, Britain's obligations to Hong Kong and its people do not end on 1st July 1997, bearing in mind that the Joint Liaison Group continues its existence until the year 2000. We must therefore continue to take a close and sympathetic interest in Hong Kong's future and in everything which happens to it after 1997. We should also maximise our trade and commerce with both Hong Kong and China. I believe that the unique spirit of Hong Kong's people, the skills of its Civil Service, the acumen of its businessmen and the wisdom and self-interest of China will ensure that the passage from British sovereignty back to China will be a safe one.
7.8 p.m.
Lord MacLehose of Beoch: My Lords, it is a great honour to follow the noble Baroness. I seem to recollect that when she was leader of the Opposition I had the pleasure of being her host in Hong Kong. I explained to her what the future held and when that shoe was likely to pinch, which would be in the early '80s. With typical lack of discretion I said that as she might well be Prime Minister at the time I hoped she would take great interest in Hong Kong's affairs, and so she did.
I am glad that in introducing this debate the noble Lord, Lord Willoughby de Broke, and all subsequent speakers, paid tribute to the economic well-being of Hong Kong. It is doing extraordinarily well, but since China is apt to be cast as the villain of the piece it is as well to point out that much of Hong Kong's prosperity results from the prosperity that has transformed much of China since the sweeping reforms courageously introduced and persevered with by Deng Xiaoping. It is against that background that the private sector in Hong Kong was able to seize the opportunity to invest and work with businesses in the rest of China to their great mutual benefit and to the benefit of all people in Hong Kong.
I, for one, believe that the change of sovereignty should not greatly affect that situation, and that this mutual prosperity is likely to continue since there is no problem about Hong Kong/China relations in the private sector economic and financial fields.
It is good news, I believe, that officials have just agreed on the principles and procedures on which the budget for 1997–98 should be conducted. That has been done in close collaboration with their Chinese vis-à-vis.

1203
I do not know whether there is a difference in the information that I have and that of the noble Lord, Lord Willoughby de Broke. However, if I am right, it is a good augury for the future because such an issue could have been the subject of endless fruitless argument. Perhaps when the Minister winds up he will cover that point.
An excellent economic and financial situation is a great asset for the people of Hong Kong when approaching the problems of transition. However, a different but, to my mind, an even more important asset is one to which other speakers have referred. It is significant that all have done so. I refer to the excellence of the public services. I found them equal to any public service in any of the seven countries in which I have served. They are non-political and committed to the service of the Hong Kong people and the Government of Hong Kong. The public service is composed of men and women of the highest calibre. Their professionalism and skill, and freedom from corruption, have been crucial to the huge improvements in the economic and social life of the people over the past 20 or 30 years. I believe that they will be equally crucial for the success that we all wish for the SAR.
I have, therefore, been deeply concerned that, in the heat of new political developments and the noisy political exchanges about them, nothing should be done or said that will confuse or discourage the public services. As we know, something of that sort happened recently. It was good news, therefore, that in the Secretary of State's recent meeting with his Chinese colleague, there appears to have been mutual understanding about the importance of the service to Hong Kong, its non-political character, and the need not to confront or confuse it with choices of conflicting loyalty. In winding up, it would be useful if the Minister will confirm that that optimistic note is correct.
The most obvious potential problem of conflict of loyalty for the public service lay in the prospect of a plurality of councils all making claims on the public service while the public service was still trying to run Hong Kong. Hong Kong would have the sitting Legislative Council, the Preparatory Committee and the expected Provisional Legislative Council. It may be that progress is being made in some respects if reports are correct that the Executive Council has agreed to most Chinese requests at least for collaboration with the Preparatory Committee. I hope, again, that the Minister will confirm that because it is an important development.
That leaves the question of how the provisional council is to be dealt with since the Government totally object to it—and I can understand why. However, here, too, in practice things may not be as bad as they appear in principle. Provided that the co-existence of the sitting and provisional councils is fairly short, ingenuity, informality and a modicum of common sense should surmount the problem. Much in this, as in so much else, will depend on the personality of the new chief executive, to be designated. There is a report in today's Hong Kong Standard that the provisional council is scheduled to be in place, "early next year"; and if that
1204
is right it would appear to result in only a few months of duality. Perhaps the Minister will agree that the shorter the Chinese Government contrive to make this period of duality, the better it will be for the people of Hong Kong.
I apologise for asking the Minister to respond to so many questions. However, I hope that he will confirm my impression that the political relationship with China has improved slightly, and that members of the Hong Kong public service are now being freed to play a larger part, together with their Chinese vis-à-vis, in tackling the work necessary if the transition is to go tolerably smoothly. With the end of the concept of a through train for the Legislative Council, a heavy responsibility falls on members of the public service to keep things going. That is why I have taken up so much of your Lordships' time in talking about them. It has been their city all their working lives, and it is they who, I believe, will play the major part in maintaining Hong Kong's prosperity and international reputation in the future, based on a sound working relationship with the new chief executive.
7.18 p.m.
Lord Skidelsky: My Lords, I, too, am grateful to my noble friend for introducing the debate. It has already been graced by several remarkable contributions. Noble Lords have talked about a crisis of confidence in Hong Kong. To my mind, that crisis of confidence arises directly from the credibility gap between what China promised and what many people in Hong Kong now expect.
In the Joint Declaration of 1984 China undertook to preserve Hong Kong's "lifestyle" and "rights and freedoms" for 50 years. The Basic Law set out in some detail the governmental structure designed to underpin those "rights and freedoms", including a legislative council elected by universal suffrage, exercising wide law-making powers, as well as the right to impeach the chief executive if he or she broke the law. Its independence from the Executive and its democratic legitimacy as established in free elections, together with the Bill of Rights, thus lie at the heart of the guarantees of Hong Kong's freedoms.
Let me add a further point. It is only from strong local institutions that a strong political leadership can emerge. I know that it is Communist doctrine that there cannot be any conflicts of interest in a Communist society. But in any real world there always are, and Hong Kong's interests are bound at times to conflict with those of Beijing. Hong Kong needs a strong leadership to defend its interests within China much more than it needed one to defend its interests outside China. That is what politicians are for. It cannot all be done by businessmen, as businessmen sometimes believe.
This constitutional infrastructure has had to be created by the British Government before the handover. Indeed, it has only been built since 1992, when Chris Patten became Governor. The reason is that Hong Kong was a colony whose freedoms were protected by the British Parliament. After 1997, that protection is withdrawn; hence the urgent need for new local institutions. A Court

1205
of Final Appeal has been established; a Bill of Rights is in place; and last year a Legislative Council was set up, elected on a wide franchise in multi-party elections.
Each step in the move from general promises to concrete institutional guarantees has been resisted by China, despite all efforts to secure its co-operation. Now China has said that it will restore the "colonial" clauses in the Bill of Rights and abolish the recently elected LegCo, replacing it with a hand-picked provisional legislature, itself chosen by a hand-picked Preparatory Commission, from which Hong Kong's largest party, the Democratic Party, has been excluded. When Frederick Fung voted on the Preparatory Commission against the abolition of the existing LegCo, he was told in no uncertain terms that his political life in Hong Kong would be terminated. Further, no members of the Democratic Party are to be allowed a share in choosing the chief executive.
The message from all this is clear. The Chinese Government do not want any local institutions which might weaken their own control over the political life of Hong Kong. To put it bluntly, they will not tolerate democracy in any shape or form. China's vision of "one country, two systems" is confined to economics. In politics, it is "one country, one system"—the system which produced Tiananmen Square.
China's spokesmen argue that Britain is trying to impose limits on China's sovereignty which it never accepted for itself when it was Hong Kong's sovereign. To this charge there seems to be a clear answer. The new constitution was not imposed on Hong Kong by the British Government. Our Government responded—in many people's opinion inadequately and belatedly—to the demand of the people of Hong Kong themselves. Their demand for institutionally embedded guarantees was a measure of their mistrust of their new sovereign. China's opposition to those institutions is the main cause of the existing crisis of confidence.
Nor can we say any longer, as some noble Lords did when we debated these questions in the past, that democracy is unsuited to the Asian character. Democracy has arrived in East Asia. The only countries which now resist it in principle are the few remaining communist states. Whatever may have been true before, by today's standards the abolition of democracy would be a profoundly retrograde step. I do not see how we could hand over our responsibilities with a good conscience if we thought that would be likely to happen. As the Governor said in his broadcast three days ago, the survival of a "cleanly elected legislature" is the,
"litmus test of what else will survive".
The way the Hong Kong Government have sought to entrench the freedoms associated with the Joint Declaration is not some personal folly of Chris Patten, as some people have argued. It is the policy of our Government. It has just been endorsed by the Foreign Secretary, who said that the abolition of LegCo was "neither acceptable nor necessary". As has been pointed out in the debate, the Prime Minister recently reminded China that Britain had a 50-year responsibility towards Hong Kong as joint signatory of the 1984 Declaration. "Hong Kong", John Major said, "will never walk alone".
1206
The question is: what can we do to ensure the outcome that we all want? First, we have to probe China's intentions. If China insists on abolishing the present LegCo, how long will the provisional legislature last? One year is being suggested; that is surely too long. By what system will the new legislature be elected? We have only the vaguest ideas about that. Will the Democratic Party be granted an unencumbered right to participate in any election? We do not know. Article 70 of the Basic Law states that if the chief executive dissolves the Legislative Council, it must be reconstituted within three months. In 1994 the National People's Congress only talked about "dissolution", not about "abolition". This may offer a way forward, provided that the new LegCo is not inferior in powers, functions or democratic legitimacy to the existing one. That, I believe, must be our sticking point.
We should make every effort to draw China into discussions leading to a reasonable outcome. But suppose it refuses to play? Then I believe we and our allies should be prepared to make clear to China that there will be a price to pay: a political, diplomatic and economic price.
If we act in concert—and I hope that that situation will never arise—we are not without resources. Noble Lords have talked about trade, and it is my earnest wish that trade with China will expand and will lead, as expanding trade should, to a cumulative increase in prosperity. But let us be realistic, as the noble Lord, Lord Wilson, said. China stands to lose far more than we do from any interruption of trade and investment flows. Both the European Union and Japan import more from China than they export to it. The United States runs a balance of trade surplus with China, it is true, but even so its exports to China are only 2 per cent. of its total exports.
Inward investment to China from the EU, USA and Japan came to 6 billion dollars in 1995. To put the point dramatically, China depends much more on trade with us and investment from us for its continued growth than we depend on trade with China or returns on our investment in China. I am talking of the aggregate. If China had no economic relations with us at all, our economic circumstances would be little affected and our unemployment might be somewhat lower—a point which is well understood in Europe and the United States.
China has all kinds of claims on the world community. It wants membership of the World Trade Organisation; it wants a renewal of its Most Favoured Nation status with the United States. It needs international acquiescence for the reunification with Taiwan; it wants to host an Olympic Games; it wants to be at every top table in economic and security matters.
These are all reasonable claims, but they need to be put in the context of an emerging single world which is not precisely a western world but is heavily influenced by western norms of behaviour—a world in which there are membership conditions. Those are not very onerous and they do not in any way diminish China's dignity or interests. Indeed, it is only if China meets those conditions that it can hope to secure the peaceful

