Sitting of 10 February 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  PRICES AND CONSUMER PROTECTION

    Sugar (Conditional Sales)
    Mr. Whiteheadasked the Secretary of State for Prices and Consumer Protection how many complaints of sugar purchases being restricted to those who buy a minimum of £1 worth of other goods have been received by her Department and if she will make a statement.
    Mr. McCrindleasked the Secretary of State for Prices and Consumer Protection what representations she has received on the subject of supermarkets only being prepared to supply goods in short supply, subject to the purchase of a minimum amount or value of other goods.
    The Minister of State, Department of Prices and Consumer Protection (Mr. Alan Williams): The 680 complaints about conditional sales which have been received since last July have all concerned sugar. About half quoted £1 as the minimum sum to be spent on other goods in order to obtain sugar. This practice is not illegal but I again urge that it should be applied with care to avoid unnecessary hardship.
    Mr. Whitehead: I thank my hon. Friend for that reply. Does he feel that he is speaking strongly enough to the stores concerned about this practice, bearing in mind the fact that the new sugar agreement which the Government have negotiated makes it less likely that supplies have to be restricted in this way? Is he aware that old-age pensioners especially are suffering from this restriction levied on them by the stores?
    Mr. Alan Williams: As my hon. Friend has said, it is less likely that this sort of practice will be needed in the future. I notice that many stores seem to have stopped the practice now. My right hon. Friend the Secretary of State for Prices and Consumer Protection, in advice to the trade, indicated that it was essential that it should take account of the needs of pensioners, those on low incomes and, where possible, regular customers. However, with mass supermarkets it is not always possible to identify the regular customer.
    Mr. Teddy Taylor: Does the Minister agree that, although restriction is clumsy and unfair, there is nothing wrong with a shop trying to ensure that regular customers receive supplies of sugar which are short?
    Mr. Alan Williams: This is the practical quandary. I am sure most hon. Members will recognise that shops wanting to be fair find themselves faced with individuals sometimes shopping around buying as much sugar as they can, and going back to the same store again and again. Perhaps it is a great pity that the practice of hoarding has been given the stamp of approval by the Conservative Party.

    European Economic Community
    Mr. Mike Thomasasked the Secretary of State for Prices and Consumer Protection what effect her Department estimates Great Britain's membership of the EEC has had on prices and on the other consumer matters for which her Department is responsible.
    The Secretary of State for Prices and Consumer Protection (Mrs. Shirley Williams): While it is difficult to estimate the total effect of EEC membership on prices, prices of imported industrial goods from both the EEC and other parts of the world will be less because of reductions in tariffs; food prides are also at present slightly below what they would have been had we not been members. Community work on consumer protection is at an early stage, but I very much welcome the Commission's recent Programme for Consumer Protection and Information.
    Mr. Thomas: Will my right hon. Friend state her view whether the flexibility shown by our European partners in these matters will enable us to meet the manifesto commitment on them?
    Mrs. Shirley Williams: My hon. Friend will appreciate that there are still outstanding matters being negotiated and that we are anxious to see the common agricultural policy more flexible on such matters as direct national payments for agriculture and the variable beef premium. It is encouraging that in such matters as sugar and beef the EEC shows a degree of flexibility which I do not think it showed a year ago.
    Mr. Hurd: Will the Secretary of State give us an up-to-date indication of the main foodstuffs which are now cheaper because we are in the EEC than they would be if we kicked ourselves out?
    Mrs. Shirley Williams: I ask the hon. Gentleman to await a further Question on the Order Paper which deals precisely with that point.

    Retail Price Index
    Mr. Rostasked the Secretary of State for Prices and Consumer Protection what is the current rate of price increases, based upon the last three months of the retail price index grossed up to an annual rate.
    Mr. Tebbitasked the Secretary of State for Prices and Consumer Protection what she estimates the annual rate of increase in the detail price index now to be.
    Mr. Macfarlaneasked the Secretary of State for Prices and Consumer Protection what has been the increase in the cost of living since February 1974
    Mr. Tim Rentonasked the Secretary of State for Prices and Consumer Protection what is her latest estimate for the rise in the cost of living during the past 12 months.
    Mrs. Shirley Williams: The retail price index rose by 19·1 per cent. in the 12 months to December 1974 and the increase over the three months to December, expressed at an annual rate, was 25·2 per cent. Since February 1974 the actual increase was 14·9 per cent.
    Mr. Rost: Are the Government trying to fool the country by pretending they can stem the tide of inflation by indiscriminate food subsidies when this additional Government spending is simply adding to the pressures of inflation?
    Mrs. Shirley Williams: The Government are not trying to fool anybody. From the beginning we pointed out what subsidies could do and what they could not do. Nevertheless it is true that subsidies have reduced the food index by six points, and in consequence the food index in the whole of this year has not yet reached the levels that it reached when the

    5
    last Conservative administration left office.
    Mr. MacFarlane: Is not the right hon. Lady disappointed by the figures which she has quoted in view of what was promised to the electorate before the 1974 election?
    Mrs. Shirley Williams: The promises which we made have been carried out. They include such matters as maximum price orders, food subsidies and display requirements. All are being introduced on to the statute book. I am, however, disappointed by a rate of inflation which is as high as 20 per cent. a year. The factors involved in that, as the hon. Gentleman will know, include such matters as the level of the value of sterling, the recent very sharp increase in some food raw materials, especially sugar, and, as my right hon. Friends the Secretary of State for Employment and the Chancellor of the Exchequer have made clear, our considerable concern about the level of at least a minority of the income and wage settlements being made. But this is not entirely due to those who are within the social contract. Some of the highest settlements are being proposed by professional groups and others outside it.
    Mr. Gow: On the basis of the figure of 25·2 per cent. being the rate of inflation over the past three months, will the right hon. Lady say what the rate of inflation would have been had there been no food subsidies?
    Mrs. Shirley Williams: I have said already that the rate of inflation over the RPI generally would have been between 1½ and 2 per cent. higher. The food index would have been 6·.8 per cent. higher. The 25·2 per cent. figure is misleading because it is based on a 13-week and not a 12-week period, which is the normal period.
    Mr. George Rodgers: Is my right hon. Friend aware that there is considerable confusion amongst housewives about what are genuine prices? Is there a problem in recruiting qualified staff in the weights and measures departments of the responsible authority?
    Mrs. Shirley Williams: There is a problem here, and my hon. Friend will agree, I am sure, that this is one reason why the Government want to make as widely available as possible both comparisons
    6
    of prices and full display of maximum prices where these apply. We are anxious to involve the housewife in supporting trading standards officers in bringing this about.
    Mr. Mike Thomas: Is my right hon. Friend aware that an important component in the retail prices index, especially for pensioners, is the price of fuel? Although my right hon. Friend's Department appears to have the food situation under control, there is considerable doubt whether the price of fuel is to be controlled properly.
    Mrs. Shirley Williams: My hon. Friend will be aware of the efforts being made by the Government to try to restructure tariffs so as to assist the small and less-well-off consumer. Incidentally, this is the first time that that has been undertaken by a Government in respect of the nationalised industries.
    Mrs. Sally Oppenheim: As the right hon. Lady's prognostications about the rate of inflation have been somewhat variable, volatile and subject to seasonal fluctuations, will she now say what she expects the rate of inflation to be over the coming 12 months, what the main contributing factors are likely to be and how long it will be before a packet of crisps costs £10 if claim settlements at the rate of the present miners' settlement are allowed?
    Mrs. Shirley Williams: If I were unwise enough to enter the hypothetical stakes suggested by the hon. Lady, I might have to put in for the leadership of a party different from my own.
    Mr. Powell: Has not the rate of inflation something to do with the borrowing requirement in respect of State expenditure in this and previous years?
    Mrs. Shirley Williams: The right hon. Gentleman is right in saying that one of the inflationary factors is the public sector borrowing requirement. However, I have always made it clear that food subsidies are offset almost entirely by the increased taxation introduced in the April 1974 Budget.

    Sugar Prices
    Mrs. Millie Millerasked the Secretary of State for Prices and Consumer Protection if she will take steps to ensure that the Price Commission takes into

    7
    account the increased profits of the sugar industry in determining the price of sugar to the housewife.
    Mrs. Wiseasked the Secretary of State for Prices and Consumer Protection if she will ask the Price Commission to take into account the increased profits of the sugar industry when considering retail sugar prices.
    Mr. Alan Williams: This happens already. The net profit margins of the sugar refiners on their operations in the United Kingdom, though not their overseas operations, are limited by the Price Code in the same way as those of other enterprises. They are always taken into account by the Price Commission when an increase in the price of sugar is notified. Both the cane-refining companies have recently reported substantially reduced profits on their United Kingdom refining interests.
    Mrs. Miller: Will my hon Friend bear in mind that, although home profits have reduced because of the sugar shortage last year, the advertisement of the record profits that Mr. Cube made last year list those who benefit as including the Government, the economy, investors and the industry's employees and partners? Bearing in mind the level of these profits, would not it be a good idea if the consumers benefited also?
    Mr. Alan Williams: I understand my hen. Friend's reaction to the advertisement. Frankly, I thought that in the present context, whatever its managerial justification, it lacked a certain sensitivity. But we must be fair and make it clear that the sugar refiners have co-operated fully with the Government during this period of shortage and have been very careful not to exploit the situation.
    Mr. Giles Shaw: Is the hon. Gentleman aware that, when the Minister of Agriculture, Fisheries and Food made his statement on his return from Brussels, he said that there would be no retail price rise as a result of his sugar agreement? Is he aware, further, that the 48 per cent. of raw sugar which is used in food manufacturing and drinks will find its way into retail prices, and can he indicate what will be the rise in the food index as a result of the sugar agreement?
    Mr. Alan Williams: The ultimate price of sugar will depend on the mix of sources of supply and the balance of supply between the various sources. Until we have a clearer picture of the proportions in which the sugar will come from the different sources, it is impossible to predict whether the price will be stable or variable.
    Mr. Jim Spicer: Can the hon. Gentleman add a little to what he said about the price factor on sugar? The Minister of Agriculture said that there would be an equalising factor coming in from the sugar purchased through the EEC and subsidised by the EEC. What will that be in terms of a price saving to the housewife on a 2-lb bag?
    Mr. Alan Williams: It is not possible to quantify in that way. The equalisation scheme is operating at the moment because sugar is obtained from different sources at widely differing prices. To avoid vast increases in price on shop shelves, with the co-operation of the industry we introduced the equalisation scheme. The exact level at which the equalisation figure pitches depends on the ultimate proportions of supplies from the different suppliers.

    Price Increases
    Sir A. Meyerasked the Secretary of State for Prices and Consumer Protection by how much food prices have increased in the United Kingdom since 1st January 1973; and what proportion of this figure can be attributed to membership of the EEC.
    Mrs. Shirley Williams: The food price index rose by 37·4 per cent. between January 1973 and December 1974. Latest official estimates indicate that food prices are, on balance, very slightly lower than they would have been were we not members of the Community. But the further we get from the date of entry into the Community, the harder it is to calculate what food prices would have been if we had stayed out.
    Sir A. Meyer: Will the right hon. Lady say whether any items of food which are imported from the EEC have been subjected to the kind of almost extortionate increases to which certain imports of food from other quarters have been subject?
    Mrs. Shirley Williams: The most dramatic increases in prices have been in fuel and sugar, and there are no such dramatic increases which can be associated with the EEC countries. Nevertheless, broadly speaking, it is still true that butter, cheese and Iamb from New Zealand are cheaper than they are from EEC sources whereas, largely because of the monetary compensatory amounts, wheat, beef and sugar are now less expensive from EEC sources than from outside.
    Mr. Teddy Taylor: Although that answer is very encouraging, does the right hon. Lady agree that world prices come down easier than Common Market prices?
    Mrs. Shirley Williams: It is difficult to predict what will be the pattern of world prices in the next year or so. Obviously there is more volatility in world prices, upwards and downwards, because they are not subject to the kind of regime that the common agricultural policy involves.

    Food Prices
    Mr. Blakerasked the Secretary of State for Prices and Consumer Protection whether, further to the answer on 27th November 1974 [col. 190], she is able to give examples in terms of items bought by the average housewife of the specific saving involved in the costs of cereals, beef, butter and sugar as a result of British Membership of the EEC.
    Mr. George Gardinerasked the Secretary of State for Prices and Consumer Protection whether she can now give examples, in terms of items bought by the average housewife, of the specific saving in the cost of cereals, beef, butter and sugar as a result of British membership of the EEC.
    The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan): The commodities mentioned benefit from EEC measures such as monetary compensatory amounts on imports and Community-financed subsidies. As a number of qualifications have to be made about the calculation, I will, with permission, circulate the information in the Official Report.
    Mr. Blaker: Is the Minister aware of the forecast made at the recent World
    10
    Food Conference, by the Secretary-General of the United Nations and by the Food and Agriculture Organisation, of a continuing shortage of world food? If those forecasts are justified, does not this mean that there will be continuing advantages to us both in terms of supply and in terms of price from membership of the Community?
    Mr. Maclennan: My right hon. Friends have made plain that changes in the pattern of production and demand in the world market make it more important for us to be self-sufficient in the production of food.
    Mr. Spriggs: Is my hon. Friend aware that Britain's entry into the Common Market has affected most of our Commonwealth markets? Will he give his mind to the increased prices which have resulted from our leaving the Commonwealth market and joining the EEC?
    Mr. Maclennan: We are aware of that. My hon. Friend will also be aware that New Zealand has not been able to make full provision for our cheese requirements which we negotiated with the EEC, and that some of our difficulties with sugar stem from the attractiveness of the world market to the African, Caribbean and Pacific countries.
    Mr. Hurd: Will not the hon. Gentleman assure his hon. Friend the Member for St. Helens (Mr. Spriggs) that our problem with sugar and other commodities in recent months has often been the inability of our former Commonwealth suppliers to supply us, and that we should have been in a very poor position if sugar had not been made available to us under the Lardinois plan?
    Mr. Maclennan: That is the point which I have just made to my hon. Friend.
    Following is the information:
    Possible United Kingdom consumer benefits on certain foodstuffs from monetary compensatory amounts on imports and from community financed subsidies during the week 3rd-9th February 1975.
    1. Bread

    (a) MCAs are paid on imports of wheat from the EEC and third countries (mainly USA and Canada) and are currently worth £6·93 per ton. Assuming that the UK bread grist is now about 55 per cent. imported wheat the mca subsidy is

    11
    equivalent to about 0·3 per large loaf (28 ounces).

    (b) Until recently, levies on EEC wheat exports to third countries have meant that the UK was able to import EEC wheat cheaper than if she were outside the EEC Export levies are not at this point in time being charged and so no consumer benefit is now assumed.

    2. Beef

    (a) A social beef subsidy is now payable to virtually all pensioners in the form of a token, worth 20p a week, which can be redeemed for beef and veal. The precise value of this subsidy in terms of beef prices therefore depends upon the quality and quantity of beef purchased.

    (b) MCAs are now payable on imports from the EEC and on imports under the GATT levy free quota. The amount varies considerably according to the form in which it is imported. But for imports of fresh or chilled carcase beef (and other bone-in cuts), which is a typical form of imports at present, the mca amounts to f125·02 per ton or about 5p per lb on imported beef only. It would be misleading to spread this benefit over all beef sold in the shops, including home produced.

    3. Butter

    (a) The general consumer subsidy on butter is paid in part by FEOGA, and this portion is worth £25·33 per ton, equivalent to about 1p per lb.

    (b) The mca which is paid on imports is now worth between f8885 per ton (80 per cent. fat) and 01·08 per ton (82 per cent. fat) This is equivalent to about 4p per lb.

    4. Sugar

    (a) The United Kingdom is benefiting from an EEC scheme to import sugar from world markets with the aid of a FEOGA subsidy. In the first tranche of 200,000 metric tons of raw sugar the United Kingdom is expected to receive 155,500 metric tons, and the subsidy on this to average £224·9 per ton (white). This is equivalent to a saving of about 20p per 2 lb bag on just over 3 weeks' total United Kingdom supplies. Total EEC imports of a further 300,000 metric tons have been agreed in princple, but tenders have not yet been accepted by the EEC and therefore the benefits cannot be assessed.

    (b) MCAs are payable on our imports from EEC countries. These now amount to £18·78 per ton for raw sugar and £22·14 per ton for white sugar. This subsidy is equivalent to about 2p per 2 lb bag.

    Mr. Martenasked the Secretary of State for Prices and Consumer Protection if she will list the items of food which are cheaper outside the EEC than inside.
    Mr. Alan Williams: I would refer the hon. Member to the reply given by my
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    right hon. Friend the Secretary of State for Trade on 23rd January 1975 to my right hon. Friend the Member for Battersea, North (Mr. Jay).—[Vol. 884, c. 484]
    Mr. Marten: Is it not true that since then grain prices have dropped and are dropping seriously? May we have the hon. Gentleman's views on that matter?
    Mr. Alan Williams: I congratulate the hon. Gentleman on his keen sense of timing in getting here to ask his Question.
    Mr. Marten: I have been dealing with the leadership election.
    Mr. Alan Williams: I am surprised that the hon. Gentleman does not think he has been deciding it. He should also take into account in his estimate monetary compensatory amounts.
    Mr. William Hamilton: In terms of food prices has any calculation been made of whether we would be better off outside or inside the Common Market?
    Mr. Alan Williams: I refer my hon. Friend to the earlier reply to which I referred because it gives a considerable amount of detail on the breakdown of prices. He will, however, appreciate that prices vary considerably according to quality and grading and harvest factors.
    Mr. Grimond: I understand the dangers of doing what is proposed and the difficulties of timing, but is it the Government's intention, nearer the time of the referendum, to give the public any information about prices inside and outside the Common Market?
    Mr. Alan Williams: I should have thought that the Government's intention was to give the maximum possible information so that the discussions and deliberations could be as well informed as possible.

    Cosmetics
    Mrs. Joyce Butlerasked the Secretary of State for Prices and Consumer Protection if she will make a study of the Bill which the French Health Minister is proposing to introduce to tighten controls on cosmetics, including a declaration of ingredients, with a view to introducing similar legislation; and if she will make a statement.
    Mr. Alan Williams: I am aware of the proposed French legislation. It is my intention to make regulations relating to the safety of cosmetic products on sale in this country, and their preparation will begin as soon as the proposed EEC directive on cosmetics, now under consideration by the Council of Ministers, is adopted.
    Mrs. Butler: Will my hon. Friend say whether the French proposals come within the scope of the EEC cosmetics directive or go beyond it? Will his proposed regulations include a declaration of ingredients, as consumers here are anxious to have that information?
    Mr. Alan Williams: The directive is not yet finalised. My understanding is that the French legislation is intended to implement the general purposes of the directive. I am looking at the possibility of requiring notification of ingredients even if we do not go as far as requiring the full ingredients to be listed on the label.
    Miss Fookes: I welcome the Minister's pronouncements on ingredients, but will he also take the opportunity of investigating the quantities in which cosmetics are sold, as that is a vexed and long-standing problem?
    Mr. Alan Williams: Yes.

    Inflation
    Mr. Alleyasked the Secretary of State for Prices and Consumer Protection what is the annual rate of inflation based on the Price Commission's index for the last three months.
    Mr. Neubertasked the Secretary of State for Prices and Consumer Protection what have been the main factors responsible for the increase in the Price Corn-mission's index since October.
    Mrs. Shirley Williams: The Price Commission's index for the latest available period, which is 1st September to 30th November 1974, showed an annual rate of 191 per cent. The upward swing reflects, as the Price Commission said in its report, increases throughout the energy sector, especially for oil, and rising costs of wages and salaries in all sectors. Revision of these prices is comparatively in frequent and the combined effect of these
    14
    increases may have exaggerated the upward movement.
    Mr. Adley: May I remind the right hon. Lady of the remark of her right hon. Friend the Chancellor of the Exchequer during the election that the rate of inflation as a result of his splendid achievements had been brought down to 8·4 per cent.? Was the Chancellor fabricating that statement, or is the right hon. Lady now saying that, in spite of the achievements by the Chancellor of the Exchequer and his colleagues, since then the situation has got totally out of control under the guidance of the Government?
    Mrs. Shirley Williams: The hon. Gentleman would be unwise to follow that path too far. In the winter of 1973–74 the rate of increase in inflation according to the Price Commission's index was not the 19½ per cent. of today but 23 per cent. It fell to 16 per cent. in the spring and to 9½ per cent. in the summer, which is the period to which my right hon. Friend was referring. There is no doubt that the fall had taken place by the summer and that my right hon. Friend was basing what he said directly on the statistics available to the Price Commission.
    Mr. Neubert: Does the right hon. Lady agree with the Price Commission that any hope of avoiding massive price increases has been swept away by the rising tide of higher wages? Does not this underline the ultimate futility of maintaining price control while abolishing the Pay Board? Does not the right hon. Lady agree that unless she can persuade her colleagues to control the massive explosion in wages she and her Department might just as well pack up and go home?
    Mrs. Shirley Williams: The Price Commission did not say what the hon. Gentleman has attributed to it. First, the commission said that inflation was increasingly coming within our control and it asked us to draw lessons from that. Secondly, the Secretary of the Trades Union Congress, Mr. Murray, has specifically urged upon his fellow trade unionists and those who are not trade unionists the need to follow very closely the guidance given under the social contract. Thirdly, as the hon. Gentleman will be aware, about three-quarters of trade unionists are settling within the social contract and not

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    all the pressure for breaking it comes from trade unions.
    Mr. Whitehead: Would it not be easier for the Government to continue their persuasive efforts to contain inflation if over the Christmas period they had not sanctioned increases in top salaries.
    Mrs. Shirley Williams: That is a matter primarily for my right hon. Friend the Secretary of State for Employment.
    Mr. Tebbit: The right hon. Lady scouted around the Chancellor's statement at the General Election about the 8·4 per cent., but the Chancellor also said that he thought we could contain inflation and get it down to a level of 10 per cent. per anum by the end of this year. The right hon. Lady will not give an estimate. How can those who are trying to stick to the social contract pitch their wage claims to take account of forthcoming inflation, as they are allowed to do, unless she makes an estimate of what it will be?
    Mrs. Shirley Williams: The hon. Gentleman has got himself into a tangle. First, I repeated exactly the figures that were available to the Price Commission and the Government, which are close to those quoted by my right hon. Friend after the summer when he made his statement. Secondly, the TUC's guidelines ask those who settle to have regard to the previous rate of increase and not to a prospective rate of increase. That was once again underlined by Mr. Murray in his advice to the trade unions only a few days ago. If that were done, we should be in a fairly strong position to achieve a decline in the rate of inflation.
    Mr. Tomlinson: Does my right hon. Friend agree that many of us are getting fed up with Opposition Members who, while apparently concerned about inflation, are taking every opportunity to knock the social contract, particularly when in the week before last, those hon. Members went through the Lobby to take a decision which will force up the public borrowing requirement and thereby stimulate the inflation about which they are allegedly concerned?
    Mrs. Shirley Williams: I support what my hon. Friend says. It is not notable that the Opposition condemn the pressure for settlement far outside the social con
    16
    tract from the professions and others whom they obviously do not regard as being bound by the battle against inflation.
    Mr. Tom King: Is the right hon. Lady aware that she seems to be in conflict not only with the Chancellor of the Exchequer but with the Prime Minister? What did she mean by saying that some wage claims were being made by people who were outside the social contract? The Prime Minister said that all useful people were within the social contract.
    Mrs. Shirley Williams: With respect. I said that this did not apply only to those trade unionists who regarded themselves as bound by the social contract. It applies to professionals and others outside the original TUC settlement.
    Mr. Ronald Atkins: Will my right hon. Friend consider the formulation of a specialised price index based on the cost of living of the lower income group?
    Mrs. Shirley Williams: My hon. Friend will be aware that there is already an index which deals with pensioners' expenditure, and we are exploring whether there should be further indices of this kind.
    Mr. Raison: Will the right hon. Lady acknowledge that the rate of inflation during the period she has covered is over twice the figure in the previous year? Will she indicate what rate of inflation she expects next year? The Government have just published their public expenditure figures for the February subsidy and they show that the Government must have thought hard about the inflation rate. What does the Secretary of State expect it to be?
    Mrs. Shirley Williams: I find the hon. Gentleman's remark most extraordinary, because last January the food index was running at 19·5 per cent., in February it was 20 per cent., and according to the Price Commission's own commentary it was running at 23 per cent. last winter. Therefore, I do not follow the hon. Gentleman's point.

    Food Mixer Demonstration Company
    Mr. David Watkinsasked the Secretary of State for Prices and Consumer

    17
    Protection if she will refer to the Director of Public Prosecutions the activities of a company, whose name has been supplied to her, in demonstrating food mixers, taking customers' money and not delivering.
    Mr. Alan Williams: I understand that the company is now in voluntary liquidation. Under the provisions of Section 334 of the Companies Act 1948, the liquidator is required to report to the Director of Public Prosecutions if it appears to him that criminal offences have occurred in relation to the company. My right hon. Friend the Secretary of State for Trade also proposes to make certain inquiries under the provisions of the Companies Act.
    Mr. Watkins: I am grateful to my hon. Friend for that answer. Is he aware that over the last year a large number of people have lost a lot of money as a result of the activities of this company? Is he also aware that there is evidence to suggest that the company's representatives have continued their activities in seeking to obtain money after the company was known to be failing?
    Mr. Alan Williams: I am aware that a great many people have lost money or are in danger of losing money as a result of the activities of this company. However, in view of the nature of the inquiries which are now taking place I believe that it would be inappropriate for me to say more.

    Prices (Voluntary Agreement)
    Mrs. Sally Oppenheimasked the Secretary of State for Prices and Consumer Protection by how much the items in the voluntary agreement taken both collectively and individually, have risen since the agreement was made.
    Mr. Maclennan: The collective price of the goods in the voluntary agreement increased by 4·9 per cent. between May and December 1974, the latest month for which figures are available. This compares with a rise in the retail price index of 8·6 per cent. With permission, I will provide detailed information on individual commodities in the Official Report.
    Mrs. Oppenheim: Will the Minister say how widespread is the departmental monitoring of these figures and why his answer conflicts so sharply with the
    18
    evidence in the Grocer in January—namely, that promotional offers in relation to the items on the right hon. Lady's list of goods which may be on continuous offer at all times were curtailed by 30 per cent. and that 15 items advertised by the Co-op the day after the announcement of "Shirley's special price offers" were found to be on sale in a Co-op during the weekend at 28 per cent. more?
    Mr. Maclennan: The hon. Lady should be satisfied that the voluntary agreement is being monitored most carefully by my Department. We are basing the matter on a calculation of price indices and the monitoring of the promotional material that is available to us. The hon. Lady should also realise that resources for the agreement were provided largely by the 10 per cent. cut in gross margin reference levels. While we are not endeavouring to seek price stability over the entire front, we are endeavouring to concentrate on cutting reference levels for items of particular importance. We believe that this is effectively being achieved.
    Mr. Mike Thomas: Is the Minister aware that those of us who are involved in the co-operative movement condemn the sort of instance purported to be put forward by the hon. Member for Gloucester (Mrs. Oppenheim) as the true state of affairs? The hon. Lady cannot have the argument both ways. She cannot on the one hand claim that her friends in the distributive trades are maintaining the agreement and on the other hand attack the Government for the failure of the agreement.
    Mr. Maclennan: It is curious that the Opposition have never given full-hearted support to the voluntary agreement—an agreement which the trade has been anxious to support.
    Mr. Giles Shaw: Will the Minister agree that since there has been a 4·6 per cent. price increase through the voluntary agreement against an increase of 8·6 per cent. in the Price Code, the Government should abandon the Price Code and stick by the voluntary agreement?
    Mr. Maclennan: I suggest that the hon. Gentleman can have put forward that view only in a spirit of levity. However, the voluntary agreement comes to an end at the end of March, and we shall be

    19
    considering whether it is the most appropriate method of seeking to concentrate benefits on the shopping baskets of housewives. [HON. MEMBERS: "Oh."] If the Opposition have other methods in mind, I have no doubt that we shall consider them very carefully.
    Mr. Michael Morris: Is the Minister honestly saying that the statement in the Grocer to which my hon. Friend the Member for Gloucester (Mrs. Oppenheim) drew attention was totally erroneous?
    Mr. Maclennan: I made no such suggestion.
    Mr. Gow: Is the Minister aware that no charge of levity could ever be raised against him?
    Following is the information:
    VOLUNTARY AGREEMENT
    Pecenrage changes in Price Indices

    A RETAILERS' LIST

    ITEM—COVERAGE MAY DIFFER FROM AGREEMENT ITEMS IN SOME MINOR RESPECTS

    Percentage increase May-Dec. 1974

    Bread (per loaf) large white small white

    0·5

    Cheese (cheddar type)

    10·1

    Butter (NZ)

    8·8

    Milk-based infant food (full cream) (per 16 oz. tin)

    14·8

    Self-raising flour (per 3 lb.)

    -2·1

    Apples (dessert)

    7·4

    Bananas

    3·1

    Oranges

    17·4

    Potatoes

    0·1

    Tomatoes

    0·4

    Cabbage

    -35·1

    Cauliflower

    4·0

    Carrots

    8·8

    Onions

    -23·1

    Beef (all cuts home and imported)

    -0·4

    Lamb (cheap cuts home and imported)

    -10·1

    Chicken*

    9·6

    Chicken portions*

    10·5

    Biscuits (sweet lower priced)

    24·9

    Electric light bulbs

    3·8

    Matches

    16·5

    Toilet soap

    15·9

    Toothpaste

    -9·4

    2·4

    INDEX ALL RETAILERS' ITEMS
    *Chickens—Frozen 3 lb. and fresh and chilled 4 lb.
    Chicken portions—using index for frozen 3 lb. chickens.

    B MANUFACTURERS' LIST

    Percentage increase May-Dec. 1974

    Sausages (pork and beef)

    5·6

    Cooking fat and lard (lard price only)

    16·5

    Margarine

    30·8

    Tea (lower and medium priced) (per ¼ lb.)

    -2·8

    Breakfast cereals

    20·5

    Fish fingers

    -0·2

    Frozen peas and beans

    10·8

    Instant coffee (per 4 oz.)