1207
reunification with Taiwan. And that is particularly true of Hong Kong. China should understand that to try to rule Hong Kong without the consent of its people will produce social and economic turmoil and complicate every aspect of its relations with the rest of the world.
In 1997, China will not be liberating a victim of colonialism but taking over a complex, sophisticated society in which economic prosperity and stability are intimately interwoven with the rule of law, uncorrupt administration, personal liberty, freedom of assembly and speech and local institutions set up to underpin those things. For Hong Kong, prosperity and freedom are indivisible. So I beg those who want prosperity not to give up on freedom.
7.30 p.m.
Baroness Dunn: My Lords, the initiative of my noble friend Lord Willoughby de Broke in tabling this Motion gives Members of this House the chance to take stock of how Hong Kong is doing in the final run-up to the historic transfer of sovereignty in 1997. The continuing concern for the well-being of Hong Kong on the part of both Houses of Parliament is always deeply appreciated in Hong Kong.
It is 12 years since the Sino-British Joint Declaration settled the question of Hong Kong's future. In that time Hong Kong continued to prosper, to invest its capital and skills in China's economic growth, to develop its political institutions and to localise its Civil Service.
As I have said before in this House, the transition was never going to be easy. It is perhaps inevitable that the incoming and outgoing sovereigns will differ on some aspects connected with the long and complex process of transfer. At the same time, it is to be expected that the spotlight of the international media on Hong Kong as 1997 draws near will inevitably encourage agitation from pressure groups and individuals with their own agendas.
I have no doubt whatsoever that China's leadership remains committed to maintaining Hong Kong as a separate, Special Administrative Region with its own autonomous social, economic and legal systems. It is in China's own interest to do so.
I also have no doubt that the Hong Kong people are determined to make the Sino-British Joint Declaration a success. They have a proven track record of resilience, enterprise and pragmatism. They are driven on ,by confidence in themselves and in their own government—in Hong Kong's systems, which give everyone who is willing to work hard a fair chance to improve his lot. But confidence is a delicate flower, and it needs to be nurtured.
I have been concerned about the cumulative effect on confidence in Hong Kong of the continued political wrangling between Britain and China. There is no point in apportioning blame. However, with little more than a year to go before sovereignty transfers, the overriding objective of both governments must surely be to achieve a smooth transition for Hong Kong from a British colony to a Special Administrative Region of China.
1208
Hong Kong people have the right to expect the closest possible co-operation between Britain and China to achieve that aim. Instead, they are subjected every day to unsettling political debate—over the provisional legislature, the role of the Civil Service in relation to the incoming regime and even over the protocol of the historic handover.
I am particularly concerned about the impact of all this upon the morale of Hong Kong's outstanding civil servants, whom previous speakers have already mentioned. They have a special role to play in ensuring continuity beyond 1997, in assisting a smooth transition and in maintaining stability. Their task as part of the Executive over recent years in handling the new relationship with Hong Kong's elected, more assertive legislature has been difficult enough, and we all pay tribute to the way in which they have managed it. But they cannot be made the political football whenever British and Chinese diplomats clash.
Hong Kong's Civil Service, like those in most administrations, has always been non-political. That is a great strength and a stabilising factor in a changing society like Hong Kong. These able and devoted men and women with life-long career commitments cannot be expected to be at the beck and call of two political masters in these last months. Britain and China need to be particularly sensitive to the unique anxieties of civil servants. And, above all, I agree with the noble Lord, Lord Wilson of Tillyorn: they must not place civil servants in the invidious position of having publicly to take sides.
I am also concerned about the impact of recent events on the confidence of investors. I have said time and again that the ultimate safeguard for Hong Kong is its economic contribution to China which its buoyant economy guarantees. We all know only too well that nowadays capital can move around the world at the speed of a telephone call or the push of a computer button. A serious disagreement between China and Britain could so easily trigger a flight of capital. And so could fear of disagreement.
There are already warning signs. A report by Merrill Lynch to its clients this month concludes with these words:
"It is not necessary to be starry-eyed about China to see the force of the arguments for optimism about Hong Kong's long-term future as part of China. But the negative factors relating to the mechanics of transition seem set to cause some significant jolts to confidence in the weeks and months ahead…We are revising our strategic view of the Hong Kong market to a neutral position on a three month outlook".
In addition, there are increasing concerns among investors that Chinese bureaucrats might be tempted to interfere with Hong Kong's commercial life and to influence commercial decisions which lie strictly within Hong Kong's promised autonomy. One of Hong Kong's main attractions to investors is its reputation as a free, fair and clean place to do business. That hard-earned status must not be put at risk.
The basis of Hong Kong's future is "one country, two systems", with a high degree of autonomy, a far-sighted concept put forward by Deng Xiaoping. For that concept to work, the people of Hong Kong must be trusted with

1209
that autonomy. In these remaining months it is right and necessary that people at all levels be encouraged to have contacts with China without their loyalty being called into question.
By the same token, although Hong Kong people have lived under British rule and have learnt from the British and prospered under the British, that does not mean that they have become British or agents for the British. They have retained the distinct culture, manners and outlook of Chinese people wherever in the world they go. They are proud of their heritage and the values that have come down to them through 5,000 years of history.
When the Sino-British Joint Declaration was signed in 1984, Hong Kong's GDP per capita was over 6,000 US dollars; today it is over 23,000 US dollars. Its legislature was then wholly appointed. Today it is wholly elected. Its senior Civil Service was largely expatriate. Today it is nearly all Chinese. Its contacts then with China were largely family visits. Today in South China alone there are some 25,000 Hong Kong owned factories employing more than 3 million people. It is to the credit of the Hong Kong people that such mammoth progress in only the past decade has been achieved with dignity and responsibility and without any upheaval. There is every reason to believe that they will work as fervently and robustly for Hong Kong after 1997 as part of China.
Like my noble friend Lady Thatcher, I remain today, as on previous occasions when this House has heard me, an optimist, convinced that Hong Kong will continue to be a success story. But I would end with this obvious point: the calmer the seas, the safer will be the passage.
7.41 p.m.
Lord Marlesford: My Lords, when my noble friend Lord Willoughby de Broke put down this question for debate, there was some consideration whether it was helpful to have this debate at all, particularly in the context of what the noble Baroness, Lady Dunn, described as the atmosphere of unsettling political debate during the past few months. However, the speeches we have had so far in this debate from people who have enormous knowledge and understanding of all matters connected with Hong Kong, not only reflect great credit on your Lordships' House and its tradition whereby people do not speak unless they have something worth saying, but also could be of great help in resolving some of the problems. In the light of the people who have spoken before, it is with great diffidence that I venture to contribute. In doing so, I should declare an interest as an adviser to John Swire and Sons.
I should like to focus on one or two of the misapprehensions which have led to some of the embryonic problems—misapprehensions which can, by being better understood, perhaps lead to some solution and some amelioration of the effect.
First of all, I agree with Baroness Dunn that the leadership of China is wholly sincere in their intention to fulfill the main objective of the 1984 agreement for one country and two systems. In so far as there are
1210
problems coming from the behaviour of Chinese officials, it is a great deal lower down than the Chinese leadership.
I recognise that of course China is cross with Mr. Patten. I would echo what my noble friend Lord Skidelsky said, which is to highlight the sincerity of Mr. Patten in what he sought to do. In its simplest form, it was, as my noble friend said, to meet the new condition in which Hong Kong will no longer have Westminster to ensure that the people are not ill-treated, either by the local Hong Kong government or with the connivance of the government from Whitehall. I believe that the real objective of introducing an independent legislature was to strengthen the people of Hong Kong in their ability to draw attention to the need for proper treatment. I recognise that the way in which Mr. Patten set about it has greatly irritated China. Perhaps they are not accustomed to the enormous political charm and talent with which Mr. Patten goes about his business. Indeed some people in this country found it hard to get used to. But that said, I hope that in spite of the irritation which China feels with Mr. Patten, and which I can understand, that China will not feel it necessary to take this out on Hong Kong. Hong Kong is much too important to China for them to do that. I hope that they will look much more objectively.
I agree with the noble Lord, Lord Wilson of Tillyorn, that it was regrettable that a decision has apparently been taken to scrap the elected legislative council and put in its place a provisional council nominated by the Preparatory Committee. I would suggest that when the time comes to make those nominations, the situation could be ameliorated by including on the provisional council a number of people who are on the present elected legislative council.
There are certain things I believe that Hong Kong is not really about. I do not think Hong Kong is really about loyalty to governments, let alone foreign governments. To people in Hong Kong, government is a back drop, it is a necessary back drop. It is something which does not interfere in their lives. They expect good government but they do not feel a personal loyalty to some foreign power. By raising this loyalty issue, damage is being done and unnecessary problems are being created particularly for the civil service. I agree, with respect, with the noble Lord, Lord MacLehose of Beoch when he talks of the impressive quality through the years of the Hong Kong civil service. But their loyalty has been to the people of Hong Kong. It has not been to some foreign power as such so it is not helpful for China to start raising the question, "Are you loyal to us or are you loyal to Britain?" That is not a real factor.
Secondly there has been reference to human rights, and I respect those who have referred to this. But so far as concerns Hong Kong, human rights inside China are not a direct factor. Human rights are of course a very crucial factor for Hong Kong. So far as foreign business is concerned, for business to feel happy in Hong Kong it has to feel happy about certain factors. Human rights are very much one of those factors. Indeed, there has been concern. I heard a senior foreign businessman express the other day considerable worry that some employees of his company in China had started to

1211
disappear. China must recognise that there will be business worries about infringements of human rights but I do not think it is helpful for us in the context of Hong Kong to start talking about human rights in China itself.
Some of China's particular problems—and they are considerable—are to the advantage of Hong Kong. First of all the uneven economic development in China which is causing a very real problem: the rapid development of eastern seaboard and the much slower development of the inner provinces and the disparities which are now seen through television etc. in the inner areas of China. I have recently visited Shanghai. In my opinion, as a centre for international businessmen, Shanghai is still not under starter's orders as a competitor to Hong Kong. The second consequence of this unevenness of economic development is the uncontrolled and now uncontrollable movement of population to the eastern seaboard. This is profoundly destabilising and a very difficult problem for China. You only have to go to a railway station in one of the big cities of China to see huge numbers of people who have arrived in the hope of finding jobs. It is very difficult to deal with. What that certainly means is that China will be extremely firm in ensuring that there is not a similar movement of people into Hong Kong.
A third problem—and a very real one—which China recognises is the problem of corruption. Hong Kong is remarkably free from corruption at the government level. This has been done through conscious effort. It is most important, with the arrival of 1997, that there is not the corruption introduced through lower apparachiks from China. That is one of the main reasons why I believe we do need an independent legislature in Hong Kong.
The noble Baroness, Lady Dunn, referred to the fragility of Hong Kong. It has been traditional to say how important it is for China to treat Hong Kong properly if China is to have a hope of getting back Taiwan. Recently there has been an example of the reverse situation, in which some of China's political posturing about Taiwan has been unsettling for Hong Kong.
China must take account of that delicacy and fragility. That means that the leaders at the top in China must control those cadres further down. The through-train was a splendid concept. That it has been partially derailed is a danger. Frankly, it is difficult to conceive of partial derailment. When one carriage is derailed, there is a risk of derailing the whole train. I do not believe that China can pick and choose between the economic side of Hong Kong and the whole character of Hong Kong.
There is one final point to make. In 150 years—and particularly in the past 50 years—of British colonial rule in Hong Kong, Hong Kong has done staggeringly well, much to the advantage of China, and of course with China's help. We hear a lot about the importance of face in China. I do not believe that face is any more important to Chinese people than it is to anyone else. But face is traditionally more talked about there. It is not only because Hong Kong is of such importance
1212
economically to China that China has to do its best to make sure that Hong Kong prospers. It is also because after the past 50 years of prosperity and flourishing, just imagine the impressions if within two or three years of Chinese rule Hong Kong started to wither. I am sure that China will not therefore allow that to happen.
7.52 p.m.
Lord St. John of Bletso: My Lords, there is both a distinct advantage and a disadvantage in being the last speaker before those who wind up. The advantage comes from having been able to listen to the wisdom of so many eminent speakers and gain from their vast experience and expertise. The disadvantage arises because, by the time one comes to speak, most of what one wanted to say has already been said by other speakers. I am most grateful to the noble Lord, Lord Willoughby de Broke, for introducing this timely debate. It is timely indeed because, as the noble Lord mentioned, it has been two years since this House last had a full debate on Hong Kong. I was a little apprehensive about putting down my name, having seen the list of speakers for today's debate, as I lack experience and expertise. My experience comes from the year I spent living in Hong Kong and China before the Joint Declaration was signed and after studying Chinese law at London University, where in fact my thesis was titled "The Hong Kong Lease through the Eyes of Beijing".
With less than 500 days to go to the handover, there are a number of real or what I might even call tactical issues that will affect Hong Kong's return to Chinese sovereignty. Clearly, there are many factors leading to optimism. But some recent developments suggest that for the short term the outlook appears a little rocky. As the noble Baroness, Lady Thatcher, and several other noble Lords mentioned, I firmly believe that China is fully committed to wanting Hong Kong to succeed but does not always convey that message well. As the noble Lord, Lord Willoughby de Broke, and others have already outlined, there are strong incentives for China to do what is needful to ensure the success of Hong Kong after 1997.
I perceive a major stumbling block to a smooth transitional process and stronger Sino-British co-operation to be the lack of clear leadership in China as well as the damaging effects of China's past hostility to the British legacy. With Deng Xiaoping's ill health and the jockeying for power in China to succeed him, I believe that many senior officials in China are scared to be seen as going soft on Hong Kong.
There have been a number of common denominators in the speeches we have heard this evening. I picked out five words in particular: confidence, trust, co-operation, continuity and, of course, the buzzword "safeguards" for the people of Hong Kong. To achieve those ends, there needs to be an effective public relations exercise from China. Clearly, one of the major problems in the short term is the lack of morale and, in the words of many, the crisis of confidence not just in China but for many inward investors into China. Recent events, as the noble Lord, Lord Skidelsky, mentioned, and events such as the snub by senior Chinese officials to Frederick Fung—