    15·2

    Baby (infant) foods (per jar)

    30·0

    Canned beans in tomato sauce

    10·5

    Canned soup

    26·2

    Food Subsidies
    Mr. Michael Lathamasked the Secretary of State for Prices and Consumer Protection whether she intends to increase expenditure on food subsidies.
    Mrs. Shirley Williams: As I told the House on 30th January, the Government intend to continue the food subsidies programme during the coming year at broadly its present level.
    Mr. Latham: Does the Secretary of State draw any conclusion from an answer given to me last Thursday by the Minister of State, Department of Health and Social Security that even on the most favourable assumption to the Government it would be cheaper to increase pensions, supplementary benefits, family income supplement and family allowances by the exact financial weekly benefit of the food subsidy than to continue with this wasteful subsidy?
    Mrs. Shirley Williams: I wish that the hon. Gentleman had paid us the courtesy of being present for the Second Reading of the Prices Bill, when this matter was discussed at great length.
    Mr. Latham: Oh, yes, I was.
    Mrs. Shirley Williams: If so, he will know that one of the points made was that while the Government have introduced food subsidies they have also increased pensions and supplementary benefits and intend to increase family allowances to boot. In other words, we are doing both these things.
    Mr. Fry: Is the right hon. Lady aware that one of my constituents is very fond of cats, orders 14 pints of milk a week to feed them and is unwillingly being heavily subsidised by the taxpayer? Does not this show how ludicrous the food subsidy is?
    Mrs. Shirley Williams: Perhaps the hon. Gentleman should also tell his constituent that the Conservative Government introduced the subsidy on milk and, therefore, helped her cats long ago.
    Sir B. Rhys Williams: Is the right hon. Lady happy that the Government have abandoned the family endowment programme? Does she not agree that it would have been better to accept the proposal for family allowances for the first child?
    Mrs. Shirley Williams: The hon. Gentleman will be aware that I made clear during the Second Reading of the new Prices Bill that the Government intend to extend family allowances to the first child but that this is a matter which requires a good deal of fresh administration. We see the subsidy programme as being linked to the phasing-in of this new benefit.
    Mrs. Dunwoody: Does my right hon. Friend agree that the Conservatives are displaying a magnificent example of their unawareness of the circumstances of life since they do not realise that it is only by subsidising the staple foods that one helps the families who could be categorised as poor?
    Mrs. Shirley Williams: My hon. Friend will be aware that the take-up of means-tested benefits has not been anything like the entitlement of those whom it is intended to benefit.
    Mr. Raison: Will the right hon. Lady make a start in reducing food subsidies by doing away with the interim bread subsidy which was brought in to pay for a wage settlement?
    Mrs. Shirley Williams: The hon. Gentleman knows that we are awaiting from the Price Commission a full report on various applications made to it, including that based on recent increases in the price of world wheat.
    Mr. Rost: How much of the extra costs of the food subsidy will be printed by the Government, and how much will come out of Government taxation?
    Mrs. Shirley Williams: I hope that we can rely on the hon. Gentleman's support in taking it out of taxation.
    Mr. Gwilym Roberts: Although most Members on the Labour benches readily support the fact that Conservative Members are now calling for allowances for the first child, does not this show that a system of food subsidies is an essential part of the redistributive process in the foreseeable future?
    Mrs. Shirley Williams: My hon. Friend will also recall that over a long period of time the Conservative Government did nothing to increase family allowances and nothing to extend them to the first child.
    Mr. Jim Spicer: Does the right hon. Lady recall that when the Home Secretary recently made a statement about the increase in television licence fees there was a strong request from the Labour benches that old-age pensioners should be subsidised the full amount of that increase? Does she remember that her right hon. Friend made it clear that in the Government's view it was wrong to subsidise people in that blanket fashion and that he proposed that it should be done by increasing old-age pensions and not by acting indirectly? Does not this contradict the argument which is always being advanced about food subsidies?
    Mrs. Shirley Williams: There seems to be some dispute about whether my right hon. Friend the Home Secretary has been directly and correctly reported, but I must point out that the increase in the black-and-white television licence fee is far less than that in the colour television licence fee because most low-income families have access to black-and-white television and not to colour television.
    Mr. Ronald Atkins: Is my right hon. Friend aware of the high indirect subsidies paid on expensive foodstuffs to business men who live on expense accounts?
    Mrs. Shirley Williams: My hon. Friend has raised a very fair point, and I hope that very shortly my right hon. Friend will stop up this food loophole, too.
    Mr. Michael Latham: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.
    Miss Fookesasked the Secretary of State for Prices and Consumer Protection whether she intends to subsidise any further foodstuffs.
    Mrs. Shirley Williams: I have no plans at present for introducing new subsidy schemes.
    Miss Fookes: Does the right hon. Lady have any programme for reducing the amount of subsidies in view of the burden on the public purse?
    Mrs. Shirley Williams: It has been indicated that under the present subsidy arrangements there will be a slight diminution in the level of subsidies in 1975–76.
    Mr. Gwilym Roberts: Will my right hon. Friend accept with what deep sorrow I heard what she has just said? Does she realise that many of us feel that it is time to consider the extension of subsidies not only to essential foodstuffs but to other essential consumer goods?
    Mrs. Shirley Williams: I have some sympathy with my hon. Friend's remarks, but I can assure him that the diminution will be small.
    Mr. Giles Shaw: Will the right hon. Lady go a little further? I appreciate that in the Prices Bill there is a limit on the amount of money she is seeking, but does she agree that as there has been a reduction in the subsidy element in nationalised industries' prices there should be a comparable reduction in the subsidy element in food prices?
    Mrs. Shirley Williams: It might be argued that the opposite is the case. However, the crucial point about nationalised industries' subsidies is to try to protect the less well off, and that it what the Government are trying to do.
    Mr. Adley: Following the supplementary question asked by the hon. Member for Cannock (Mr. Roberts) about increase
    24
    ing the indiscriminate use of subsidies, may I inform the right hon. Lady that in Lymington there is a tremendous shortage of wide-necked bottles of Heinz tomato ketchup? When will she start to subsidise them?
    Mrs. Shirley Williams: I shall leave it to the Conservative Party, when it comes to office, to do that in the indiscriminate way in which it subsidised all nationalised industry prices.
    Mr. Tom King: The right hon. Lady has said that food subsidies will be met by increases in taxation. Since it is clear that there will be a deficit on the Government's borrowing requirement, how is it that only her subsidies are met by taxation and the increased expenditure of all other Departments is met by the printing of money?
    Mrs. Shirley Williams: The hon. Gentleman would lead me down a long path if I were to pursue that matter too far. However, the nationalised industries' subsidy level, as the Government have made clear, is subject to gradual narrowing as we begin to bring prices up to commercial viability. Secondly, the great bulk of the food subsidy expenditure has been met—not "will be", but "has been"—by the additional income taxation and value added taxation raised in the April 1974 Budget.
    Mr. Raison: If there is a diminution in the amount of food subsidies in 1975–76, why is the Secretary of State asking for a sum of money which will enable her to increase them?
    Mrs. Shirley Williams: The hon. Gentleman will be aware, as he was told during the Second Reading of the Prices Bill, that there will be a slight decline in our proposed expenditure in 1975–76.
    Mr. Gowasked the Secretary of State for Prices and Consumer Protection what is the latest estimate of the cost of food subsidies during the current financial year; and what is the estimated cost for the financial year ending 5th April 1976.
    Mrs. Shirley Williams: The estimated cost in the current financial year is about £510 million. The cost in 1975–76 is expected to be of the order of £550 million—that is in real terms, of course

    25
    —and detailed Estimates will be presented to the House in due course.
    Mr. Gow: Will the right hon. Lady tell the House how she reconciles her previous statement that she hopes to phase out food subsidies with her statement today that she proposes to increase them during the forthcoming financial year?
    Mrs. Shirley Williams: The hon. Gentleman has got it very badly wrong. He should remember that a number of schemes for subsidies were introduced late in the financial year 1974–75. Therefore, we are not talking about a full year when I give him the estimated cost of £510 million. For example, tea was brought in very late in the financial year. The cost of the subsidies in a full year is estimated at £550 million. That does not allow for what changes may be made in the year. Therefore, the hon. Gentleman has based the wrong conclusion on the wrong premises.
    Mr. Edwin Wainwright: Will my right hon. Friend continue to subsidise the staple foods to ensure that the benefit goes to people on low incomes? However, will she bear in mind that the large companies—wholesalers and some retailers—should not be allowed to take advantage of subsidies to the extent that some of them do?
    Mrs. Shirley Williams: It is my intention to do what my hon. Friend suggests in the first part of his supplementary question until there is full compensation through social benefit. I have said that to the House before. Secondly, we have no evidence that any subsidy is going to the benefit of manufacturers or retailers. However, if my hon. Friend has any evidence to the contrary I shall be grateful if he will let us have it and we will then pursue the matter with the utmost determination.

    Maximum Price Notices
    Mr. Sainsburyasked the Secretary of State for Prices and Consumer Protection how many traders have been prosecuted for failure to display notices of maximum prices.
    Mr. Maclennan: I have not been notified of any by the prosecution authorities in the 63 days since the only display
    26
    requirements now in force—those for bread—came into operation.
    Mr. Sainsbury: Is the hon. Gentleman aware that it has been widely held that these notices are confusing to such consumers as read them? Even weights and measures inspectors have found them to be confusing. Therefore, would it not be wise to postpone the introduction into the shops of yet further maximum price orders—butter and cheese orders are due on 17th February—until the matter can be considered during the Committee stage of the Prices Bill?
    Mr. Maclennan: Consumers are entitled to have available to them in every shop complete information about the maximum prices for subsidised foods. Under the present powers this has not been achieved by the public display notices. However, the Prices Bill contains other proposals which will, I think, provide for greater flexibility.
    Mr. Costain: Does the hon. Gentleman appreciate how the regulation is confusing small shopkeepers? Surely he can make a concession to stop them having to exhibit printed notices like marriage banns on the church door.
    Mr. Maclennan: The hon. Gentleman appears to be under a misapprehension. The design of the notices has been subject to discussion with the trade and we have modified greatly the original requirements to allow the sort of informality which I know he would welcome.
    Mr. Stallard: Does my hon. Friend accept that the present situation—in other words, the absence of display notices—is even more confusing to thousands of my constituents who do not know the prices of various goods in shops, and particularly in public houses?
    Mr. Maclennan: My hon. Friend is quite right to express the view that many people would welcome the provision of information of this kind, and the Government are committed by the February manifesto to providing it.
    Mrs. Sally Oppenheim: As the proposed Prices Bill amendment would exempt some shopkeepers from displaying these notices, will the hon. Gentleman give an undertaking that the Government will reimburse small shopkeepers who

    27
    have already been involved in considerable and unnecessary expense?
    Mr. Maclennan: That matter seems appropriate for discussion during the Committee stage of the Prices Bill.

    Firework Casualties
    Mr. James Johnsonasked the Secretary of State for Prices and Consumer Protection if she is now able to issue the firework casualty figures for November 1974; and if she will make a statement.
    Mr. Alan Williams: Statistics based on information provided by hospitals in England and Wales relating to persons who received hospital treatment for injuries caused by fireworks during the period 13th October to 9th November 1974 have just become available. I will, with permission circulate them in the Official Report, with the figures for the comparable periods in the four preceding years.
    Mr. Johnson: While not expecting an answer today, may I have an assurance that as soon as these figures are published the Minister will forthwith have consultative studies and then call a conference of all the bodies and organisations interested, particularly those concerned with the campaign for firework reform?
    Mr. Alan Williams: I have indicated that I am publishing the figures in the Official Report. I am sure that my hon. Friend, whose deep interest in this matter

    FIREWORK INJURIES IN ENGLAND AND WALES (4-week period in October/November)

    Year

    1974

    1973

    1972

    1971

    1970

    TOTAL

    …

    …

    …

    …

    883

    1,186

    1,260

    1,059

    1,164

    PLACE OF ACCIDENT

    1. Family or private party

    …

    267

    385

    441

    382

    433

    2. Public or semi-public party

    137

    153

    166

    139

    155

    3. Casual incident in street etc

    …

    …

    …

    272

    422

    422

    349

    399

    4. Other place

    …

    …

    89

    119

    95

    88

    87

    5. Do not know

    …

    …

    118

    107

    136

    101

    90

    TYPE OF FIREWORK

    1. Banger

    …

    …

    …

    228

    356

    369

    316

    359

    2. Rocket

    …

    …

    …

    70

    118

    129

    126

    160

    3. Jumping Cracker

    …

    42

    58

    51

    47

    46

    4. Other flyabout (flying saucer, helicopter, whirlibird etc.)

    …

    52

    Included in 7

    5. Display Firework (e.g. Roman Candle or Coloured Fires etc.)

    …

    151

    280

    262

    223

    250

    6. Home made or extracted powder

    …

    …

    …

    29

    38

    54

    57

    48

    7. Other

    …

    …

    …

    60

    79

    83

    82

    95

    8. Do not know

    …

    …

    251

    257

    312

    208

    206

    I well understand, will welcome the fact that the injuries figure for last year, the lowest ever, represents a 25 per cent. fall compared with the previous year.
    I have already given a commitment to the House that I will issue a consultative document. I hope to get it out by the end of March. Every group with a special interest and information will have the right to participate in the discussion. I doubt whether a conference as such would be the most appropriate way of dealing with this matter. This is the kind of issue in which the individual details need to be argued in depth.
    Mr. Gwilym Roberts: We greatly welcome the steps being taken by my hon. Friend. However, when this was a matter for the Home Office many of us had hoped to see legislation before another 5th November. I would earnestly point out that my hon. Friend must get cracking if something is to be done before then.
    Mr. Alan Williams: Having the generosity to interpret that as an unintentional pun, I should point out that when my hon. Friend looks at the figures he will find that we were justified in waiting to see them as they may upset certain preconceived positions taken by some individuals. For example, the accident trend with organised firework displays is not as encouraging as the figures generally. Important matters of public interest are involved which merit full public discussion.

    SEVERITY OF INJURY

    1. Died

    …

    …

    …

    0

    0

    0

    1

    0

    2. Detained more than one night

    …

    …

    …

    70

    80

    91

    69

    74

    3. Sufficient to cause absence from work or equivalent

    121

    178

    143

    88

    104

    4. Minor injury

    …

    …

    654

    892

    1,009

    879

    965

    5. Do not know

    …

    …

    38

    36

    17

    22

    21

    AGE GROUP OF INJURED PERSONS

    Over 21

    …

    …

    …

    131

    195

    167

    145

    184

    16–20

    …

    …

    …

    …

    58

    74

    68

    56

    96

    13–15

    …

    …

    …

    …

    184

    248

    257

    210

    226

    Under 13

    …

    …

    …

    510

    669

    768

    648

    658

    SEX OF CASUALTIES

    Male

    …

    …

    …

    …

    713

    966

    1,022

    851

    913

    Female

    …

    …

    …

    170

    219

    235

    203

    251

    Not recorded

    …

    …

    …

    —

    1

    3

    5

    0

    EYE INJURIES

    …

    …

    …

    372

    448

    449

    386

    418

    Agriculture (Price Margins)
    Mr. Grimondasked the Secretary of State for prices and Consumer Protection what progress she has made in her inquiries into the causes of the gap between the retail price of agricultural products such as beef and leather and the prices the farmer receives for cattle and hides.
    Mr. Maclennan: There is no special inquiry concerning agricultural products generally, but the Price Commission's study of the meat industry is continuing. My right hon. Friend has asked that it be given the highest priority.
    Mr. Grimond: I am grateful to the Minister for indicating that the study is continuing. Could it be broadened into a general inquiry into why everything that the farmer has to sell has fallen in price whereas everything that he has to buy has risen in price? Surely this shows the fault in the whole marketing system which farmers' organisations and other would like to see put right, but first we must know why this is so.
    Mr. Maclennan: The Government are consulting the agriculture industry about the current price review. Some of the considerations to which the right hon. Gentleman has given expression will be borne in mind.
    Mr. Jim Spicer: Will the Minister assure the House that he will bring all possible influence on the Minister of Agriculture, Fisheries and Food to support the National Farmers' Union in its drive for marketing boards?
    Mr. Maclennan: I understand that the National Farmers' Union is consulting its membership on a county-by-county basis about its reactions. We shall be interested in the outcome of the inquiries.

  TRADE

    Airline Passengers (Infectious Diseases)
    Mr. Shersbyasked the Secretary of State for Trade if he will set up a departmental inquiry into the circumstances whereby a Sabena airline's passenger reported to have been suffering from Lassa fever was carried from Nigeria to London Airport via Brussels in unrestricted contact with other passengers and to examine what international guidelines exist covering the transportation by commercial airlines of passengers known to be suffering from infectious diseases; and if he will make a statement.
    The Under-Secretary of State for Trade (Mr. Clinton Davis): On 30th January my hon. Friend the Minister of State, Department of Health and Social Security stated that the circumstances of this case had been fully investigated, and indicated that his chief medical officer was examining the issues with a view to minimising any risk.
    The International Air Transport Association has recommended practices in connection with the carriage of sick or infectious persons, and many airlines—including British Airways and British Caledonian Airways—have special internal instructions. The World Health Organisation has recently issued specific

    31
    guidance about the handling of Lassa fever victims and suspects and their transport, where assential. If an airline captain has doubts about a passenger's health, he would normally require medical clearance before accepting him, as I understand was done in the recent case. I shall examine with my hon. Friend the possible scope for further safeguards in this matter, but the real problem seems to lie in diagnosing the infection prior to embarkation.
    Mr. Shersby: Is the Minister aware that the House will be grateful for his reply? Is he also aware that his hon. Friend the Minister of State in his answer to me on 30th January said:
    "To refuse admission to this country to any British person who was unwell and who wished to return to the United Kingdom for treatment from a tropical area would raise very serious issues of principle and practicability."—[Official Report, 30th January 1975; Vol. 885, c. 302.]
    Will he, therefore, consider what steps can be taken to reach international agreement on substantially improved arrangements for transporting passengers by air to this country when they are returning with infectious tropical diseases?
    Mr. Davis: I have already indicated in what was perhaps a rather long answer that IATA has recommended practices relating to the carriage of sick or infectious persons and that the World Health Organisation issued specific guidance about this particular disease some little time ago. Therefore, international action is being taken. I assure the hon. Gentleman that the Government do not view the matter with any degree of complacency.
    Mrs. Dunwoody: Does my hon. Friend accept that, while we sympathise very much with the captain of the aircraft who must have had to take the medical opinion of people at the airport, it is important that these international rules should be enforced, because there is a great likelihood that people who come into contact with Lassa fever will not only take the infection themselves but spread it widely? Will he, therefore, ensure that the airlines concerned take special precautions when they know that these regulations exist?
    Mr. Davis: My hon. Friend must realise that all responsible airlines take this matter most seriously. There is no evidence to suggest the contrary. The difficulty with this particular disease is its diagnosis. I am advised that it is very difficult to diagnose the disease and that there is at present only one organisation in the world, in Atlanta, Georgia, which has the facilities to carry out the necessary analyses that make diagnosis possible.
    Mr. Higgins: Is the Minister aware that there is widespread concern about this issue and that recommendations and guidance may not be sufficient? Will he consider whether regulations should be introduced? Would not the ICAO have a rôle to play in this direction?
    Mr. Davis: If additional regulations might be of help, we will consider the matter. However, as I indicated to my hon. Friend the Member for Crewe (Mrs. Dunwoody), the difficulty lies not in having regulations but in having effective diagnosis. This is most difficult with a rare disease, as this one is.

  INDUSTRY

    Shipbuilding (Public Ownership)
    Mr. Willeyasked the Secretary of State for Industry when he proposes to publish the White Paper on the public ownership of the shipbuilding industry.
    The Under-Secretary of State for Industry (Mr. Michael Meacher): It will not be possible to publish a White Paper in the time available, but a full statement on the Government's proposals will be made as soon as possible.
    Mr. Willey: I welcome the news that there will not be a White Paper, because both those in favour of and those against the proposed legislation are anxious that it should be introduced as soon as possible. Does my hon. Friend appreciate that some shipbuilders feel that their prospective plans are prejudiced until the publication of the Bill? Will he therefore do his utmost to ensure that the legislation is expedited?
    Mr. Meacher: I am grateful for my right hon. Friend's remarks. We are conscious that the Shipbuilders and Repairers

    33
    National Association has made clear that it accepts in principle the fact of nationalisation and is anxious to ensure the best possible organisation. We shall certainly hope to co-operate closely with the association to secure that result.
    Mr. Dodsworth: Will the Minister ensure that in any statement which is made the greatest possible care will be given to alternative forms of calculation of any compensation, bearing in mind the alternatives of valuing on a net asset basis, and earnings basis or share price value? These are extremely important considerations in ensuring fairness in any announcement which is made.
    Mr. Meacher: I am well aware of the point being made by the hon. Gentleman and of the fact that there are these alternative bases for the calculation of compensation. He will understand that I cannot at this stage indicate precisely what the form of compensation will be, otherwise there may be a good deal of undesirable speculation.
    Mr. Blenkinsop: Will my hon. Friend accept that the shorter the period of uncertainty the better, and that the sooner we get the Bill the happier we shall all be?
    Mr. Meacher: I am glad to assure my hon. Friend that we propose to bring in the Bill with the minimum delay.
    Mr. Viggers: Is the hon. Gentleman aware that a large number of overseas customers for ships being built in this country will be reluctant to purchase from a company which is owned by the State and that loss of orders will mean the loss of jobs? What is the hon. Gentleman going to do about that?
    Mr. Meacher: I do not believe there is any evidence that foreign ship owners will be unwilling to purchase from United Kingdom shipyards. What they will be concerned about will be the quality of the product, price and delivery date, and in all those we hope to produce improvements.
    Mr. Mike Thomas: Is my hon. Friend aware that concern about this matter is as great on the Tyne as on the Wear? We do not share the prejudices and fears of Conservative Members about this matter. We want to get it expedited for the benefit of both workers and management.
    Mr. Meacher: I can only again emphasise to my hon. Friend that it is our intention to introduce the Bill at the earliest possible moment. I am sure it will produce the kind of security and support that is wanted for workers at Swan Hunter as at other shipyards in the United Kingdom.
    Mr. Teddy Taylor: Can the hon. Gentleman say what possible advantage can accrue to the nation by nationalising the ship repairing industry, and precisely how I can explain to my constituents in Glasgow that the Government apparently have millions of pounds to spare to nationalise industry at the same time as they have reduced the school building programme by £30 million for the current year?
    Mr. Meacher: The PA Consultants' report of last year indicated considerable weaknesses in the performance of the ship repairing industry. In particular it drew attention to low investment, poor labour relations and the need for a new dry dock. Furthermore, the report indicated that the magnitude of the demand for new resources to ensure that this industry performs as well as possible was unlikely to be met from private sources.
    Mr. Eldon Griffiths: The hon. Gentleman is well known for his rash public statements. Can he confirm what he said, namely, that the shipbuilding industry accepts nationalisation in principle, when it must be well known to him that Vosper Thorneycroft and Swan Hunter do not? Would he like to comment on that?
    The hon. Gentleman having, as an exponent of open Government, said that there will be no White Paper, will he make sure that his further statement—which we shall all welcome—covers those matters not covered in the consultative document on the aircraft industry—namely, how much it will cost, whether it fits in with our obligations to the European Economic Community, and why he thinks it will produce a single extra ship or sell a single extra ship on foreign markets?
    Mr. Meacher: The hon. Gentleman has asked at least half a dozen questions. The answer to his first question is that the SRNA has told us that it accepts nationalisation as a fact of life and is

    35
    anxious to achieve the kind of organisation that will be most suitable. I assure the hon. Gentleman that the workers in the industry, who in terms of numbers form a great deal more than half of it, are satisfied and wish to press on with nationalisation as soon as possible.
    I have already indicated that because of speculation it is not possible at this stage to make clear the basis on which compensation will operate. We intend to introduce the Bill at the earliest possible opportunity.
    There is no question of any conflict with the EEC. There is nothing in the Treaty of Rome which prevents the nationalisation of industries.
    Several Hon. Members rose—
    Mr. Speaker: We are not going to debate these matters today.
    Mr. Eldon Griffiths: On a point of order, Mr. Speaker. I think it will be within your recollection that the Minister said that the industry accepts the fact of nationalisation. Is not that a matter for the House to decide?
    Mr. Speaker: Whether or not it is, no doubt it will be debated in due course.

  STATUTORY INSTRUMENTS
  Ordered,
  That the draft Supplementary Benefit (Determination of Requirements) Regulations 1975 be referred to a Standing Committee on Statutory Instruments.—[Mr. Pendry.]
  Ordered,
  That the draft Medicines (Dental Filling Substances) Order 1975 be referred to a Standing Committee on Statutory Instruments.—[Mr. Pendry.]

THE ARTS
3.34 p.m.
Mr. Bryan Magee: I beg to move,
That this House draws attention to the fact that we are now in a period, like the Second World War, which is an appropriate time to multiply public support for the arts; and calls on the Government to take appropriate measures to this end and to encourage local authorities to do likewise.
One of the salient characteristics of our method of controlling public expenditure in this country is that increases in public expenditure tend to be incremental. We always find ourselves struggling to get 5 per cent., 10 per cent. or 20 per cent. added to the expenditure of a particular Department, or subtracted from the expenditure of a particular Department, but it means that the struggle for the use of scarce resources, which is such an important part of the political process, tends always to take place on the margin of the expenditure of important Departments.
One consequence of this is that those Members in this House who think that the whole pattern of expenditure is mistaken, those who would like to see the national cake cut up into slices of entirely different proportions, have an almost insuperably difficult task ahead of them, but there are exceptions to this. The exceptions occur when the total amounts are exceedingly small, and I think that for that reason public expenditure on the arts is such an exception.
The central thesis of my speech is that Government expenditure on the arts should be doubled, and that local authority expenditure on the arts should be more than doubled. That is why I have used the word "multiply" in my motion. I think that the smallness of the sums involved makes this practicable, and I shall argue that the benefits that will accrue from that are out of all proportion to the size of the sums involved.
I must meet the argument, because it is the most important argument against what I have to say, that, although all these things are desirable in themselves, we cannot afford them now. I shall try to argue the positive case for the increases for which I am calling on three grounds: first, the unique value of the arts to this country especially at this time; secondly,

37
comparisons with what other genuinely comparable countries are doing; thirdly, and perhaps most important and most specific, the unmet needs for which the extra money is required.
First let me make it clear exactly what sums we are talking about, and what is the order of expenditure that we are to discuss. In the financial year 1973–74 the Government spent £47½ million on the arts. That was one quarter of 1 per cent. of total Government expenditure. Of that £47½ million, almost exactly half—that is to say, £23·4 million—went to the Arts Council to be further redistributed at its discretion, and £9·8 million went to sustain national and provincial art galleries and museums.
Local authority expenditure on the arts is extremely important, but local authorities are not required to give returns for their expenditure in this field and, therefore, any estimate has to be precisely that—an estimate—but the research staff of our House of Commons Library have been to great trouble to get me an informed estimate of the figures of local authority expenditure on the arts. For the financial year 1972–73 that amounted to £15½ million, which is 0·2 per cent. of total local authority expenditure.
In the financial year 1973–74, total expenditure on the arts in this country was approximately £63 million, or if we add to that the expenditure of local authorities on art galleries and museums it can be made up to £75 million. There is a further important source of patronage of the arts, and that is the private patron. Again, for obvious reasons it is impossible to put a precise figure on this, but informed estimates reckon that to be about £1½ million a year. At this point, as I shall not mention them again, I should like to say how grateful I am to the research staff in the House of Commons Library for getting these figures for me and, indeed, a number of figures that I shall use later in my speech.
I should like to say, in defence of the figures and of the staff who have worked so hard to provide them, that I do not want to hinge any of my arguments on the nice exactitude of figures. The fact that some of them are unavoidably estimates means that other speakers may, if they wish, by using a different basis of calculation, arrive at different estimates.
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The main point at issue in this debate is not the precise sums about which we are talking but their order of magnitude, and it is upon this that what I have to say depends.
Looked at from one point of view, the figures I have just read out illustrate a success story, because we have reached that level of public expenditure on the arts by a continuous upward development from a starting point in the Second World War, and that upward development, that growth of public expenditure on the arts, had to be fought for every inch of the way by people, some of whom are still fondly remembered for their work in this direction. When I talk of the unmet needs or criticise our attitude as a society to our willingness to spend money on the arts, I do not want anything that I say to be taken as reflecting on those who fought so very hard to get us to the present situation. On the contrary, what I shall say is that we in our time should adopt the same irreverent and pioneering attitude to public expenditure on the arts, the same unwillingness to stop at and be bound by the existing levels of public expenditure that we inherited, that those people did in their time.
I shall not debate this matter as a party matter. This is an area of activity in which the party to which I belong has a particularly fine record, of which one can be especially proud. No doubt the various parties on the Opposition benches can also point to achievements of which they are justly proud. I shall not be making any party points during the debate, so I hope that no one who speaks after me will feel any need to be defensive in his comments. I say that especially of my hon. Friend the Minister. The proposals I shall make for things which I hope the Minister will do with the backing of the Government, whom I support, are in no way meant to be criticisms either of him or of the Government's record so far. But I am talking now of unfinished business, of urgent needs for the future.
In one sense there is only one important argument against what I am proposing, because almost any civilised person is likely to have the view that in itself it is desirable for public expenditure on the arts to be increased. The only possible objection there can be to our doing so is the economic plight that the country is

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in at present. The only possible objection can consist in the assertion that, desirable though it is, we cannot possibly afford it. That is the only argument against my motion which I respect, because anyone who thinks on any other ground that it is not desirable to enrich and expand the arts in this country is unlikely in most circumstances to be an opponent with whom it is worth arguing.
But to those who say that we cannot afford it, I would say this: public financial support for the arts began, on any substantial and organised scale, during the darkest years of the Second World War, when we in this country were fighting for our survival against an enemy far more terrible than inflation, when we as a country were far poorer than we are today, when the average standard of living of most of the members of our community was immeasurably lower than standards of living today and when every penny which could be found of public money was diverted for other purposes. That is why I mention the Second World War in the wording of my motion. Anyone who says that we cannot afford it now must explain why, bad though our situation is now, we are less well able to afford what was afforded in far more terrible and dangerous times, when public subsidy of the arts began.
These public subsidies which first became an important factor in our national life and which revolutionised the theatre, music, opera and the performing arts generally, were continued by the post-war Labour Government in years which were again, though peacetime years, years of bleak financial austerity, shortage and continued wartime rationing. It was in those grey years that the Arts Council was incorporated, in August 1946. It was in those years that we had the Festival of Britain and built the Royal Festival Hall, which has so enriched the musical life of our capital city. There were plenty of voices raised in those days to say that we could not afford it. I remember fulminations in the editorial columns of national and local newspapers saying that we should not have the Festival Hall because we could not afford it. But there is no one now with the slightest concern for the arts who would unwish that building and the difference that it has made to the cultural
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life of this country, and particularly this capital, in the last 20 years.
It is not only our society which has behaved in this way and spent money on the expansion of the arts, especially the performing arts, in what were some of the darkest and most difficult days of our history. The brilliant director of the National Theatre, Peter Hall, has carried with him for most of his life memories of a vivid kind from his experience in post-war Germany as a young National Service man. In the current issue of the magazine "Opera" he recalls them, saying:
"I have memories of Germany in 1949–50, still poor, still ruined, yet to my amazement spending money on the arts. No houses, yet building new opera houses. Making sure that the opera was going, the orchestras were subsidised, that the theatres were there. It was a revelation to me, as I had left a country where the Arts Council was a very under-subsidised struggling organization, where art was not in the centre of a town's life."
I have very similar memories from a similar time, in fact a year before Peter Hall's, when I was a young Service man in Austria. I vividly remember the Austrians, even poorer than the Germans, their cities destroyed by the war, insisting on the priority of having the Vienna State Opera rebuilt. In the remote country town where I happened to be stationed. I remember subsidised music and subsidised concerts of Schubert and Mozart, to which the audiences, consisting of farm labourers and peasant women, came in their droves.
Coming back to even later peacetime England, when the Labour Government came to power in 1964 after 13 years in Opposition, we came back to power in the middle of what was then the worst economic crisis there had been since the immediate post-war years, and yet again precisely at that time, for the first time, a Minister responsible for the arts was appointed. In those very difficult financial days, Jennie Lee, with the co-operation of Lord Goodman on the Arts Council, did creative and pioneering work of permanent importance which is still smilingly remembered and very gratefully remembered in the world of the arts in this country.
I would say that the argument that we cannot afford it because times are bad really holds no water in a historical context. It has always been when times

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were bad that some of the most valuable things of this kind were done in our society, and as far back as one goes, in times of great social upheaval, even civil war, one finds that that has been the time when some of the most important and lastingly valuable public projects, such as cathedrals, churches, public buildings and so on, have been created.
One might even say, as I would, that it is when times are bad that we need these things most. That is particularly true in an age like ours, when the consolations of religion are not accessible to large numbers of people and when the deepest emotional and, if I dare use the word, spiritual experiences which are available to many, perhaps even to most, people are those provided by the arts and it is through the arts that increasing numbers of people find their deepest sense of contact with enduring realities and values.
In the light of the importance of the arts and of the considerations which I have outlined, it is footling to say that we cannot afford increases of expenditure of the order that I am asking for, especially when we consider just what other things we as a society spend immense sums on. Considering what we as a community spend on things like drinking, tobacco and gambling, all of which incidentally have given me enormous pleasure, the sums involved for the arts are miniscule and almost invisible.
Since we are talking about Government expenditure, perhaps I should make a comparison with Government revenue from these sources. The estimated Government revenue this year from alcoholic drinks is £1,110 million, from tobacco £1,325 million and from gambling a mere £240 million. The figure of additional Government expenditure on the arts for which I am asking is less than a quarter of the smallest of those figures.
There is no other sphere in our national life in which such a small expenditure could make such an enormous difference or, indeed, where Britain is so preeminenly in the forefront in world terms. When one considers what Britain has done since the end of the Second World War in a global context, one sees that there are only about two things for which we are really outstanding. One is the grace with which we have divested ourselves of what must have been much the largest empire that the world has ever
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seen and the fact that we managed to do so in a comparatively peaceful and civilised way.
The other is that Britain, or at any rate London, has became the world's artistic centre. We are acknowledged throughout the world to have the finest theatre. We are far and away the most important centre in the world for the public performance of music. More books are published here than anywhere else in the world, more gramophone records are made here and I believe that we are the world centre for dealing in works of art. This has happened in London in about the last 20 years. So there is no other sphere which so deserves our support and the financial nourishment which it is within the power of the Government to bestow.
But even if we consider this matter in vulgar terms of money, prestige and promotion, there is an enormous return to be got from our arts. There is, first, the incalculable prestige and promotion value of the foreign tours by the Royal Opera Company and the Royal Ballet Company. There are the gramophone records which sell by the million all over the world and the revenue that they bring. There is our world trade in books and the revenue that that brings.
But the specific example that I would give is the theatre, which, to put it no more highly, is an enormous earner of foreign currency. The tourist authorities have discovered in their investigations and surveys that over half of all the foreign tourists who visit this country give going to the theatre as one of their reasons for doing so. In, 1973, for example, of 1,300,000 American tourists over 1 million went to the theatre. So this is not just something that visitors say they will do: they actually do it. It clearly is one of the reasons for coming to this country, because it is something which can be found here which can be found almost nowhere else in the same quantity and quality. Bearing in mind the fact that the total spent by tourists in 1972–73 was £682 million, it is clear that the theatre alone makes an enormous, indirect, but very real, contribution to the earning of large sums of foreign currency.
We get revenue from our theatre in other ways. For example, it is the actors, writers, directors, designers and producers