1213
who until recently was perceived as one of the accepted Hong Kong political elite after 1997 for his recent voting against the proposed provisional legislature—have been seen by many as a hard-line campaign by China to ignore its promise of "one country, two systems".
I believe that there are a number of important lessons that have been learned from what has happened in the transitional period. Much of the media coverage has focused on the ups and downs of Sino-British relations over Hong Kong. But, in my opinion, commentators have underestimated Hong Kong's ability to manage its own relationship with China. In many cases, Hong Kong has proved its ability to deal with China, even on sensitive issues.
However, having said that, it in no way implies that Her Majesty's Government and Governor Chris Patten have not played a significant role in endeavouring to achieve a successful and effective handover of Hong Kong to China. Despite the many criticisms levied against him, I have always been an ardent admirer of the Governor in his commitment to ensuring safeguards and a degree of democracy in Hong Kong. As my noble friend Lady Dunn—I am delighted she has been able to join us here today—stressed, it is important to appreciate that, in their preparations for negotiations with Britain, Chinese leaders took the basic policy decision that Hong Kong would be more useful to them as a separate economic and social entity than if it were forcibly reintegrated into China.
The propaganda campaign directed by China at Governor Chris Patten in the run-up to last year's LegCo elections led many commentators to doubt China's commitment to the high degree of autonomy promised in the Joint Declaration. It is apparent that China's anxieties and suspicions about Britain's intentions on Hong Kong have led to its aggressive approach. However, there are encouraging signs. In the past year there have been significant breakthroughs in Sino-British co-operation over Hong Kong. That has led to the resolution of several important agreements, such as the Court of Final Appeal, and, as several noble Lords mentioned, the airport financing agreements.
I firmly believe that a major issue in the whole debate in the run-up to the handover of Hong Kong to China and the prospects for the future there is the question of "face". That has not been mentioned by many noble Lords so far. China certainly does not want anyone to be able to say that Hong Kong was one of the great success stories while it was under British rule but then went "down the tubes" as soon as China took over. The noble Lord, Lord Marlesford, took up that point in his closing remarks. Hong Kong has undergone a remarkable political transformation in the past 12 years since the Joint Declaration. I think that few people would have believed it possible at the time the Joint Declaration was signed.
There is another significant point. It is also apparent that, in the past two years, China has moved from virulent public opposition to the whole idea of direct elections in Hong Kong to accepting the idea now. This sea-change in China's position has been brought about
1214
by the pressure of public opinion in Hong Kong and the fact that Chinese officials responsible for the transitional process could no longer use mistrust of Britain as a reason for avoiding this issue. Even pro-Chinese figures in Hong Kong have recognised the importance of a local mandate.
But there are a number of thorny issues that several of your noble Lords have raised today, some of which I shall mention briefly. A lingering problem in Hong Kong has been the Vietnamese migrants—I understand they number in excess of 20,000—who are required to be repatriated to Vietnam before the change of sovereignty. This should not he seen as a problem belonging purely to Hong Kong. Hong Kong has provided temporary abode for over 100,000 migrants over the years and has made a significant advance to the UNHCR for financing and maintenance of the migrants.
It is encouraging that the Minister of State at the Foreign Office, Jeremy Hanley, made most useful progress during his visit to Vietnam earlier this month. Can the Government give a further full reassurance that they will remain fully committed to helping to resolve the problem of the Vietnamese migrants before July 1997?
Furthermore, can the Minister give any insight as to what progress, if any, has been made with China to ensure that the United Nations Human Rights Committee continues to receive human rights reports from Hong Kong after 1997, and say whether they have achieved any progress in their negotiations with China on their plans to amend the Bill of Rights Ordnance?
Following the debate two years ago initiated by the late Lord Bonham-Carter, in which I and several other noble Lords took part, I was delighted by the Prime Minister's recent announcement that the British Government is prepared to guarantee admission and settlement to ethnic minorities if, after 3rd July 1997, they were to come under pressure to leave Hong Kong. However, as the noble Lord, Lord Willoughby de Broke, mentioned, it was couched in rather general terms. Would the Minister be more specific as to the kind of circumstances that will give rise to this concession?
My joint messages,to Her Majesty's Government and the Chinese authorities from this debate today emphasise, first, the value of and the need for effective communication and co-operation—in the words of my noble friend Lord Wilson of Tillyorn, constraint and sensitivity based on trust and goodwill—and, secondly, the necessity of not rocking the boat.
As for the people of Hong Kong who are watching, listening or will be reading the contents of this debate later, I hope they will be assured, as the Prime Minister recently said, that Britain will continue to have a strong commitment to Hong Kong well beyond 1997.
8.4 p.m.
Lord Thomson of Monifieth: My Lords, as the noble Lord, Lord St. John of Bletso, has just said, this is a timely debate. We are grateful to the noble Lord, Lord Willoughby de Broke, for initiating it, but we are also conscious that it is a debate at a very sensitive time. It is just over a year now to the transfer of sovereignty,

1215
which will be this country's last major act of decolonisation. It is a unique transfer of sovereignty, for obvious reasons that we all know. I am sure that noble Lords will all share my wish that we do not say anything in this final year to make things more difficult for a brave and democratic governor in Hong Kong and, equally importantly, for the people in Hong Kong.
I thought the noble Baroness, Lady Dunn, put the matter in the proper perspective with her combination of realism and optimism about the future. We are now left with a very short transition period, in effect. It is true that one of the realities of that transition period is that there is a reformed LegCo existing alongside something new which that has been created by the Chinese authorities. In that sense, looking back on our debate of two years ago, what was expressed by the two distinguished former governors of Hong Kong—the noble Lords, Lord Wilson of Tillyorn and Lord MacLehose of Beoch—has in fact proved to be right. We have to recognise that the Chinese commitment to abolish the reformed LegCo is now beyond doubt.
The noble Lord, Lord Wilson of Tillyorn, was absolutely right two years ago when he reminded us that the LegCo is only one carriage in the so-called through train which has many other carriages. In that debate the noble Lord, Lord Marlesford, to whom we listened again with great interest this evening, added that the engine of the through train remains the Joint Declaration and the Basic Law, and that it is vital to try to keep those in good order.
The Prime Minister, in the very notable speech that he made in Hong Kong recently, which was referred to by the noble Lord, Lord Willoughby, drew attention to how much has been achieved under the Joint Declaration, as against the difficulties which have arisen over the LegCo. He mentioned the agreements on Hong Kong's membership of international bodies such as the World Trade Organisation; agreements on the Court of Final Appeal; agreements on the future of the defence lands and on the network of international treaties applying to Hong Kong.
I echo the words of the noble Baroness, Lady Thatcher, the author of the original negotiations, that our wisest course in the months that remain is to concentrate on underlining to China how the inter-dependence in Hong Kong of its various facets—the integrity of the Civil Service, the inviolability of the commercial law system, the academic freedom of the universities, its citizens' right to travel—all hang together. They form a seamless web essential to the continuation of Hong Kong's economic success. As Hong Kong's 7 million people generate a GDP nearly a quarter of that generated by China's 1 billion plus population, any damage to Hong Kong's economy as a world trading city will do massive damage to the whole Chinese economy. That is by far the best argument to Chinese self-interest in living up to its commitment to "one country two systems", under the Joint Declaration.
Hong Kong's role as part of China depends upon the confidence of the international trading community. The Joint Liaison Group, which has been mentioned, will
1216
continue to function during the critical additional transitional period—in a sense a confidence building period—until the year 2000. The guarantees in the Joint Declaration run for 50 years until 2047. Those are significant factors, and it will be the responsibility of the British Government to make sure that what the Prime Minister said about ensuring that the international community backs all those undertakings is honoured.
In the meantime, the Government have their own heavy responsibilities in confidence building. We on these Benches welcome the Government's three-quarter U-turn on the issue of wives and widows of ex-servicemen from Hong Kong. But I echo the words of the noble Lord, Lord Dubs. I am totally baffled as to why, on this sensitive and emotional issue upon which there has been so much debate, when the Government decide that they are going to make this concession they have to do it by a Private Member's Bill. We shall want a clear explanation about that from the Minister in his winding up remarks. There seem to be great advantages from the Government's point of view and the British point of view to have a wholehearted, urgent government Bill to deal with this matter.
Then there is the case of the 5,000 members of non-Chinese ethnic minorities born in Hong Kong who face the possibility of being stateless on 1st July 1997. That is an issue that my friend the late Lord Bonham-Carter made his own cause over many years, as was mentioned. The Government moved from what I always regarded as weasel words when they said that they would,
"consider with considerable and particular sympathy",
their case for entry if under pressure to leave. They expanded on those words when the Prime Minister said that they are "prepared to guarantee"—and he repeated the word "guarantee"—entry in an emergency. I cannot believe that my colleague the late Lord Bonham-Carter would have been satisfied with those words.
Why cannot the Government now abandon their paranoia about immigration? It is a paranoia that in some ways matches Beijing's paranoia about modest democratic changes in the LegCo. Why do not the Government at this stage, as a parting gift, present those 5,000 with the right to a full British passport? After all, as the Prime Minister said, they are hardly likely to want to leave a home where the top rate of tax is 15 per cent. (paid by only 2 per cent. of the taxpayers) unless something goes badly wrong. I hope that the optimism of the noble Baroness is justified. I share it. But if something goes badly wrong the Government would have to admit them anyway. Having made that concession, why do they not reap the benefit of it, not only for themselves, but also for the reputation of this country?
The noble Lord, Lord St. John of Bletso, in his final remarks raised the case of the Vietnamese immigrants. According to the LegCo, I understand that the Government are seeking to wash their hands of the problem, saying that it belongs to Hong Kong alone. That surely cannot be right. The LegCo made a series of requests to the Government for more action and assistance. I hope that there will be a positive response.