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who work their way up through the live theatre, through repertory companies, and so on, who sustain the whole of the acting side of our television industry and the Anglo-American film industry, from which even those who do not go to the live theatre benefit.
Yet this goose which lays such golden eggs, the live theatre, we are in danger of allowing to die from starvation. At the moment, of 60 provincial theatres no fewer than 11 are having seriously to consider the possibility of closing. In London's West End half a dozen theatres are dark and two are given over to one-man shows. It has become almost impossible for an unsubsidised commercial management to put on a play which has a large cast and requires several changes of scene. It simply is no longer economically possible.
Last year was a disaster, financially, for the Royal Shakespeare Company and there has been talk, which I hope will come to nothing, of a merger between that company and the National Theatre Company. Talking of the latter, it has now become clear that for financial as well as other reasons the new building for the National Theatre Company will not open—estimates differ, but this would be mine—until summer next year at the earliest and possibly not until the autumn.
What can the Government do to help the theatre in its present straits? There are many things that the Government can do. The first thing that they can do, and immediately, is zero-rate the theatre for VAT. I would beg the Government to do so for all the performing arts. We all know from personal experience as ticket buyers for any form of entertainment that the law of supply and demand operates powerfully in ticket prices. Other things being equal, the cheaper the tickets are the more people buy them and the more expensive they are the fewer people buy them.
The fact that all the performing arts are being required to collect a tax of 8 per cent. on the tickets they sell artificially lowers their audiences or their income, depending on how one looks at it. It means that if they were able to charge what they themselves collect—in other words, if they could charge the lower seat prices without the 8 per cent. VAT—they would
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get a substantially larger audience. Conversely—this is what I suggest they be encouraged to do—if the performing arts were zero-rated but encouraged to keep their prices at the existing level, this would be an enormous immediate increase in revenue without any increase in seat prices or loss of audience. For even a comparatively small theatre in London's West End this would make a difference of some hundreds of pounds a week. In this way, by immediate action, the Government could help greatly to increase the amount of money available to the theatre and to the performing arts generally.
There are other ways in which the Government could help in the present situation. They could greatly increase the amount made available through the Arts Council for distribution to the arts generally. Here, since I am discussing specific ways in which the Government could assist the arts, I underline that they could make some changes which would in themselves cost the Government no money.
One important change would be to return to the triennial system of financing the Arts Council. At present, the Arts Council is on an annual budget, and we have the extraordinary state of affairs that less than eight weeks from the beginning of the next financial year the Arts Council still has not been officially informed what its grant for next year will be, which, in turn, means that it is unable to inform all those multitudinous organisations whose survival depends on it what their income for next year will be.
This is a disastrous situation for any organisation, but for certain organisations dependent on the Arts Council—for example, Covent Garden, whose budget runs literally into millions—it is preposterous.
The Arts Council would benefit enormously if it were allowed to go back to the old system of triennial finance. Under that system, in June of each year the Arts Council would be given an estimate of the grant likely to be made available to it in the following financial year, with further estimates of what would be available in the second and third financial years beyond that. At the beginning of the following calendar year, in about January, the estimate for the next financial year would be made firm, and the

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estimates for the second and third years would be revised in the light of inflation or any other relevant considerations. I plead with the Government, through my hon. Friend the Minister, to give serious consideration to returning to that system of finance.
There is yet another way in which the Government could give enormous assistance to the performing arts without themselves directly spending money—that is, to take steps to preserve the buildings in which performances of the arts occur, notably the theatres.
Theatres considered as buildings are subject to some very odd influences in our market economy. For obvious reasons, they tend to be in the centre of cities, and they tend, therefore, to be in those parts of cities which have maximum site values. London's theatres, of course, are concentrated in the West End, where site values are among the highest in the land. Moreover, because of their nature, theatres, though large buildings, are in use for only a few hours out of the 24. This means that, considered brutally in exclusively economic terms, they are uneconomic buildings, and this makes them a standing temptation to the property developer.
If market forces alone are to be allowed to determine the future of our theatres, I fear that many of them will have no future at all, because it will always be more profitable in purely monetary terms to knock down these buildings in the centre of cities, especially in London's West End, and replace them with multi-storey office blocks. If that is allowed to happen—it has already happened in a number of cases in London, which has lost some of its best loved theatres purely to the greed of the property developers—the future for the theatre will be dark indeed. It is within the Government's power, without spending money, to preserve these buildings for their existing use.
I shall not make specific suggestions as to how this might be done. Many suggestions have been made. Equity, the actors' union, has asked the Government to consider nationalising the buildings. A body which has been set up to try to save London's theatres has made the alternative suggestion that the sites might be nationalised. It would be possible to list the theatres so that either the buildings
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or the sites could be used only for their existing purposes, without nationalising either.
The Government should consider those possibilities carefully, and I beg them in any event not only to consider the problem but to choose one or other solution so that, without involving themselves in expenditure, they ensure that the theatre buildings themselves are preserved.
The Government could help also with the National Theatre building itself. In the light of the history of this project, it is interesting to consider its present position. For decades, radicals in the theatre have been campaigning to have a National Theatre and a National Theatre building. But, now that we are on the verge of having one, it begins to look to some people as though it is part of the establishment and we are in the paradoxical and ironical situation of seeing radicals in the theatre now campaigning against it.
The true explanation, when one looks into it, I think, is that in our present state of financial stringency, when the sums of money made available to the arts are so small, people working in other parts of the theatre are afraid that a gigantic institution such as the National Theatre—as it undoubtedly will be when the building is open and running, with all three auditoria—will pre-empt scarce resources and starve the rest of the theatre. It seems to me that their hostility to the opening of our National Theatre is based straightforwardly on a fear of the consequences for them. This fear could be assuaged, or entirely removed, and the conflict within the world of the theatre removed, by the assurance of additional resources which it is in the Government's power to bestow.
One of the undesirable consequences of the extreme shortage of money for the art which characterises our national life is that it incites conflict within the arts of the kind I have just instanced. It makes artistes in the same field jealous and frightened of one another, and, worst of all, it makes artistes in the same field frightened of expansion on the part of rivals because of the effect which that has on the availability of scarce resources.
The biggest target of that fear and jealousy over a number of years—certainly in London, and probably in the

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country as a whole—has been Covent Garden. It is natural that this should be so, because the Royal Opera House is far and away the biggest single spender of Arts Council money. For many years now, voices have been raised to say that Covent Garden should have less so that other artistic enterprises in the country could have more.
I believe that this hostility—financial hostility—to Covent Garden is misplaced for many reasons. One reason is that, in spite of all the difficulties and obstacles with which it has had to contend, Covent Garden has raised its standards during the past 20 years until they are at their best equivalent to any to be found anywhere in the world, and it has done this, and is continuing to do so, in spite of extreme shortage of money in its own operations.
The chorus at Covent Garden is far too small; it is smaller than that of the English National Opera at the Coliseum. The workship capacity is too small. Its backstage facilities generally are too small. The orchestra is too small, with the result that members of the orchestra are overworked and orchestral standards are lower than they would otherwise be, and lower than they need be.
There is need for a bigger orchestra pit at Covent Garden. In fact, the need is of two kinds—need for room to accommodate a larger number of musicians, and need also for room to improve the orchestral sound. Acoustics experts have advised that one reason why the quality of orchestral sound at Covent Garden is not as good as it might be is that the pit is so constricted that there is insufficient reverberation of sound in the pit before it emerges into the auditorium. What is desirable at Covent Garden therefore, is that the front row of the stalls should be removed entirely and the orchestra pit extended so that it could take the greater number of players needed and at the same time give the improved quality of sound which is so much needed. Again the obstacles to this are purely financial. To remove that one row of the stalls permanently would cost Covent Garden between £30,000 and £40,000 in revenue a year. In its present financial state it cannot afford to meet that expenditure.
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Covent Garden is suffering in all sorts of ways. It has had to abandon some productions and postpone others. Completion of "The Ring" has had to be postponed until next year. Covent Garden is still hundreds of thousands of pounds short of the money that it requires even for the coming financial year. In this situation standards are not merely threatened; I am afraid that already standards are falling. I do not think that anyone who is familiar with what goes on at Covent Garden would deny—though perhaps many would not wish to say so in public—that artistic standards there are lower now than they were four years ago. I repeat that for an organisation of that size and degree of complexity—which, if it is to compete in the international market for singers and conductors, must lock itself into contracts with artistes two years ahead—not even to know what its income is going to be eight weeks ahead is to put it under almost crippling financial disabilities. I do not know what its income for next year will be. I suppose it will be about £3 million, or slightly more, but it would be surprising if it were as much as £3¼ million. The need, if it is to maintain its standards, is for about £4 million.
I should like to make some comparisons with the situation abroad. For example, the opera company at Frankfurt, in Germany, does not pretend to be one of the world's front-line opera houses. It does not imagine that it is in the same league as those companies in its own country such as Hamburg and Munich. Yet last year the Frankfurt Opera Company had a public subsidy of £4 million, and the public subsidy for this coming calendar year, in 1975, of £5 million was already voted on and committed at the beginning of last year. Subsidies of this order, almost twice what our national opera house gets, come not from the Federal Government of Germany but from the city authority of Frankfurt.
Something of this kind happens to the even more important and better opera houses in Hamburg and Munich. Those opera companies are all subsidised to the extent of about £6 million a year, and that is the order of subsidy which all the international opera houses, except for Covent Garden, enjoy. It is the order of

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subsidy for opera houses such as La Scala and Vienna. Hamburg and Munich get these subsidies of £6 million not from the national government but from the regional government, from the Bavarian Government in the case of Munich and from the Hamburger Land Government in the other case. What a contrast with the picture of public subsidy in this country.
Another extremely important effect of public subsidies in the performing arts is to enable ticket prices to be kept lower than would otherwise be the case. This is especially so with opera. It is particularly important for social reasons, if for no other, that ticket prices should not be allowed to rise the slightest fraction more than is absolutely necessary. It is only by public subsidy, especially of the most expensive of all the performing arts, which is opera, that ticket prices can be kept down to a reasonable level.
I turn to the situation of orchestras in this country, and this is the last of the specific examples which I want to give. The situation governing orchestras in this country parallels that which governs the theatre and opera houses of which I have been speaking. In London we are uniquely favoured by the number of first-class orchestras which we have. There are four symphony orchestras in London, in addition to the symphony orchestras of the BBC, our outstandingly fine chamber orchestras, the Academy of St. Martin's in the Fields and the English Chamber Orchestra and the orchestras of our major opera houses. No other city in the world has that number of orchestras and, in consequence, this amount of first-rate orchestral music. We give, of public money, to each of our four London symphony orchestras about £120,000 a year. The major orchestras in other countries with which they have to compete get subsidies of over £1 million a year. Even the Concertgebouw Orchestra of Amsterdam—and I remind the House that Holland is much smaller than this country and has a much lower level of national resources—gets over £1 million in public subsidy, as indeed does the orchestra in Paris, while the orchestra in Berlin gets over £2 million of public money.
People may think that in the United States the situation is significantly
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different. Most of us have a picture of the arts in America as being entirely dependent on private patrons and very little provided for by public money. By our standards that is not the case. Recently I met in London the man who manages the Los Angeles Orchestra, which would not claim to be one of the front-line American orchestras. It is not an orchestra of world class like Boston, Philadelphia, Chicago or Cleveland. Yet the Los Angeles Orchestra gets a subsidy of $500,000 a year from the county authority. The county government of Los Angeles makes available another $500,000 for facilities such as the free use of the Hollywood Bowl for its concerts. Therefore, from the county authority the orchestra gets a total subsidy of $1 million a year. The Los Angeles city gives the orchestra $65,000 a year in addition.
I am not asking the Government to give subsidies of this order to all four of London's symphony orchestras. That could not be justified on artistic grounds, let alone financial grounds. There is not the artistic need or the possibility of having four world-class orchestras in London. But what I should like to see happen—and it is within the Government's power to help it to happen—is the amalgamation of those four orchestras into two, one based at the Royal Festival Hall and the other based at the Barbican Hall, which is due to open later in this decade. I should like to see those two properly established orchestras absorb the other two, and those musicians in the other two who were not absorbed into the two established symphony orchestras would be very much needed by the orchestras of our national opera houses where orchestral standards are not as high as they could be or need to be.
One aspect of the question which we are discussing concerns the working lives of the artistes involved in the arts. One of the most important ways in which the arts are subsidised at the moment, and should not be subsidised, is by sacrifices made by the performing artistes. It is possible for our symphony orchestras to produce works at the level at which they do produce them only because the musicians are overworked; they work many weeks at a stretch and often without a day off. They have low salaries, with low or no pensions. They have very bad rehearsal

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facilities in outlying places, involving them in yet more burdensome travel at difficult hours. This kind of subsidy for our arts is the one kind of subsidy that we ought to try to abolish. One of our aims in reestablishing, for example, the symphony orchestras of London on a different foundation should be to transform completely the working conditions of the musicians.
There is no doubt, and I do not think anyone involved with these things will question what I am saying, that an improvement in the working and living conditions and the security of the artistes concerned would have a considerable artistic bonus. It would result in a considerable rise in standards, and the better these people are the more money they make, so there is even a financial aspect to that matter, too.
So far I have spoken only of London, and I have done so for some very good reasons. In a country as tiny as ours it is inevitable that artistic ventures should be concentrated in the capital city. It is also unavoidable that centres of excellence in a small society like ours have a profound effect throughout the whole of society and influence artistic activities taking place everywhere else. However, there is another side to the coin, and that is the artistic improverishment of the regions. The situation is utterly extraordinary when compared with the situation in Germany, Italy or even in some respects France and the United States.
It is not possible for our excellent London-based ochestras and opera and ballet companies to meet the need in the regions by touring because there simply are not the places for them to visit and perform in. It is an astounding fact that outside London there is no theatre which can take the full stage productions of the Royal Opera Company of Covent Garden. With the doubtful exception of the Hippodrome in Bristol, there is not a single theatre which can accommodate the productions of the Royal Ballet Company of Covent Garden. Outside London there is only one fully-equipped concert hall, and that is in Liverpool. This is a fantastic degree of improverishment. I shall not launch into comparisons between this country and other countries because on that front they would be painful to any patriotic Englishman.
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When considering spending money on the arts, especially the arts in the regions, we should consider the effect the arts have on community life in ways which are not directly artistic. We have seen what can happen in the case of many repertory theatres in the regions. The buildings become social centres with restaurants, coffee shops, clubs, jazz concerts, lectures, film shows and so on. But they can also become centres from which people move out into the community. The actors in these repertory theatres can, and do, get involved with amateur theatrical enterprises in the communities in which they live. Perhaps most important, the actors and musicians can be made available for work in schools.
Here enormously valuable work can be done and has begun to be done. I have in mind not just that actors should visit schools and put on plays, or that musicians should visit and give concerts, but that they should actually rehearse with the children, direct them in plays and concerts, and sit around with them in seminars or in the classroom to discuss what they are doing. In other words, the professional artistes should create a workshop situation in the schools. This can be done, and the means to do it are there if the artistes are there. Young actors—and most of them are young—have shown themselves to be extremely enthusiastic for enterprises of this kind, and all that is needed is encouragement and a bit of money from the local authority.
The local authorities have so far shown themselves unwilling to spend more than a pitiful amount on promoting activities of this kind. In 1972–73 they spent £2,500 million on education, yet they spent less than £16 million on the arts. The training that it is possible to give children by bringing artistes, in co-operation with the local authority, into the schools is of incalculable value in all sorts of ways. Not only should all our children be involved in the theatre, drama, painting and music as a normal part of education, but everyone should be taught to read music as one is taught to read a language and everyone should be taught to play an instrument.
This is training not only the professional artistes of the future, who are a very small proportion of the children involved. It is preparing the audiences

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of the future and even the patrons of the future. Some of these children will be local councillors or will work in firms and schools. They will have a hand in buying pictures and commissioning artists in all sorts of ways. I know that local authorities face their worst financial crisis for a long time, but I apply the same argument to them as I applied to the national Government at the beginning of my speech. Because times are bad and the need is great, now is the time for them seriously to rethink their priorities. In times of extreme financial stringency I do not believe in making cuts across the board. When the authorities have to cut they must most seriously consider which things can be done without. They must be prepared actually to increase expenditure in some other areas. We did precisely that during the war, and the arts were beneficiaries, and we should do it now.
There is one other source of patronage, and that is the private patron. We have a number of private patrons in Britain. The Guinness company assists the Wexford Festival, the Wills company the London Philharmonic, the Peter Stuyvesant Foundation assists the London Symphony Orchestra and, most imaginative, the Midland Bank gives help to the Royal Opera and the Royal Ballet Companies at Covent Garden. What these private firms do is itself an indication of how much more can be done with Government encouragement. I plead with the Government most seriously to consider emulating the United States and other countries in making the money that is given to the arts by private individuals and business firms exempt from tax to some degree. That kind of encouragement for the private patron would be of enormous benefit to the arts.
It is of great advantage to the arts that there should be a multiplicity of patrons. It is not good for the arts or the patronage that all the commissions should come from one source or that they should all come from sources of one particular kind, like local authorities. It is considerably to the advantage of the arts that they should come from as many different sources as possible, and the very quirkiness and eccentricity of the private patron often adds to the value of his patronage and to what comes out of it.
I am not speaking of one side of industry. The TUC should get much
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more involved in the arts than it has done in the past. I am pleased to say that it has at least set up a special committee to deal with the subject. I hope that the trade unions here will learn many lessons from the Scandinavian trade unions, which have been fruitful patrons of the arts.
I hope there will be more co-operation of another kind from some of the trade unions involved in artistic ventures. The technicians, electricians, stage hands and so on who work behind the scenes in the performing arts are every bit as indispensable to the success of performances as the actors and singers. They do not always behave in that way, however, and, to do them justice, they have not always been treated as if they are indispensable. They should be brought into the community enterprise and made to feel part of it, and I hope that in response to that kind of approach they would be much more co-operative—I am thinking in particular of the recent dispute at the Coliseum—than they have sometimes been in the past. In disputes of that kind there are two sides, and one of the two sides at fault was certainly the union side.
Yet another way of financing the arts which would not cost the Government anything would be the use of the lottery system. I would very much like to see lotteries used to finance artistic enterprises. Almost every one of the buildings, for example, of the kind for which I listed the need earlier could be paid for by one monthly national lottery of the sort that is employed in France. I have listed a catalogue of specific needs that exist in the world of the arts. They are needs which it is within the power of government to meet.
Although I have spoken at great length, the case that I have made is in many important respects incomplete, and I shall leave it incomplete. I have said virtually nothing about the visual arts. I have said virtually nothing about the need to subsidise creative artists as distinct from performing artistes. I have talked almost entirely about the performing arts for two good reasons. The first reason is that by far and away the biggest spenders of public money are the performing artistes. It is therefore more relevant to talk about them than about any other kind of artistes in the context of a debate of this

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kind. The second reason is that I happen to have had a lifelong involvement in one capacity or another with the performing arts. It is a subject of which I have some knowledge. I know something about the organisation and running of that sector of the arts.
I have not talked about all the major areas of need in the performing arts. I have said almost nothing about ballet, for example, yet we have a world famous ballet company—it is widely thought to be the best ballet company in the world—that does not even have a theatre of its own. It can perform on only half the evenings of the week in a theatre which it shares with an opera company.
I have said nothing about the film industry, yet it is moribund for lack of public money. It desperately needs public finance. I will give one figure and from that one comparison hon. Members can draw all the lessons that I wish to draw. The British Film Institute now provides for the British film industry £110,000 a year in subsidy. France subsidises films to the tune of £13 million a year. Italy subsidies its film industry to the extent of £14 million a year. The incompleteness of my case and the fact that I have left out so many deserving areas of artistic activity means that the case is very much stronger than that which I have been able to make even in the time available. I am sure that the case will be much strengthened by other speakers.
My last point is that all the needs that I have instanced could be met by one man if he were determined and if he had the imagination and the political will to do so. They could be met by one decision from the Chancellor of the Exchequer. The total increase in central Government expenditure that we are talking of is of the order of £50 million a year or less. It may be tactless of me to recall it, but there was an incident in this Chamber only a week ago last Wedesday in which, contrary to the Chancellor's expectations, he found himself called upon by a vote of this House to find an extra £54 million in his forthcoming Budget for expenditure in the next year. I cannot pretend that he was pleased by that. He lost his temper and shouted at many people, including me.
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I am prepared to forgive my right hon. Friend for that. I am prepared to overlook that incident, on condition that he listens to me in the context of this debate. The example to which I have referred shows that the Chancellor can, if called upon, find a sum of that magnitude in the Budget even at short notice. If we look more than one year ahead it can be done given the political will.
It is something of a paradox that the survival of the creative arts depends on money which is made available by party politicians. Given that that is the case, there is nothing that we can do collectively or individually which is of greater value and enrichment to our national life and the community that we are supposed to serve than to increase the money which it is in the power of the Government, drawn from our numbers and sustained by us in office to give, and without which the arts cannot survive.
Mr. Deputy Speaker: I remind the House that this is a brief debate. Unless there can be less enthusiasm there will be a great deal of frustrated oratory.
4.36 p.m.
Mr. Robert Cooke: I share the enthusiasm of the hon. Member for Leyton (Mr. Magee) and I thank him for giving us this opportunity to debate an important subject. Already a third of our time for the debate has gone. I hope that the Minister will seek other opportunities to debate this matter. If he wanted to do so he could find the time even if he cannot find the money for the arts.
I wish to make a brief and unembroidered intervention. I share the hon. Gentleman's enthusiasm but he must know that we cannot all do it his way. He must know in his heart that he will not get the total amount of money required from the Chancellor. It would be demoralising and initiative-sapping if all the money came from the Exchequer.
I hope that the Minister has come here today, despite the present financial stringency, with a few new ideas. I hope that he will present some ideas in terms of the new ground which could be broken. I also hope that he will say something about his position in the Government. We do our best to bolster him up on

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occasions. It is not all criticism and attack. For instance, what is his relationship with the Department of the Environment, which owns the greater part of our national heritage that is in public hands and with which the Minister's Department must be greatly involved? What is his relationship with broadcasting, the outlet for much of that which the Minister subsidises? What is he doing about industrial design and the great Department of State involved there?
I share the hope that we shall have some continuity in arts finance. It is not satisfactory to leave the Arts Council guessing right up to this moment, even though it has had a few gentle hints from the Minister. It cannot make any planned progress unless it knows where it is. Although I cannot go as far as the hon. Member for Leyton, it surely should be a growth industry and not a stagnant or declining affair.
I come straight to some proposals for alternative finance. We must be realists. There have been some notable examples of patronage on the part of industry despite its present difficulties. Local authorities cannot be expected to do much more at present. So far their efforts have proved extraordinarily uneven. An influential and persuasive Minister could persuade some of them that are not doing their bit by pledging a little for the future if they are not prepared to do it now.
We must consider bringing finance back into the arts from the public and private sectors of broadcasting. The Under-Secretary of State was present when I had words the other day with the Secretary of State for the Home Department, who is responsible for broadcasting. I suggested that because BBC 2 would obviously have to suffer some financial stringency because of the present BBC licence proposals, there would be a considerable loss to the arts. The right hon. Gentleman said that that was not his affair but the affair of the Under-Secretary of State. I hope that he will mention that matter.
Next, there is the missed opportunity of ITV 2 which many of my hon. Friends wish had been introduced some time ago. I hope that the Minister will give some thoughts about what he might say to the Annan Committee. There is no doubt
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that out of the Annan Report should come more finance for the arts. I hope that the Minister will not be shy to give evidence to Annan by whatever process is appropriate.
We have heard a little about opera. It must be true that more people could see the opera on the television in one week than could possibly get into Covent Garden between now and the end of the century. Any of the unkind and jealous remarks made about Covent Garden could surely be set at nought if only the opera were to be televised a great deal more. In one of the national papers today a headline suggests that we can now all go to the opera. That is because there is to be televised by the BBC the present production of Verdi's "The Masked Ball". The production is possible because of the finance put into the production by the Imperial Tobacco Company and the National Westminster Bank. I feel that I, too, have a part to play in this matter because, running a struggling stately home, I have paid the National Westminster branch in South Street, Dorchester, enough in interest charges in recent years to have given a considerable boost to that production. I am glad that at least some of the money has gone to a good cause.
The point about this initiative by these two great public companies—national institutions, one might call them—is that they will get no credits on the television screen for financing the production. That would be against the rules of the BBC. The BBC is not allowed to say, "by courtesy of" or "sponsored by".
I hope that the Under-Secretary of State will give attention to this aspect. After all, a great deal of advertising goes on through the BBC now. It frequently shows sporting events sponsored, rightly, by great companies, and one sees their names through the camera, even if, as it were, it is accidental. Indeed, there have been complaints about it. If we want great companies to do these good things for the arts and sporting events, they must be allowed some public credit for it. I hope that the hon. Gentleman will talk to his colleagues in the Home Office about this matter.
I welcome also the way in which the unions are at last showing common sense in this matter. It was not possible at

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one time to televise opera productions because of the vast fees asked by some performers. Now they are being more realistic and are embracing television as a friend and not regarding it as an enemy.
I hope that the hon. Gentleman will adopt a flexible approach towards housing the arts. We must make greater use of our historic buildings, including redundant churches. You, Mr. Deputy Speaker, know how in the land of your fathers so much of your music is generated in churches and chapels. Incidentally Wales was the land of my birth. We should make more use not only of redundant churches but of our living cathedrals.
How many cathedrals are fully used for artistic and cultural activities? Has the hon. Gentleman any figures? It does not look as if he has any. Perhaps he can go into the subject with some care, because a little or even no help could make it possible for many people to enjoy performances by national orchestras and others in our cathedrals. Cathedrals are the ideal places for a certain kind of music. Some of the more recent works of contemporary composers are perhaps hardly suitable for ecclesiastical buildings, but some of the earlier music—the sort which I prefer, in any case—is often very suitable to gothic architecture. I hope that the hon. Gentleman will think about that.
Museums and galleries are having a difficult time. What can we do to bring them to a wider public? Some already do a splendid job. Some of our national institutions do better than others. Some local museums are quite splendid in serving the community. One of these is the Dorset County Museum—a private enterprise concern, which is not run by the county council, although the council does give a little help. There is a tremendous expansion under way, with new buildings and the funds being raised by private subscription. If that museum and others, such as the Kendal Museum, can do it, so could local authority museums.
The hon. Gentleman is the catalyst in this matter. He has a unique opportunity to encourage museums and galleries.
In the theatre the problem of value added tax looms large. It is a compre
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hensive tax. We knew when it was introduced that it would produce considerable difficulties in certain directions, but we never intended that the performing arts should be crippled through it. If the Government remove VAT from theatre tickets, they must also do so for museums and galleries and so on.
The right hon. Member for Vauxhall (Mr. Strauss) and I combined recently to do our little towards saving the national heritage, at least in part, from the threat of taxation. It was all due to my right hon. Friend the Member for Finchley (Mrs. Thatcher) and her team on the Finance Bill that we got the concession that the Government have announced in Committee upstairs. The Government have given a firm pledge, but we need to see the details. We cannot preserve the national heritage without the resources, so the concession will have to encompass houses, contents, gardens, supporting estates, and, in some cases, trust funds as well.
The hon. Member for Leyton spoke at some length about theatre buildings. The Under-Secretary of State and I have had exchanges in Standing Committee, when he showed how concerned he is not only to preserve the fabric but the use of such buildings. I hope that he still bears this in mind.
There is the problem of the theatre museum. Perhaps we made a mistake in thinking that Somerset House would be ideal. Of course we must have a theatre museum, but I wonder whether the wealth of material can properly be displayed in the fine rooms there. The commitment so far is that there should be a theatre museum. It is not an irrevocable commitment that it should be in Somerset House. There is the rival claim now of the Turner Collection. Probably, with the fine rooms and one side of the courtyard, the Turner Collection could be well displayed in Somerset House which might be more suitably for it than a theatre museum. Surely, in the Covent Garden area, among the buildings which are now vacant there is room for a theatre museum which would be far better than we could have in Somerset House.
There is also the question of Public Lending Rights. Could not a self-financing scheme be used to get over this problem? Could there not be, for example,

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some scheme of extended copyright to 60 years with the extra 10 years for living authors. The hon. Gentleman will understand what I mean.
Another problem is that of the crafts. A number of private enterprise institutions such as West Dean Crofts College, do a splendid job. But could we not have an agency to collect the work of craftsmen and market it? Many craftsmen have considerable problems in marketing their work.
There is also the problem of the national film archives as well as the British Film Institute. A little help here could make a great deal of difference. Many films will be lost for ever unless we do something quickly.
Art teaching in schools is important. Art is about life. Let it be integrated with life and not taken in isolation.
What is the Under-Secretary of State doing about the European Architectural Heritage Year and about the international influence that this country could have across the whole spectrum of the arts? I would like him to be our ambassador of the arts and tell people abroad about the good things that we are doing and that we have, and also to bring back ideas to us.
I hope that the hon. Gentleman has anticipated my questions and is receptive to my suggestions. He has a difficult responsibility to fulfil. He will have our support if he displays energy and force in working towards what are, after all, our shared objectives.
4.48 p.m.
Mr. G. R. Strauss: We are all grateful to my hon. Friend the Member for Leyton (Mr. Magee) for raising this very important subject today. He gave us an informative and persuasive speech covering the whole range of the nationally-sponsored arts. His speech was not a moment too long, and I am grateful to him for his wide range as it enables me to make my speech much shorter than it would otherwise have been. Unlike certain hon. Members, I have a strong aversion to making points in a debate which have already been made by other hon. Members, particularly if they have been made better than I could make them. I shall confine myself to very
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few remarks, addressed to my hon. Friend the Under-Secretary of State on one or two important questions.
I endorse almost everything that the hon. Member for Bristol, West (Mr. Cooke) said, but I was a little surprised that when he mentioned museums and galleries there was not a blush of humiliation and guilt on his face, because if there is one thing that he and his colleagues in the Conservative Party will never be forgiven for it is their criminal attitude to museums and galleries when they tried to erect a financial barrier between the cultural heritage they contain and the viewing public.
I want to ask some questions which I think my hon. Friend will be able to answer easily. It would be useful if he could reiterate some of the assurances he has given recently. Many people are worried that the amount of money available to the Arts Council has not yet been settled by the Treasury, and, in turn, the Arts Council has not yet found it possible to give a definitive undertaking to its various beneficiaries as to what they will get in the coming year.
There is anxiety amongst those bodies that the undertakings on these matters given by the Government may not be wholly fulfilled. We have been led to believe that it is the purpose of the Government, fully supported by the Minister responsible for the arts, that the support for the arts by the Arts Council will not be allowed to suffer as a result of inflation, and that all enterprises supported by the Arts Council will receive sufficient grants to enable them to carry on at the same standards as in the past.
My hon. Friend the Member for Leyton asked for much more than that. He wants the Arts Council grant doubled, if not trebled. That would be lovely, but I do not think we can expect it. I shall be satisfied if, during this year, they receive from the Treasury sufficient money to ensure that the present standard of excellence achieved by the theatres and other Arts Council supported bodies, including museums and galleries, can continue at the same level, with the prospect of a substantial increase next year and in the year, to come. Will my hon. Friend the Minister with responsibility for the arts, repeat his assurance?

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One of the reasons why there is some anxiety on this matter is that in their speeches some Ministers, perhaps unintentionally, have given rise to doubts as to what will happen. A short time ago the Lord President of the Council said that everybody, including actors, would have to tighten their belts. I cannot believe he meant that. May we have some reassurance that the money available for the arts will not be reduced; that it will not be too long before the amounts are announced, and that the arts will not suffer as a result of inflation. It would indeed be foolish and tragic if we allowed the standards of excellence which have been built up, especially in the performing arts, to be reduced because of inflation. Once the standard of an artistic enterprise, such as the theatre, opera or ballet, is allowed to fall, it is difficult to recover it, and irremedial damage can be done.
I should like to say a word in support of the plea made by my hon. Friend the Member for Leyton—which I know the Minister responsible for the arts has very much at heart—for the preservation of our existing theatres, not only for the reasons he gave but for the reasons which I believe are very important. I do not believe that the theatres can now be built which are as attractive for drama, ballet or opera as theatres built in the latter part of the last century and the early part of this century. These have a warmth and a welcome which enchants any audience the moment it enters the theatre, and which, in turn, must be encouraging to actors and actresses. However fine and magnificent the new theatres may be, and however acoustically perfect, all those I have seen lack—I am a little fearful that even the National Theatre may lack it—that atmosphere which can be found only in theatres built in the 50 years between 1890 and 1940.
I ask the Minister responsible for the arts what is happening to the National Theatre. We know that, through no fault of the National Theatre Board, further delays are occurring. First, we were told that the National Theatre was likely to open last year. Then we were told that it was likely to open in the early part of this year. Then we were led to expect
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that it would open in the latter part of this year. Now we understand that it will probably not be opening before the early part of next year. That is the fault not of the National Theatre Board but of the construction industry. Never mind whose fault it is. It is not only exceedingly disappointing but very costly, as every time it is announced that the builders expect that the theatre will be ready by a certain date, the theatre board becomes active, employs technicians, engages staff, and makes arrangements to open all at great expense. That expense is particularly infuriating if, a short time later, the whole project has to be cancelled.
I ask my hon. Friend what is the present position of the National Theatre. Can we receive any assurance on the matter? Many questions were asked about this when we discussed the National Theatre a short while ago; in particular, whether, in spite of all the delays and the increased cost, due to inflation, which will arise as a result of those delays, the additional amounts, supplied by the Arts Council to support its other sponsored activities, will not prevent the full operation of the National Theatre when construction is finally completed.
In an earlier debate I expressed my hope that the desire of some people to turn the Old Vic, when the National Theatre leaves it, into an opera or ballet theatre, should be turned down. It would mean extensive reconstruction of the auditorium of the Old Vic and would seriously damage its atmosphere. I am glad now to learn that the Old Vic will continue, as it traditionally has been, a theatre—its delightful auditorium preserved—showing classical plays, and will not be used for other purposes.
Museums and galleries are late, too, in receiving information from the Government about the amount of their annual grants. I assume that the delay—possibly inevitable because of the economic circumstances of today, does not mean any reduction, and that museums and galleries will receive, like the theatres, an increased allocation to make up for inflation.
I have heard a rumour—I do not know whether it is true; perhaps the Minister will comment on it—that there is a proposal that some of the museums and

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galleries in London will suffer a diminution in Government financial support for the benefit of museums and galleries in the regions. I am all for increasing the money and contributions to the regions, which I think may need it as much as, and perhaps more than, London. However, I do not think that that should be used as an excuse to reduce the contributions at present paid to London galleries and museums.
We have heard of the proposal, advanced in responsible circles, to house the Turner pictures in Somerset House. That matters was touched upon by the hon. Member for Bristol, West. Many people feel keenly about the matter, particularly my hon. Friend the Member for Warley, East (Mr. Faulds). Both Sir John Betjeman and Mr. Henry Moore suggest that this would be an appropriate place in which to house permanently this great collection of pictures. Many of us have seen it recently at Burlington House.
At first, I was entranced by the idea, but, reluctantly, I have reached the conclusion that it is a doubtful proposal. I am unwilling to disagree with the views of Mr. Henry Moore, who is a warm friend of mine as I accept his views on all artistic matters. But I wonder whether it is a good idea to concentrate the works of a great artist like Turner in one place. Is it not far better to maintain a policy of dispersal? The Turner pictures are pretty well dispersed at the moment. There is a magnificent collection at the Tate, where they can be seen together with the gallery's exhibition of other English artists. I should like to see Turner pictures in galleries throughout the country. The idea of concentrating them in one place and therefore making them much more difficult for visitors to see when they go to a gallery to see a wide range of pictures, possibly for comparison purposes, is a doubtful one.
There are technical reasons, too, why it would be unwise to put these pictures in Somerset House. There are lighting difficulties. There would have to be artificial lighting which would be expensive and difficult to arrange. Water colours could be exhibited only for a short time, or they deteriorate. On the face of it, this is an
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attractive suggestion, but I feel it should be considered carefully before it is accepted.
Contrary to what my hon. Friend the Member for Warley, East believes, in my view the suggested use of Somerset House for a theatre museum should not be abandoned. The idea of a theatre museum has been discussed for many years. There is a strong case for putting together the magnificent collections which now exist in the Victoria and Albert, Leighton House and many other places, of costumes, documents, scenery and other evidence of our theatrical history. They should be put together for the benefit of historians and the public.
After much discussion it has been agreed that Somerset House would be a good place in which to house such a comprehensive theatre museum. Under the auspices of the Victoria and Albert, the project has now been organised and settled. It is hoped to open the museum in about a year.
Somerset House may not be the ideal place. The ideal arrangement would be to build a new museum. But Somerset House is there. It is a lovely building, and it would be more than adequate. Of course, if we were prepared to spend the money we could readopt some of the buildings which have been abandoned in the Covent Garden area. I am told, for example, that at a cost of many hundreds of thousands of pounds the Flower Market would make an even better museum. But unless that is guaranteed, it would be unwise to abandon the Somerset House project. The theatre is the art form in which this country is outstanding, and to have a museum devoted to it is a good idea, which should not be jeopardised. This is a minor problem for my hon. Friend the Minister, but it is being persuasively urged upon him from many authoritative directions which cannot be ignored. I ask him to act cautiously.
Above all else, I want the assurance from the Minister asked for by my hon. Friend the Member for Leyton that the amount of money to be made available by the Government to the Arts Council will be maintained at least at its present level in the next year or two. We

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are fortunate in having Ministers responsible for the arts who have such a deep personal interest in them. The Labour Party is on record as having, on all occasions, both in this House and in local government, endeavoured to carry out its philosophy of giving high priority to the arts and public availability of the arts.
In this House, we now have a Minister responsible for the arts who from personal experience is deeply involved in one aspect of the arts, and I know that he is equally interested in many others. We have a Chancellor of the Exchequer who is similarly interested in and devoted to the arts. He has always taken an immense interest in their development. We also have a Financial Secretary to the Treasury interested in the arts. He is a key man in the Government set-up, as it is he who considers and, if necessary, vetoes all requests which come to the Treasury for departmental expenditure. We have, therefore, three people who are anxious to do all in their power to help the arts and to prevent any deterioration during the period of inflation.
I am therefore sure that the Minister will give the House satisfactory replies to the questions which I and others have asked. I await his reply with confidence.
5.6 p.m.
Mr. J. Grimond: I wish to emphasise two points which have been made already. The first is that the Arts Council should be told as soon as possible what its allocation is to be. The second is that there should be a triennial budget for the arts.
Like other right hon. and hon. Members, I welcome this opportunity to debate this important subject of support for the arts. If I appear to approach it from a slightly different angle from that of previous speakers in the debate, it is not because of any conceivable antagonism either to the motives which have led them to make their speeches or to the arts themselves.
We are bound to ask not only that adequate resources are made available to the arts but for what purpose these resources are to be used. I was impressed greatly by the annual report of the Arts Council, but I had one slight reservation
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about it. It seemed to be saying that there must always be an increase in real terms in the amount of resources available to the arts.
I question that approach. I take the point made by the hon. Member for Leyton (Mr. Magee) that the amounts in question are very small and that the time is very apposite for giving the nation some sort of lift. But the Government must be beset by people demanding more resources, all pointing out that the amounts are very small and that this is the moment for their projects to be carried out. The fact is that, unfortunately, production of all sorts in this country is not rising.
I do not believe that all-round increased expenditure necessarily encourages creativity, and it is about the encouragement of creativity that we should be most concerned. Further, for reasons which go wider, I question the attitude which judges the success of Ministers in charge of the arts, of members of the Arts Council and of museum and gallery curators simply by the amount of public money that they can squeeze out of the Treasury.
We live in times when the nation is split into innumerable bureaucracies each claiming more in terms of salaries, pensions, payments in kind, perquisites and funds to be spent. We still have "growth", no matter what sort, as our dominant fashion. Public authorities especially must use more of everything. In this process values go by the board.
This seems to be the onset of barbarism. The Barbarians grabbed what they could and were incapable of economy or restraint. They had little regard for the past and still less for the future. Above all, they had no respect for individual flowering, freedom or the common good of communities.
Civilisation has not only accepted economy, it has seen economy as being essential to its values. Civilisation has stood for the individual and for individual choice in a decent society. Civilisation has never been achieved by the worship of size, the pursuit of growth for growth's sake or the spectacular waste which is the feature of much public wisdom today. Art is intimately concerned with civilisation, and it is indeed the core of the

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civilising values which have fought against barbarism.
Painters have never demanded more and more colours on their palettes. Art in general has been a matter of choice and of making use of hard materials. Very often it has been a matter of some astringency. I regard art as the main hope of the twentieth century in its struggle against dehumanised, wasteful and self-destructive attitudes—bureaucratic attitudes. I must, therefore, be disturbed that sometimes the arts seem to be in danger of bureaucracy and in danger of catching the fatal disease that we must all always demand more and more.
I welcome the suggestion made by the hon. Member for Bristol, West (Mr. Cooke) that we should look to the use of cathedrals for concerts. My own county of Orkney has a beautiful Norman cathedral, Kirkwall, which is used for many public occasions and for concerts.
There are two matters which I wish to mention. I put forward the first with great diffidence. It might be said to be outside the main theme of the speech made by the hon. Member for Leyton. He, quite rightly, was concerned with the living and performing artist. My point is about the policy of art galleries and museums. I make it with diffidence because many people, better qualified than I, take a different view. I believe that the buying up of pictures, china and furniture by the great public galleries needs to be done with extreme care and in moderation. I cannot believe that the £1 million spent on "Diana and Actaeon" was well spent. There are many Titians in the National Gallery. Pictures which go abroad are not destroyed: they are enjoyed by other people. On the other hand, if public money is not available for the preservation of buildings, they are destroyed. If money is not available for the provision of opera houses and theatres, performances do not take place. The Prado buys no more pictures, and I believe that to be right. The Wallace Collection would not benefit if it went on accumulating French furniture.
In every debate of this sort in which I take part I make a plea that the dozens if not hundreds of pictures kept in the basements of galleries which the public never see should either be exposed to
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view or ultimately be disposed of by those galleries to people who can enjoy them and see them. I reject the view that huge sums must be spent for prestige purposes. Still more do I reject the view that the buying of art is a good investment.
The right hon. Member for Vauxhall (Mr. Strauss) touched on the question of the Turners. I agree with him. The main reason for considering housing the Turners in Somerset House is to free space in the Tate Gallery. The Tate has a great many pictures which are seldom if ever seen by the public. But it is possible to have too much of a good thing. A hundred Turners would be admirable but 500 or 600 would be too much. I very much enjoy going to the National Gallery in Edinburgh and seeing "Summerhill". I hope very much that the pictures of King George IV's visit to Edinburgh will be returned. I do not think that those pictures would be more enjoyable were they to be with the innumerable Turners in the Tate.
There seems to be some point in buying pictures which are intimately connected with the history of the country, and I am more sympathetic, though not entirely sympathetic, to the demands of portrait galleries. It may be right to buy a picture of Sterne to keep in England. I regret the dispersal of the remarkable series of pictures at Gifford House outside Edinburgh. I hope that it might be possible to get the great galleries of the world to enter into a mutual self-denying ordinance not to put up the prices of old masters to astronomical limits. It is done simply for prestige purposes and I am sure that it is not a useful use of public funds.
A purpose for which public money is much needed is the preservation of buildings and areas of cities which are of great beauty and for opera houses and theatres for the performing arts. In this regard I touch on the delicate state of our architecture. Our opera, our music and to a great extent our visual art and our design—I think of the designs of Mary Quant 15 years ago—and of the reputation of our art schools over the last 30 years have reached an international level which has seldom been seen in British art. At the same time our architecture has been

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appalling. Cannot the Government, the Arts Council or someone do something about the training of architects?
First, there has been the destruction of Birmingham. That is now being repeated in Glasgow. The Scotsman on Saturday contained an article on Glasgow. What is said in the article is true. Glasgow is awful. Even so, the article does not mention the horrors that have been perpetrated in Glasgow's vast bleak housing schemes or in those inverted matchboxes in the Gorbals. Those atrocities have not been committed by wicked private landlords. They have been committed by public authorities employing supposedly highly qualified architects.
At least, we should give up believing that architects are fit to plan. If one takes a visitor round the universities and the great cities one sees that the number of buildings built in the last 30 years that are worth looking at can be counted on the fingers of one hand, and most of them were designed by foreigners. Are we to go on pretending that this dehumanised profession which cannot even carry out its proper task properly should be put in charge of the planning of human communities?
The three points which I wish to put forward are these. First, it is not so important how much money we give to the arts but that we should judge its results by different criteria from expenditure. We should judge its results by the art which flows from it. Secondly, we should concentrate on the living arts, the performing arts, providing artistes with a means of performance and encouraging them, cutting down if necessary upon the accumulation of pictures which are of the greatest artistic merit from the past but which will never-the less be preserved, if not in this country then somewhere else. Thirdly, we should pay attention, particularly in this year, to our legacy of buildings and beautiful cities and villages and do something to improve the standard of architectural training.
5.20 p.m.
Mrs. Renée Short: I wish to add my congratulations to my hon. Friend the Member for Leyton (Mr. Magee) on his choice of subject. We get few opportunities to
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debate the organisation and future of the arts. I am sorry that this subject appears to be such a minority interest since the arts comprise a very important part of our lives. Therefore, we should seize this opportunity to make our contributions and we hope that, even in this short debate, our speeches will be read by the Chancellor of the Exchequer with great care.
I should at the outset declare a certain interest. I hasten to say that it is not a financial interest but its brings me a fair amount of work. I refer to the fact that I followed my hon. Friend the Under-Secretary of State for Education and Science as Chairman of the Theatre Advisory Council when he relinquished that post to take up his present appointment.
On 2nd December I took a deputation from the council to see my right hon. Friend the Chancellor of the Exchequer about the vexed problem of VAT on the theatre. The Theatre Advisory Council represents the independent and the subsidised theatres. It represents the Arts Council, the London West End managers and the provincial theatres. The unions in the entertainment world are represented by the Musicians' Union and Equity. Therefore, the council is a very representative body, and when we visited my right hon. Friend we were speaking for the whole of the entertainment industry. I think I can say that he listened to us sympathetically.
Since that time the Evening Standard has taken up the campaign and it is being supported by members of the theatrical profession. Although not a large amount of money is involved, a very important principle is at stake. I support the view that the price of theatre and concert tickets should not be kept as high as it is at present, for if it is we shall have falling audiences in our theatres and attendances will decline even more than they have declined in latter years.
I am concerned at the view that the theatre and opera appeal to only a minority of the community. We need to examine the way in which the money now used in the arts is employed. We have a difficult problem of trying to persuade whole sections of the community that the theatre is a place for them. I am afraid that the theatre is regarded as

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an upper middle-class entertainment. The right hon. Member for Orkney and Shetland (Mr. Grimond) mentioned the City of Birmingham and its buildings. It is a surprising fact that although many cities have been rebuilt since the war, the threatres within them are still not supported by the large mass of the people.
I also happen to be a member of the Round House Management Council, and recently we have been trying to raise money for the redevelopment of that theatre. We seek to transform it into a real community arts centre embracing all sorts of activities and this, I believe will reflect the future development of the theatre. It is a building in which the public can view plays and in which people can put on theatre workshop productions; where they can do photography where amateurs can stage their performances, and indeed where the public can go in much the same way as they attend functions in public houses. People can also take their children in the centre and involve them in play groups, drama and all the rest of it.
We envisage a building that will be open seven days a week, from 10 o'clock in the morning until midnight or beyond. Films could be screened and late-night pop concerts could be staged. Classical concerts and other activities could also be put on. All these activities would amount to a stimulating and exciting form of community centre.
We are trying—with limited funds and, I am glad to say, with some help from the Arts Council—to organise the rebuilding of what was an old engine shed at Chalk Farm. To supplement the funds we receive from the Arts Council, we decided to launch an appeal. The appeal was aimed at firms, organisations, trade unions, and so on. I regret to say that the result has been absolutely depressing. We have reached only a small part of our total target. We found very few firms willing to risk even a few thousand pounds, which is not a lot of money for a flourishing and well-established firm to donate. We found the trade unions similarly timid about providing any money at all for what we hoped the trade union movement would regard as a rather exciting project. Therefore, we cannot be sanguine about what can be achieved by such approaches.
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I believe that we shall achieve a thriving and flourishing theatre only if we are able to stimulate all sections of the community to think that the theatre is something for them and something in which they must be involved. Therefore, we need to look at ways and means of attracting people into the theatre, whether it be the drama, ballet or whatever it may be. We might have more success with our efforts if we transform some of our conventional theatres into community arts centres of the kind I have described, and, above all, if those centres were situated in places where people live and work rather than in some beautiful park remote from the community.
One way in which we could upgrade the whole business of support for the theatre would be by making sure that my hon. Friend the Under-Secretary of State for Education and Science, who is to reply to the debate, becomes a fully-fledged Minister with his own Department. I believe that there should be such a Minister responsible for this important part of our national life and that he should have the proper backing and support. This will mean nothing less than a Minister with his own Department and entitled Minister for Arts, Culture and Entertainment, or the Minister of Arts and Leisure, or whatever it may be. I hope that this proposal will be considered.
What has been said so far in the debate about the value of the theatre economically is quite irrefutable. The fact is that in 1973 tourists to Great Britain spent the staggering sum of £872 million. The fact that visits to the London theatres can be put up by travel agents as a bait to travellers is a very important matter to be considered. I know that the theatre is often put forward as a tourist attraction when visits to this country are advertised in the United States.
One theatre management responsible for four West End theatres has kept a close check on the box office. That management submitted evidence to the Chancellor that about 30 per cent. of its total clientele throughout the year comes from abroad. The theatre is a very important foreign currency earner.
A total of £3½ million would flow back to theatres if the theatre were zero-rated. This would be excellent insurance to make sure that the money which flows

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into the country through tourism does not decline. Certainly over the years the total sum flowing from foreign earnings into the United Kingdom has increased, and that is something we want to encourage.
There is no doubt that many theatres are in darkness because of the existence of VAT. It makes all the difference between a successful show and one which cannot continue because of the increased costs—costs which are being met by theatre managements all over the country.
I suggest that if we promote my hon. Friend as a fully fledged Minister—and I am glad to see the Under-Secretary of State has returned to the Front Bench, since I am anxious to elevate him—and if we develop our theatres on the lines of community art centres, we shall fully involve the whole of the population in all that is going on. I believe that this is a vital way to bring more people into the theatre and with them more financial support.
I hope it is not too ambiguous to say that, if the Ministry was established on these lines, to aim for about 5 per cent. of the total education Vote might not be unrealistic, not this year or next year, but over three or four years. I do not think it would be unreasonable to hope to get that in order to expand the theatre and music and to stimulate activities of all kinds. We must stimulate creativity by giving opportunities to those who are trained to do the job for which they are trained, and to work in the art form of their choice.
This is probably one way in which we can stimulate more interest in the theatre and in the arts. Without it I do not think we shall achieve the sort of development that all of us would wish. I hope that my right hon. Friend will be able to indicate that he is prepared to press on these lines for this additional help.
I was impressed by what the right hon. Member for Orkney and Shetland said about the training of architects. I am not clear whether he was referring to training architects for house building or for the kind of buildings that we are considering today. There is an urgent need to train architects to build the kind of buildings that we shall need in future, such as community art centres or theatres. But theatres tend to be one-off jobs by
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architects. We have no tradition in the kind of theatre buildings that are needed. I agree that theatres built before 1912 are delightful and beautiful places and most of them ought to be preserved. My hon. Friend would do a great service if he could stimulate architects into designing the kind of buildings that we need for the future.
5.33 p.m.
Mr. Nicholas Fairbairn: It is an inevitable concept at present that all services which the State subsidises or supplies should be retracted and that logically each should be retracted by a similar amount. In my view, that is a false attitude.
If there is one area in which the confidence, imagination and development of this country has had success in the past 10 or 15 years, it is in the increase in our cultural stature. Here I pay tribute to the late Aneurin Bevan, who insisted on giving local authorities the capability to make provision for this purpose in the local authority grant to the extent of 4¼d in England and 3¾d in Scotland.
I have a broad interest in these matters. I was responsible for the development and the existence of the modern Traverse Theatre in Edinburgh. I have served on the Edinburgh Festival Council which might be regarded as a more traditional art form. I have been responsible to an extent for the development of various art galleries and theatres in Edinburgh. I have heard a lot today about Covent Garden, Turner, and so forth. Needless to say there are no Scottish Nationalists here, because they belong to a separatist party and not a Scottish party. In the regions—I do not exclude Wales, Mr. Deputy Speaker—there have been remarkable stimuli of cultural capability on very small budgets. I think that this is a matter which must be advanced and not restricted.
Art is about perfection. It is about élitism and excellence. One cannot cut down on a standard of excellence or artificially stop a movement towards excellence. It is often said—and this argument has been put forward in committee on the Edinburgh Festival—that art is a middle-class or upper-class entertainment. I do not accept that. That is an utterly false attitude. Art is perfection and it

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is élitist. Unless art is perfection, it is nothing.
I entirely agree with the right hon. Member for Orkney and Shetland. To take a balance of art is wrong. Architecture involves the environment in which all of us live. We allow buildings which are either good or bad works of art to be put up or destroyed. We do not have the same bad standards in other visual concepts.
Is art a good investment? I think that it is an extremely good investment. I hope that what I propose to say is not too nationalistic, but the Scottish Arts Council exists on £1·9 million. It spends on culture, on a conservative estimate, one-fiftieth of what is spent on the bread subsidy in Scotland. About one-tenth, £274,000, is spent on housing the arts, and that is less than the Government spent on creating four new toll booths at the Forth Bridge Road. The Edinburgh Festival, which is without question the major unchallenged international festival, existed last year on a subsidy of £275,000—less than the cost of four toll booths and their associated lights.
Now we begin to get the matter into proportion. If the Philadelphia Report is correct, the annual income to the Edinburgh area from those who go there is about £16 million. From this small investment, trade and income worth £16 million is being generated. I pay tribute to Dr. Diamand and those who are involved in the festival for having maintained the standard with so small an investment.
In Edinburgh there is also the question of the Opera House. In this respect I make a plea to the Minister. When I was first involved in the question of the Opera House it was to cost £2·4 million, but by the time they had dithered the cost had risen to the astronomic sum of £4 million. There has been a futile delay and now the cost is £20 million. If there is one lesson to be learned in the arts, it is that we must invest in the capital of the arts rather than in the income. Although it is normally thought that now is a bad time to invest in the arts, the lesson should be learned by the Minister and impressed on the Chancellor of the Exchequer that now is the best time. Tomorrow is always a worse time.
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The arts cannot drop their standards. If we allow the income of the arts to fall, it will not be possible to run festivals such as the Edinburgh Festival. We cannot have a low-standard international event. Whatever people's incomes may increase to, there is a psychological point above which we cannot raise a price. In the theatre and the arts we have almost reached that point. We shall therefore have to find a way of raising more money.
I am anxious that there should be more community participation in the arts. I do not like public subsidy of the arts in the way in which the Treasury subsidises false teeth. That is not a good system. I should like the Minister to allow tax relief to companies and individuals so that they can indulge in patronage of a capital object, such as a theatre, opera house or orchestra. That would be of great benefit. If they do not have strong feelings for one or another, let the money be put in a fund which the Arts Council can run. It is bad to have annual accounts, but it is important, when dealing with a subject concerning the way in which the world will judge our civilization, that we should realise that good opera companies, good festivals, good buildings and good exhibitions have an investment value which goes far beyond trivial financial considerations.
I should be the last person to advocate an increase in Government expenditure, but we must sustain the arts and the quality of the arts—which essentially is in a labour-intensive and therefore inflation-vulnerable sphere of investment—and whatever else we allow to drop and whatever other national difficulties there may be, we must keep our culture and civilisation at a level which all other countries will envy.
5.43 p.m.
Mr. Jasper More: It is curious that in any discussion of the arts a differentiation soon creeps in between the architects and the remainder of the arts. That was apparent in the speeches of the right hon. Members for Orkney and Shetland (Mr. Grimond) and Vauxhall (Mr. Strauss). It may be a psychological fact of deeper significance than we think.
Usually artistes are renowned, certainly in literature, for the gaiety of their lives—the demi-monde in which they live and

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the general attractiveness and sometimes advanced character of their way of life. But it has been pointed out by a great literary authority that it is a curious fact in the history of fiction and literature that there is no recorded case of a heroine in literature losing her reputation or virginity in the company of an architect. That may be a fact of some importance in the diverse considerations which have to be applied first to architecture and then to the other arts.
Being a county councillor, I declare an interest in this debate as a member of a local authority. I wish to say a few words about the last sentence of the motion so ably moved by the hon. Member for Leyton (Mr. Magee), which proposes that the House should call
"on the Government to take appropriate measures … to encourage local authorities to"
multiply public support for the arts.
Local authorities are in a difficult position. They can ignore the other arts if they wish to do so, but they cannot ignore architecture because of the obligations and powers laid on them by the planning Acts, and increasingly they are, facing practical problems which they cannot avoid relating to historic houses, listed buildings and schemes for maintaining the centres of beautiful towns. Increasingly they face situations in which a building needs to be preserved, a large sum of money is needed to repair it and the owner says to the local authority, "You wish this building to be preserved. What are you prepared to pay towards the cost? "If the bill is to be several thousands of pounds, the local authority usually produces a few hundred pounds. That is unsatisfactory and leaves everyone in a false position—local authority, ratepayers, owner, and the Department of the Environment, which wants the building to be preserved. The public are left in a false position, if they are interested, or, if they are not, think that the money has been wasted.
That is one aspect of the problem which affects local authorities, but looking at the matter financially it is part of the general problem of the extent to which local authorities should or could contribute to the cause. In local government, now is not an appropriate time to multiply public support for the arts. According
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to the Government and all the powers-that-be, it is an appropriate, and indeed imperative, time for economising on almost every aspect of local government expenditure. It is not easy to say to local authorities that they must economise and yet spend more money on the arts.
My hon. Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) referred to the forward step taken by the late Aneurin Bevan when he created for local authorities the special capability to spend so much in the pound on the arts. But, in practice, that has not been enough. If we want local authorities to take action, should there not be a new system of finance between central Government and local authorities—in other words, a specific optional grant from the Government in aid of the arts to be administered by local authorities?
There might be great resentment if a special rate subsidy were paid or authorised every year by the Government, but there should be created a scheme of proportionate or percentage grant whereby up to a stated limit of expenditure local authorities could be told, "To anything which you spend up to this level in the cause of the arts in your area the Government will contribute such-and-such a percentage". That would be a specific encouragement to local authorities and might prevent the reproach that local authorities are not interested in this all-important sphere of their activities.
5.49 p.m.
Mr. Arthur Blenkinsop: I am specially interested in the way in which we can encourage local authorities and others to support developments in the arts on a regional basis. While I was not a Member of the House for a time, I had the opportunity of helping to establish the Northern Arts Association, or, as it was then, the North-Eastern Association for the Arts, which has proved to be a trail blazer for the other regional bodies which have since been established.
I welcome the support given to that concept by Governments of both parties. There was the work of Baroness Lee as the Minister with special responsibility for the arts. I am particularly glad that the Government have indicated their good will towards this concept. The Arts Council, in its last published report, said

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that it welcomed this approach and had every intention of maintaining support on a regional basis. It also called attention to the fact that it is not wholly satisfactory that too great a proportion of the support should come direct from central funds, whether the Arts Council or the Government.
There is a great deal to be said for insisting that local authorities should face this problem and the inevitable criticism that is bound to come. If local authorities—in a sense, local communities—do not indicate in a fairly clear way their concern about the position, it is unreasonable to expect either the Arts Council or the Government direct to step in and take their place.
We want some effective form of parnership. I share some of the anxiety expressed by the Arts Council in its last report where it points out that recent figures suggest that it is contributing more than half towards the support of regional work.
At a time of obvious difficulty and pressure upon local authorities, I am happy that support for the arts in the North has been maintained as well as it has. Since we established the Northern Association for the Arts, support for the arts has increasingly become accepted as a proper and reasonable sphere for public patronage. That was not the position in the past. We had a considerable battle to get this concept accepted, but I am glad that, at least to some degree, it has been achieved.
I should be happy if local authorities could be persuaded to contribute a good deal more. We cannot burke the issue. It should be discussed openly in our local communities to win the understanding and good will of people for this activity. Broadly speaking, that is what we have been able to do in the North.
I turn now to the important issue: on what area should we concentrate our support of the arts? Inevitably, there is conflict about this matter. There was a great deal of conflict when I was involved in it. Some of my political friends and others would ask, "How can you justify spending public funds in this way when those who are benefiting or seeking the opportunity of going to the concerts and other works that we are helping to finance largely come from one
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stratum of society? You are encouraging one group—an élite—and making it possible for them to enjoy what they want to see, but you are not necessarily making a contribution to widening the scope of artistic enjoyment." That is a real problem.
The frontiers of experience and enjoyment of some of the highest standards of artistic production, whether in music, the theatre, opera, ballet, and so on, are being steadily pushed out. The idea that such works were for a narrow élite group to enjoy is gradually being broken down. There is still a lot of this feeling. We must try to overcome it by encouraging support for a wide range of activities, some of which clearly have much wider support than others. This is where locally-based organisations, regional bodies, are in a better position to pick and choose and to decide what should be given encouragement than is a central body such as the Arts Council.
In the North we have band contests. Some areas in Northumberland and on Tyneside are still rich in some of the remaining colliery bands. Some famous festivals have been staged over many years. Basically, they were provided for band contests, but they included a good deal of local music, too. These activities have been encouraged and developed with support from the regional centre. What was undoubtedly a limited form of activity has been broadened, and we now have a more extensive and widely supported festival because of the support that has been given by the Regional Arts Council. Because of its interest, a great number of local arts associations have been established which encourage all kinds of local activities, both professional and amateur.
I believe that the Arts Council has rightly concentrated its whole effort on the support and maintenance of a high standard of excellence of professional work. We would have no hope of seeing ballet, opera, or many of our great orchestras without that support. But we should also encourage effective amateur work. A serious effort should be made to establish a reasonable standard of work. Again, a regional body can do a considerable amount to help for relatively small expenditure. I support the motion because expenditure in this area can do a great deal to fructify a lot

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of other activity of both an amateur and a professional kind which otherwise would not be available.
I pay tribute to all those who have helped to ensure that projects started on a regional basis have become nation-wide and we have a level of support which some years ago seemed hopeless even to dream of. They are all under the grip of inflation, like everything else, and therefore need all the support that we can give them. I hope very much that my hon. Friend will be able to increase the support wherever he can so that the standards which we have managed to achieve can be maintained.
6.0 p.m.
Mr. Norman St. John-Stevas: I congratulate the hon. Member for Leyton (Mr. Magee) on his motion, the terms of which I entirely agree with. I read in my Evening Standard yesterday that he said:
"I am likely to speak for quite some time",
and I think the hon. Gentleman kept his word. We had not only a tour d'horizon but a tour de sous sol as well.
I must not complain about that, because the views expressed by the hon. Gentleman closely parallel the views which I have been expressing for a considerable time. If I may allow myself the luxury and indulgence of quoting from an article of my own without, I hope, being mistaken for the Prime Minister, I refer the House to the Sunday Times of 17th November, in which I wrote:
"With an arts budget so minuscule a substantial increase would have a negligible effect on the economy. Doubling the arts appropriation—and the Arts Minister should demand no less—would still further revitalise the artistic scene in Britain; it would be an investment which would bring immense returns, not only in artistic achievement but in national self-confidence and prestige abroad, and reverberate helpfully even in that most mundane of spheres, the balance of payments."
It was also the view of the hon. Member for Warley, East (Mr. Faulds), expressed in a paper called a "Practical Arts Policy" in June 1973, that the amount spent on the arts should be doubled. The hon. Gentleman, who, alas, is not present now, is the best Minister for the Arts that we have not got, and if only the Under-Secretary of State would join us in this campaign for doubling the amount of money spent on the arts
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harmony and concord would reign in what would become a truly ecumenical endeavour.
I want to deal first with the general question of principle. It would need a decision at Cabinet level to double the amount of money devoted to the arts. They would have to be treated as a special case and exempted from the cuts in public expenditure. I do not see why that should not be done. I agree with the hon. Member for Wolverhampton, North-East (Mrs. Short), who has also disappeared at an untimely moment, that it would be a help if the Under-Secretary of State were a full Minister, with his own Department. However, I would go further. The hon. Lady said that she wished to elevate her hon. Friend. I suggest that the Minister for the Arts should be in the Cabinet. The hon. Gentleman looks nervous, but I assure him that he has both the temperament and the profile for it.
There are three practical reasons why we should support this increase in the arts budget. First, our great successes since the war have been in the arts, and in the performing arts in particular. I agree with my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbaim)—he, too, has vanished; I hope it is not the effect of my rising to my feet that has denuded the Chamber—that this priority would be in the national interest. We have led the way in ballet, opera and the theatre since the war.
Secondly—the point has been made frequently during this debate—the sums are small. The grant to the Arts Council last year was £19 million. If that were doubled the sum would hardly be noticed in an education budget approaching £4,000 million. The amount spent on the Arts Council at the moment is less than the cheese subsidy, and palls into significance when one considers other items in the budget which have been detailed by the hon. Member for Leyton.
The third point is that there would be a direct return on the balance of payments. I yield to no one in my espousal of ars gratia artis, but the arts are not only justified on their own merit; they pay their way. It is perhaps because I am not as middle class as the hon. Member for Leyton that I consider there is