1217
I am told that today the LegCo is debating an Immigration (Amendment) Bill which raises serious human rights issues inside Hong Kong. If enacted, it would make it impossible for Vietnamese asylum seekers, some of whom have been detained for years, successfully to challenge their detention in the courts. There is a danger of the Bill being rushed through the LegCo in Hong Kong in a single day. From these Benches we certainly support the call of Jonathan Daw, the legal adviser to the LegCo, seeking to delay matters until there can be proper representations from the various interested parties in Hong Kong, including representations that some of us received from an organisation called Refugee Concern.
None of those matters depends upon the decision of Beijing. They are within the power of decision of Her Majesty's Government. Within the limits of our country's freedom of action, and this very difficult situation in relation to Hong Kong, it would greatly help to sustain morale in Hong Kong and their reputation in Hong Kong were the Government to take the action I am suggesting. Besides, they are the right things to do.
8.14 p.m.
Baroness Blackstone: My Lords, unlike my noble friend Lord Dubs, who has been to Hong Kong quite recently, unfortunately it is now three years since I was there. But, like him, I feel privileged to speak in a debate in which so many of those who have spoken have so much expertise.
This is a most opportune debate, coming at a time of renewed concern about the Chinese approach to the way in which Hong Kong is governed when it ceases to become a colony in just over one year's time. That concern was reflected in a number of the speeches made this evening, and we on these Benches share it. Indeed, this has been a debate where there has been a remarkable degree of agreement on all sides.
However, we must be careful not to exaggerate the problems. China is still committed, as the noble Baroness, Lady Dunn, said, to the one-country/two-system formula which was the basis of the negotiated agreement between the UK and China on the colony's return to Chinese rule. Unacceptable though it is, China's recent announcement that it intends to set up a provisional body which will actually replace LegCo after the takeover should have taken no one by surprise.
The Chinese Government made it clear that they would not accept the reforms introduced by the Governor after talks broke down the year before last. When I visited the Ministry of Foreign Affairs in Beijing 18 months ago, I was told in no uncertain terms that was the case. Indeed, China also made it clear that it would eventually dismantle all three levels of elected government. It rejects those bodies on what it claims to be legal grounds since they were created without its prior agreement. However, some commentators have suggested that at least the existing elected members of the municipalities and the districts will be reappointed to provisional bodies. Let us hope that they are right.
1218
In saying that it is not surprising, I am not in any way endorsing the position China took in resisting democratisation during those earlier negotiations. Nor am I endorsing the Preparatory Committee's decision to set up a provisional LegCo. It would surely be far better, as many speakers have said, to allow the existing LegCo, which was elected on a fair and open basis, to run its full term.
The new body appears to have been constructed on the narrowest of electoral bases—just 400 people. In reality, it is an appointed body. The important constitutional questions now are, first, how we get to 1st July 1997 without unacceptable confusion between the role of the new provisional council and the existing LegCo? Secondly, how do we secure from China further commitments that after 1997 new elections will take place as soon as possible to replace the provisional council, which abide by the Basic Law and the Joint Agreement and that will not in any way renege on earlier agreements because China does not like the possible outcome of such elections? For example, China cannot be allowed to believe that manipulation of the system to exclude the democrats from elected positions would be acceptable. The Basic Law commits it to making 30 of the seats directly elected by the third post-1997 legislature and eventually all 60.
Perhaps when he replies the noble Lord opposite speaking for the Government would indicate whether his right honourable friend the Foreign Secretary referred to the timetable for elections with his opposite number in Beijing when they met recently in the Hague.
I do not often agree with the noble Baroness, Lady Thatcher. However, I share her optimism and that of the noble Baroness, Lady Dunn, in regard to Hong Kong. I remain optimistic, as I have always been and as I believe she is, that China will not be so foolish as to jeopardise business confidence in Hong Kong by initiating political change that goes back on earlier agreements and which, as such, will be unacceptable not just in Hong Kong, but also in the UK and in the international community.
My noble friend Lord Dubs and the noble Lord, Lord Marlesford, mentioned corruption. Again, I should like to be optimistic. However, there are, as a number of other speakers have mentioned, one or two signs that China has not entirely understood the importance of curbing its authoritarian tendencies. I ask the Government whether they have raised with China its treatment of Frederick Fung, who voted against the setting up of the Provisional Council. Can he confirm that it is true that Mr. Lu Ping demanded unanimity and has told Mr. Fung that he is unfit to serve on the Provisional Committee or on the committee to select the territory's first chief executive? If that is the case, have the Chinese been asked to reconsider his exclusion?
Elaborating a little on the earlier questions from the noble Lord, Lord Maclehose, can the Minister also tell the House what is the position of the UK Government on the role of the Provisional Committee up until July 1997? How, for example, will decisions about the 1997–98 budget be agreed? What can be done to prevent conflict between existing bodies and the new one? Even

1219
though LegCo is, in some senses, the consultative arm of an executive-led government, conflict over exerting power and influence between the two bodies in the coming year could be very unsettling.
The Chinese Government's attitude towards the Civil Service in Hong Kong has been raised and is a matter of concern. There has been, as other speakers have already mentioned, a very welcome retreat from the quite unacceptable requirement that top civil servants demonstrate their support for the incoming regime by declaring that they back the new provisional LegCo. Again, as has already been said by the former Governors of Hong Kong, the noble Lords, Lord Wilson and Maclehose, the neutrality of the Civil Service must be preserved. If this were threatened, it would affect morale and put at risk the whole transition. The appointment of the first post-1997 chief executive is of the utmost importance in helping to maintain confidence in Hong Kong as well as in ensuring a smooth transition. Without saying whom it should be, she or he must have the appropriate experience, skill and intelligence, to do what will be undoubtedly a very demanding job.
Other speakers have raised the issue of the future rights of Hong Kong's ethnic minorities. Does the noble Lord speaking for the Government accept that it is already clear that these minorities will not enjoy the same rights as the ethnically Chinese majority after 1997? For example, because of the race-based nature of Chinese nationality law, they will not be able to become Chinese nationals, and only Chinese nationals will be eligible for certain political offices under the Basic Law in the post-1997 constitution.
We very much welcome the Prime Minister's pledge made when he was in Hong Kong recently to allow the ethnic minorities the right to settle in the UK, should they come under pressure to leave Hong Kong after 1997. However, I ask the noble Lord opposite to say, when he replies, whether it would be fairer to go a little further and agree to restore full British citizenship to this relatively small group. We on these Benches also strongly endorse the views expressed by the noble Lord, Lord Willoughby de Broke, and others, on this matter. We also support the point that has been made about the need for a Government Bill, not a Private Member's Bill—a point made by my noble friend Lord Dubs and by the noble Lord, Lord Thomson of Monifieth—on the widows of servicemen.
On the more general question of human rights, perhaps I may pick up the points, again made by other speakers, on the unfortunate fact that China is not a signatory to the UN covenants on civil and political rights and on economic, social and cultural rights. Hong Kong, however, has been covered by these covenants since Britain ratified them some 20 years ago. Moreover, the Joint Declaration, I believe, made it clear that they should continue to be in force after 1997, and this is embodied in Article 39 of the Basic Law. As the noble Lord, Lord Willoughby de Broke, and others have indicated, if this is to have any meaning, future Hong Kong governments must report to the UN's human rights committees. When the noble Lord opposite replies, can he reassure the House that the
1220
Government intend putting further pressure on China to agree special arrangements for Hong Kong to make such reports? Surely, this is a minimal safeguard which the people of Hong Kong deserve. There must be procedures for the international monitoring of human rights in Hong Kong after the transfer of sovereignty.
Let me end by saying that we on these Benches have not always been in agreement with the details of the Government's handling of every aspect of the changes that have been instituted in Hong Kong nor with every minor detail of the way they have been handled by the Governor. But we share with the Government and with the governor the wish that Hong Kong should remain not only prosperous and economically successful, but that it should continue to be governed in a way that is totally consistent with the rule of law and with the freedoms referred to by a number of speakers, including the noble Lord, Lord Skidelsky, in particular, to which its people have become accustomed; and freedoms which we must ensure they continue to experience after 1997.
8.27 p.m.
Lord Chesham: My Lords, my noble friend Lady Chalker of Wallasey is extremely sad that she is unable to be here for this debate tonight. I am, too. I, too, would like to thank the noble Lord, Lord Willoughby de Broke, for initiating this debate. Hong Kong has always, and will always, occupy a special place in the knowledge and affections of this House. Again, the range and quality of the contributions from all sides of the House this evening have confirmed that. They included contributions from two distinguished former Governors of Hong Kong and from the former British Prime Minister who signed the Joint Declaration. They have amply justified my noble friend's initiative in bringing the subject of Hong Kong's future before us. I pay particular tribute to the contribution to our deliberations by the noble Baroness, Lady Dunn: her wisdom and experience in these matters are unrivalled.
As has been stated, it is some 700 days since our last full debate devoted to Hong Kong in May 1994 and much has happened in Hong Kong in that time. I expect that at least as much will happen in the 400 days or so remaining until the transfer of sovereignty.
As other noble Lords have done, before looking forward to the handover and beyond, I shall go back just a little to what has been achieved in and for Hong Kong since our last debate. At that time, in May 1994, LegCo had not finally decided the arrangements for the final cycle of elections under British rule. The arrangements which it then adopted were, and are, fully consistent with the Joint Declaration and the Basic Law and the other agreements and understandings between Britain and China. They were duly implemented in elections to the district boards in September 1994; in the elections to the two new municipal councils in March 1995; and, most significantly, in the elections to the Legislative Council itself last September. In all three sets of elections more Hong Kong people than ever in the

1221
territory's history registered to vote and more than ever turned out on polling day and exercised their democratic choice.
The success of those elections and of the representative assemblies they produced in contributing to the governance of Hong Kong make it all the more regrettable that China has indicated that those elected to serve on those bodies will be replaced in 14 months' time. In the case of LegCo, China's plan is apparently to put a provisional legislature in its place. Neither the Joint Declaration nor the Basic Law provides for any such body. We have made it clear to the Chinese, both in public and in private and from the highest levels, that we see no reason for this. We consider it would be a reprehensible and unjustifiable step for China to take. We believe that the members of LegCo duly elected on 17th September should be allowed to serve their appointed four-year term.
My right honourable friend the Prime Minister stressed those points to Premier Li Peng in Bangkok on 29th February. My right honourable friend the Foreign Secretary did the same with the Chinese Foreign Minister in The Hague on 20th April. Vice-Premier Qian Qichen confirmed that until 1st July 1997 China accepted the sole authority of the Governor, LegCo and the Privy Council with regard to the government of Hong Kong. But we look to China to show that the promise of Hong Kong people ruling Hong Kong will be honoured in the spirit as well as in the letter. As the handover approaches, it is inevitable and right that Hong Kong people should look increasingly to the incoming sovereign power for reassurance about their future. As Hong Kong turns to China, so I hope that China will listen to the Hong Kong people—to all Hong Kong people, including those whose views China does not much care for.
I have already referred to the meeting which my right honourable friend the Foreign Secretary had with the Chinese Foreign Minister last Saturday. Apart from the provisional legislature, one of the most important subjects covered in their discussions was continuity in the Hong Kong Civil Service—something which I am sure the whole House agrees with, as has been stated. I am sure that this is vital for Hong Kong's future success. Vice-Premier Qian told the Foreign Secretary that China hoped that all civil servants would stay on to serve the Government of the Hong Kong Special Administrative Region, and reaffirmed China's commitment to a politically impartial civil service. The two Ministers also agreed that civil servants should remain loyal to the Hong Kong Government before 1st July 1997 and to the SAR Government thereafter. That important statement has already been widely welcomed in Hong Kong.
I would just like to mention here that I am pleased that earlier today the Queen in Council made two orders under the Bill for the payment of compensation; that is, the Overseas Public Servants Act, as it is now. That is compensation by the British Government to Hong Kong overseas officers. The orders will also allow the Governor to permit them to take early retirement. I am sure that this news will be welcomed by the officers concerned.
1222
Many of those who have spoken today have placed our policy on Hong Kong in the wider context of relations with China. We will not hesitate to speak openly and frankly on matters like the future of LegCo. But, wherever possible, we believe it our duty to try to reach solid and lasting agreements with China which will safeguard Hong Kong's future stability and prosperity.
Overall, we have achieved some improvement in our relations with China. My right honourable friend the Deputy Prime Minister visited China in May last year in his previous capacity. He will do so again next month, travelling on to Hong Kong. I can confirm to my noble friend, Lord Willoughby de Broke that Hong Kong will be high on the agenda at those meetings with the senior Chinese officials. In the past six months my right honourable friend the Foreign Secretary has had no fewer than three meetings with the Chinese Foreign Minister.
This engagement with China, which extends to all levels, is important in its own right between two permanent members of the UN Security Council. It is also important to secure practical, positive results for Hong Kong in the last year or so of British rule. Let me give some examples.
In June 1994, we reached agreement with China on the future of the military estate, enabling the Hong Kong Government to sell for development real estate worth some 65 billion Hong Kong dollars. In November that year we at last reached agreement on financial arrangements for Hong Kong's magnificent new airport. As my noble friend Lord Willoughby de Broke said, Hong Kong is an extremely important regional training centre and has the world's busiest container port. The expansion of this port is vital for the continuing prosperity of Hong Kong and the wider region. Therefore, we very much welcome the Chinese Foreign Minister's agreement during the Foreign Secretary's visit to Peking in January that China would accept whatever arrangements the consortia agreed among themselves on the redistribution of stakes in container terminals 1 to 9. The consortia are now holding extensive discussions to this end. We hope that they will find an early solution.
In June 1995, we agreed with China on setting up a Court of Final Appeal for Hong Kong which will fulfil the role now performed by the Privy Council here in London. We have also reached a large number of agreements on mainly technical issues, all of importance for Hong Kong's future prosperity. This year the Joint Liaison Group will hold four rather than three plenary sessions, a measure of both sides' determination to complete the transition agenda.
All this painstaking and persistent work has rested on the firm foundation of the Sino-British Joint Declaration of 1984. The principles which it enshrines in treaty form—of Hong Kong enjoying a high degree of autonomy and its current social and economic systems, rights and freedoms for 50 years after the handover—govern all our exchanges with China. The Chinese Government have regularly repeated their commitment to the Joint Declaration. Meanwhile, Hong Kong has