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nothing vulgar about referring to money in relation to the arts. We want to cornsider money, and the amount the arts earn, because that gets down to the nitty-gritty of the subject. It is true that all the arts, but the performing arts in particular, earn money for this country.
Many people come to this country for the theatre. In 1971 it was said that 58 per cent. of the tourists coming here gave as a reason for visiting Britain their desire to participate in our theatre. In 1973, in the West End alone, the theatre—that excludes Stratford, Glyndebourne, Edinburgh and the other great regional centres—contributed £12 million to the balance of payments. In 1974, a research project showed that overseas visitors at four West End theatres contributed 35 per cent. of the cash at the box office. Also, there are great gains for exports in the arts. One has only to look at Broadway, New York, and see that of the 21 shows running there 11 are British to realise what a contribution the theatre is making to our balance of payments.
Compared with what other countries spend on the arts, what we spend is small indeed. France spends a mere £118 million, but that is four times as much as we spend in Britain. Germany spends five times as much as we do, and in Italy expenditure on opera, ballet and drama alone, at £23½ million, exceeds the whole Arts Council grant, so there is room here for considerable improvement. I think that both in principle and in practice it would be desirable to double the amount spent on the arts.
What are the sources to which we could look? First, there is the Exchequer making grants through the Arts Council, but local government is just as important, and I agree with my hon. Friend the Member for Ludlow (Mr. More) that there is a dilemma here. We are calling upon local authorities to economise, and at the same time we are asking them to spend more money on particular projects, but I plead in aid once again the smallness of the sums involved.
When, in July 1973, as a Minister, I addressed the Standing Conference of Regional Arts Associations, I suggested that the desirable division between the Arts Council, the regions and private sources was one-third each. In 1973–74, unhappily the balance had tipped further
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away in favour of central Government. Seventy per cent. came from the Arts Council, local authorities, provided 20 per cent., and 8 per cent. came from other sources. I ask the Minister what he intends doing about this. There is a permissive power, of course, given in the local Government Act 1948, to provide a sixpenny rate, but many authorities do not use that power. I believe that the most active councils spend the equivalent of only a twopenny rate.
I ask the Minister, first, to give us up-to-date figures about the situation. What is the amount spent by local authorities in 1974–75, and what is the proportion now between the amounts spent by local authorities and money that comes from other sources? Secondly, I ask the Minister what he intends to do to improve the situation.
The hon. Gentleman's eight-point programme for the arts was the subject of an exclusive interview in The Guardian. Unhappily, it seems to have remained exclusive to the readers of that paper ever since, because we have not heard any more about it. The report said:
"'Local authorities have got to be encouraged to take a far greater share in the financing of the arts.' Mr. Jenkins contemplates direct grants to local councils and every pound of local authority expenditure on the arts would be matched by grants from central government."
I hope that those contemplations have led to some practical results and that we shall hear about them when the Minister replies. Would he please also let us know the Government's view on the use of local lotteries for the arts? That would be a most desirable development.
A third source of finance to the arts comes indirectly from the Exchequer in the form of tax relief. Here, one thinks of value added tax. The Chancellor of the Exchequer, as he has made clear, is not unsympathetic to the project of exempting the arts, or portions of them, from VAT. I urge the Under-Secretary to throw his weight into the argument on the side of the exemptors. He says that he has been pressing the Chancellor of the Exchequer since September 1974. Will he continue that pressing until it comes to a successful conclusion? It certainly makes no sense to give a grant with one hand and take it away with the other. If it is not robbing Peter to pay Paul, at

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any rate it is, perhaps, robbing Hugh to pay Denis.
Could we not see a more reasonable approach in the financial sphere? A campaign has been mounted by the Evening Standard to secure the exemption of the arts from VAT. I applaud that campaign and certainly support it. It reinforces the Evening Standard's claim to be the most civilised newspaper in Fleet Street. I would award that palm to The Guardian were it not for its rather doctrinaire attitude to education. I urge the Under-Secretary to secure from his colleagues in the Government the exemption of the living artists, the theatre, the opera and the concert hall from the effect of VAT.
I should be content to see films exempted from VAT as well. Just before this debate began I received a telegram from Michael Relpho, the Chairman of the Film Production Association, saying:
"British film-makers urge you that you include films among the arts for which you are advocating VAT zero-rating. Present plight of film production most serious yet and preservation of our cultural identity demands a strong home market. VAT accelerates cinema closures, prevents modernisation. Entertainment tax proved unsupportable and was removed. Now VAT imposes tax burden at time of much greater difficulty."
I hope that the Minister will take note of that expression of opinion, particularly in view of what he said in that eight-point programme, when he suggested
"A scheme to save the flagging British film industry by a National Film Fund subsidised by 50 per cent. of the profits from the Eady Fund and a Government subsidy for non-profit making film companies or films made for the public good and of high quality. All responsibility for films would pass to the Arts Minister."
I do not think that that has happened as yet, but the Minister might make a start by helping the film industry—I know that he has its welfare at heart—by securing exemption from VAT.
Value added tax on ticket sales amounts to 8 per cent. of the product of the tickets. The same expenditure goes to the author-8 per cent. It costs the theatre alone £3·5 million a year, and the 1972 figures show that for the commercial theatre, an overall loss of £675,000 was made. Yet the commercial theatre is just as important as the subsidised theatre for the future of theatre
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in Britain. The Arts Council in 1973–74 spent £1·2 million on VAT. Admittedly it got a grant of £750,000 back from the Government but that was a once-and-for-all grant. We would welcome a statement from the Minister today that the Arts Council will continue to get a remission of the money which it expends on VAT.
We welcome the concessions already made by the Chancellor of the Exchequer on the capital transfer tax in relation to the national heritage. I hope that he will expand that concept to include theatres. I should like to see positive legislation in this sphere protecting London's theatres. They are not adequately protected under the present planning law. Once again, I come back to the eight-point programme, when the Minister, in his days in opposition, referred to
"Security for all West End theatres, including those threatened with demolition by the public ownership of the site. Independent producers would be granted security of tenure."
That is an admirable sentiment. I hope that we shall soon see some Government action in that respect.
If we turn from, alas, the all-too-theoretical eight points to the actual financial situation, what we see is grave indeed. The ravages of inflation are threatening to wreck the whole of the arts programme. We have grown accustomed to 10 per cent. growth, in real terms, for the arts. I make no party point about this. It was a growth rate that was achieved under both preceding Governments. Even when cuts were made in the winter of 1973, a growth rate of 3 per cent. remained for the arts.
What will the Minister do to help the Arts Council? We really need to know. Lord Gibson, in his annual report, pointed out that he needed £25 million for the Arts Council to maintain the projects which it had already embarked upon, and to maintain activity at the same level in the coming year. But, of course, that was written in September 1974, since when inflation has rushed further ahead. It is clear that £25 million, which he calculated as being sufficient, will not be sufficient today, and must be up-graded to a sum which I calculate as being about £26·5 million. That is allowing for no growth at all. Of course the arts are an extremely labour-intensive industry.

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If it is impossible that the arts should be treated as a special case, what yardstick can we use to see what, in a time of admitted economic stringency, it is fair to give the arts? At the very least, they should advance at the same pace as education. The arts are connected with the Department of Education and Science. They should have the advantages as well as the disadvantages of that connection.
On 5th December last, the Secretary of State for Education and Science was reported in The Times as having said,
"Education in England and Wales is likely to expand by about a tenth over the next two years."
When I faced the Under-Secretary, at Question Time on a date not so long ago, he told me that the Secretary of State had not made that statement. I am very glad to see that the Secretary of State has just taken his seat on the Government Front Bench. I was referring to the statement he is reported to have made, according to The Times of 5th December—that education in England and Wales was likely to expand by about one-tenth over the next two years.
Following the denial of the Under-Secretary, I checked with the education correspondent, Mr. Devlin, who sticks by his report. My submission is that if there is to be a 10 per cent. growth rate in education services in general over the next two years, the same rate of growth should be made for increases in the Arts Council's budget—and they would be quite dramatic.
The Secretary of State for Education and Science (Mr. Reg Prentice): I am sorry to interrupt the hon. Gentleman—particularly after coming in so late in his speech—but the comparison of 10 per cent. was a comparison of the education component in the rate support grant for 1975–76 with the actual expenditure in 1973–74 by local authorities.
Mr. St. John-Stevas: I accept absolutely that explanation from the Secretary of State. All that I can say is that it is not the statement he was reported as having made in The Times. I know that Departments do not like their Ministers writing letters to newspapers, but it would have been helpful if the Secretary of State could have overruled his officials on that occasion and made the point clear.
Mr. Prentice: I made it clear several times.
Mr. St. John-Stevas: Never so clear as the right hon. Gentleman has made today in timely arrival in this debate. Alas, my statistical researches on this point have been wasted, since I shall not project further. But had the Secretary of State's assessment for the expansion of the educational budget been what The Times said it was, in 1976–77, allowing for a modest 25 per cent. inflation and a 5 per cent. growth rate, the grant for the arts would have to be about £37 million a year. No matter; the Secretary of State has cleared un this point, and I must, therefore, go to another source which cannot be so simply dismissed—the White Paper on Public Expenditure to 1978–79.
Looking at that document we find that education expenditure over the next two years, 1975–76 and 1976–77, increases at a rate of 5·7 per cent.—that is, education excluding the libraries and the arts. But if one looks at the figures for the arts, one finds that there is a 6·5 per cent. decline in the same period. Admittedly—before the Minister for the Arts sends for his advisers—there was one special item in that—the site for the Royal Opera House. But even allowing for that special item and excluding it, the growth rate for the arts over the next two years will be only 1·8 per cent., if that. That is the estimate made by the survey.
My point is that discrimination is being practised within the education service, of which the arts are part, against the arts and in favour of other components of the programme. We see this discrimination again if we follow the figures to the end of the period covered by the White Paper to 1978–79, where expenditure on education will have grown by 11 per cent. whereas expenditure on the arts, on the first basis of calculation, including the special item, will grow by only 2½ per cent. and on the other basis, by only 8 per cent.
Those are the serious facts of the situation. I found the fantasies of the hon. Member for Leyton agreeable, but unfortunately they were only fantasies. The facts of the situation are that the arts will not do well in relation to the rest of the education budget.
A further most important point is that the triennial system of grants has broken

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down. Previously, in June, a preliminary notice was given of how much the Arts Council could expect for the following year; in January it was revalued, and in April the council got the money. But here we are in February and still, as far as I know, no figure has been given to the Arts Council. It may be that a private figure has been given by the Minister. If so, the House is entitled to know it as well.
I freely admit that the inflationary situation has created great difficulties for the Minister for which he is not primarily responsible, but he should bestir himself and find some alternative means of informing the Arts Council sufficiently far in advance so that it may know what its grant will be, in order that it can fulfil its commitments.
I conclude on a number of points of a positive character. The Chairman of the Arts Committee in the Conservative Party—my hon. Friend the Member for Bristol, West (Mr. Cooke)—made various suggestions, which I noted with great interest. They ranged from the use of television to that of Canterbury Cathedral. I want to raise some points with the Minister under the general heading of public support for the arts. What about public lending right? It is true that if we had not had that little local difficulty last February, this measure would have been passed into law by now. We would have had a public lending right, and a long-standing injustice would have been righted. On coming back to the eight-point programme, what do I find? This is the platform which the Under-Secretary put forward as his platform—an admirable one—for gaining votes from those interested in the arts at the election. There he said
"The financial situation permitting"—
that is the small print—
"the Minister for the Arts should ask the Exchequer for £5 millions a year for public lending right, and £20 millions a year for the Arts Council."
We have not seen even the first draft of the Bill, let alone the £5 million. Are we to have £5 million for public lending right? No one will be more delighted than myself if that is so, because authors are badly treated. Under the Arts Council system they got only £133,000 out of
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the whole budget of the Arts Council last year.
May I also ask the Minister to take action over the Criterion Theatre? I hope that he will get his colleague who has direct responsibility here—the Secretary of State for the Environment—to appoint an inquiry, so that we can be assured that the theatre will be kept open, as the planning committee of the GLC has suggested. Secondly, will he intervene with Sir Charles Forte to ensure that the rentals and the length of the lease will be equitable, and will be such as to be compatible with the running of a legitimate commercial theatre?
I come, thirdly, to the question of the Turner paintings. Sir John Betjeman has suggested that they should be housed at Somerset House, in which the theatre museum already has a prior claim. I do not wish to get involved in a squabble between two sets of artistic protagonists; that would be foolish indeed. The point is that we really need both. I suggest that the Minister uses his good offices to bring them together. It has been suggested that the Covent Garden flower market should be used for the Turner paintings. That would cost, I think, £330,000—not much more than the £250,000 which is projected for housing them in Somerset House. I hope that the Minister will intervene—that is his job, as the Minister—and bring the parties together to see whether he can work out an amicable agreement by which we can get the best of both worlds and get the projects housed.
Lastly, I hope that the Minister will devote the attention of himself and his right hon. Friend the Secretary of State to the extremely important question of extending the audience for the arts away from a limited portion of the middle class to the vast majority of the people. I believe that the solution to this matter lies in the schools and in giving art education a much higher priority, and ensuring that resources are devoted to that. I have been active myself in promoting a trust for the Unicorn Theatre, which performs plays for school children, and I hope that its work will continue to have the Minister's support.
This has been a valuable debate. I congratulate once again the hon. Member for Leyton on devoting his time to it. On the whole, it has been a good-tempered

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debate and I have been nice to the Minister. I cannot guarantee that I shall go on doing that, but I have made an effort today. I have only the hope that that eight-point programme review will be put into operation. The only point which so far has been put into effect is that in which the Minister said:
"I'd get away from the aristocracy, except for Lady Antonia Fraser."
History, perhaps mercifully, does not record the lady's views on the prospect of proximity to the hon. Gentleman, but tonight at any rate we look forward to hearing from the Minister a positive speech with constructive proposals for the future of the arts. For the moment, we shall be content with that.
6.31 p.m.
The Under Secretary of State for Education and Science (Mr. Hugh Jenkins): I, too, should like to congratulate my hon. Friend the Member for Leyton (Mr. Magee) on his fortune in the Ballot, on his selection of subject, and on the manner of his presentation of his argument. He carries perhaps rather more weight—certainly rather more conviction—than does the hon. Member for Chelmsford (Mr. St. John-Stevas), if only because he has not been a member of an administration which, when in office, totally failed to carry out any of the things which the hon. Member now advocates in opposition. We can therefore take much more account of my hon. Friend's points than of those with which we are becoming over-familiar from the hon. Member for Chelmsford. I hope to reciprocate what the hon. Member for Chelmsford claimed to be his kindness to me; after having made that one point, I shall try to be equally kind to him.
I have some sympathy with my hon. Friend's point that our methods of public finance for the arts are, in general, over-rigid. He also made good points about the Government's revenue from drink and gambling, and so on. That is salutary information for the House to have. It is difficult for me to reply to all the points that he made in a long and interesting speech, but I shall try to cover most of them. I am afraid that I shall have to take most of the remaining time, if not all of it.
On a Private Members' day, the Government are here first to listen, second, to
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reply and, third, to provide information. We are a rather thin House today. Perhaps that is due to the fact that the media do not find front page space for the Government's good works for the arts, for galleries, libraries and museums. Perhaps we should not complain too much; while the Opposition have been providing a daily sensation-drama, a serial compared with which the Pallisers pale and Barlow is baffled—
Mr. St. John Stevas: What about Pearl White?
Mr. Jenkins: I was about to say that there has been nothing like it since Pearl White. With such competition, we must be grateful that our doings attract any attention at all.
Despite the thin House, I have good news for all those who have taken part in the debate. The arts world is full of diligent readers of Hansard, and what hon. Members have said will not be wasted. What is more, I believe that the media are more and more finding that viewers, listeners and readers are deeply interested in the arts. Even people who have not read the book or seen the play or the film like to be able to talk about it knowledgeably. There is an increasing public for news and comments about the arts. I have listened with close attention to what has been said and I shall try to reply to specific questions. I shall have to resist any attempts to intervene unless hon. Members press very hard, because I hope to cover most points.
I should like to remind the House that the motion says that we are now in a period like the Second World War, which, as my hon. Friend said, is an appropriate time to multiply public support for the arts. The motion calls on the Government to take appropriate measures to this end and to encourage local authorities to do the same. What are the facts? I can put matters into perspective here.
The Arts Council's predecessor was the Council for the Encouragement of Music and Arts, which was formed in December 1939. In that month, the Council received £25,000 from the Pilgrim Trust and five months later had a grant of £50,000 which was borne on the Vote of the then Board of Education. By 1944, that grant had risen to £175,000, or by seven times over the period, despite the

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financial difficulties of the war years. That was no mean achievement.
Let me remind the House of the record since then. The total grant-in-aid to the Arts Council was £235,000 in 1945, but for the current year it stands at £21,335,000, including just over £500,000 for expenditure on housing the arts and £21 million on supplementary grants this year to the Arts Council, which Parliament has now approved.
Those figures represent nearly a hundredfold increase over 30 years in the funds made available from central Government to the Arts Council. Even allowing for inflation, the post-war record of successive administrations represents a significant improvement on that Second World War period. In this sense, therefore, what successive Governments have already achieved since the war in terms of hard cash support for the arts more than answers the motion.
Indeed, my hon. Friend himself went far to make withdrawal of his motion a self-imposed necessity. He paid great and justified tribute to this country's achievements in the arts. At one moment I thought that I was seeing a band of emaciated pilgrims and the next moment a crowd of princes clothed in diamonds and pearls. My hon. Friend cannot have it both ways. I understand that his feelings stem from a real concern for the arts, which I warmly share.
The growth of this expenditure since the war has been steady, but the increases in grants to the Arts Council were particularly significant from 1965 onwards, with the appointment of my noble Friend, Baroness Lee, as the first Minister for the Arts. That year also marked the first year of the "Housing the Arts" fund, which has been of such benefit in providing central Government contributions to the construction of arts buildings of various kinds by local authorities and other bodies.
Hon. Members may have noted from page 100 of the Government's Expenditure White Paper for the period to 1978–79 that since the introduction of the scheme 217 projects have benefited or have been promised support, and the Arts Council's contribution to them is nearly £6 million out of a total of £34 million-
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worth of capital expenditure on the arts from all sources. This is one reason why the hon. Member for Chelmsford suffered from his usual confusion with figures—
Mr. St. John-Stevas: Will you substantiate that, please?
Mr. Speaker: Order. The hon. Gentleman asks me to substantiate something; I would not dream of it.
Mr. Jenkins: I am grateful for your protection, Mr. Speaker.
As for the recurrent grant, the rise from 1965 onwards has been similarly encouraging. In that year the grant to the Arts Council was nearly £4 million. It rose to nearly £6 million the following year and has increased steadily to the total, for the current year, or over £21 million.
Hon. Members know the financial problems facing the arts both now and in future years. It has been emphasised correctly in this debate that the labour-intensive nature of the arts, particularly the performance arts, makes them especially vulnerable to inflation. As my hon. Friend who moved the motion said in his article in The Times on 9th October last, and as was pointed out by Beaumol and Bowen in 1966, it is difficult, if not impossible, to reduce the number of words in "Hamlet", or to enable a company to play it in less time or with fewer actors. Indeed, at the moment we have three Macbeths in one play, so we have more rather than less in that respect. There is also little scope for reducing the number of instruments in an orchestra. The City of Birmingham Orchestra at the Royal Festival Hall on Friday, using a number of instrumentalists and a choir which were certainly not over-large for the Grande Messe des Marts of Berlioz, had to overflow into the boxes.
It is an earnest of my intention, and of the Government's determination to maintain standards in the arts, that this year we have presented, and Parliament has approved, two Supplementary Estimates for the Arts Council—one of £750,000 last July and one on 9th December last of £1¾ million.
Many hon. Members have, quite naturally, asked about the money that the Arts Council is to receive from the Government in the next financial year. I welcome, in particular, the good intention

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of my hon. Friend the Member for Leyton that finance from the central Government should be increased, and should be seen to be increased. I hope that steady progress can be made in this direction.
It is, perhaps, an awkward time for me to be talking on this subject—when we are expecting the presentation of the Estimates. It will be well understood that I can hardly anticipate my right hon. Friend the Chancellor in these matters. The hon. Member for Chelmsford must, as I have advised him before, learn to contain his impatience until the Estimates are presented to Parliament.
Mr. St. John-Stevas: Will the hon. Member give way?
Mr. Jenkins: I can tell the hon. Gentleman that I shall shortly be dealing with the point he raised on the Public Expenditure Estimates. In those Estimates there is a slight error in presentation. I hope to clarify that matter in answer to a Question, which should clear up some of the points that have added to the hon. Member's confusion.
Mr. St. John-Stevas: I am grateful to the hon. Gentleman for establishing that the only confusion that exists—since my figures were perfectly clear—is in the Estimates published by the Government. The hon. Member made a rather sibylline utterance about that, and we shall be interested to hear from him further.
I rose first to tell the hon. Gentleman that it is not my impatience that is important but the impatience of the Arts Council and all those who are dependent on it who cannot go ahead with their projects until they know their financial position.
Mr. Jenkins: The hon. Gentleman said that if any private information had been given to the Arts Council it should be given publicly in this House. But if that were done it would no longer be private, so that, even if there had been a private communication to the Arts Council, we could not pursue that in the House now.
I challenge the hon. Gentleman's figures and his comparison with the Education Vote, and my right hon. Friend the Secretary of State adds the weight of his office in joining with me in that challenge.
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I should like to turn to one or two points raised by my hon. Friend the Member for Leyton whose motion this is. I agree with him that on the preservation of buildings we have a problem. The Government have tackled it. It will not have escaped my hon. Friend's notice that the daily outcry about theatres in peril that used to occur has now stopped. This is largely because of the different political climate. It is known that permission will not be granted for theatres to be pulled down, and therefore developers are not as eager to put their money into theatres in the hope of converting them to other uses as they used to be when the Conservatives were in power.
The hon. and learned Member for Kinross and West Perthshire (Mr. Fairburn) raised a number of points with particular reference to Scotland. I disagree with him on one matter, which does not relate specifically to Scotland. I agree with him that art is certainly about excellence, but it is not about élitism, and I do not agree that excellence and élitism are exactly the same.
A number of hon. Members have referred to value added tax. The Government are still considering this matter. The House is probably aware—it has been made aware—that the Chancellor of the Exchequer recently saw a deputation led by my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short), who gave me her apologies for having to leave early. She succeeded me as Chairman of the Theatres Advisory Council. My hon. Friend's meeting with the Chancellor resulted in a useful exchange of views, and he is taking those into account before coming to any decision on value added tax.
At the same time, it must be made clear that value added tax is a Common Market tax—that the EEC is unlikely to relieve any part of the theatre from the tax, and will certainly not recommend any relief for the commercial theatre. On the contrary, if we remain in membership, harmonisation of policies will not make it easy for any Government to act unilaterally in the matter. The Evening Standard campaign may therefore be regarded as a reversion by the Beaverbrook Press to its previous anti-EEC position. As far as I am concerned, that is not unwelcome, but supporters of the campaign should be aware that

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they may be regarded in Europe as firing the first shots on behalf of the anti-Marketeers in the coming referendum campaign.
A good deal has been said about the currently fashionable notion that the fine rooms in Somerset House should become a Turner gallery rather than a theatre museum. There is a firm Government commitment to the theatre museum, and there is no intention of abandoning that commitment.
Turner's great works were passed to the trustees of the National Gallery as a result of the settlement by the Court of Chancery in 1856. Since then, as a result of gallery organisation and other events, the drawings and paintings have come to be held by the Tate Gallery and the British Museum as well as the National Gallery. The Government have no authority to deprive the various trustees of their holdings.
Greater space for display of works of art will arise from the current improvements and extensions of the National Gallery, the Tate Gallery and the British Museum. Whether the works of an artist are better shown en masse than in different galleries is arguable, as we have heard today. It is not a matter on which the Government would wish to take a firm view. It is not the Government's intention to interfere in matters that are the proper rôle and function of the trustees. As my right hon. Friend the Member for Vauxhall (Mr. Strauss) pointed out, other Governments have not taken the attitude that we have—that the views of trustees should be taken into consideration in these matters and they ought not to be interfered with too much. I hope to announce at some time a measure of greater devolution of responsibility to the trustees of the museums and galleries.
I have from time to time drawn attention to the over-centralised nature of public spending on the arts.
Mr. W. R. Rees-Davies: May I bring the Minister's attention back for a moment to the idea of having one gallery or museum where the whole range of Turner's work might be seen? I feel that this is a scheme well worthy of consideration by all three groups of trustees concerned. Have the Government considered putting to the trustees of the
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British Museum and the others concerned the possibility of having one suitable place for all Turner's work? Such a scheme would commend itself to a great many of us who have some knowledge and understanding of this artist's work, and there are a great many people who believe that it would be the right approach if it could be done with the general agreement of those concerned.
Mr. Jenkins: Had the hon. and learned Gentleman been here earlier he would have heard those matters fairly fully canvassed. I hope that he will forgive me if I do not at this stage give him a full reply. I am sure that his remarks will be given due weight.
The opening paragraph of the public expenditure White Paper emphasised the necessary restrictions which the Government have to impose on public expenditure, and it would therefore be misleading of me to give any indication to the House tonight that local authorities can be encouraged to increase their total expenditure. What is open to them, however—this is important—is to examine very carefully their priorities for expenditure with a view to seeing whether they can obtain better value for the money which they spend within existing resources. My hon. Friend the Member for South Shields (Mr. Blenkinsop) had that very much in mind.
Mr. Fairbairn rose—
Mr. Jenkins: We have very little time, and I ask the hon. and learned Gentleman to allow me to continue.
As local authorities know, it is my view that the channelling of money to the regional arts associations can often lead to more fruitful results per pound spent than if an authority goes it alone on some particular project. There is no time like the present for concentrating the mind on obtaining better value for money. Indeed, as that was the very point made by the hon. and learned Member for Kinross and West Perthshire, I hope that my response there may satisfy him so that he will not wish to intervene further.
That leads me on to what I want to say about the multiplier effect of the arts deriving their finance from a wide variety of sources, a matter to which my hon. Friend the Member for Leyton

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referred. I commend to the House the words of the Secretary-General of the Arts Council in the current annual report of that body on how the Arts Council works.
Sir Hugh Willatt elaborates in some detail the response theory of patronage, of contributions from a wide variety of sources to independent enterprises contributing to the remarkable results which have been achieved in this country, which have saved us from the dullness and conformity of "establishment" art. This has largely been the result of what one calls the response method.
The policy of aiding and subsidising a large number of local initiatives has resulted also in significant changes in the pattern of Arts Council support as between the national companies and the regions. I have no time to go into detail now, but there has been a large move away from the four national companies out into the regions. Whereas at one time about two-thirds of Arts Council expenditure was spent in London, now the situation is reversed and the majority of Arts Council expenditure is spent outside London.
Mr. Fairbairn rose—
Mr. Jenkins: I must ask the hon. and learned Gentleman to forgive me. I have a good deal more to say. I very much hope that private organisations and individuals will continue their smaller but nevertheless significant contributions to the arts. I am having some private discussions to this end, and I have opened them with a talk with Mr. Campbell Adamson of the CBI. Some business organisations are already doing quite a lot, and it is time that we gave these beneficent activities greater publicity so that others may be encouraged to follow their example.
Comparisons with other countries are somewhat misleading. Neither the totally centralised system in France nor the fundamentally local system in Western Germany can be directly compared with our own methods of support. It is the deliberate policy of this Government—and, to be fair, it was the policy of previous Governments—to encourage diversity of support for the arts, and this very fact makes it more difficult to ensure that one is comparing the whole of expenditure on the arts with similar expenditure
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abroad—that is, whether one is, in fact, comparing like with like.
In any event, I am inclined to question—this point was made by the right hon. Member for Orkney and Shetland (Mr. Grimond)—whether that is an aim which we should seek to pursue, whether we should drive up our subsidy to the point which it has reached in some Continental capitals.
For example, Covent Garden manages at present on about 50 per cent. support from the State, compared with about 75 per cent. for many Continental opera houses. Is it not a healthy state of affairs that Covent Garden should have a larger income from the box office and that some of the financing of its productions is undertaken by business? I see nothing against that. Bearing in mind the limits on financial resources, I should hesitate as a matter of principle to say that Government subsidy ought to be larger just because it seems the right thing that Government subsidy should be larger. I see nothing to be ashamed of and nothing to apologise for in what we are doing in this country.
Most of the Arts Council's clients raise more than half—some of them much more than half—of their income from the box office. This is a strength—it is something to be proud of—because people are going to the theatre. It is no cause for apology I hope that inflation will not have the effect of making the Arts Council the chief source of finance for more and more projects.
In some countries the State pays most of the cost, but the quality of State support for the arts is not measured only by the amount of money involved. It is measured by the quality and variety of the national artistic output. In this respect, as has been said, we can hold our head high throughout the world. In our method of support, in the way we go about it, we are on the right lines, and even in times of stringency we can improve.
I turn for a moment to the arts notices in the papers. What other capital in the world has such an offering to make? Quite apart from the National, the Royal Shakespeare, the Royal Court and the Mermaid, there is always something valuable and controversial to be seen in our fringe theatre. We have a mass of

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concerts of all kinds, the great picture and museum galleries, and the series of splendid exhibits. What other capital has two major opera houses playing all the year round, and a range of first-class orchestras? Ask Louis Fremaux or Paavo Berglund what they think of British music. They will say that we are the greatest.
Travel the country as I do, visit the new museums and new extensions being built, and the rebuilt galleries—go to Edinburgh and Glasgow to see what they are doing—try smaller places such as Kendal, Lincoln, Milton Keynes or Battersea—visit one or two of the new community workshops and watch people doing their own thing—hear the Wandsworth School Choir or the John Bate Choir in my constituency—there has never been a time when so much artistic activity has been going on; nor has there been one in which so many people not only participate but appreciate the best there is to experience.
This is not a country starved of culture. It is a country eager for culture. My hon. Friend has seen avidity and mistaken it for emaciation. He himself described our plenty.
Of course, there is still much to do, but even in this time of stringency we have not stood still. Let me remind the House of some of the things we have done in the past year. We began by removing the museum charges.
Mr. St. John-Stevas: What else have the Government done?
Mr. Jenkins: Then, despite the difficult times, we protected the Arts Councils against rises in costs in 1974–75, giving the council a real increase over inflation. Subsequently, we obtained a Supplementary Estimate to keep it that way, and a further Supplementary Estimate in recognition of the cost of value added tax. We spent £15,000 on research into the practicalities of public lending right, and we are now drafting a Bill to legislate on it. We increased the grant to area museum councils by 300 per cent. We have this year given £440,000 to the Crafts Advisory Council. We started the process of drawing the membership of the Arts Council and its committees from
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a wider spectrum. We are pushing ahead with a major building programme for our national museums and galleries. We have bought land earmarked for a future extension of the Royal Opera House. We are finding money to complete the building of the National Theatre. Go where one will—it is all happening.
Soon I shall be issuing a publication provisionally entitled "Arts with the People". Those who read it may find it difficult not to take pride in belonging to this nation and in being one of these people.
What other inducement can I offer my hon. Friend to withdraw his motion? The other day, I saw that sprightly nonagenarian Sir Robert Mayer rejecting the lift and walking up the stairs at Queen Elizabeth Hall. He told me that he had written to the Prime Minister. I have since seen the reply, and I have permission to quote from it. The Prime Minister said to Sir Robert:
"I know of the daunting problems that music and the other performing arts now face, because of the effects upon them of rising costs and prices. Of course, the arts are not alone in suffering these effects; but I recognise how especially vulnerable they are.
"In the difficult economic situation that faces us, the Government has to weigh the claims of the arts, comparatively small though they may be, against the other demands for public support. I do not think that I can say much more than that we shall try to strike the right balance. It is clearly not a time for expansion, and we shall not be able to do everything that people would like us to do. But we shall try to help maintain standards, and we shall hope to sustain what has been achieved in music and in the other arts. I am deeply conscious of the value of that achievement in our national life—as important in difficult as in easy times—and its contribution to our international standing."
On the basis of what I have said, and on the basis of what the Prime Minister has said on behalf of the Government, I invite my hon. Friend to withdraw his motion, on the understanding that our purposes are identical and our effort will be unremitting.
Mr. Magee: In the expectation of even greater benefits to come than we have received already, I beg to ask leave to withdraw the motion.
Motion, by leave, withdrawn.