1223
prospered, as has been mentioned by many noble Lords here. It has been a wonderful example of how hard work and sensible attitudes can be so successful.
I would like to turn now to try to cover as many of the points raised by noble Lords as possible. However, if time runs out on me, I shall certainly write to them on any matters that I have not been able to cover.
The noble Baroness, Lady Dunn, mentioned Chinese interference in Hong Kong's economic autonomy. We believe that a level playing-field for business is one of Hong Kong's strongest assets. It is imperative for Hong Kong's continuing prosperity that nothing is done to undermine this and that Hong Kong enjoys the high degree of autonomy promised in the Joint Declaration. We welcome recent Chinese reassurances on these points.
A number of noble Lords, including my noble friends Lord Willoughby de Broke and Lord Skidelsky and the noble Lord, Lord St. John of Bletso, mentioned human rights, as did the noble Baroness, Lady Blackstone, in relation to the International Covenant on Civil and Political Rights. The Bill of Rights ordinance which implements in local law the provisions of the International Covenant on Civil and Political Rights is entirely consistent with the Joint Declaration and Basic Law. We have expressed our serious concern over the proposals made last year by the preliminary working committee to amend the Bill of Rights ordinance and to reinstate earlier versions of six other ordinances which were amended to ensure that they were in line with the Bill of Rights. My right honourable friend the Foreign Secretary urged the Chinese Foreign Minister to leave this issue to the Special Administrative Region Government to decide in due course.
We are in no doubt that China is obliged under the Joint Declaration to ensure that the provisions of the international covenants as applied to Hong Kong remain in force. That includes the requirement to report to the UN treaty-monitoring bodies, as mentioned by a number of noble Lords. We are continuing to urge China to accede to the covenants and to press the Chinese on how China will report on the Hong Kong Special Administrative Region. My right honourable friend the Foreign Secretary raised this issue with his Chinese counterpart during their meeting on 20th April.
A number of noble Lords were asking about the assurances to and the situation of ethnic minorities. My right honourable friend the Prime Minister, as has been stated, announced in Hong Kong that we would guarantee to members of this community admission and settlement in Britain in the unlikely event that they came under pressure to leave Hong Kong after the transfer of sovereignty. This commitment reinforces the Government's existing commitment to this group and will remove any doubts that may exist about whether they would be admitted to Britain. This group, whose families have been in Hong Kong for many generations, want to remain in Hong Kong. We believe that this reassurance will give them the confidence that they need to stay there.
The noble Lord, Lord Thomson of Monifieth, and the
1224
noble Baroness, Lady Blackstone, mentioned statelessness. No member of the community will be stateless after the transfer of sovereignty. They can apply for a BNO passport before 1st July 1997. If they do not and would otherwise be stateless, they will automatically become British overseas citizens. Moreover, their position in Hong Kong is secure. The Joint Declaration and the Basic Law guarantee their right of abode in the Hong Kong Special Administrative Region after the handover. There have been suggestions, including recently—
Baroness Blackstone: My Lords, I am sorry to interrupt the noble Lord, but my question and that of the noble Lord, Lord Thomson of Monifieth, was: why will the Government not give that relatively small group of people British nationality?
Lord Chesham: My Lords, negotiations are going on at the moment. Indeed, I was just about to announce that there have been suggestions, including recently from Chinese officials, that the ethnic minorities in the Hong Kong Special Administrative Region might be granted Chinese nationality. We continue to press for early expert talks with the Chinese, during which we hope to obtain clarification on that and other points. While that is going on, there is certainly nothing that this Government should do.
A number of noble Lords asked haw pressure to leave will be determined. The Prime Minister undertook in Hong Kong to consider whether we should seek to identify specific circumstances that should be met. We are still considering the issue. However, the Prime Minister also made clear his view that setting down in advance a specific set of circumstances would not necessarily give better protection than the broad guarantees already in place and that it would not therefore best serve the interests of the ethnic minorities. In any case, I am sure that the Ministers of the day would not interpret Britain's commitment narrowly. We continue to accept that evidence of discrimination could be a relevant factor.
I confirm to the noble Lord, Lord MacLehose, that the Executive Council discussed on Tuesday the request for co-operation from the Preparatory Committee. We hope to respond soon on that point. On his question about agreement on procedures for the 1997℃98 budget, to which other noble Lords also referred, I should say that the optimism may be a little premature. Discussions on arrangements for the 1997–98 budget are still continuing. We remain committed to the closest consultation and co-operation with China in that area without compromising the Hong Kong Government's authority until 1st July 1997.
The noble Lord, Lord Dubs, among others, asked why there is to be a Private Member's Bill for wives and widows. The Government believe that a Private Member's Bill is the easiest and quickest way of getting the provisions onto the statute book at a time when the legislative programme is full. The effect will be exactly the same.
The noble Baroness, Lady Blackstone, asked about representations on the timetable on LegCo. We have stressed the view that China should stick to the timetable

1225
set down in the Basic Law. We have repeatedly raised the question of Frederick Fung with China and the need for his involvement in the transitional institutions.
I turn now to the point about Vietnamese migrants. It remains our firm objective to complete the repatriation of Vietnamese migrants before July 1997. Recent developments have been encouraging after the set-backs last year through factors beyond our control. The international steering committee on this issue met in Geneva in March and underlined the fact that the only viable option for non-refugees was to return to Vietnam. When the Minister of State, Mr. Hanley, visited Vietnam earlier this month, the Vietnamese Government promised their full co-operation in accelerating the return programme. We hope that the brake on voluntary repatriation caused by an initiative in the US Congress has now been lifted and that all migrants will quickly realise that their future lies in Vietnam.
On the release of non-nationals, the Hong Kong Government have released over 250 Vietnamese migrants covered by the terms of the Privy Council judgment on 27th March. That relates to migrants who claim that they are not Vietnamese nationals and who will therefore not be accepted back by Vietnam. We are continuing to discuss the issue with the Vietnamese authorities. The Minister of State, Mr. Hanley, raised it during his visit there earlier this month when the Vietnamese Government undertook to look at the problem again.
The noble Lord, Lord Thomson of Monifieth, mentioned the legislation being introduced on Vietnamese migrants. The Privy Council judgment exposed loopholes in the law. The judgment could have a disastrous impact on the number of migrants volunteering to return to Vietnam and is likely to encourage many more migrants to fabricate or destroy evidence of their nationality. Any of the 4,600 ethnic Chinese migrants in Hong Kong camps could potentially be released if they were to claim to be non-nationals. Substantial releases would cause an outcry in the community. The legislative amendments put forward by the Hong Kong Government would limit the scope of the Privy Council judgment to those migrants who have been rejected by the Vietnamese Government. The amendments are compatible with the International Covenant on Civil and Political Rights.
I must now move on to my final comments. On 30th June next year Britain's relationship with Hong Kong will change, but it will not end. The Joint Liaison Group will continue its work until the turn of the century. The Joint Declaration will remain in force for 50 years. As the Prime Minister said in Hong Kong, Britain will have continuing responsibilities to the people of Hong Kong, responsibilities we intend to do all in our power to fulfil, responsibilities which include holding China to the promises made in the Joint Declaration.
As the Prime Minister also suggested, our continuing commitment to Hong Kong stems not just from a sense of moral and legal responsibility under the Joint Declaration, essential though both of those are, but from a powerful awareness of our continuing direct stake in Hong Kong
1226
after 1997: 3 million British passport holders, 1,000 British companies, nearly £3 billion-worth of British exports each year and tens of billions of pounds' worth of British investment. It was with that awareness that the Government decided to offer visa-free access to Britain next year to more than 2 million or so holders of the Hong Kong SAR passport who would otherwise require visas to enter Britain. That was an earnest of Britain's continuing commitment to Hong Kong, as was the Government's decision to support legislation granting British citizenship to the wives and widows of ex-servicemen.
Looking back at Britain's record in Hong Kong over the past 50 years and over the past five years, I believe there is much of which we can be justly proud. Under British sovereignty, Hong Kong and its people have succeeded like few other places on earth. Our efforts to secure the best possible future for the people of Hong Kong have been unremitting. They will continue now, in the next months and years, and well into the new century.
Chris Patten has been a magnificent Governor, the best we could possibly hope for. He has stood up for Hong Kong's interests with skill and courage. He enjoys popularity ratings in Hong Kong that would be the envy of any western politician. He will end our stewardship of Hong Kong on a high and honourable note.
Next summer, Hong Kong will undergo a transition unique in modern history. Sovereignty over 1,000 square kilometres of territory and 6 million people will be transferred from one great power to another. There will be much at stake—for Hong Kong, for China and for Britain. As we enter the final 14 months before that historic handover, the British Government will redouble their efforts to secure the best possible future for Hong Kong, in co-operation with China. We look to China to join us in this great enterprise—
Lord Willoughby de Broke: My Lords, before my noble friend sits down, I wonder whether he can give us an assurance about the Bill on war widows. A number of noble Lords have raised the point. Can we at least have an assurance that the Bill will go through during this Session of Parliament? I think that that is what concerns everybody here. The method that is used is as important as the timing. We are talking about old ladies in Hong Kong. Time is not on their side. The background noises suggest that nothing much is happening. If my noble friend could dispel that, we would all be grateful.
Lord Chesham: My Lords, wheels have been set in motion to ensure that the legislation is enacted as soon as possible. We are very keen that it should happen in this Session. Meanwhile, the wives and widows can come to Britain to settle whenever they wish.
8.50 p.m.
Lord Willoughby de Broke: My Lords, I should like to thank all noble Lords who have taken part in this debate. When I tabled this Motion several noble Lords felt that perhaps it was not the right time for a debate on Hong Kong, for quite understandable reasons. However, having heard the quality of the speeches tonight, I am

1227
clear that this is absolutely the right moment to have a debate on Hong Kong. The presence here of my noble friend Lady Thatcher is a great indication of confidence that, while she is here to defend Hong Kong, none of us in this House will ever be allowed to let the subject go. I share her concern.
The noble Baroness, Lady Dunn, made another outstanding contribution. She embodies the spirit of Hong Kong during the dark days following Tiananmen Square. It is a great honour to hear her speak again tonight. It is also a great honour to have with us two distinguished past Governors of Hong Kong. I thank them for their contributions. My noble friend Lord Skidelsky flew in today from America particularly to take part in the debate. I should like to thank him for his most stimulating speech, with which I agree wholeheartedly.
It falls to me to thank my noble friend the Minister for his courteous answers to all the questions put to him tonight. He has said that if questions have not been answered he will write to noble Lords on the subject. I believe that those who have listened to this debate or read about it in Hong Kong can only be encouraged by the robust assurances that my noble friend gave on behalf of Her Majesty's Government that we will maintain and fulfil our commitment to Hong Kong up to and beyond 1997. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Law Reform (Year and a Day Rule) Bill
8.52 p.m.
Lord Dormand of Easington: My Lords, I beg to move that this Bill be now read a second time. This Bill was taken through another place by my honourable friend Doug Hoyle, MP, chairman of the Parliamentary Labour Party. It arose from the hard work undertaken by my honourable friend Alan Milburn, Member of Parliament for Darlington. He pressed the Government for three years because of a tragic case involving his constituent, Michael Gibson. Mr. Gibson was assaulted in an unprovoked attack in April 1992. Because he did not die until August 1993, his assailant was given a two-year prison sentence for grievous bodily harm. In the event, that person was released from prison two months after Mr. Gibson's death. Society owes a great deal to Mrs. Gibson for the unrelenting pressure that she has brought to bear in seeking to have the law changed.
The need for this Bill, therefore, arises from an 800 year-old rule whereby a person can be charged with murder only if the alleged victim dies within a year and a day of the act which was the cause of death. My honourable friend the Member for Darlington in his campaign to change the law came across no fewer than five recent cases which were dealt with under the year and a day rule. The Gibson case received a great deal of publicity in the north east of England, and indeed in all parts of the country. It gave rise to widespread public criticism.
1228
The rule is a legacy of a time when medical science was so rudimentary that, if there was a substantial lapse of time between injury and death, it was unsafe to pronounce on the question of whether the defendant's conduct or some other event had caused the death. Medical science has now progressed to a point where it is possible accurately to link injury with death even if there is a significant time lapse. Moreover, advances in technology mean that seriously injured patients can be kept alive for long periods. This can have the effect, as in the case of Michael Gibson, of rendering impossible a prosecution for murder simply because of the year and a day rule. One can fully understand the additional distress that this must cause to a victim's family.
The Bill before us provides an opportunity to abolish this outdated rule and prevent such distress in future. The rule has been examined by the Law Commission and the Home Affairs Select Committee of another place, both of which recommend that it should be abolished. The Government agree that, subject to certain safeguards, the rule should be abolished. The purpose of the Bill, to which I trust your Lordships will give a second reading tonight, is to abolish without replacement the year and a day rule in homicide.
The Bill extends to England, Wales and Northern Ireland and contains only three clauses. Clause 1 abolishes the rule for all offences in which death is an element. Although the precise scope of the rule is unclear, it certainly applies to murder, manslaughter, infanticide and aiding and abetting suicide. It may also apply to motoring offences in which death is an element. causing death by dangerous driving; causing death by reckless driving while under the influence of drink or drugs; and aggravated vehicle taking causing death.
Clause 2 provides a safeguard against prosecution in two types of case. The consent of the Attorney-General is required before a prosecution may be brought where the injury alleged to have caused the death was sustained more than three years before the death occurred or the person whom it is intended to prosecute for a fatal offence has already been convicted of an offence committed in circumstances alleged to be connected with the death.
This is a sensible safeguard. If there is a realistic prospect of conviction, prosecution should not be rendered impossible just because there is a long time lapse between the act that led to death and the death itself. Nevertheless, it is right that such cases should be carefully considered at the highest level to weigh public interest for and against prosecution. Similarly, the consent of the Attorney-General is required before prosecution whenever there is a risk of double jeopardy; that is, where a defendant has already been convicted of a non-fatal offence arising out of the same incident. Clause 3 sets out the Bill's short title, commencement and extent.
I believe that the abolition of the year and a day rule is universally regarded as a sensible measure and one that is long overdue. For the sake of emphasis, I repeat that the Law Commission and the Home Affairs Select Committee of another place recommend that it should be abolished. Most importantly, the families of victims of crime want it abolished.

1229
My honourable friend Alan Milburn, MP, is from the North-East. I come from the North-East. We are both proud that our region should play a part in such an important change in national legislation, especially since it arises immediately from a tragedy that occurred in the north east of England.
I am particularly grateful to the Government and to the Ministers (both of whom I see on the Front Bench) for assisting in the passage of the Bill so far and for their continuing support.
Moved, That the Bill be now read a second time.—(Lord Dormand of Easington.)
8.59 p.m.
Lord Tope: My Lords, I intervene briefly to place on record the support of the Liberal Democrat Benches for this Bill. As the noble Lord has said, it is a measure that is long overdue, and it is one that has our wholehearted support.
9.00 p.m.
Baroness Mallalieu: My Lords, I should like to thank my noble friend Lord Dormand of Easington, both for introducing the Bill in this House and for explaining its purposes, provisions and safeguards with such clarity. The law in this area has failed to keep pace with developments in medical science which can now prolong life following serious injury for periods which could never have been contemplated as a possibility even 20 years ago. Pathology, too, has developed to a degree where causation of death can now often be established with certainty after a lengthy delay between injury and death in cases where, even a relatively short time ago, it would have been speculative to try to do so.
In the recent past families of victims of crime have, on occasion, suffered additional distress because this outdated law remains in force. It is unfortunate that it has taken the death of Michael Gibson and the energy and dedication of his mother to bring pressure to correct this injustice for the future. In a real sense, this Bill is his Bill. His Member of Parliament, the honourable Member for Darlington, who campaigned for the legislation, together with the honourable Member for Warrington North, who piloted the Bill through another place, both also deserve praise and our gratitude.
No one should as a result of a technicality such as this be able to escape punishment for a serious crime which they have committed and which results in the death of another. Nonetheless, I am glad that safeguards have been incorporated into the proposed legislation to guard against any risk of double jeopardy. If, as I hope, the Bill reaches the statute book as it deserves to do, I believe that it will make a real contribution towards relieving the additional distress which the families of victims of crime can suffer in these peculiar and dreadful circumstances. From these Benches, the Bill has our full support.
9.2 p.m.
The Earl of Courtown: My Lords, I should like, first, to congratulate the noble Lord, Lord Dormand of Easington, on his introduction of the Bill. I should also
1230
like to thank the noble Baroness, Lady Mallalieu, and the noble Lord, Lord Tope, for their support for this important Bill to abolish the year and a day rule. This is a reform of the law to which the Government give unqualified support.
I should also at the outset like to add my voice to the tribute paid to Mrs. Pat Gibson, who has campaigned tirelessly for the abolition of the year and a day rule since the tragic death of her son Michael. At the same time, I should also like to congratulate the honourable Member for Darlington on piloting the Bill through another place and, indeed, to thank the honourable Member for Warrington North for the work that he has carried out on the legislation.
It is entirely understandable that the families of those who become the victims of crime should want to see an end to the rule. Their view is shared by the Government and, I believe, by your Lordships' House. We have heard something of the history of the rule. It was right that there should be a careful assessment of the implications of abolishing a rule that has been with us for 800 years. We asked the Law Commission to advise us and it concluded that the rule should be abolished for all purposes and with certain safeguards. The Home Affairs Select Committee of another place also endorsed abolition of the rule.
I am confident that we are dealing with a law that, as the noble Lord, Lord Dormand, said, must be abolished. There is now little difficulty in proving the link between an injury and eventual death, particularly in those tragic cases where the victim enters a long coma. It can only add to the devastation felt by a victim's family if they know that their loved one's assailant will escape prosecution because of this ancient rule.
I shall not delay progress by repeating what has already been said about the contents of the Bill. It meets all the concerns of the ,Government which were set out in our response to the report of the Home Affairs Committee of another place last July. In particular, it provides that abolition of the rule should be accompanied by certain safeguards, as mentioned by the noble Baroness, to prevent inappropriate prosecutions. The Government appreciate the sensitivities involved in prosecuting offences long after they were committed. We believe that the provisions of Clause 2, which require the consent of the Attorney-General to institute proceedings in certain cases, strike the right balance between the public interest and the rights of defendants.
There is a very wide measure of support for the abolition of the year and a day rule. I trust that your Lordships will agree to give the Bill a Second Reading, and that it will complete its remaining stages smoothly and quickly. I commend it to the House.
9.4 p.m.
Lord Dormand of Easington: My Lords, I should like to thank the Minister, the noble Lord, Lord Tope, and my noble friend Lady Mallalieu for their very supportive contributions. I am sure that no one in the

1231
country would oppose this long, overdue change in the law. I commend the Bill to your Lordships and ask the House to give it a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Civil Aviation (Amendment) Bill [H.L.]
9.5 p.m.
The Lord Brabazon of Tara: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Brabazon of Tara.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMIEES (Baroness Nicol) in the Chair.]
Clause 1 [Applications of criminal law to United Kingdom-bound foreign aircraft]:
The Minister of State, Home Office (Baroness Blatch)The Minister of State, Home Office (Baroness Blatch) moved Amendment No. 1:
Page 1, line 8, leave out from ("inserted") to end of line 9 and insert (""or (subject to subsection (1A) below) a foreign aircraft".").
The noble Baroness said: In moving the amendment, I shall, with the leave of the Committee, speak also to Amendments Nos. 2, 4, 6 and 7 which are tabled in my name. Amendment No. 2 is the core of this series of amendments. It imports into the Bill the principle of dual criminality. The effect of the amendment is to limit the jurisdiction of the courts conferred by this Bill to those offences committed on board foreign aircraft whose first landing after the commission of the act is in the United Kingdom, where the act in question is an offence both in this country and in the state of registration of the aircraft.
The United Kingdom regularly opposes attempts by other countries to impose their laws on United Kingdom companies or nationals, when outside the territory of the state concerned. There have, for example, been attempts recently by some countries to impose their laws on the conduct of people in British aircraft flying to their countries, to the detriment of the airlines concerned. We resist these attempts by foreign states to impose their laws on our companies and therefore we cannot seek to impose our laws on others in similar circumstances.
The purpose of the Bill is to give our courts the power to hear cases where an offence takes place on board a foreign aircraft. In almost all cases, the kinds of crimes which are, regrettably, committed on board aircraft will have the requisite dual criminality.
Some noble Lords at Second Reading expressed concern that the inclusion of a dual criminality provision in the Bill would make it more difficult to investigate offences and convict offenders. Of course I should not have proposed such a provision without first consulting those who will prosecute those offenders. However, in view of the concerns expressed by some noble Lords at
1232
Second Reading, and following a constructive meeting with my noble friends Lord Hacking and Lord Brabazon and the noble and learned Lord, Lord Wilberforce, I have gone back to the prosecuting authorities to put the points to them. I am pleased to report to the Committee that the prosecuting authorities consider that the dual criminality provision, as expressed in the amendments, would give rise to no significant difficulties in the prosecution of offenders.
The last part of Amendment No. 2 inserts a new subsection (1B) into Section 92 of the Civil Aviation Act, which provides that an act or omission punishable under the law in force in any country is an offence under that law for the purposes of dual criminality however it is described in that law. This provision together with the provisions of Amendment No. 4 should make it more simple to determine the requirement of dual criminality. Under the provisions of Amendment No. 4, the dual criminality test is deemed to be satisfied unless the defence shows grounds that it is not. If the defence is able to show grounds that the test is not satisfied, it will then be for the prosecution to prove that it is, though, in the Crown Court, that will be a matter for the judge alone to decide. These provisions taken together should ensure that the dual criminality test places no undue burden on the prosecution.
Amendments Nos. 1 and 6 amend the definition of foreign aircraft in the Bill. The amendments are necessary to ensure that all non-British controlled aircraft are covered by the term "foreign aircraft", even those which have no official state of registration. Amendment No. 1 in effect deletes the definition in the unamended Bill and Amendment No. 6 inserts the new definition.
Amendment No. 7 is consequential to the change in the definition of foreign aircraft achieved by Amendments Nos. 1 and 6. It concerns the powers of a consular official to investigate offences on board a foreign aircraft and restricts that power to situations where the courts would have jurisdiction over the offence. I beg to move.
Baroness Mallalieu: There are two aspects of this group of amendments which the noble Baroness has just introduced which concern me.
Baroness Blatch: I am grateful to the noble Baroness for giving way. I wonder whether it might be for the convenience of the Committee if we discussed the two amendments that are amendments to my amendments and then had one debate on the amendments to my amendments and my group of amendments. That might cut down the time we spend on the Bill.
The Deputy Chairman of Committees (Baroness Nicol): That is a rather complicated procedure to try to follow. I think it might be better if we proceeded in the normal fashion. As I understand it, I shall call Amendment No. 2 and then the amendment to it.
On Question, amendment agreed to.
Baroness Blotch Baroness Blotch moved Amendment No. 2:
Page 1, line 9, at end insert—
("() After that subsection there shall be inserted—
"(1A) Subsection (1) above shall only apply to an act or omission which takes place on board a foreign aircraft where—

(a) the next landing of the aircraft is in the United Kingdom, and

(b) in the case of an aircraft registered in a country other than the United Kingdom, the act or omission would, if taking place there, also constitute an offence under the law in force in that country.