ORDERS OF THE DAY

  EXPORT GUARANTEES AMENDMENT BILL
  Order for Second Reading read.
  7.0 p.m.
  The Under-Secretary of State for Trade (Mr. Eric Deakins): I beg to move, That the Bill be now read a Second time.
  The Bill has two purposes. First, it proposes that the Export Credits Guarantee Department should be empowered to make loans and grants for specified purposes connected with exports. Second, it proposes that the two limits on the Department's commitments set out in the export guarantees Acts be combined and be subject to increase by order.
  In the Written Answer which my right hon. Friend the Secretary of State gave on 21st November to the Question put by my hon. Friend the Member for Norwich, South (Mr. Garrett) he referred to the Government's intention of introducing legislation in connection with the refinancing arrangements between the Government and the banks. It is to this that the first proposal is basically directed. The second proposal is simply an administrative change designed to give greater simplicity to save parliamentary time.
  Before discussing these proposals in greater detail, I should like to make some general comments to set the background against which the Bill might perhaps best be considered. This debate comes at a time when we are facing a very difficult and rapidly changing world trading scene. There has been a significant shift in the balance of economic and commercial power and in the terms of our international trade. Inflation is an international problem which has still to be solved.
  One feature of this spreading inflation over the last two or three years which is of particular relevance to this Bill has been the dramatic rise in interest rates. Competition for export markets can scarcely ever have been fiercer, and we cannot afford a return to the kind of protective or beggar-my-neighbour policies of the 1930s. No more can we contemplate with equanimity the kind
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  of world trade recession from which we and almost all other countries could only lose. We face a daunting balance of payments challenge, a key feature of which is the need substantially to increase our exports.
  These are the stark facts of the present situation, and they mean that the support and assistance which we give to out exporters must be broadly comparable with that available to exporters in other countries. To do less than this would mean placing British exporters at a significant competitive disadvantage. I take this opportunity to assure the House that it remains Government policy to maintain the position in which the package of facilities available from the Export Credits Guarantee Department stands comparison with those available from any other credit insurance institution in the world.
  I recognise that one or two institutions may offer individual facilities which are not available from ECGD. I should, I think, comment on this in three ways. First, it is necessary to look at the whole range of facilities and services involved in order to judge whether United Kingdom exporters are at a competitive disadvantage. Second, ECGD is constantly reviewing existing facilities to see whether they might usefully be extended or amended. The Department is also considering new forms of cover and new facilities. Indeed, following discussions with industry and the banks, several such possible new ventures are currently under very active consideration.
  Third, when considering whether a new facility should be introduced we must consider not only the benefits expected to flow from such changes but also the costs and expenditure likely to be involved. This is of particular importance when public expenditure is involved or where losses on one new facility mean that extra charges have to be raised from other ECGD policyholders who will have no share in the benefits of the cover. It is also important to draw a distinction between commercial credit insurance and aid.
  I should, therefore, stress that support for exporters and efforts to ensure that they can offer internationally competitive facilities are not cost free. Second, I have referred to the general

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  package or range of facilities available from the Export Credits Guarantee Department, but I have not said that we should seek fully to match each and every facility which one or other overseas credit insurer may offer. Third, there are limits beyond which it is simply not worth going in order to support exporters in their search for exports.
  Let me turn now to the detailed purposes of the Bill before the House. An essential competitive feature of exports is the financial arrangements or terms offered to overseas buyers. Over the years ECGD has played an increasingly significant rôle in this, whilst never actually financing exports or acting as an export bank. On balance, we believe that it is probably right for this to remain the position.
  For many years now the clearing banks, with the backing of the Export Credits Guarantee Department, have made available special financing facilities for exporters. In 1972, as part of these facilities, the banks agreed to new arrangements under which they would provide finance for exports sold on two years credit or longer, and for home shipbuilding, at fixed rates. The Bill is concerned only with the export side of the arrangement. These fixed rates have been set within a range in the light of the rates available from our major overseas competitors, and for some time the rates have been below commercial and market interest rates.
  The clearing banks could not and cannot be expected to lend vast sums of moneys for long periods at rates below market rates. Therefore, as part of the package or scheme agreed with the banks, in return each bank participating in the refinancing scheme was to receive refinancing loans to cover that part of its total fixed rate lending in excess of 18 per cent. of its current account balances. It was agreed that the banks lending at fixed rates to exporters could receive an agreed rate of return on unrefinanced fixed rate lending based on commercial rates.
  In very general terms, this scheme represented—and represents—one aspect of the cost of keeping British exports competitive. However, I want to stress that it was, of course, never the intention that
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  the cost of operating the arrangements should become a charge on ECGD's premium income. Indeed, it was expected that the interest supplement in respect of the difference between the fixed rate and the agreed rate would not be large and that it would be offset by adjusting the interest due from the banks on the refinancing loans. In practice, however, this has not in fact happened.
  There are two main reasons why this has been so. In the first place, due largely to the unprecedented rise in commercial interest rates and the continuing need to keep fixed export rates generally in line with our overseas competitors so as to ensure that our exporters are not placed at a serious competitive disadvantage, the gap between the fixed rate and the agreed rate has widened. At the same time, the banks' current account balances increased faster than expected so that the amount of fixed rate lending required to reach the 18 per cent. threshold was higher than anticipated. Thus smaller amounts became eligible for refinancing, while the agreed rate of return was earned on a larger volume of lending.
  Inevitably, therefore, the interest supplement payable to the banks from ECGD far exceeded the amount of interest due from them to ECGD on the refinancing loans. As ECGD does not have the necessary statutory powers to make grants to the banks, substantial arrears of interest supplement accrued. By October of last year these amounted to approximately £86 million.
  In the light of this developing situation, a review of the fixed rate scheme was commenced some months ago. Modifications to the scheme came into effect on 17th October 1974. The modified scheme will have broadly the same framework as the previous one in that banks will continue to finance exports at fixed rates set by the Government, but with the important difference that when commercial rates are at a high level the agreed rate of return which the banks receive on their unrefinanced lending will be subject to a taper.
  The precise effect of this taper will depend on a range of factors such as future levels of interest rates, the level, size and profile of future exports and the total amount of current account deposits.

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  It is possible, however, that if interest rates remain at their present level the financial benefit to the Government of the modified arrangements over the next three years will be of the order of £30 million.
  I gave full details of how the return to the banks is calculated, and of the rates which have applied for the last 12 months, in a Written Answer to the hon. Member for Tonbridge and Mailing (Mr. Stanley) on 23rd January. An integral part of this modified scheme is that arrangements are made to ensure that no arrears arise in the future. The House is already aware that provision was made in the winter Supplementary Estimates to pay the banks the arrears, and these have now been paid.
  Mr. John Stanley: Will the Minister confirm that the dimensions of the taper are not wider than 1¼ per cent.?
  Mr. Deakins: Indeed, and I hope to give more details in my concluding speech if hon. Members wish to know more of the facts that the hon. Member has been seeking to cover in the Questions he has been asking.
  The main purpose of the Bill is to provide ECGD with the necessary powers to operate this scheme more effectively. One is the power to make grants in respect of the interest supplement. This will enable us to ensure that further arrears do not accumulate in future. The other is to enable ECGD to make loans to refinance part of the banks' fixed rate lending. ECGD has until now been providing refinancing loans under an existing power. These powers are not wholly satisfactory. The Bill will provide a more satisfactory basis on which to operate refinancing.
  It is the Government's intention to ensure that United Kingdom exporters are able to compete with their overseas competitors, and the fixed rate finance scheme has played a vital part in this respect. In 1970 ECGD sought more specific powers to enable it to assist United Kingdom exporters in competing with unusual credit terms offered by foreign competitors. The need arose because of the use by some overseas competitors of a mixture of commercial credit and so-called
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  aid which led to an overall softening of the credit terms for some contracts.
  The United Kingdom has always opposed these arrangements since it believes that aid and commercial credit are two separate matters, that these should be kept separate and that this separation is in the interest of both the developing and aid-giving countries. In addition, ECGD and commercial credit are not suitable vehicles for aid giving.
  However, in order to ensure that United Kingdom exporters were able to compete with these terms if necessary, the ECGD needed to be able to match this competition by providing grants in respect of interest payable in connection with such contracts. But, in view of the Law Officers' advice that the 1970 Act does not provide the necessary power, the grant-making powers in the Bill are wide enough to cover this use as well. I confirm, however, that it remains our policy that these powers will only be used sparingly and only where there is a clear national interest in doing so. They do not in any sense represent an escalation in the international credit race.
  Clauses 2,4 and 5 contain certain technical amendments to the ECGD Acts. These are the necessary consequential changes following from the taking of the specific loan and grant powers in Clause 1. I shall of course be dealing with these clauses in detail in Committee.
  I stressed at the beginning of my speech that support for exporters is not a cost-free process. The size and scope of the refinancing arrangements perhaps serve to reinforce this point. It is, therefore, essential that there should be a continuous watch and detailed scrutiny on all resources used to assist exporters. On the one hand there is the continuing—indeed increasing—need for exports and the clear need for support to exporters to be of a kind and at a level to ensure that our exports are fully competitive in terms of credit.
  But on the other hand, the cost and length of credit is only one factor, particularly for the majority of goods which are sold for cash or on short-term credit, in export competition, and we need to be clear that we are not making our exports too cheap or unnecessarily competitive, or supporting exports which will not be paid for. In other words, we must ensure

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  valuable resources are not used to provide open-ended support or support which is not required.
  Of course, the balance between these two extremes is not easy to find. But the difficulties involved in trying to reach it cannot be avoided. The modifications to the refinancing arrangements are one result of attempts to reach a balance. It is not, however, the only one.
  For some time now, the United Kingdom has been playing a very active rôle in international discussions and negotiations designed to rationalise competition between supplying countries on the terms, cost and length of export credit. In particular there is general agreement on the need to put export credit to other developed and rich countries on a more realistic footing. These discussions have taken place within a number of international fora, but I should stress that they are not intended to set up some kind of cartel between supplying countries, simply to shift some of the competition away from what has, perhaps, become an undue emphasis on credit terms. Competition paying regard to price, delivery dates, quality and after-sales service can scarcely be against the interests of overseas buyers.
  These international discussions have already borne some fruit and agreement has been reached between a number of major exportinig countries on a minimum interest rate of 7½ per cent. for business involving more than five years' credit. Perhaps I should repeat an assurance which has been given before that there is no question of the United Kingdom unilaterally restricting terms in advance of international agreements and thus putting our exporters at a competitive disadvantage.
  The prerequisites for us are that we are satisfied that it is in our general interests to implement any agreement and that it is signed and implemented by our main competitors. The negotiations have been in progress for some time. However, the difficulties are such that it is not possible to anticipate their outcome, either in terms of timing or content. In view of this I cannot speculate on what results may emerge.
  There is one minor adjustment to interest rates. At present, for business on credit between two and five years,
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  ECGD guarantees to banks make finance available at a fixed rate of 7 per cent. I am proposing to vary this arrangement to the extent that 7 per cent. should become the minimum rather than the fixed rate. Thus where it is clear that it would be possible to charge more than 7 per cent. without any significant risk of the business being lost, ECGD will have freedom to use a higher rate. This is not, of course a very significant adjustment to the present arrangements, but it will give ECGD some useful discretion.
  Mr. Tom King: The Minister has commented on efforts which have been made to equalise competition between different countries. Those efforts are most important. He will be aware, however, of the difficulty of comparing assistance when some of the aids are distinctly opaque in certain countries. Have the Government studied aid which is palpably not opaque, and have they examined the study by Professor Jones which has shown that British companies are taxed four times as heavily on exports compared with the situation in Japan? Is he aware that this is a most significant factor in the investment potential of Japanese industry compared with British industry?
  Mr. Deakins: The hon. Member has raised a very much wider question about the way the Government manage the economy.
  Mr. King: This is a most serious point.
  Mr. Deakins: I accept that it is and can be serious for exporters, and one has to consider not just the ECGD facilities but the whole package of Government economic measures. I do not wish to cross swords with the hon. Member on this point since it would take me and the debate rather wide of the purposes of the Bill. I take his point that we cannot consider ECGD in isolation, but the Bill is concerned only with the ECGD part of what might have to be a total package for exporters. That package must include the taxation of companies, the investment sources available to companies, general incentives which are given to firms and so on. All these will have to be taken into account, but they are not within the ambit of the Bill.
  Mr. King: The hon. Gentleman has extensive ministerial responsibility for

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  exports. Professor Jones's report was apparently made to the Secretary of State for Industry. Has the Secretary of State for Trade asked for this matter to be further investigated?
  Mr. Deakins: The hon. Gentleman can rest assured that we have a close relationship with the Department of Industry, not least because we are at opposite sides of a couple of corridors in Victoria Street. Secondly, in view of the prime need to increase British exports and the efficiency of British firms exporting to the rest of the world, my Department is increasingly taking an interest in what goes on in industry in this country. That takes us into the ambit of the Department of Industry. We have a close and harmonious working relationship with the Department of Industry. I believe that the relationship will have to get a lot closer in view of what is being proposed in the Department of Industry and elsewhere.
  Mr. King: There is an argument for amalgamation.
  Mr. Deakins: At this stage I shall not argue about whether or not the Departments should be put together. A number of changes have been made in Government Departments during the past 10 years. Some of them have come full circle. Some Departments have been separated, amalgamated and then separated again.
  I now return to my speech. I have earlier referred to the fact that not all exports are worth while, for it cannot make economic or commercial sense to export at any price. In spite of this, some kind of ECGD cover is available, for exports to virtually every country in the world. However, it must remain the case that whether or not ECGD cover will be available for a particular contract to a particular overseas market will depend on ECGD's underwriting judgments based on the circumstances applying at the point in time. There will always be a few cases where there is no point in ECGD giving a credit guarantee since the risks of non-payment are so high that they cannot be insured at a reasonable premium. An exceptionally high risk of non-payment makes the export itself unattractive from a balance of payments point of view. Indeed, if
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  we are not paid, there has not been an export in any real sense no matter what the trade accounts may say. We have merely given goods away at the expense of ECGD or, indirectly through ECGD premium charges, at the expense of the general body of exporters.
  The recent history of ECGD has been characterised by the continuing rise in business. This is the main reason for the second provision of the Bill, namely, the need to adjust ECGD's statutory limits.
  This increase in business has not only reflected the rise in United Kingdom exports but also represents an increase in the proportion of exports covered by the Department. In the first six months of this financial year ECGD covered £3,018 million of United Kingdom exports representing 37 per cent. of the total. This was a 40 per cent. increase on the volume of business covered in the same six months last year. Most of the increase was in the short-term field. This has been of particular benefit to the balance of payments and illustrates the competitiveness of United Kingdom export prices. Because of the rise in the volume of the Department's business it would have been necessary to seek an increase this year in one of the two existing statutory limits on the amount of liability that the Department may undertake. This would in itself have necessitated further legislation.
  The two limits on ECGD's liabilities are, first, £6,200 million in respect of Section 1 business—that is, commercial business undertaken with the advice of the Export Guarantees Advisory Council. The other limit is £6,000 million for Section 2 business which is underwritten in the national interest. Although these are revolving limits against which only live liabilities are counted, new liabilities have built up faster than old ones have run off. It now seems clear that the Section 1 limit will be reached this year.
  Both limits have been increased at fairly regular intervals in the past by legislation. However, it has nearly always been the case that limits which were expected to last five years have needed to be increased after only some three years. Inflation makes this all the more likely to be so. Therefore, the second proposal in the Bill is that the two limits should be combined into one of £12,200

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  million. This, of course, represents the total of the two existing limits and no increase in this limit is thus proposed.
  The Bill also provides that increases may be made by affirmative resolution of the House up to a total not exceeding £21,200 million. Although this may seem a high figure it represents a volume of business which could well arise over the next five years. I wish to stress that this is simply an administrative change. It will not change the way ECGD underwrites business, nor the relationship between ECGD and Ministers and ECGD and Parliament. The provision for increases by order will of course provide the opportunity for debate if the House should so wish.
  In referring to the ECGD's Section I business, I mentioned the Export Guarantees Advisory Council. It would not be right to let this pass without placing on record the Government's appreciation of the valuable work carried out over the years by this body whose members are drawn from business and the City. Their skills and experience help the Department to react positively to the changing exporting world with which it is faced.
  The ECGD has a high reputation—I think a deserved reputation—for the range and quality of the facilities and services which it offers to exporters. However, this is not to say that the Department is perfect or that its facilities cannot be improved and extended or that it never makes mistakes.
  ECGD is constantly looking for ways of speeding up the processing of the enomous number of cases put forward each week. In this connection, an extensive computerisation programme will soon be under way. The new computer which will be sited in Cardiff should be operational by 1977, and this should help to speed up decisions on individual overseas buyers. In addition, a major reshaping and rationalisation of the Department's regional organisation has recently been completed. This has represented a departure from traditional practice, but one which it is hoped will bring important advantages to exporters all over the country. Instead of virtually all the business decisions being made in the London headquarters of the Department, many are now going to be made in the new regional
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  centres. This should mean a quicker and more direct service from ECGD. And it will be a service from officers who are based in the regional centre and who thus have an intimate knowledge of the exporters in the area and the problems which they face.
  This decentralisation of work to regional offices does not mark the end of the changes. Indeed, the Department will shortly face one of its biggest changes and challenges for many years. Plans are now in hand for the implementation of the decision announced to the House on 30th July last year that 800 jobs from ECGD Headquarters in London are to be dispersed to Cardiff. The aim is to complete the move by the end of 1979. Much of the planning will of course be concentrated on organising the move without any disruption of services to ECGD's customers.
  Some Members of the House will no doubt be aware of the increases in ECGD's premium rates for short-term business which were announced last autumn and come into effect on 1st April this year. I should perhaps stress that these increases—and, indeed, ECGD's premium income as a whole—are in no way affected by or related to the refinancing arrangements which I have earlier discussed. These arrangements are a distinct function from the credit insurance operations with their charging of premium and are accounted for separately. There can, therefore, be no question of premiums having been raised or need to be raised because of the cost of operating the refinancing arrangements.
  In general terms ECGD in its credit insurance operations is charged to operate at no net cost to the Consolidated Fund. This is becoming an increasingly difficult thing to do. Not only is ECGD faced with rising costs, but the risks it accepts are increasing as both individual buyers overseas and whole markets are hit by inflation and by the general uncertainties which have followed in the wake of the oil price rises. The Department expects these increased risks to be reflected in the pattern and level of its claims payments. Claims paid in respect of private buyers' insolvencies and default under ECGD's Section 1 commercial underwriting account are an interesting example.

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  In the financial years 1971–72 and 1972–73, these claims payments were between £8 million and £9 million in each year. In the last financial year they rose sharply to over £16 million. I think few of us can be under any illusion that in the foreseeable future, the international trading world is likely to be an increasingly uncertain and difficult one. It is important, therefore, that ECGD is equipped to meet this situation.
  The short-term premium increases are put into perspective when I tell the House that the changes still leave premiums lower than they were 10 years ago. Even including the increases, an average rate would be less than a third of the rate which applied in the late 1940s, when the form of cover available to exporters was much more restricted.
  I should stress that in raising some of its premium rates, the ECGD is seeking to make prudent provision for a developing situation. It should be borne in mind that many of the risks underwritten in one year will remain on the ECGD's books for many years ahead, and the premiums received in one year and credited to its underwriting accounts in that year will need to reflect these risks—risks which stretch over a decade and for which no additional premium will be received. It is partly for this reason that the ECGD is re-examining the form of its accounts with a view to providing a clearer picture of its financial position than is to be obtained from the present simple annual cash flow accounts.
  The ECGD's notional operating balances are sometimes quoted as proving that the Department is charging too high premiums or is taking too conservative an attitude. Perhaps I can best illustrate how misleading this kind of allegation is by reminding the House that, at the end of the last financial year, the ECGD's Section 1 commercially underwritten commitments stood at £4,922 million, whilst the Section 1 balance stood at £111 million. It is, I think, against the background of the total liability outstanding and the developing nature of the risks involved that the size of the balances and the level of premium charges can best be viewed.
  The proposals in the Bill are designed to make a number of technical adjustments to the ECGD's powers. The pro
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  posals all have the same objective—namely, to enable the Department to continue to react flexibly and with imagination in a rapidly developing situation to the changing needs of United Kingdom exporters. This is not an easy task. However, the post-war history of the ECGD has been characterised not only by a steadily rising stream of business, but also by a steadily developing range of facilities and activities. The Bill will, I hope, enable this to continue.
  7.32 p.m.
  Mr. Terence Higgins: The House rarely has an opportunity to debate the question of export credits. The last occasion was in 1970. Since then, there have been significant developments both in the trade pattern and in finance for international trade, especially in the breakdown of the Bretton Woods system, and now in the régime of floating exchange rates. All of these have tended to transform the picture, and it is appropriate that we should therefore examine both the principles of the Bill and, as the hon. Gentleman has done, the general environment within which we expect the provisions of the Bill to operate.
  First, I express our appreciation to the hon. Gentleman. His notes were perhaps a little copious, but I have rarely heard copious notes read so clearly. The technical points were explained very clearly—and they are pretty complex. I join him in some of the points he has made, particularly in relation to the Governments' attitude to the avoidance of beggar-my-neighbour policies. That is a view shared on both sides of the House.
  I also agree with the hon. Gentleman's point about not financing exports that will never be paid for. There is sometimes a great danger, and perhaps even more temptation, that one is so concerned with the problem of exports that one overlooks the question of payment. That is certainly true as far as the figures are concerned. I am sure that the hon. Gentleman is right in saying that the important thing is to strike a balance between promoting exports, on the one hand, and the cost to the taxpayer on the other. I want to concentrate on that question in a moment, but first I must declare an interest, to the extent that I am a director of an engineering firm some products of which are exported.

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  I shall deal first with some of the more general points raised by the hon. Gentleman. The first is that one must clearly look at the package as a whole. Export credit is only one of the items which determine whether firms find it advantageous or desirable to export. In this context, we are in a critical situation. We have had the effect of the so-called "J" curve which followed depreciation of the sterling exchange rate. This made our exports, in particular, more competitive, or, alternatively, enabled firms to sell them at the same prices but at a higher profit margin. This position has since been eroded significantly, if not entirely, by the increase in domestic costs, which, in turn, has affected the profitability of exporting.
  All of us must have been concerned by the Press statement issued by the Department on 15th January, which showed that in the fourth quarter of 1974 exports averaged £1,333 million a month—4 per cent. lower than in the previous quarter. We are in an extremely difficult balance of payments situation—the three-months' trend is not favourable—and therefore we need to look at the whole question of the package which determines whether our exports are competitive.
  In this context, the hon. Gentleman distinguished between the insurance aspect of the ECGD and the refinancing function. It is true that although the two are to some extent inextricably mixed this Bill is concerned largely with the refinancing function, and I am sure that it is on that aspect that the House will wish to concentrate tonight.
  A number of questions arise. We have to ask, first, whether the Government should guarantee—or, at any rate, subsidise—export credits at all, and if so—this question has not arisen very clearly on previous occasions—to which countries or groups of countries. The hon. Gentleman made an interesting distinction in mentioning that we should consider to what extent credit was extended to developed or rich countries. The second question is at what rate of interest exports should be financed. The third is where such financing fits into the general pattern of export promotion.
  There are other questions—for example, whether the supply of export credits should be used in any way as a
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  bargaining counter to eliminate some of the undesirable practices which may be followed by some of our trading partners to whom we export. A case that springs to mind in this context is flag discrimination in shipping.
  Finally, there is the whole question whether the innovations in the Bill are necessary and desirable, and whether the information which will be provided under the Bill is going to be adequate. We may well have doubts about some of these aspects, and I hope that we shall be able to persuade the Government to change their minds about some of them.
  First, then, should the Government guarantee exports at all, or subsidise them? We all agree, of course, that a system of export credits is desirable, and we appreciate the points made by the hon. Gentleman concerning that aspect of the ECGD being self-financing, or at any rate intended to be so. The question of whether the rate of interest should be below the market rate is more difficult, and one needs to put it in the context of the extent to which export credit is outstanding.
  It is not just a question of saying that our exports in some cases are not going to be paid for, but also that some of them will not be paid for for a very long time. Constant increases in the amount of export credit outstanding at a time when we are in balance of payments difficulties, as distinct from the balance of trade situation, is a matter we need to consider. I had some difficulty in distinguishing the figures, but I understand that the total amount outstanding of more than six months to maturity is some £556 million. It would be helpful to know, if not on this occasion then in Committee, the extent to which credit is paid out, through both time and duration.
  I understand that a sample survey in 1972 in the construction industry, for example, showed that 41 per cent. of the exports were on terms longer than five years, and that about £1,000 million of exports last year which were insured were for periods of greater than six months. The whole question of how the commitments are spread through time and how soon we are going to be paid is a matter to which in Committee we will perhaps want to give greater attention. We must take into account the fact that,

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  through time, the exchange rate may change, which may mean that the amount we are eventually paid in terms of sterling is different from the figure which originally appeared in the trade statistics on an immediate basis.
  That brings me to the question whether we should distinguish between the countries to which we export. The Minister referred to the terms we give to developed or rich countries. It would be a little paradoxical if we extended credit to oil-producing countries at a low rate when at a time they were depositing funds here at a higher rate. Even from their own point of view there may be an argument for saying that even for a large industrial project, which is typically the kind which is paid for over time, payment should be made on a very short-term cash basis rather than deferred, since the extent to which we shall transfer real resources to the oil producers over time is limited. Therefore, there are complex arguments which alter the picture from that which existed in 1970, when we last debated this matter, and to which we should give some attention.
  As regards the rate of interest, I see the case against a credit war. However, we must be careful to ensure that we do not in any way precipitate such a credit war, since that will alter the balance between the cost to the taxpayer and the gain to the balance of payments. We shall wait to see what will arise from the enigmatic statements that the Minister made about the new forms of cover and facilities.
  For many years, export credit was provided effectively at market rates. Although I am sure that the Opposition want our terms to be reasonable and competitive, we ought to consider whether we should be doing more to ensure that all exporting countries do not tend to provide credit at a lower rate, which is justified in terms of the cost to the taxpayer, because the differential is being made up by the taxpayer. Therefore, it is not just a question whether the rates are comparable but whether the rates, in relation to domestic rates, are in any way too far out of line. We shall need to consider that.
  There is the question whether some countries are engaging in practices which are suspect. I believe that my hon.
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  Friend the Member for Tonbridge and Mailing (Mr. Stanley) drew attention to that in a recent Question about the French and the so-called inflation-proofing clauses. The right line is to take an extremely tough position in ensuring that that kind of competition, which will tend to produce repercussions, is not engaged in. However, we need to debate that at further length.
  Regarding our position vis-à-vis other countries, there has been a tendency for us to find ourselves at the bottom end of the interest rate scale. Perhaps the Minister will give us greater details about where our rates stand in relation to others—although we note with interest his announcement this evening that the ECGD rate will not now necessarily be fixed but that there may be scope for raising it in certain circumstances, thereby reducing the cost to the taxpayer, though that must be done in relation to the danger of losing orders which may be important to both employment and the balance of payments.
  I turn to Clause 3, and the related parts of the Bill. Here, we wish to take issue with the Minister because he has pointed out that the previous limits which have been imposed—£6,200 million for Section 1 advances and £6,000 million for Section 2 advances—are to be amalgamated into a single limit. The Minister argued that that would be administratively more convenient and would save the time of the House. If there is one argument which the House views with more suspicion than the fact that something cannot be done because it is administratively impossible, it is the argument that the House should do it because it is administratively convenient.
  There is a case for separate limits. If we are up against the limit in one category, the House will view sympathetically the argument that we should raise that limit. However, it is a curious argument to say that the way to deal with that problem is to amalgamate all the limits into one homogeneous mass. That would be the wrong way of setting about it. We ought to leave the division as it is now. There is probably a strong case for giving rather more consideration to the possibility of breaking down the figures into the various categories, so that we know how much is commercial guarantees and how much is special

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  guarantees. A breakdown of the figures is contained in the statistics provided, but there is no breakdown of the special guarantees case in any detail.
  There were exchanges about the relationship between the Department of Industry and the Department of Trade. I notice that the name of the Minister for Industry appears on this Bill, although it does not appear as a sponsor of the Bill concerned with travel agencies. We view that with some suspicion, because the Secretary of State for Industry may feel that an industrial enterprise should be provided with additional facilities because he, in his wisdom, has decided that he wishes to support that enterprise. In those circumstances it may be possible to use the powers in the Bill to give additional special help to one of those firms.
  It does not appear from the Bill whether the statistics to be provided, which will enable the Secretary of State to make grants to cover areas of self-financing, will be used, perhaps for political reasons, within a domestic context. We hope that provision can be made to ensure that, if there are any special cases of that kind, they are reported annually to Parliament and that it is made clear that the Secretary of State for Industry is not using the provisions in the Bill to secure ends which were not envisaged by the House of Commons at the time when it passed the legislation. We shall wish to pursue that matter in Committee.
  I have discussed the possibility of using the export credits provisions to ensure that discriminatory trade practices are removed, and I mentioned flag discrimination. I understand that some of the trade with Eastern bloc countries is conducted on the basis that the deal goes through only if the arrangements are f.o.b. rather than c.i.f., and effectively there is flag discrimination to that extent. Perhaps, as a result of that, our balance of payments loses, since we do not provide the shipping services, even though they may be more competitive. We may pursue that matter subsequently to ensure that in providing export credits we do not agree deals which are discriminatory against other sections of British industry. That is a sensitive area, and we need to take into account the possible repercussions. In the present context, that is worth examining.
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  I come finally to the technical matters referred to by the Minister. He pointed out that new provision is taken to make grants effectively to the clearing banks. That raises the question whether the terms on which these arrangements are negotiated are satisfactory, again from the taxpayer's point of view.
  Obviously we need to strike a balance. Obviously we need to examine in some detail the provisions which are made for the taper. As I understand it, the need to pay some £86 million to the clearing banks arises from the fact that the operations for the past two years or so have resulted in the leads and lags between the ECGD and the clearers being other than those which were expected in the first place. It is that factor which accounts for the £86 million which we are asked retrospectively to validate.
  The £86 million is not the total amount of the differential between all payments of interest at the export rate and the normal market rate. The provision is essentially to deal with leads and lags problem and the fact that there may be future changes of that kind, rather than the overall question of the differential rate.
  Nevertheless, if we take the picture as a whole, we shall need to probe carefully the extent to which there is a cost to public funds and the extent to which the profits of the clearers are higher, presumably, than they would otherwise be. The Bank of England is presumably providing the credit base on which the clearers provide the credit. This is a matter of judgment and balance. We do not wish to inhibit desirable exports. At the same time we ought to examine this carefully, and we propose to do so in Committee.
  Subject to those qualifications—and some of them are important—I do not intend to urge my hon. Friends to oppose the passage of the Bill. In the overall context, especially the difficult balance of payments situation that we face, it is a desirable measure, but we shall need to look at the detail, and I hope that we shall scrutinise it carefully in Committee.
  7.53 p.m.
  Mr. John Cockcroft: I agree that the terms of the Bill are unexceptionable. There is no doubt that over

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  many years the ECGD has offered favourable terms to exporters. By any rational standards, it compares favourably with almost any comparable organisation in the world.
  My fear, however, is that we may be getting to a situation where every country is competing to provide almost unlimited credit terms and that the beggar-my-neighbour policies of the 1930s could arise again. There are certain risks which cannot be insured against. I think that it would be a mistake if what used to be regarded as the richer countries of the world insured their own exporters against political risks to a greater degree. If that happened, it would only encourage countries which are nationalistic and, even by our standards, Left-wing to nationalise more than they would otherwise. There is a limit to the process which we see in train of encouraging exporters by cheap State loans, and so on.
  Turning to the wider scene, I seek not to make partisan points. The poor export performance of the country over many years going back to 1945 and the end of the Second World War has many causes. They include poor delivery dates, poor quality, bad invoicing, strikes, slow delivery at the ports and so on. This has been caught up in the vicious circle of competitive devaluations by this and other countries, making it essential for us to earn more foreign currency.
  At the same time, our price is depressed in sterling terms. We are in a very serious vicious circle and, in the short term, it is difficult to see how to get out of it. In the longer term, the solution lies at home in higher investment, in more machinery behind each worker and in creating a climate of optimism which has not existed for some time. Above all, it lies in avoiding the kind of taxation policies which discourage exporters from doing their best.
  There is a limit to what any Government can do to encourage exports. Companies can do it themselves as long as they are provided with the right environment. In the longer term, we shall have to concentrate more on import saving rather than on exporting more. But, to the extent that we can export more, so much the better.
  I speak from memory, but I think that in volume terms our exports have doubled since the beginning of the First
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  World War. There is a limit to how far the process can go in a country which, apart from North Sea oil, which is heavily mortgaged already, is almost devoid of natural resources. Increasingly, the emphasis should be on import savings.
  I want to suggest one possibility which has been canvassed before but from which nothing very much has come. Since importers have been encouraged over the years to export more by means of cheap loans from banks, ought not we to think seriously about encouraging import savers such as farmers, by offering them cheap or subsidised loans? The theme of the future must be import saving rather than increasing exports. We must be almost at the limit of that process.
  7.56 p.m.
  Mr. Michael Morris: We all agree that this is an important Bill concerned with the important area of exports, not least at a time when our deficit is running at about 4 per cent. of our gross national product.
  The Minister and my hon. Friend the Member for Worthing (Mr. Higgins) were right to pull out the fact that this is only part of the general support for export services which needs careful scrutiny. We should never forget, especially in the context of the ECGD, that we have in the City a very sophisticated area of financial activity which in itself is very much engaged in the export markets. That is an advantage we have as a nation.
  Although the Minister was fairly emphatic in suggesting that we did not want a return to beggar-my neighbour policies and that there were only minor areas in which we were at a disadvantage, I suggest that the disadvantaged areas are not of such a minor nature. Although we rebate VAT, simply because our level of VAT is lower than the levels of Germany and our other continental friends, the benefit is less.
  We see a situation where in France, Italy and Japan there are varying forms of exemption from or delayed payment of corporation tax or its equivalent which give major exporters a significant advantage.
  Mention has been made of shipping, and we know in current terms that there has been comment that our pre-shipment insurance rates are not as competitive as those in other countries.