(1B) Any act or omission punishable under the law in force in any country is an offence under that law for the purposes of subsection (1A) above, however it is described in that law.".").
The noble Baroness said: I beg to move.
Lord Hacking Lord Hacking moved, as an amendment to Amendment No. 2, Amendment No. 3:
Line 13, at end insert—
("(1C) The Secretary of State may by order made by statutory instrument, subject to approval by resolution of each House of Parliament, repeal subsections (1A)(b) and (1B)".").
The noble Lord said: If this is a convenient moment to address the Committee on my amendment to my noble friend's amendment, I certainly do so. In tabling this amendment and addressing the Committee on it, I was trying to find a position between the Bill as introduced by my noble friend Lord Brabazon and the position that my noble friend the Minister has taken in her amendments. I was trying to find a compromise position.
The effect of my amendment is exactly the same as the effect of my Amendment No. 5, and that is to give an opportunity to the Government—after the Bill, hopefully, has come into law and the dual criminality test has come into being—to review the progress of this Bill and how the dual criminality test is working. Then, if the Government find that there are difficulties—I am concerned that there are difficulties both in substantive law and procedural law—it will give the Government an opportunity to address that without having to go back to primary legislation. It is by the affirmative resolution so there would have to be a resolution affirmatively put before both Houses of Parliament. It is not something that we are going to slip under a secondary legislation door, but it is nonetheless an easier way, in my submission, for the matters of difficulty, that I apprehend exist in my noble friend's amendment, to be dealt with.
The precedent for this lies in the Arbitration Bill which has recently passed through this House. In Clause 88 of that Bill precisely such a device was used and approved by noble Lords to deal with the problem of domestic and international arbitrations. Clause 88 of the Arbitration Bill gives power to the Secretary of State to remove this distinction between domestic and international arbitrations after the further consultation period which the Minister of State agreed to undertake. Under my amendment the Government would be in that position without having to come back to the House with primary legislation. That is the purpose of my amendment.
I am entirely in the Committee's hands. Perhaps it would be convenient if I commented on my noble friend's amendment. If the Committee would like me to make those comments later, I shall do so. However, I wished to explain to the Committee the purpose of my amendment.
9.15 p.m.
Baroness Mallalieu: This might be an appropriate moment for me to raise my anxieties in relation to the whole of the debate on various options raised by the amendments. Two aspects of this part of the suggested changes to the proposed legislation cause me concern.
First, I believe that we are all most anxious that the Bill should reach the statute book with as few obstructions as possible to the successful prosecution of those who commit crimes in the air. I am, therefore, concerned that Amendment No. 2 introduces into the draft Bill the concept of dual criminality which must necessarily mean that acts and omissions which are crimes in this country, and are committed on an aircraft bound for the United Kingdom which then lands here, cannot be prosecuted here.
I hope that the noble Baroness will be able to reassure me. I should like to know from where the impetus for this change to the draft Bill comes. Have the other countries which have already introduced legislation of this nature—I understand from the debate at Second Reading that they include the United States, Canada, Australia, France and Belgium—included dual criminality in their legislation? If so, can the Minister tell us whether difficulties of proof or delays in prosecutions—I am concerned about both if these changes are made—have resulted?
If those countries have not incorporated dual criminality into their legislation, why is it necessary for us to introduce it into ours? It will undoubtedly cause a legal complication in some cases. For my part I should like to be further reassured that it is a necessary and beneficial change.
My other anxiety at this stage concerns Amendment No. 4. The Minister was good enough to write to me and to other noble Lords. In her letter of 19th April she said:
"The amendments are drafted in such a way as substantially to shift the burden of proof onto the defence which must show grounds for believing that the behaviour which is prosecuted is not a criminal offence in the country of origin".
My reading of Amendment No. 4 is that the burden of proof does not shift. Indeed, I would be greatly concerned if it did. What Amendment No. 4 appears to establish is a presumption that the act or omission constitutes an offence under the law in the country of registration unless and until the defence contends otherwise, either by notice or, if it does not give notice, with leave of the court. In that case, the prosecution is required to prove that it is an offence. As I read Amendment No. 4, it is not for the defence at any stage to prove that an act or omission is not a crime in a foreign country. In other words, the burden remains on the Crown to prove that it is a crime if there is any query about it.

1235
I am always concerned about criminal legislation which is introduced in which the burden of proof is placed on the defence. It seems to me to be contrary to the general principles of our criminal law, to be generally undesirable and permissible only in exceptional circumstances.
I hope that the Minister will be able to reassure me, notwithstanding the wording of her letter, that under the proposed amendments it will not be for the defence to prove that the matter was not a crime in a foreign country and that, if there is any query, the burden remains on the Crown to establish the matter.
Those are my concerns. I hope that the Minister may be able to meet them.
Lord Brabazon of Tara: I am grateful to my noble friend for having introduced the amendments. I am grateful to her also for having sent me, and I think others, explanatory notes on the amendments, together with a most useful copy of the Bill as it will appear if and when these amendments are carried.
I have listened to the arguments on all sides as regards dual criminality. My principal aim is to make the Bill as simple as possible. We should be able to prosecute the people who committed the crimes to which I referred at Second Reading and make it as easy as possible for them to be brought to book.
On the other hand, like my noble friend I oppose the efforts of certain foreign governments to introduce extra-territorial legislation which does not always suit our book. In my experience in the Department of Transport, I came across issues where there were difficulties with a government on the other side of the Atlantic and also governments in other parts of the world. Therefore, to include the issue of dual criminality is worth while, it does not give other governments a stick with which to beat us about the head, if they try to introduce extra-territorial legislation which does not meet with our approval. For example, there is the issue of smoking on board aircraft bound for the United States and drinking alcohol on board aircraft bound for certain countries to the east. There are other cases where something is clearly not an offence in this country and we would not wish to see such an activity banned on our aircraft, but nor would we wish to give the government at the other end the opportunity to say: "Well, you did this with your legislation, therefore we can do it with ours". I do not say that it will prevent them doing it; it attempts to do so and at least it leaves us fireproof.
My noble friend gave me the assurance which I wanted to hear that the prosecuting authorities perceive no problem with the additional measure. There will be no difficulty in prosecuting those who commit offences when they arrive in this country. I believe that the extra subsection which puts the burden of proof on the defence is useful.
As to the other amendment on the definition of "foreign aircraft", it is helpful in that foreign aircraft is defined as anything which is not British. That is straightforward and simple. I find it hard to understand
1236
that any aircraft would arrive in this country with no registration; but if my noble friend thinks it might be a problem, then who am I to argue? As the noble Baroness, Lady Mallalieu, said, we want as few obstructions to the provisions as possible and no delay in prosecutions. I hope that with the assurances that my noble friend has given, it will be the case.
In his Amendments Nos. 3 and 5, my noble friend Lord Hacking seeks to introduce a procedure for removing the hurdles to an affirmative instrument. I have no view other than that, like anyone who sits in this House, I am well aware of the resistance of the House to secondary rather than primary legislation. We shall have to see. If there is a problem, then it will be necessary for the law to be changed. However, from what has been said, I do not foresee a problem and therefore I wholeheartedly support the amendments moved by the Minister.
Baroness Blatch: First, I shall respond to the amendments of my noble friend Lord Hacking. I am grateful to him for explaining the purpose behind his amendments, and I recognise the anxieties which lie behind them. However, the Government are convinced of the need for a dual criminality test and that is why I have brought forward amendments to introduce it into the Bill. As I said, we do not seek to export our criminal law to other countries, and we believe it essential to preserve ourselves against attempts by other countries to impose their laws on us. If we were not to do that, we should leave ourselves very vulnerable. As I have already made clear, I do not believe that the dual criminality test will in practice cause any difficulty in regard to the sorts of criminal behaviour which have led the Bill's sponsors to come forward with their proposals.
I have given an assurance to my noble friend, which I hope he will accept, that, if the requirements of dual criminality introduced in the Bill do, nevertheless, prove unworkable, we will certainly look at the matter again. But that cannot be anticipated in the manner proposed by my noble friend. While subordinate legislation is often a very useful device, we do not consider that it would be right. First, that is a well-established principle on the part of the Government, and an important one. Were the provisions to be repealed, our view is that that should be done through primary legislation.
The issue of protecting ourselves from the territorial incursions of the laws of other countries is important. I know that Members in another place will agree that it is a matter of fundamental importance. The place for any proposal which might compromise that protection is, as I have just said, in primary legislation.
Perhaps I may take this opportunity to respond to the noble Baroness, Lady Mallalieu. As I made clear earlier, the prosecuting authorities have no significant concerns about this procedure, for which there is an exact precedent. I do not believe that the courts would lightly set aside the requirement on the defence to give notice of the intention to challenge dual criminality grounds and to set out the grounds for such a challenge.
However, the noble Baroness is absolutely right in her interpretation of how the law would work. I spoke in my letter about shifting the burden of proof. I was

1237
referring to precisely the point made by the noble Baroness. We are creating a presumption that the conditions for dual criminality have been met; and it would be for the defence to serve notice of a claim that it has not been met and to seek leave of the court. So the prosecution would then be required to prove to the court that the dual criminality condition had been met. The noble Baroness's interpretation is absolutely right. To give just one example of a precedent, the Computer Misuse Act 1990 contains an exactly similar provision. I am not aware, again, that it has caused any difficulties.
I turn to the other point made by the noble Baroness about other countries, and in particular America. We know that the Americans have not introduced dual criminality. We also know that that has caused a substantial degree of concern to a number of other countries. My understanding is that the United Kingdom has joined 17 other countries in protesting to the United States about the fact that it has not introduced dual criminality. I cannot give any particular instance of any of those countries having in fact introduced it; however, it can be inferred that, if they are concerned about the US not having introduced it, they must consider it an important principle. While I cannot name the countries, I can say that a number of countries are concerned about the fact that dual criminality is not an issue for the United States. We assume that it is an issue for those 17 countries.
The Government take the view that this is an important measure that should be on the statute book. I hope that my noble friend will feel assured that we will monitor the working of this Bill and believe that to be important. I should be the first to say, if we thought that either spurious legal delays or administrative burdens were getting in the way of this measure being used in a sensible way and in the manner we all wish, that we should want to return to it.
9.30 p.m.
Lord Hacking: I should like to intervene again and address my concerns in a little more detail. I believe they are important and that the Committee should be addressing them now. Therefore I am somewhat disappointed that my noble friend the Minister is not accepting the opportunity that I am giving her to monitor the performance of this Bill and to test the difficulties that have already been expressed to my noble friend in the meeting that she kindly convened, and which I express again now.
My noble friend talks about this being a well-established principle. I take it that she refers to the dual criminality test. She speaks of an exact precedent, and then refers to some computer legislation. Unfortunately, I have not had an opportunity to examine that. But, other than that precedent, I certainly do not know of the dual criminality test as an established principle of English law.
Perhaps I could just remind my noble friend that her office, the Home Office, issued a paper on these proposals. It was a paper that was commenting upon an Opinion which I wrote with two very learned counsel—two more learned counsel than myself: Mr. Robert
1238
Webb, QC, who is listening to this debate, and also Mr. David Hart. When this opinion was being considered by the Home Office there was a reference to some other part of it to do with the Extradition Act 1989. This is what the Home Office paper says,
"there are two drawbacks to [the mechanism in] the Extradition Act of 1989. It only applies where an act is committed which is an offence both in the country of jurisdiction and in the UK."
So in March of 1995 there was perceived to be a difficulty in using the device of the Extradition Act to deal with a problem which we were addressing in this opinion of June of 1993, because—and I stress "because"—of the dual criminality issue. Therefore it is somewhat puzzling to hear that my noble friend is speaking of this as a well-established principle. It is a principle which has been tried out in the Sexual Offences Bill which is going through the House; but so far as I know, it is not an established principle.
As your Lordships know, a number of other countries have been addressing the issue of crime in the air for a number of years. And, as your Lordships know, the United States of America, Canada, Australia, France and Belgium—to cite five countries—have-all had in place for some time legislation which gave extra-territorial jurisdiction to crimes committed on foreign aircraft landing at their airports.
I should say specifically concerning the United States of America that that legislation has been in existence for 40 years. So far as I know—and my noble friend will correct me if I am wrong—there has not been one single protest by a British airline or another foreign line over the United States exercising this extra-territorial jurisdiction. Indeed, it has been welcomed by airlines flying into the United States of America because it is the captains of those airlines who radio ahead to the airport of destination, who ask for the assistance of the federal agents, and who are grateful to have that assistance. Therefore, to present this as something that is intrusively extra-territorial in my submission is not the correct way to identify this issue.
I have difficulty as to the procedural aspects which the noble Baroness, Lady Mallalieu, addressed to your Lordships and I also have difficulties on the substantive law. Perhaps I may start with the procedural issues because the noble Baroness raised those in her speech to your Lordships. Then my noble friend said that the view of the noble Baroness about the burden of proof not shifting from the prosecution to the defence was a correct interpretation. We have at least established that.
The difficulty of this Bill is in its application. I am aware that views have been expressed by the prosecuting authorities but, nonetheless, it is helpful for all of us who have some experience in these matters also to express our views. The noble Baroness, Lady Mallalieu, has immense experience in dealing with criminal matters. She stayed at the Bar many years after I left, and very successfully too. The trouble arises when one looks at the actual application of this proposed measure.
When a person has allegedly committed an offence on an aircraft, when the arrest at the gate at the request of the aircraft commander has happened and when the

1239
alleged offender has been taken into custody, he may well be an offender who, for example, does not speak English. So the first thing that has to be done is to tell him that he has rights under our law. Those rights are for the defence to serve a notice on the prosecution setting out whether, in the defendant's opinion, this is an offence—not in his country—but in the country of registration of the aircraft.
Secondly, he has to show that there are grounds for that opinion. How on earth can a non-speaking alleged offender in a cell at Heathrow comply with all those requirements without assistance? He will need some form of assistance. He will probably not be eligible for legal aid and there will be language difficulties. From the beginning there are difficulties for the alleged offender. We pride ourselves, do we not, on having a law which is fair in its prosecution process and fair to all defendants?
In my submission, the very beginning of the process presents difficulties. Then, because the burden of proof rests with the prosecution, the difficulties are taken over by the prosecution—the difficulties being that the prosecution then has to go through a process of proving that the offence which allegedly took place in the aircraft is an offence also in the country of registration of the aircraft. That will require expert evidence, an affidavit from a person who is qualified to give an affidavit in the law in the country of registration and possibly the production of statutory law from that country and so forth. So it opens up many procedural difficulties. Most significant of all, as I have tried to emphasise to the Committee, it introduces a process which is not fair on the accused and places a burden on him. Even if the burden of proof does not shift, it still places a burden on that non-speaking alleged offender who is now in a cell at Heathrow or Gatwick Airport. But there are also substantive difficulties. The laws of other countries are not the same as ours. I am not speaking about the more complicated realms of law which also ought to be addressed: laws relating to conspiracy, fraud, telecommunications and so on.
Let me just deal with the kinds of incident that can occur on an aircraft. They rarely occur, but when they do they are extremely unpleasant for all the passengers and crew and cause a great deal of upset. I cited a case at Second Reading concerning threatening behaviour when the offending passenger did not physically hit someone but put his fist in the face of a couple travelling with a child and threatened to hit them in front of the child. It caused a great deal of distress. Under English law such threatening behaviour is an assault because one does not have to hit someone physically to commit an assault. One has to have the capacity to carry out the physical violence and that is sufficient.
Under French law, for example, that is not per se an offence. Therefore, there could be a situation of a serious assault—threatening behaviour by a passenger in an aircraft which is extremely offensive to another passenger—which is an offence under English law but is not under French law; so in that example the accused could not be prosecuted.
1240
Let me give one other example which concerns sexual offences. Unfortunately, offences of a sexual nature happen on aircraft. Some of them are extremely unpleasant. One case was cited by my noble friend, relating to the near rape of an air hostess.
In the time available to me, I have not been able to carry out any full research. However, I must tell the Committee that the age of consent to sexual intercourse for women under the law of Thailand is 15 years. Even more worrying is that there is no limit on the age of consent for males. So a sexual offence can take place with a consenting male down to the age of a baby and that is lawful under the Thai law, as it has been conveyed to me. For another example, under Turkish law it is permissible for a male to have sexual intercourse at age 15 years on a consensual basis and for a woman at 14 years. Both those ages are again beneath our ages of consent.
Those sorts of things can happen on an aeroplane, and the result of the introduction of these amendments by the Government is that the prosecution process cannot go through. That is unsatisfactory, and for that reason I am asking my noble friend the Minister at least to take the opportunity to get some experience about this issue.
The news will not go back very easily or very frequently from the cell in Heathrow with a non-English speaking alleged offender. This is not something which will see the light of day very easily, as all of us who have been involved in the prosecution process know.
I feel strongly about this. However, I feel more strongly that this Bill should go onto the statute book, even if it does have what I believe to be the imperfection of the dual criminality test. I truly want the Government to have the freedom to keep this under review. That is really the emphasis I am placing upon this matter. I give way to my learned friend.
Lord Brabazon of Tara: I am not your learned friend; I am your noble friend. I might have an advantage not being a lawyer and trying to inject a bit of common sense into this Bill.
Will my noble friend expand on his point about sex between consenting adults on a Turkish basis if the age of consent is 15? Quite honestly, if two consenting Turks are on a Turkish airliner coming into this country, what business is it of ours to say what they should do? It may be an offence in this country and undesirable as far as we are concerned, but what business is it of ours?
Lord Hacking: It is the business of anybody who is concerned when an offence has been committed on an aircraft which is an offence under English law.
I will cite just one example. I will not name the airline, but there was a sexual activity which took place in an airliner which was flying from London to Chicago. That sexual activity caused such offence to some passengers that there ended up being a fight in that aeroplane. When the aeroplane arrived in Chicago, not only were the two persons who perpetrated the act arrested—and they were both well over the age of consent for the activity they were indulging in—but it

1241
ended up at the gate of Chicago airport that six passengers had to be arrested by the police for the disturbance that had been created in that aircraft.
We do not live in an isolated world. It may not upset my noble friend that certain forms of activity take place, but it does offend other people. The purpose of our laws is to create stability, and particularly in relation to this Bill to create stability in an aircraft.
Baroness Blatch: I note how strongly my noble friend feels about these matters, but some of his case is rather exaggerated. The concern that he has about somebody who does not speak English arriving in this country accused of an offence on board an aeroplane being somewhat disadvantaged is true. But that disadvantage is just as much a disadvantage whether the condition of dual criminality has to be met or not. It is nevertheless something which has to be dealt with. I can say to my noble friend that the person will be entitled to legal aid; he will be entitled to an interpreter if he cannot speak the language; he will be entitled to put the prosecution to prove dual criminality if there are grounds upon which he can do so. Again, that is unlikely if the offence is what we expect it commonly to be; that is, one of assault.
There are other examples. The Criminal Justice Act 1993 contains the provision and, as my noble friend said, the sexual tourism Bill which is going through this House and another place, also contains it. Work is going on within government on the extension of territorial jurisdiction. It would be quite wrong for us to include in this Bill alone the provision proposed by the noble Lord, Lord Hacking, that, if it turns out in practice not to be working very well—having already given the promise that we shall be monitoring it—the Home Secretary can exercise a power to remove the provision.
We have taken the view that it is an issue; that it should be monitored; and that it should be addressed if it turns out to be a problem. We oppose attempts by other countries to impose their laws on the United Kingdom. We have a strong view that if we are not to include dual criminality in this Bill, we leave ourselves vulnerable. We know that the Americans are anxious to impose their laws on other countries and it is for that reason that, not only the United Kingdom, but also 17 other countries, are extremely concerned that the Americans did not include dual criminality in their own laws and are making protestations on that matter.
My noble friend made much of sexual offences on board aeroplanes. I note the point that he made. However, I do not share his view that the introduction of the dual criminality test will cause difficulties in the prosecution of sexual offences. Non-consensual sexual offences such as rape and sexual assault are, of course, offences in foreign countries and in the case of those offences, which I know are crimes which rightly concern the Bill's sponsors, the dual criminality test will in practice cause no difficulty. Under the Bill, the vast majority of sexual offences committed on board foreign-registered aircraft will be offences which will come within the jurisdiction of our courts.
1242
I am aware that the age of consent for sexual intercourse differs throughout the world. In some countries it is lower than in the UK; in others it is higher. But that is a matter for the authorities of the country or territory concerned, as my noble friend Lord Brabazon said, which will no doubt have framed their legislation in the light of the social and moral climate of their own societies.
If we were to seek to take jurisdiction over sexual acts which were not offences in the country in which the aircraft was registered we would, in effect, be exporting our own laws. Parliament would be claiming authority to legislate in respect of conduct which takes place elsewhere and which is not considered to be an offence in the place where it occurs. No doubt Parliament would resist attempts by the legislative bodies of other countries to purport to legislate for conduct which takes place within its jurisdiction and it would wish to consider very carefully before taking such powers to itself.
I do not believe in practice that that is likely to be a problem in relation to the operation of this Bill. An offensive act (albeit consensual) performed in the presence of other passengers, is likely—by the very fact of being done in public—to constitute an offence in other jurisdictions, as well as in our own. It is inconceivable that some of the more serious acts referred to by my noble friend—if they were consensual and were so disturbing and offensive to other passengers—would not become some form of public order offence and therefore could be coped with under the Bill.
My final point is in no way intended as a threat; it is a matter of fact. We wish to support my noble friend's Bill. It is a good piece of legislation. It will go a long way towards addressing some of the anxieties held by the carriers of passengers by air. But the Government are not in a position to accept my noble friend's amendments. If he insists on the Committee accepting them, we shall have to withdraw our support for the Bill as amended by those amendments.
Lord Hacking: It is my turn to take a position on my amendment. I do not intend to press my amendment. In addressing the Committee, my desire was to draw attention to what I believed to be the difficulties under substantive law and under procedural law following through on the comments made by the noble Baroness, Lady Mallalieu. I have advanced those arguments. I have cited one case. It can result in a public order issue. In the time available I have not had time to research the matter. An enormous map has been opened up on which to consider each and every criminal act, whether it is a criminal act in any country of the world which has registered aircraft which fly into this country.
I certainly do not want to part company from my noble friend—I shall cease calling him "my learned noble friend" because he does not seem to think that that is a compliment. He is to be congratulated on bringing this Bill before your Lordships. On the basis that I have made my concerns known, I beg leave to withdraw my amendment.

1243
Amendment No. 3, as an amendment to Amendment No. 2, by leave, withdrawn.
On Question, Amendment No. 2 agreed to.
Baroness Blatch Baroness Blatch moved Amendment No. 4:
Page 1, line 9, at end insert—
("() After subsection (2) there shall be inserted—
"(2A) The requirement in subsection (1A)(b) above shall be taken to be met unless, not later than the rules of court may provide, the defence serve on the prosecution a notice—

(a) stating that, on the facts as alleged with respect to the act or omission, the requirement is not in their opinion met;

(b) showing the grounds for their opinion; and

(c) requiring the prosecution to prove that it is met.

(2B) The court, if it thinks fit, may permit the defence to require the prosecution to prove that the requirement is met without the prior service of a notice under subsection (2A) above.
(2C) In the Crown Court the question whether the requirement is met is to be decided by the judge alone.".").
The noble Baroness said: I beg to move.
[Amendment No. 5, as an amendment to Amendment No. 4, not moved.]
On Question, Amendment No. 4 agreed to.
Baroness Blatch Baroness Blatch moved Amendment No 6:
Page 1, line 10, leave out subsection (3) and insert—
("() In subsection (5), after the definition of "British-controlled aircraft" there shall be inserted—
"'foreign aircraft' means any aircraft other than a British-controlled aircraft;".").
On Question, amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2 [Provisions as to evidence in connection with aircraft]:
Baroness Blatch Baroness Blatch moved Amendment No. 7:
1244
Page 2, line 3, leave out subsection (2) and insert—
("() In subsection (4), for the words from "any" to "Kingdom" there shall be substituted "—

(a) any offence has been committed on a British-controlled aircraft while in flight elsewhere than in or over the United Kingdom, or

(b) there has taken place on board a foreign aircraft an act or omission which constitutes an offence by virtue of section 92(1) above,".").

On Question, amendment agreed to.
Clause 2, as amended, agreed to.
Clause 3 [Short title and extent]:
Baroness Blatch Baroness Blatch moved Amendment No. 8:
Page 2, line 8, leave out subsection (2).
The noble Baroness said: This amendment removes the commencement provision in the Bill. The effect is that the provisions in the Bill will come into force immediately the Bill receives Royal Assent. This is a sensible Bill which gives our courts much needed powers. We are grateful to my noble friend Lord Brabazon for bringing the Bill before the House. I hope the Committee will agree that its provisions should be available to the courts at the 'earliest possible moment. I beg to move.
On Question, amendment agreed to.
Clause 3, as amended, agreed to.
House resumed: Bill reported with amendments.

Education (Scotland) Bill [H.L.]
Reported from the Committee in the Moses Room with amendments and ordered to be printed as amended.
House adjourned at six minutes before ten o'clock.