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  The Minister said that we should not export to places where we could not be sure of getting payment for our goods. As a professional marketing man prior to coming to this House, I know that the most costly time for any exporter is when he is opening up a new market. It is when someone is opening up markets of great potentiatl that he looks for flexibility in the ECGD and in other areas.
  I suggest that in recent months in the Middle East offered a case in point. Had the ECGD really been sharp as a pointer to exporters, or perhaps through the BOTB or some other organisation, there could have been some competitive advantage to our exporters in terms of insurance rates in opening up the new ground areas, we might have benefited a little quicker. The French, and to some extent the Japanese, seem to have achieved the ability of getting greater Government involvement in large projects. That is particularly so in the capital goods and construction area. There is no doubt that when the BNEC was set up we were in the forefront of ancillary services. It is the general view of people in the exporting world that we are no longer in the forefront, and attention should be paid to this.
  I know that the Queen's Award is being reviewed. One must ask in this general context whether it is right that the time taken over the review should be so long. As the Minister said, it is an area of considerable urgency. One wonders whether the review should not be brought forward. Could we not consider implementing it for this year's awards rather than the following year's awards?
  Lastly in the general area of credit, the French have a system of crédit mixte in which ancillary orders alongside a main Government project are pulled into the net. The French have been very successful in this area, and Italy and Japan seem to have learned the tricks of the trade. I hope those general areas will be taken into account, because they are of great importance to a number of exporters.
  I come specifically to the Bill. It is right that Opposition Members should raise the question how it is that given all the circumstances we are having to pay off £85 million—or a figure substantially in excess of that, although that is just a rumour. I should like to have reassurance
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  that the figure is only £85 million. How has that amount been allowed to run up in considerably over a year? It should have been brought to our attention a little earlier.
  Correspondence has appeared in the Press, and I draw to the Minister's attention letters which have appeared in The Times, one of which was dated 16th December which contained complaints of the mechanics of the ECGD. Like many other hon. Members I am full of praise for the general running of the ECGD, but specific complaints were made in that correspondence, and I hope that the Department will see what can be done about them.
  The Minister has not mentioned performance bonds. They are particularly relevant to the Middle East where our exporters, particularly those in the heavy capital goods and construction area, are being asked to provide between 10 per cent. and 30 per cent. performance bonds on demand. The net result is that there is some difficulty in laying off that risk and our sub-contractors working alongside the main contractors are laying off performance bonds one against the other. That is a problem area which should be looked at quickly, otherwise the situation will get out of hand.
  There are a number of detailed aspects of the Bill which we shall want to consider in Committee. I have tried to look at some of the overall problems of the credit and export promotion area and to pick out particular instances where the ECGD will have to look sharply at its performance.
  I echo what my hon. Friend the Member for Worthing (Mr. Higgins) said about reporting back to the House, particularly on the question of who is being granted what. I respectfully suggest that an annual report is hardly adequate. If we are to have quarterly returns on the money side we should have quarterly returns saying where the money has gone.
  If the Minister cannot cover all these questions in his reply tonight, I hope that he will give an indication that they are recognised and that some action will be taken.
  8.5 p.m.
  Mr. Geoffrey Dodsworth: May I, first, declare

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  an interest as director of a London merchant bank? I have responsibility for its export finance operations and can claim to be involved day to day in the details and problems involved in trying to secure financing arrangements. That work is done because exports are achieved by manufacturers and exporters, and finance is the handmaiden or servant, albeit an important one, of that operation. In the course of those activities from the ECGD point of view I have had long, interesting and detailed negotiations in London and overseas. I add to the tributes which have been paid to the work of the ECGD. The Department has an expertise and dedication which is admired throughout the world, and rightly so.
  I understand the meaning of the comment that perhaps we do not have quite the same leading position as we did, but I do not share the view that our credit operations are not still looked upon as the foremost in the world. Many countries look at the way in which the ECGD arranges its operations before deciding how to carry out their own. The ECGD is an interesting and happy example of co-operation between industry, financial institutions and Government. That is why we are being so successful with it. There are lessons to be learned from this area of co-operation. When we seek to improve our industrial performance and to decide what rôle Government should play we should do well to look at this example and to see what lessons can be learned.
  Each side has mutual respect for the other's rights and the Department's reputation throughout for professional expertise and knowledge put it in a dominant position in the world. It is because of that respect that industry and the institutions are able to work so closely together. The Department has managed to ally the strength of Government to the business acumen of the credit insurance industry, so that thousands of individual firms have been able to carry out work of national importance. That must be a valuable experience, and it suggests assistance and support rather than interference with independent business operations. There is no interference, but there is co-operation, mutual confidence and trust. Those are the factors which generate business and export performance.
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  I turn to the question of exports and their success or otherwise, and of course the situation is affected by world inflation. A document has been produced by the Government showing provisional results for 1973–74—and, incidentally, I noticed in the Minister's remarks a promise to improve the methods of presentation. That document has one interesting passage which runs as follows:
  "As is usual with Government Department accounting, the figures in this report have been prepared on a cash flow basis …"
  That is a very nice way of saying that the document is incomplete—in other words, that the system used is similar to that employed with golf club accounts. "Receipts and payments account" is perhaps a kind way of putting it. It is a sad reflection on much Governmental accounting that it is carried out on a purely cash basis. We do not attempt to reflect the true expenditure or asset position. That is perhaps a topic for discussion on another occasion, but it is an important and serious matter.
  I suggest that when a similar document is next produced, my hon. Friends who have some marketing knowledge and experience might apply their minds to it. It is difficult to follow through the descriptions in the document, although the explanation is valuable and no doubt accurate, but it does not differentiate clearly between the different types of finance. I hope that we shall, see an improvement in future. There is a great deal to be proud of in what is reported, but it would suggest that a little more time and effort in reporting would be well repaid.
  It might be helpful to examine some of the figures in the Bill. Parts of the Bill's provisions come back to me like an old friend. For example, on Clause 3 we are given the familiar reassurance that all is well and that it is just a matter of administrative convenience. When I hear that phrase, I am immediately on my guard. I ask myself "From what are we being protected, and why is it better that we should not know?" I recollect experience of the Public Works Loan Board which involved a doubling of the sums of money which were being made available and the extra amount was to be brought about by affirmative order. Well sure enough, here it is—another affirmative order. Last time with

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  the board the figure was only a modest £4,000 million. This time the figure being governed by affirmative order is an extra £9,000 million—
  Mr. Deakins: May I put the hon. Gentleman right on details? There will be provision for up to three orders and there will be tranches—I prefer to use the words slices or portions—of up to £3,000 million each time.
  Mr. Dodsworth: I am grateful to the Minister. He has saved me having to come to the next part of my explanation as to how the tranche works. I accept that the £9,000 million is to be divided into three parts. But the fact is that there is a total lending capacity written into the Bill of £9,000 million and it is to be doled out in appropriate pieces. What is astonishing is that there is no time interval or limit on the amount of the pieces. In some of the other provisions I believe there is a reference to the provision taking effect at a certain date. Therefore, we should examine the Bill in Committee and look at the intervals which will occur.
  I went to the Library to try to ascertain the number of orders now going through the House and I sought to carry out some sort of monitoring operation. It was a hard task and difficult to know where to begin. If we are to rely only on "administrative convenience", I suggest that we should have the matter in a different form from this. The method proposed in the Bill appears to envisage far too lax a control of the expenditure of sums of money through the House. This is not a method that commends itself to me. I understand the excellent motives and ideas lying behind the Bill, but the method of control leaves something to be desired. Perhaps we can pay some attention to that task in future.
  I refer to two other detailed matters. Let me deal first with import savings. We have a curious situation in this country in which we support the export of goods as commendable and desirable, but we also have an international arrangement and convention which allows similar levels of credit and interest rates. What is the situation that faces the British manufacturer? If he wishes to choose to buy a piece of equipment, he is able to obtain from some other country five
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  years' credit at 7½ per cent. or 8 per cent. interest rate which is far too competitive for him to buy goods produced in his own country. We are all on a carousel and it is difficult to get over the situation. There is entirely different international market operating on a different scale from the home market, and that is a most unfortunate and difficult circumstances.
  The Government's policy is to have a level of interest rate which reflects about 13 or 14 per cent. per annum compared with a supported rate of 7½ per cent. in foreign competition. The shipbuilding industry has had support of this nature and it has been very successful in supporting British export orders and British shipbuilding orders. It will be helpful if we address ourselves to that matter.
  I refer to one last detailed question which might be helpful in aiding our export performance. Delay is caused in the short-term financing of export orders by the bureaucratic structure. I tried to make a procedural manual on the steps which were required. I found that there were 11 documentary stages required for a person to get the benefit of the supported interest rate funds. It may be worth going through those stages very briefly to indicate the frustrations which can be involved for people seeking to support an export order.
  The first step is the application to the Department for cover for the transaction. Second, there is the receipt of the approval of the cover; third, the receipt of the notification of an application for a bank guarantee; fourth, the issue of the necessary bank guarantee forms; fifth, the completion of the forms and their return to the bankers; sixth, the draft facility letter issued by the bankers for ECGD approval; seventh, confirmation by the Department of that approval or any amendments that are required; eighth, the issue of the draft guarantee agreement by the Department; ninth, the recourse agreement from the Department for signature; tenth, the return of the recourse agreement to the Department; last but not least, the guarantee and the opportunity for the exporters to get the benefit of the supported funds. That process may take between two and four months.
  I have carried out a census and an operation to identify the cause of the delay.

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  One of the principal reasons for it concerns the issue of the forms by the Department. It seems to me that that could be easily overcome if instead of treating the items separately there could be an omnibus approval for the supplier by the bank concerned so that they could be covered up to a certain amount and we could thereby expedite the export transaction concerned.
  This is a matter which is worthy of the Department's attention because delay is genuinely experienced and it seems to be across the board. The effect of the delay is that an exporter does not know exactly what the cost will be of supporting or financing the operation until the receives the subsidised funds. I reiterate my praise for the work of the Department for which the country and all the people who use its services have need to be grateful.
  8.18 p.m.
  Mr. John Stanley: I should like to deal with the implications of this Bill for the profits of the clearing banks and the rate of return which the banks get under the ECGD arrangements. In February 1974, at a time which coincided with a General Election, much interest was expressed by the Labour Party about the question of clearing banks' profits, which contrasts somewhat strangely with the almost total absence of Labour Party Members.
  We are dealing with a Bill under which £86 million will be entered in the profits of the clearing banks. As parliamentarians and taxpayers we have an obligation to examine the extent to which the rate of return which is being secured by the clearing banks under the ECGD scheme represents a fair balance as between the national requirement to boost exports and the charge which is being made on public funds. The calculation of the rate of return to the clearing banks is one of the more obscure areas of public accountability and it may be helpful if I detail my understanding of the position so that the Minister can correct me if I am wrong.
  I understand that there are three components of the rate of return to the clearing banks. First, there is the observed rate, which is calculated monthly and which represents the mean of the average yield on Treasury bills and the lending rate to the nationalised industries.
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  That would seem to be a perfectly reasonable basis from which to start. That is topped up by a second element, known somewhat euphemistically as the unmarketability margin. I have never understood why the clearing banks should seek to top up their rate by an unmarketability margin, because I cannot conceive of a circumstance in which they would want 100 per cent. liquidity of their assets. Under this head there is a further addition to the agreed rate of return up to a maximum of 1¼ per cent. which, as the Under-Secretary said, is now subject to a taper when the observed rate is between 7½ per cent. and 14½ per cent.
  It is worth recalling that that adjustment in the agreed rate to the clearing banks was secured only after a fairly thorough investigation by the Public Accounts Committee, which was reported in its report for the 1974 Session. It was as a result of the Committee's investigation that the Treasury decided to make the tapering arrangement concerning the so-called unmarketablity margin of 1¼ per cent.
  This produces—here I have the Under-Secretary's most recent figures given to me in a parliamentary Answer of 23rd January—a monthly agreed rate of return to the clearing banks. In the last month for which the hon. Gentleman was able to give figures—December—that agreed rate was about 12½ per cent. I understand that it was reproduced incorrectly in Hansard and that there is a letter in the post to me making the correction. That rate is not particularly out of line, bearing in mind that this is the most secure possible banking one could have, because effectively it is lending on the back of a Government guarantee.
  It is difficult to compare that 12½ per cent. with what might be obtained in other types of lending, because it is impossible at present to obtain long-term fixed-rate finance. There is, however, one comparison in the £75 million issue announced last Friday by Finance for Industry, which offers a redemption yield of 13·1 per cent., with a redemption date in 1981. It would seem, therefore, that the combination of the observed rate with the tapered unmarketability margin is more or less in line.
  But that is not the entire story, because there is a third element in the overall return which represents the icing on the

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  export credit cake concerning the clearing banks—this is the commitment fee which the clearing banks have agreed with the Department of Trade and which is payable on the conclusion of all loan agreements for export finance. I understand that the commitment fee is 1 per cent. on the maximum amount of credit offered. It is in excess of the normal standard international financing commitment fee, which is ½ per cent., not on the total amount of credit offered but on the undrawn balance. This represents an important increase in the rate of return to the clearing banks.
  I recognise the need to encourage the clearing banks to continue to participate in the scheme. I also recognise that they lock 18 per cent. of their assets on current account into the scheme. But this is attractive business for the clearing banks, and from a public accountability point of view the overall rate of return which they secure needs to be kept under review. As an overlap to that, I suggest that there is a case for considering whether it is right to continue the monopoly position of the clearing banks.
  Mr. Higgins: Perhaps, for the sake of completeness, my hon. Friend should bear in mind the point to which I made reference in my speech, namely, that we shall need to consider whether the advances made by the clearing banks in this context are, so to speak, at the expense of other advances or whether the credit base is being expanded by the central bank and that, therefore, there is no opportunity cost to the clearers. I am not wholly sure whether that is the right way of looking at the matter, but it may be worth putting as a footnote to what he said and as a marker to be considered in Committee.
  Mr. StanleyI am grateful to my hon. Friend for his additional remarks. I think that we should consider whether the monopoly position of the clearing banks in the ECGD context should be continued.
  The Under-Secretary will know that the accepting houses have for some period—extending over a number of years—considered that they could make a contribution to the provision of export credit. I have seen recent Press reorts to that effect. It would seem to be in line with the competition and credit control policy
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  that, if members of the Accepting Houses Committee are able to provide facilities, they should in principle be encouraged to do so. In that way we can ensure that the best possible use and advantage is made of our financing facilities in order, as far as possible, to diminish the liability on the taxpayer whilst not in any way inhibiting our export effort.
  I should like to make three points about the ECGD system. Earlier the Minister said that we wish to be able to offer an overall package of export credit which would stand comparison with that provided by any other exporting country, but at the same time we did not feel that it was incumbent upon ourselves to match every individual facility that was available elsewhere. The hon. Gentleman was no doubt alluding to the practice of the French export credit agency in providing insurance against inflation.
  I suggest that the absence of any inflation insurance on our export business is seriously threatening our competitiveness in a number of key export areas. I refer particularly to the two areas referred to by my hon. Friend the Member for Northampton, South (Mr. Morris)—major capital plant exports and construction. By not being able to offer insurance against inflation we are seriously disadvantaging ourselves in competing for fixed price contracts. That is the important point. The Minister will know that today fixed price contracts are insisted upon all round the world. Therefore, this represents an increasing handicap to us. Will he therefore particularly consider introducing a contingency scheme for insurance against inflation which could provide that cover in those localised areas of our export business which are fairly easily definable but at the same time represent areas in which some of our largest export orders, in money terms, are being registered? Indeed, they are areas in which we still have companies which are leaders in their spheres taken worldwide.
  Secondly, will the Minister consider the position that he has been taking in the exchanges that we have had through the Written Answers columns in Hansard on the question of the historic practice, which is still continued, of not disclosing to buyer countries the amount of insurance premium that is being paid in their export credit arrangements? We have the practice of adding to the contract price the

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  insurance premium of ECGD. This has the effect of inflating the actual declared contract price to the buyer, with an obviously disadvantageous impact on the British exporter.
  The traditional justification for continuing with that practice is that if we disclose to the buyer exactly what insurance premium is being paid we shall reveal to a foreign country Her Majesty's Government's credit rating of that country. The traditional Foreign Office position has been that that would be diplomatically embarrassing and therefore we should not contemplate it.
  My reply to that is that many other countries have no difficulty at all and apparently suffer no diplomatic embarrassment in revealing the amount of insurance premium that their export finance agencies require. The insurance premium is disclosed by ExImbank as far as the USA is concerned, and by COFACE as far as French exports are concerned, and it does not inhibit the export efforts of those countries. I therefore ask the Minister to reconsider the position, because as long as the insurance premium is not being disclosed it means that British exporters are competing on the basis of a contract price which is artificially inflated, and that must be against the public interest in this country.
  Thirdly, will the Minister explain why the public expenditure White Paper shows a sharp reduction over the next five years in the sums allocated for the refinancing of fixed rate export credits? I cannot believe that this must imply a declining expectation of the amount of export credit that we shall use, but the figures are dramatic. From the figure of £450 million for 1974–75, the White Paper shows a decline every year down to £157 million in 1977–78, and remaining at that figure in the following year, 1978–79. Perhaps the Minister can explain why the White Paper shows a considerable decline in export credit refinancing.
  Finally, I welcome one clause of the Bill to which the Minister referred, I thought, rather diffidently. He appeared to be somewhat embarrassed by the clause, but I do not feel there are grounds for embarrassment. In fact, I welcome Clause 1(2) in which the Minister is taking power to be able to supplement existing credit arrangements by the payment of
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  a grant direct to buyers. It is a growing practice, however much it may be deplored, to blur rather than to define more clearly the distinction between export credit and foreign aid. The French have developed a system which is called crédit mixte, which is merely the bringing together of COFACE export credit and French foreign aid. It seems that the British Government have decided that they must have a similar ability to be able to bring together export credit and foreign aid.
  I see nothing to be apologetic about in that. In fact, I welcome this initiative, and I hope it is symptomatic of a thoroughgoing readiness to be truly competitive in exports and to go out and compete aggressively, with the backing of the Government, in a difficult and intensely competitive market. I hope that Clause 1(2) is a symptom of a new aggressiveness towards British exports which is sweeping through the Minister's Department and will shortly be sweeping, though it is not evident now, through both the Department of Industry and the Treasury.
  8.34 p.m.
  Mr. Geoffrey Pattie: It has been said many times before, but not so far in this debate, that British exports would increase by a large measure if the companies concerned were able to operate in a healthy domestic market, and this would seem to be somewhat out of reach at the moment.
  The present economic difficulties are, however, posing certain problems which I wonder how far ECGD will be able to assist. It has been suggested to me, for example, that certain companies in this country are finding considerable difficulty in being able to afford the cash to buy components—this was touched on by one of my hon. Friends—and are therefore unable to meet certain export commitments.
  I should like to put a series of points to the Minister. It has been suggested to me that the Government should be prepared to share the risk of unpredictable cost escalations to a rather greater degree than they are at present. This is particularly important for capital goods exporters. Although they may be a small share in terms of the total amount that we export, individually the contracts are for very large sums of money indeed. It

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  is very important for the Government, through ECGD, to take the necessary action in these very inflationary times in which we live.
  It has also been drawn to my attention that a scheme which was introduced last year for pre-shipment finance, whereby banks will allow larger overdrafts—has been spoken of in very complimentary and laudatory terms; I understand that it is a good scheme—though it is described as being too restrictive in its terms. The Minister may discover that the take-up under the scheme is not as high as it might be. I gather that it is a scheme which is extremely beneficial to companies who have a long manufacturing lead time. Therefore, it might be worth looking at the scheme to see whether it can be improved so that there will be a higher takeup.
  In the Third Report of the Public Accounts Committee last year, there were certain references about which I would like to remind the House. One in particular was:
  "The Department told us that the fixed rate of interest charged to exporters was determined primarily by the rates charged by foreign competitors because the object of the scheme was to enable British exporters to compete against foreign exporters. It seemed to us that this might lead to competition among the major capital exporting countries, so we were pleased to learn that discussions were taking place at government level to try to diminish uneconomic petition in this field and arrive at a more rational basis by fixing a minimum rate of interest to which all would adhere."
  Can the Minister say how far such discussions have progressed, if at all?
  Secondly, further on in the same report, there was an exchange about the way in which the precise rate of interest was fixed for our exports, taking the comparison with other countries. I quote:
  "Currently, from January of this year, we changed our rates to a range of 6 to 8½ per cent. If we add the bank charges to that we get a range that we are using of 6·4 to 9 per cent. That is the British interest rate."
  I speak, obviously, of the time when this report was published.
  "The current Japanese rate in the same field on the same basis is 6·25 to 8·77 per cent. The current French rate is 6·6 to 6·95 per cent. We simply take these rates and try to see how we compare with them."
  I go back to a point raised by some of my hon. Friends. How competitive are
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  we? I share the suspicion that has been voiced both here and in other places that very often other countries are using various ruses to advance the cause of their own companies. I should like to feel that the Minister could give us the assurance that we are being strictly competitive.
  Finally, in the same Public Accounts Committee's Report, dealing with this very vexed question of the precise interest rate that ought to be fixed, I quote again:
  "One has to have regard to the fact that if one were to stop providing credit at, say, 7 per cent. for particular purposes and said that the rate should go up to 10 per cent. or that it should be left to find its own level, it could have a very severe short term effect on several industries. Shipbuilding would be one; some of the heavy plant manufacturing would be another. We have looked into this and there is a fair economic case for saying that it makes sense to provide credit … for situations in which the export element may make all the difference between economic capacity and noneconomic capacity for the particular industry concerned."
  Will the Minister say something about what I regard as this extremely grey area, when we move from the precise sensible return on the sums of money being advanced to the necessity to make a sale for not only industrial considerations but also even strategic, military and tactical considerations? I have in mind here the question of the possible sale of Jaguar aircraft made by the British Aircraft Corporation to the Indian Government. Here we have a classic case, where the Indian Government wish to have whatever terms they may get spread over what might be even infinity. I am sure that they would like something along those lines. Obviously, however, we must take a different line. But how far is consideration being given to the necessity—desirability would, perhaps, be a better way of expressing it—of making a sale, possibly albeit rather reduced on the initial order involved in this particular case, but with the possibility in mind that subsequent sales could follow, hopefully when the Indian economy has improved? One cannot necessarily assume that everything will always be as bad as it now is. We should also bear in mind the further possibility of extending out from such an economic bridgehead.
  One is very aware that on a strictly actuarial basis that particular deal, and

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  many others like it—I give that deal only as an example—could look particularly unattractive. But how far is there an over-rider from a trade consideration which says, "Although this looks rather tough in the sort term, if we once get a foothold we shall be able to develop and extend it and have the spates, training and all the things that go with it." I look forward very much to hearing what the Minister has to say about that matter.
  8.42 p.m.
  Mr. Peter Viggers: I had not thought to intervene in the debate. It has been an interesting debate, with speeches of a uniformly high calibre. I am sure that the fact that all the speeches have come from the Opposition side of the House and none from the Government back benches is not connected with the high calibre of the speeches. Indeed, if there had been hon. Members on the Government back benches they would have appreciated the debate and may, perhaps, have been urged to take part in it.
  It must be right to give increased flexibility to our export credit guarantee system. It would be quite inappropriate to try to criticise or cavil at the manner in which the Bill seeks to do that.
  Timing can cause a problem in export credit. I ought to declare an interest. I do not think it is relevant, but I shall declare it anyway. I am a director of a merchant bank which does export business. I know that timing in the preparation of documents can cause difficulty, although I pay tribute not only to the staff of the Export Credits Guarantee Department but also to the comparative simplicity of their documentation. Anyone who has sought to make his way through a National Insurance form will appreciate the nature of the export credit guarantee forms. Although the matter and system with which they deal is complicated, the forms are not too complicated.
  Will the Minister comment on the manner in which multi-national companies with operations in the United Kingdom use British export credit guarantees? This is a subject upon which I cannot urge any particular views, but I want to draw the attention of the House to the fact that a number of multinational companies which operate within this country
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  find that it is quite useful for them to use the British system of export credit guarantees rather than the system of other countries in which they operate. One suspects that there is a point here and that the British system gives certain advantages which, perhaps, may be to the detriment of the British economy as a whole, rather than to its benefit. This point needs to be followed through elsewhere.
  As I have mentioned, the debate has been of a high standard. One might well have been in a non-political arena. It is with some diffidence that I lower the tone. One might have been in a Chamber in which politics did not exist. But in the area of exports the factors which are relevant are price, delivery, and certainty of performance. On price, export credit guarantees are relevant. They are not particularly relevant to delivery, but they are very relevant to certainty of performance. Not only does the exporter know that he has a certain market and a certain payment, but the customer knows that the contract has the backing of the British Government.
  It simply is not good enough for a debate on export credit guarantees not to raise the major subject of the suspicion in the City of London and among exporting companies that the Government are using the system for doctrinaire purposes. I must make the point that the Government use and are seen to use a number of weapons in their battle to do business with countries they like and to discourage business with countries that they do not like. It is not good enough for the Government to hide behind a shield of anonymity on this subject. Every time the British Government behave in a selective way, it diminishes the stature not only of the Government but also of the companies which have worked so hard to build up a reputation for reliability.
  One of the reasons that this country does quite well in international trade is that it is respected for standing by its word and because it is thought not to be selective in its use of measures such as export credit guarantees. It is appreciated that the Bill is a detailed and sophisticated weapon, but it is right that the cruder terms of export credit guarantees should be brought into the debate as well. I hope that the Minister will be able to comment on this.
  8.47 p.m.
  Mr. Tim Renton: My hon. Friend the Member for Gosport (Mr. Viggers) referred to speeches from the Opposition back benches as having been of uniformly high calibre, and his own certainly fell into that category. Speeches by my hon. Friends have been excellent—short in time but full of knowledge and expertise on the subject of ECGD. It is unfortunate that they have been totally unmatched by speeches by Government back henchers or by the Liberals. With their well-known interest in international trade, one might have expected some contribution from them. I am disappointed that there has been none from the Government side, because I know of at least one Labour Member who has been asking questions about the cost escalation policies to which my hon. Friend the Member for Tonbridge and Mailing (Mr. Stanley) referred, and to which I should like to refer later.
  Like my hon. Friends, I should like to pay a tribute to the ECGD on the skill and the depth with which it handles the many complex problems presented to it. I too had a good deal of experience with the ECGD over the years, often at one remove. It is very good indeed on general principles. If I have a criticism it is that often, after it has given a go-ahead to a project on a general basis, when it comes down to the detailed permission on the buyer's creditworthiness and the detail of his credit, the delays start to build up.
  I too must declare an interest, as a director of a London-based overseas bank whose customers, I am glad to say, make extensive use of ECGD facilities.
  The Under-Secretary said that the Bill brought about a number of technical adjustments. He was being a little too modest. In some ways the Bill is more noticeable for what it does not tell us than for what it does. In fact, over the past five years, since the Second Reading debate on what became the 1970 Act, a great deal of change has taken place in the export world and in the rôle of the ECGD itself. To give just one example—the fixed interest rate offered by the banks at that time to exporters was a mere 5½ per cent. During the debate that followed considerable reference was made and compliments were paid to the clearers on the substantial subsidies that they were giving
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  to British exporters. But there was no thought whatever, five years ago, of there being any need for relief from the Treasury.
  In 1972, as the Under-Secretary said, refinancing of long-term fixed interest export loans commenced. But, again, at that time no thought was given to supplementary interest having to be paid by the ECGD to the banks. It was thought more likely that the flow of interest would be the other way. That is why, in this Bill, it is necessary to make formal legal provision for this payment of £86 million of supplementary interest to the clearers and, as we have been told, a further £20 million in the next financial year.
  I was pleased to hear confirmation that the fixed interest rate now payable by exporters is a minimum of 7 per cent. As the Under-Secretary said, this can be varied upwards. The real answer is not to have a credit war but to try, on the question of fixed minimum interest rates, to have a credit peace. If this could be achieved, and if every major exporting country were to agree to jack up the basic rates further, we should not have to consider this supplementary payment to the clearing banks today, with a further provision in the year to come.
  I am sure that in a world of rapidly changing interest rates and changing demands among consumer countries, it is necessary that the ECGD should be flexible. But it is equally right that the House should look carefully at what is happening. Very large sums of money are involved. My hon. Friend the Member for Hertfordshire, South-West (Mr. Dodsworth) referred to the size of the tranches. Since, at the end of the day, after these three tranches have been approved, the ECGD may have total footings of over £21 billion, it is clearly right that the House should have ample opportunity to consider the figures involved. This is a matter that we may wish to refer to again in Committee.
  The Under-Secretary said that the ECGD had not become an export bank. I wonder whether that is right. I have the impression that first through the bank guarantees and then through the refinancing facilities that are now extensively offered to the clearers, the ECGD has in many ways become an export bank in all but name. Let me take the House

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  through what has happened in the past four or five years. First, we had the bank guarantees by which exporters could secure post-shipment finance to back their export credit. This was developed so that new major British firms could use this device—for want of a better word—to secure large sums with which they financed their own overseas operations without any effect whatever on their balance sheets.
  The Department's liability in this field is now around £500 million. Out of this grew the bank guarantee which brought forward finance at the concessional rate of interest that we have been discussing for credits longer than two years. Both sorts of bank guarantee were and are given by the ECGD at 100 per cent. and quite unconditional to the clearing banks involved.
  Out of this came bigger credit and other developments, so that we now have the ECGD giving 100 per cent. unconditional guarantees, fixing and subsidising where necessary the level of interest rates for medium-term credit, fixing the terms of these credits, and refinancing the clearers for a large part of their holdings of export paper, a refinancing commitment which appears at present to involve the Government in some £450 million a year.
  In short, what was originally an export credit insurance business has in this respect developed an entirely separate wing, the growth of which depends more or less on what business on a longer-term basis the ECGD is prepared to accept.
  I state the position thus not in any way to criticise the past operations of the Department's wide powers in this respect but to question on two counts whether the Department has the right controls for the future. The first question arises from the matter so well raised by my hon. Friend the Member for Hertfordshire, South-West—I hope that we shall have confirmation from the Minister on this—when he pointed out that the accounts of the ECGD do not now by any means properly represent or reflect the increased scope of the business. The cash flow accounts and profit and loss accounts of the ECGD are now totally inadequate, especially for the banking business which it is doing. For the future, we should like to see a split-down of the
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  liabilities and assets of the Department both in terms of the market and the length of the operation, and all the other details which one would normally expect to see from what is becoming a large-scale banking business.
  I go on from there to ask whether the ECGD is properly geared to act in this way as, I believe, very close to an export bank. Is the Minister satisfied that it has proper and adequate staff for the purpose, that it has the right sort of organisation, and that there is within the Department a proper financial mechanism to control the immense sums of money which it is now receiving from the Treasury or from the Bank of England?
  The sums of money involved will grow larger. In the debate on the Consolidated Fund Bill on 4th December, my hon. Friend the Member for Croydon, North-West (Mr. Taylor) pointed out that the refinancing long-term fixed interest business was up from £315 million on the original Vote last year to £450 million, a rise of £135 million in one year. Plainly, with inflation and with, I suspect, a lesser growth in the money supply and, therefore, a slower growth in the banks' volume of current accounts, more business on this basis will be offered to the ECGD in future, and its volume of refinancing business is bound to grow. The finance for this will have to come out of the public sector borrowing requirement, and it is important to know that the ECGD is properly staffed to handle it and that its accounts will fully reflect the banking business in which it has become involved.
  Arising from that, we want an assurance that, in judging whether to commit public funds, the ECGD will above all be guided by the commercial credit worthiness of the propositions put to it. My hon. Friend the Member for Worthing (Mr. Higgins) wanted confirmation that grants would not be used for political purposes, or, if they were, that a Minister would at the appropriate time make it absolutely plain so that the House knew.
  I feel that exactly the same comment applies to any loans being made by the ECGD which are strictly in the national interest but in respect of which there is not proper commercial viability. We should have an undertaking from the

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  Minister that on such occasions he will tell the House about it at the earliest opportunity.
  I should like to refer the hon. Gentleman back to no less a person than the present Prime Minister who, when he was President of the Board of Trade, said in the Committee stage of the appropriate Bill on 8th February 1949, that no "undue hazardous" or "crazy risks" business would be undertaken by ECGD. "Crazy risks business" may not be parliamentary language, but our concern today is very real that we should have a formal assurance from the Under-Secretary or from the Secretary of State that the same constraint applies.
  We have spoken tonight almost entirely about the arrangements for longer-term credit, the refinancing arrangements under bank guarantee. It is, however, worth reminding the House that it is the short-term business of ECGD—the whole turnover business—which it takes on and backs with comprehensive guarantees which forms the staple part of ECGD's business. It is the old Section 1 business, of which about £4,000 million was written by ECGD in the last year. I am not at all certain that it is right to amalgamate the Section 1 business with the Section 2 business in one overall limit. I think the House would still like to know what was the individual limit for commercial business under Section 1 and what was the business undertaken in the national interest under Section 2 or the old Section 3.
  In the Scholey Report, Review of Export Credits Guarantee Department March 1972, many recommendations were made and I understand that many of these have been adopted, but this report, in Recommendation 10, specifically saw the need for modernisation of the comprehensive guarantee policy. I was interested, therefore, in the Minister's remarks that he was expecting the computerisation of the Department to be fully in operation by 1977. The computerisation will affect particularly the whole turnover or comprehensive guarantee business, and I believe it to be most important for the British export effort that there should be no delay in this computerisation taking place.
  I referred earlier to the difficulties that I had found in years past in getting
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  specific answers from the ECGD about the credit worthiness of overseas buyers. Once the computerisation is under way and there is access from the regional offices directly to the central computer, I trust that a number of these delays will be wiped out. I should like an assurance that the present constraints on public expenditure will not delay this computerisation programme. I think it is most necessary for the continued success of ECGD in short-term business.
  This leads me to the question of the range of new policies being offered by the Department on both short-term and long-term credit. My hon. Friend the Member for Tonbridge and Mailing referred to cost escalation policies and I shall await with interest the Minister's further answer on that point. It should be borne in mind that if we do introduce these—and I am aware of the competition from the French which makes it a matter of considerable interest to some of my hon. Friends—it is right that the manufacturer should continue to bear a share of the escalation costs, and that the split between the manufacturer and the Department should be in the ratio of, say, 30–70 rather than that the Department should take on the whole burden.
  My hon. Friend the Member for Chertsey and Walton (Mr. Pattie) referred to pre-shipment finance. I particularly endorse the remarks of the hon. Member for Northampton, South (Mr. Morris) about recourse underwriting by ECGD on the performance bonds that have to be put up by consortia. These often take the shape of joint and several liability bonds to which each member of a consortium has to put his name. This involves severe potential liability on the member of the consortium, and since in almost every case these members have separate banks it is very difficult, if not impossible, for one bank to come into the middle and put up a consortium bond on behalf of every member. It is obviously time consuming and expensive for members of a consortium to obtain cross-guarantees from each other. The amount of cover available from the private insurance market is limited, and therefore this is an appropriate area for the ECGD to examine. It falls directly into the business of credit insurance rather than banking. The sums involved are

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  very large, but it will take British companies into those large tenders and orders for whole plants in, for example, Middle East countries where we wish to build up our export effort.
  Clearly the United Kingdom has a propensity to import manufactured goods. When incomes are rising here, the country's incomes elasticity of demand for the import of manufactured goods appears to be nearly 50 per cent. higher than in France and West Germany. This can be compensated for only by a higher volume of exports.
  My hon. Friends referred to the decline which is shown in the latest available statistics on our quarterly export performance. It is sad that our average annual percentage increase in exports between 1968 and 1973 was only about two-thirds that of France, West Germany and Japan expressed in dollar terms. I believe that the policies of ECGD play a vital part in helping industry to try to rectify this export gap.
  I hope that the Secretary of State for Trade's pathological dislike for the Common Market will not stop his considering all means by which the ECGD can help to expand our export trade both within and without the Common Market. It is only in this manner that we shall be able to help British industry to improve its export performance compared with other manufacturing nations.
  I do not urge my hon. Friends to vote against the Bill. I support it in principle, but there are a number of points that we shall wish to probe much more deeply in Committee, particularly on Clauses 1 and 3. Britain must export to live, and we wish to be sure that the Minister, with his right hon. Friend, is doing all he can to ensure an upward momentum in our exports on a completely commercial and creditworthy basis.
  9.8 p.m.
  Mr. Deakins: With the permission of the House, I should like to reply to this interesting and useful debate. It has illustrated the recognition in the House of the importance of ECGD's rôle in the nation's export effort. May I begin by congratulating the hon. Member for Mid-Sussex (Mr. Renton) on what I understand to be his first appearance at the Dispatch Box. He put up a remarkably impressive performance, if I may say so
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  as one who has himself only recently been "blooded", and I hope that we shall hear a lot more from him on this and other matters. I was very impressed by his expertise, as I was by that of a number of other hon. Members who have spoken. At one stage I thought that I was the only non-banker taking part. I am grateful, as I am sure my colleagues in the ECGD will be, for the compliments which have been paid by most of the speakers to the work, facilities, expertise and general efficiency of the department.
  The need for additional exports has been emphasised often enough, but I reiterate that not all exports are necessarily profitable to the country. As far as possible we must concentrate our efforts on worthwhile exports which result in as quick and large a net return to the United Kingdom as is possible. Export sales on excessively long credit and at unnecessarily low interest rates, or exports which will not be paid for, are of doubtful value when world-wide inflation is running at such a high level.
  The ECGD will therefore be continuing to play its part in the negotiations to try to reach international agreement on more realistic levels of interest rates and on a reduction in the length of export credit terms. Many of those who have taken part in the debate have alluded to the desirability of taking such action. I assure them that their views on that matter are fully endorsed and shared by the Government, who are trying to take action. However, in doing so the Department's primary objective will be at all times to ensure that United Kingdom exporters continue to be able to compete on equal terms with foreign suppliers for worthwhile business.
  Against the background of world-wide inflation and a rapidly changing trading situation, special and sometimes temporary measures may be necessary from time to time to maintain our effective exporting capacity and competitive position. The Government will not hesitate to take any necessary or urgent action in this direction.
  A number of hon. Members have referred to the problems facing exporters and contractors involved in very large projects overseas. The problems fall into three main categories. First, there is the need for finance to meet costs during the

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  manufacturing period when the sheer size of the contract may throw severe strains on companies' liquidity. Second, there is the increasing call from some overseas buyers—the Middle East has been mentioned—for performance bonds or guarantees which the present commercial bonding market does not seem fully able to meet. Third, there is the problem of cost increases and the difficulties which our exporters and contractors face, both in estimating price increases where manufacturing periods are long and in competing with exporters from other countries who are able to obtain some measure of protection or cost-escalation cover.
  Mr. Stanley: Will the Minister make clear that it is usually impossible to obtain exports contracts unless fixed-priced contracts are offered, and it is the need to go into a fixed-price tender against inflation at home which represent the real risk to British exporters? The real exposure, if they are unable to get insurance cover against inflation, is the fixed-price requirement, which is absolute. That is what makes inflation insurance imperative.
  Mr. Deakins: That is one of the most important factors which will be taken into consideration before the Government reach a decision. It is one of the factors underlying much of the pressure to which we have been subject in recent months from British exporters. The Government are well aware of the problems which have been mentioned. The ECGD and other departments have for some time been in discussion with industry and with the banks about these problems, and they are actively working to check whether there are possible solutions.
  In the general area of preshipment finance the ECGD has already agreed with the banks—this was a matter that was alluded to by the hon. Member for Chertsey and Walton (Mr. Pattie)—on an outline scheme which would make pre-shipment finance available for large projects with a long construction period. As this finance would be guaranteed by the ECGD and could represent lending over and above what the banks would otherwise make, the scheme obviously presents many difficulties. In general terms it will be restricted to large projects which are regarded as having a special national interest.
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  The ECGD is discussing with the banks and other bodies both the extent and the nature of these problems and needs in the general area of preshipment finance. Until this has been done, possible solutions cannot sensibly be considered. Some means of trying to help are already being considered but it must be recognised that the provision of working capital has been the traditional rôle of the banks. In addition, preshipment or manufacturing finance difficulties are usually the symptoms of wider and often structural problems of liquidity and under-capitalisation. It would be wrong for me to suggest that quick, easy and wide-ranging solutions are about to be produced by the ECGD. This is a difficult area, and the problems are of such a nature that it will take time for decisions on viable solutions to be made.
  The hon. Member for Northampton, South (Mr. Morris) alluded to performance bonds. The Department is drawing up a scheme of cover which should help in what has been found to be the area of greatest need—large projects. Details have still to be finalised, but the new cover should make it easier than in the past for exporters and contractors to obtain performance bonds and issue performance guarantees. But again I must stress that very difficult problems arise when the Department moves into this area, which to some extent cannot but involve the Government in guaranteeing the contract performance of individual firms.
  Then there is the problem of cost-escalation cover—a subject alluded to by the hon. Members for Tonbridge and Malling (Mr. Stanley), Chertsey and Walton, and Mid-Sussex. I have frequently answered questions about it in the past, and the House is aware of the difficulties the subject produces. However, the Government are well aware of the increasing problems that the present situation is producing for exporters. The matter is in the final stages of consideration, and my right hon. Friend the Secretary of State for Trade will be making a statement about it in due course.
  I now turn to the large number of individual and detailed points raised in the debate. I should apologise, perhaps, for the length of my reply on these points, but I hope that I shall be forgiven, since

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  there were such very good speeches and nearly all who took part asked a reasonable number of intricate and detailed technical questions, apart from making general political remarks.
  The hon. Member for Northampton, South asked about special facilities in the Department, possibly to help us do better in the Middle East. The Government do not think that that would be the best way of improving our export performance in that area of great opportunity. We believe that the best way of going about it is to strengthen our commercial representation in the area, which we have done, to concentrate the attention of home exporters and businesses on the tremendous potential opportunities there are in the area, and, in general, to strengthen our own internal organisation in the Department of Trade, which we have also done, in that we now have a special division devoted entirely to the Middle East.
  The hon. Gentleman also mentioned the possibility of Government involvement in large projects, which are sometimes called "jumbo" projects—that is becoming the technical expression. I cannot say much at the moment on this, but we are looking at it closely, as is the British Overseas Trade Board.
  The hon. Gentleman also deplored—he was the only hon. Member to do so—the demise of the British National Export Council. We have recently revised our arrangements for export promotion services. We have, we hope, added to them and improved them without substantially altering the basic structure. We have announced the setting-up of the British Overseas Trade Board Advisory Council, and hope that this will strengthen the links between the Government and the top level in industry concerned with exports.
  The hon. Gentleman also mentioned that the review of the Queen's Award might not be ready just yet. I am afraid that this matter is out of my hands. A committee is looking into it. I shall do my best to see that it reports as quickly as possible, but we must await its report. I do not think that it is a matter on which my Department can help very much. The hon. Gentleman also asked about the build-up of the £86 million. Others mentioned it, so I shall deal with it later.
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  I turn now to a point raised by the hon. Member for Worthing (Mr. Higgins) and the hon. Member for Mid-Sussex—the payment of arrears to the banks. I should make it clear that in the Bill we are not seeking approval retrospectively for the payment of these arrears. Payment was made under the authority of the winter supplementary estimates and in the subsequent Appropriation Act. The Bill is designed to give continuing powers to prevent arrears arising in future.
  The hon. Member for Worthing asked why the £86 million was not disclosed earlier. I was also asked about the comments of the Public Accounts Committee on the matter. Much of the £86 million was accumulated under the previous Government. I say that not in a partisan way but merely to make the point that this has happened over two years. I cannot say why the previous Government did not announce the losses. Equally, the report of the Public Accounts Committee did not prompt the renegotiations with the clearing banks, which started under the previous Government and which we have carried to a satisfactory conclusion. I am sure that would have been done equally by the previous Government.
  The hon. Member for Worthing asked whether we should not think of distinguishing between countries, especially the richer countries. I have much sympathy with that point of view. It is a pity that we cannot insist on cash payments for exports to a number of countries which are able to pay cash down. We live in a competitive world. If there were no assurance of cash but an insistence on credit, and if that were the reason for our losing a vital contract, we could not go so far as to insist on cash. That is the present situation. With the down turn in world trade in the OECD countries there is greater rather than lesser competition among the industrialised countries for exports to the rest of the world.
  The hon. Gentleman raised the possibility of obtaining an international agreement on export credit rates, so as to bring them nearer to the market rates of interest. I assure the hon. Gentleman that that is Government policy. It would be the policy of any Government in the present circumstances. But there is no telling when commercial rates of interest will come down. Therefore, it is in the

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  interests of the taxpayer and of the international business community generally to try to put up export interest rates. However, one can only push them to the extent that the international market will bear.
  The hon. Gentleman also asked why we should give credit to wealthy oil-producing countries rather than insist on cash. I have alluded to that. The best way of rationalising the position vis-à-vis the wealthy oil-producing countries must be through international agreement.
  On the subject of our rates in competition with those of other countries, when export credit was offered at market rates, market rates were much lower than they are now. Overseas rates vary in different ways from ours. In general, German, Canadian and American rates are higher than ours, Italian rates are about the same, and French and Japanese are lower.
  Several hon. Gentlemen asked whether we had a valid case for abolishing the separate limits in the Bill. I do not want to go into details here. I am sure that we can deal adequately with this matter, to the satisfaction of hon. Gentlemen, in Committee.
  The hon. Member for Worthing asked about the financial limits and their makeup. I am advised that Clause 3 relates neither to loans nor to money. It concerns the total volume of risks or the potential liability that the ECGD can assume. The extra total of £9,000 million is estimated to last for up to five years. That is the usual practice. In 1949 the total limit was £450 million, since when liabilities have risen to £9,000 million, which is a twenty-fold rise.
  Mr. Stanley: Will the hon. Gentleman confirm that though the figures that he has quoted do not represent the total cash liabilities of the ECGD but the total risk liabilities, they are also exclusive of the interest due?
  Mr. Deakins: I am advised that that is the case. They exclude interest. They are concerned with capital sums.
  I come to the matter raised by the hon. Member for Worthing about the amounts of export credit outstanding. In May 1974, it was £4,843 million. By November 1974, it had risen to £5,506
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  million. That is a fantastic rate of increase in five or six months.
  The hon. Member for Nantwich (Mr. Cockcroft) spoke about our poor export performance and gave some reasons for it. He went on to speak about the necessity to concentrate on import savings by means of cheap loans. If I went into that subject, it would take me wider than the general area of debate on the Bill. But if we extended cheap loans to home industry or even just to home agriculture it would represent another very big cost to the Exchequer. In view of the size of the Government's present borrowing requirement, we would wish to avoid that.
  Several hon. Members spoke about the qualities of the ECGD as insurers, compared with other insurers. It is fair to say, as a broad generalisation, that our premium is generally lower, that our percentage of cover is generally higher, and that our claims waiting period is generally shorter than anywhere else.
  We cover a higher percentage of our national exports than any other country except the Japanese. Our scheme is so good that we have helped Australia, Canada, India, Pakistan, Hong Kong and even the United States to set up credit insurance scheme. Currently, we are helping Cyprus and Iran.
  I turn now to a major point raised by the hon. Member for Worthing and the hon. Member for Mid-Sussex, who was kind enough to quote some words of my right hon. Friend the Prime Minister when he was President of the Board of Trade. In February 1949 my right hon. Friend said:
  "We have no intention of trying to guarantee exporters against unduly hazardous or quite crazy risks."—[Official Report, 8th February 1949; Vol. 461, c. 259.]
  That has remained the policy of successive Governments. It is the policy of this Government, just as much as it was in 1949. There can be no question of the Bill's being intended or used to enable the Government to circumvent assurances previously given to the House about ECGD operations and the avoidance of unduly hazardous risks.
  The purpose of Clause 1 is not to enable the ECGD to undertake the direct financing of exports. Some powers of this kind already exists in Sections 2

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  and 3 of the 1968 Act, as amended. By contrast, Clause 1 is concerned with giving the ECGD a clearer and therefore more satisfactory refinancing power, which enables the ECGD to make loans to persons who provide financial facilities in respect of export contracts. Those persons will almost always be banks. The clause is not limited specifically to banks, however, in case opportunities should arise to finance British exports from sources other than banks. Refinancing of such loans under this power would be no less appropriate and possible than under bank lending.
  I turn to the speech of the hon. Member for Hertfordshire, South-West (Mr. Dodsworth). He talked about the need for a proper accounting system and accounts presentation. I shall return to that presently, because another hon. Member referred to it. However, we are well aware of it and of its importance.
  The hon. Gentleman was also worried about the higher limits. We can have an interesting and, I hope, useful discussion in Committee about the necessity for them.
  Then the hon. Gentleman referred to the need to have some relationship between export credit interest rates and internal interest rates. Here again, if we were to try to bring the two closer into line it would not help in the safeguarding of public expenditure or, for that matter, of taxpayers' money. It would involve the ECGD in doing something which it has no power to do.
  Mr. Dodsworth: I accept that when we are raising capital for finance for industry, for example, it may be a more suitable application of Government funds to ensure that investment is aided on an import-saving basis rather than a general basis. I am suggesting that there is an illustration in the shipbuilding industry of that happening already, and that the Government might explore it.
  Mr. Deakins: I am grateful to the hon. Gentleman for saying that. On that aspect of export credit and internal credit he is preaching to the converted. I personally believe that we should move away from the general macro-economic approach in many areas, particularly in helping exporters and in enabling our industry to re-equip itself so that it competes more effectively in world markets.
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  I hope that in the next few years we shall move on to a much more selective basis, and that will probably meet the hon. Gentleman's point.
  The hon. Member for Worthing spoke about flag discrimination and the use of ECGD facilities in that connection. That problem, if necessary, can be examined in Committee, but the Government's position remains the same. To condition the Department's guarantees in that way would be an unacceptable use of the Department's facilities. Credit insurance should not be used as an instrument to fight flag discrimination. That is a matte: to be dealt with in normal trade negotiations.
  The hon. Member for Chertsey and Walton referred to interest rates on exports under Section 2. In no circumstances should we encourage exports which will be a dead loss to the balance of payments and the Exchequer. If the hon. Gentleman does not mind, I should prefer not to make any public comment on the specific deal he mentioned, which has been under fairly detailed consideration.
  I certainly accept that we have to weigh up the balance of trade considerations against other considerations, but in the present state of the national economy and with our balance of payments deficit and the likely expected deficit over the next couple of years, increasing our exports and ensuring that we get paid for them must be priority number one for any Government. Therefore, if the possibility should arise of doing a deal which will not benefit the balance of payments we must look askance at it, consider it in a detailed way and perhaps even decide not to do the deal, although there may be a possibility that some of our competitors will be tempted to do it. Our national economy cannot stand the strain of deals like that.
  The hon. Member for Gosport (Mr. Viggers) spoke of multinational companies which were using our ECGD facilities. We are happy that multinational companies operating in this country should use our ECGD facilities. As long as they are exporting we want to encourage them to go on exporting. If they want to set up manufacturing plants in this country, those plants, like native British firms, will have access to all ECGD facilities.

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  The hon. Member for Gosport also suggested that the Government were using ECGD facilities for their own purposes. I give him a categorical assurance that that is not so. My right hon. Friend the Secretary of State for Trade, has already given assurances to the House in this connection. The matter arises in connection with so-called sensitive markets, and several questions on this subject have been asked in the past few months. The hon. Member for Tonbridge and Malling pursued it not long ago. I repeat my right hon. Friend's assurance to the right hon. Member for Stafford and Stone (Mr. Fraser), when he said:
  "I am happy to give the right hon. Gentleman that assurance. If, with my colleagues, I decide to restrict ECGD transactions in relation to particular countries, I have no doubt that I shall want to make a statement to the House about that."
  He went on to say:
  "The right hon. Member for Stafford and Stone (Mr. Fraser) made the perfectly reasonable request that if we made changes in ECGD we should inform the House. I shall be glad to do that."—[Official Report, 10th June 1974; Vol. 968, c. 1208.]
  I hope that these assurances are considered satisfactory by the hon. Gentleman who raised the subject.
  Mr. Viggers: In view of the importance of this matter, I am most grateful for the Minister's categorical assurance.
  Mr. Deakins: The hon. Member for Tonbridge and Mailing raised a number of points. He asked whether the overall rate should be kept under review. I can tell him that we keep the overall rate under review, as, indeed, we keep under review all other aspects of ECGD operations.
  The hon. Gentleman asked about the taper of the agreed refinancing rate. I confirm that the maximum margin is 1¼ per cent. The taper runs from 1¼ to ½ per cent. The minimum ½ per cent. margin applies when the agreed rate is 14½ per cent. or more.
  The hon. Gentleman also asked about the commitment fee, and said that it was higher than that of our international competitors. I can inform the House that the commitment fee was taken into account when the arrangement was drawn up. It recognises that the banks earmark funds up to the total of the ECGD
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  facility. Some such charge figures in overseas banking transactions. Their charges may be lower than ours, but our credit insurance premium charge is generally lower than that of our creditors.
  The hon. Gentleman then mentioned the extension of the scheme to non-clearing banks. I do not wish to say too much about that matter in detail, but a possible extension of the refinancing scheme to non-clearing banks is under active consideration. This raises problems of compatibility between existing arrangements and any extension.
  Mr. Stanley: I do not want to draw the Minister too much on what is obviously a delicate commercial matter, but his last remarks presumably refer to the fact that the 18 per cent. ratio on current account balances would not be applicable to non-clearing banks.
  Mr. Deakins: That is one factor which has to be taken into account and it is making the task of extending the facility to non-clearing banks rather more difficult than was envisaged.
  The hon. Gentleman asked about the disclosure of premiums. Disclosure abroad is not automatic. We have had experience of the fact that difficulties arise over demand by foreign buyers for disclosure. Therefore, we prefer at present to stick to the generally accepted practice of not disclosing the amounts of premium which reffect our assessment of the risk involved. We do not think that it would be in our export interest to alter the situation. Insurance premium forms part of the contract price and I am not aware that this gives rise to uncertainties.
  The hon. Gentleman referred to the public expenditure White Paper. The figure of expenditure which he quoted represents the balance between new loans and repayments and also the balance between the contribution of the banks and the contribution by the Government. They also are at 1974 prices, with no allowance for inflation. This explains why the Government's annual expenditure is expected to go down while the total amount of export credit outstanding will go on increasing.
  I should like to turn to the points made by the hon. Member for Mid-Sussex, who concluded the debate for the Opposition. The whole House will share his hope that

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  we need a period of international credit peace, not credit war. I assure him that the present Government are striving for that aim in every available international forum, of which there are a number.
  Several hon. Gentlemen referred to the subject of the ECGD accounts. Following the Scholey Report recommendations, we have revised our accounts substantially in a way which has already been referred to. I do not want to delay the House on that point now, but perhaps in Committee we shall have an opportunity to go into it in more detail.
  The hon. Member for Mid-Sussex asked whether our organisation, staffing and financial control were satisfactory. I said earlier that the ECGD was not perfect, but in so far as we keep a constant look-out for what our competitors are doing and for what our City and other business advisers tell us we ought to be doing, we are in control of the situation and flexible enough to adapt when the need arises.
  The hon. Gentleman also asked for assurance that there would be no delay in computerisation. I can assure him that we in our Department shall resist strongly any attempt to delay computerisation, but I do not think there will be any such attempt.
  I have dealt with most of the points that were raised by the hon. Gentlemen opposite. If I have not covered every point I apologise, but I am sure there will be an opportunity in Committee to return to these matters.
  The ECGD will certainly face a number of challenges in the coming years. Continued negotiations in the EEC on the form of export credit insurance, negotiations on export credit terms with our major exporting competitors and in the OECD, and participation in the activities of the Berne Union will involve the Department in important and demanding discussions. The changing world economic situation will undoubtedly affect buyers in many countries, as well as firms in the United Kingdom. Any increase in claims and related problems in assessing buyer and country risks cannot but make the Department's work that much more difficult. At the same time, extensive computerisation, which has already been mentioned, will be taking
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  place and planning of the partial dispersal to Cardiff will be reaching its final stages.
  All this will put a considerable strain on the ECGD, but it has dealt successfully in the past with many difficulties and I am sure it will do so again. The new powers proposed in the Bill are technical amendments to the ECGD's powers, which will enable it to carry out its funtions more satisfactorily.
  The ECGD has often been a pioneer in the export credit insurance field, and, as I have noted, has helped many countries in the establishment of their own schemes. Its package of facilities stands comparison with those of its competitors and it is our firm intention that this should continue to be the case. The Department should have the ability to react speedily and flexibly to the changing export situation and it is our aim that it should have the powers and the resources to do so.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  EXPORT GUARANTEES AMENDMENT [MONEY]
  Queen's Recommendation having been signfied—
  Resolved,
  That, for the purposes of any Act of the present Session to make further provision in connection with the powers and duties of the Secretary of State under the Export Guarantees Acts 1968 and 1970, it is expedient to authorize—

  (1) the payment out of moneys provided by Parliament of any sums required by the Secretary of State for making—

  (a) loans in connection with the provision of financial facilities in respect of export contracts;.

  (b) grant—

  (i) for supplementing interest received or receivable as consideration for the provision of such facilities;

  (ii) in respect of interest paid or pay able under such contracts;

  (2) any increase in the sums payable out of such moneys or charged on the Consolidated Fund under the Export Guarantees Act 1968 which is attributable to new provisions replacing section 4 of that Act;

  (3) payments into the Consolidated Fund.—[Mr. Dunn.]

  ARBITRATION BILL [Lords]
  Not amended (in the Standing Committee), considered.
  Motion made and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, without amendment.

  BIOLOGICAL STANDARDS BILL [Lords]
  As amended (in the Standing Committee), considered.
  Motion made and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, with an amendment.

  EDUCATION BILL
  Lords amendments agreed to.

  NORTHERN IRELAND COMMITTEE
  Motion made, and Question proposed.
  (1) There shall be a Standing Committee, to be called the Northern Ireland Committee which shall consider such specified matters relating exclusively to Northern Ireland as may be referred to them and shall consist of all Members sitting for constituencies in Northern Ireland, together with not more than Twenty other Members to be nominated by the Committee of Selection, who shall have power from time to time to discharge the Members so nominated by them and to appoint others in substitution for those discharged.
  (2) A motion may be made by a Minister of the Crown at the commencement of public business to the effect that a specified matter or matters relating exclusively to Northern Ireland be referred to the Northern Ireland Committee for their consideration, and the question thereon shall be put forthwith.
  (3) If such a motion be agreed to, the Committee shall consider the matter or matters to them referred on not more than four days in a Session and shall report only that they have considered the said matter or matters:
  That this Order he a Standing Order of the House.—[Miss Margaret Jackson.]
  9.44 p.m.
  Mr. J. Enoch Powell: I am much obliged to the Lord President
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  of the Council for being in his place on the occasion of this motion. It fulfils the indication which he gave the House on 14th January, and, since it is clearly important to Northern Ireland, there are one or two matters in connection with it which I thought should be on the record of the House.
  On 14th January, the right hon. Gentleman said, I think in relation to this Committee as well as to others which he was mentioning, that
  "matters would be sent to the Committee only by agreement".
  Later he said, quite certainly in relation to this Committee, that
  "The topic to be discussed will possibly be agreed with the Members concerned before the debate and agreed by the House."—[Official Report, 14th January 1975; Vol. 884, c. 211 and 213.]
  There is no disagreement, I think, that the right hon. Gentleman has indicated that it would be the intention that the agreement of hon. Members representing Northern Ireland constituencies should be secured both to the sitting of the Committee and to the topics which it was proposed it should discuss. He has generously renewed that assurance to hon. Members concerned in private, but I am sure that he would agree that as the Committee is likely to form quite a lasting institution of the House it is only right that it should be on the record.
  Secondly, unlike some committees which go by the name of Grand Committees, it is I believe the intention that only occasionally should there be found a subject which was thought appropriate for this special treatment. That is perhaps worth emphasising because plainly when a part of the United Kingdom is represented in this House by a large number of hon. Members a Grand Committee plays a different rôle from that which it would play in the case of Northern Ireland where the 12 or, one hopes, 21 Members representing Northern Ireland would be more or less bound to find themselves in a minority.
  Nevertheless, we entirely agree that from time to time there will be subjects which deserve mature consideration and debate in committee conditions possibly before they are brought to the House for briefer treatment. We noted with satisfaction—not that I would hold the right

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  hon. Gentleman to the exact figure—that the Lord President suggested in column 212 of the Official Report for 14th January that four times a year on average might be the number of times when a subject was thought appropriate for this treatment.
  Subject to those two points—first the agreement of Northern Ireland Members, which would not be unreasonably withheld now or in future, to the topic for discussion and to the sitting of the Committee, and, secondly, the restrained use to be made of this instrument—there would be no desire on the part of the party which I represent to oppose the motion.
  9.48 p.m.
  The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): I thank the right hon. Member for Down, South (Mr. Powell) for the spirit in which he has made his comments.
  I confirm that we shall always try to obtain the agreement of Northern Ireland Members before any subject is referred to the Committee. I should not envisage any debate taking place without such agreement. There will be no great problem about this matter.
  On the second point, we propose in the motion that the Committee should sit on four days in a Session. But we are not bound by that. If we need five days, provision could be made for that.
  I am grateful to the right hon. Gentleman for his remarks and co-operation in reaching agreement on the motion before it came to the House.
  Question put and agreed to.
  Ordered,

  (1) There shall be a Standing Committee, to be called the Northern Ireland Committee which shall consider such specified matters relating exclusively to Northern Ireland as may be referred to them and shall consist of all Members sitting for constituencies in Northern Ireland, together with not more than Twenty other Members to be nominated by the Committee of Selection, who shall have power from time to time to discharge the Members so nominated by them and to appoint others in substitution for those discharged.

  (2) A motion may be made by a Minister of the Crown at the commencement of public business to the effect that a specified matter or matters relating exclusively to Northern Ireland be referred to the Northern Ireland Committee
  166
  for their consideration, and the question thereon shall be put forthwith.

  (3) If such a motion be agreed to, the Committee shall consider the matter or matters to them referred on not more than four days in a Session and shall report only that they have considered the said matter or matters:

  That this Order be a Standing Order of the House.

  NORTHERN IRELAND COMMITTEE
    ADJOURNMENT
    Motion made, and Question proposed, That this House do now adjourn.—[Miss Margaret Jackson.]

  FISHING VESSEL "SILVER LINING"
  9.49 p.m.
  Mr. John P. Mackintosh: I wish to raise a constituency question which is the present position of the fishing vessel "Silver Lining" and the position of her owners. I also wish to raise a broader issue concerning the general interest in the disposition of public funds for assistance in building fishing boats as well as the particular issue of equity which arises.
  May I explain the circumstances of the case? Mr. Johnstone, a fisherman resident in my constituency, and his partner, who is resident in East Aberdeenshire, together wished to buy a fishing boat. I gather that the question of the choice of yard and design is left to the fishermen, and these two men went to the Bute Slip Dock Company at Rothesay, in the west of Glasgow, where, I understand, the director, a Mr. Cumming, had built six very satisfactory fishing boats in the recent past. They ordered the "Silver Lining"—one of the most sophisticated fishing boats built in Scotland in recent times—from the yard.
  Mr. Cummings, the director of the yard, designed two sister ships on what, for practical purposes, were identical lines. One was the "Trident" and the other was the "Silver Lining". I gather that in order to make these fishing boats turn more rapidly he cut the keel by 4 ft. and altered the stern design, compared with normal fishing boats, to remove a certain bulginess which is normally associated with them and gave these two boats, as it were, a flat stern section which was somewhat different.
  The point that exercises fishermen in Scotland is that the "Trident" went

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  down with all hands after reports that she was basically unseaworthy. The "Silver Lining" was impounded as unseaworthy or unstable and is still lying rusting in dock, although she is an expensive ship, because her seaworthiness and future and the savings of those who own her have not been established.
  I should like to put my finger on the public involvement in this matter. This fishing boat cost £160,000. Its present value, or the value of that kind of boat today, is reckoned at over £250,000. The £160,000 paid for the "Silver Lining" was made by a Government grant from the Herring Industry Board of £48,000, a loan of £65,000 on which the owners have to pay the current rate of interest which is extremely steep, while the two owners found £47,000, which represented their life savings. It is clear that this was a modern expensive fishing boat, that the two men involved put their total life savings into it, and that public money was involved. Therefore, apart from the question of the safety of men at sea, the public interest is important.
  The problem is that when the Government, through an ad hoc body like the Herring Industry Board, give a grant and a loan, one assumes that a reasonable check is carried out on the satisfactoriness of the expenditure. In this instance, that means the seaworthiness of the boat involved.
  I looked carefully into what check the Herring Industry Board carried out on the seaworthiness of this boat in view of the public money that it was lending and granting. I was shocked to find that the board asked for certain calculations about the shape of the vessel, which it checked, but that it did this without remeasuring the boat to discover whether it was built according to specification. Secondly, the figures were checked by surveyors, who were not marine architects. Why they were not marine architects, I do not fully understand.
  Finally, the boat was launched and taken to Peterhead on the other side of Scotland and, on 4th March 1974, a stability test was undertaken. However, it was not undertaken by the body that granted or lent the money, but by the builder who had a vested interest in establishing the seaworthiness of the boat. The builder certified that the boat reached the
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  minimum standards specified by the International Marine Consultative Organisation—IMCO, as it is known. The Herring Industry Board accepted the builder's verdict as a certificate of seaworthiness and allowed the boat to proceed to sea. The public involvement in terms of the grant and loan was thereby established.
  When the "Silver Lining" went to sea the skipper complained that it was unstable. Later I found that the Chairman of the Herring Industry Board asserted that that was because of subsequent additions to the deck of the boat. I do not think that that was adequately borne out by the subsequent stability tests. Nevertheless, the skipper complained that the boat was unseaworthy and he had eight tons of rock ballast put into the bottom of it to try to make it a little more stable.
  Meanwhile, the sister ship the "Trident" was at sea. There is some dispute about this, but I understand from people in the area that the skipper and other members of the "Trident" likewise complained about the unseaworthiness of that boat. Whether or not the fact is established, it is rumoured and talked about among the fishermen there. The "Trident" sank with all hands on 3rd October 1974, and a public inquiry has been instituted into why this vessel should have sunk under these conditions.
  Directly the "Trident" sank the authorities insisted that the "Silver Lining", the sister ship, should not go to sea again because its stability was in question, and on 11th October an inclining test was held, this time not by the builders, as in the first instance, but by other authorities, and the boat was impounded until the results of the test could become known.
  My constituent Mr. Johnstone, who had put his life savings into the boat, was thereby deprived of his source of income. He became unemployed, yet he had to pay the on-going rate of interest on his share of the £65,000 loan involved in the construction of the boat.
  At this point the situation became much more complicated, because three different groups of people were involved in the stability test. The first was the White Fish Authority because it has joint surveyors with the Herring Industry Board.

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  On 11th October the authority investigated the stability of this boat and wrote a letter to the owner of the boat, Mr. Johnstone who passed a copy of it to me, saying:
  "The stability of this fishing vessel does not fully satisfy the stability criteria as laid down in the draft Fishing Vessel (Provisional) Rules."
  Furthermore, the writer say that the operating assumptions on which the boat was designed were unrealistic, and that in future they should be made with the mutual agreement of the owner, the designer and the Department's surveyor.
  At the same time the Department of Industry took an interest in this stability test, and here a discrepancy arose. One of the problems is the number of public authorities involved in this whole question. I have here a letter from the Under-Secretary in which he said that
  "whereas the boat was unsuitable for going to sea, it was unstable only when fully loaded. When unloaded it was stable".
  That is contrary to the report on the same test carried out by two other public authorities.
  A third group interested in this matter was the Napier Company, a naval architect firm. It was employed originally by the owners of the boat, but the company's reputation is such that the Herring Industry Board accepted that its judgment could, in a sense, be an impartial arbitration on the matter. The company investigated the stability of the vessel by means of the same inclining test and said quite flatly that the boat was unseaworthy not, as the Department suggested, only when fully loaded but under all conditions. All these three authorities made no mention of extra gear or extra equipment being placed on the deck of the boat causing it to become unstable. They said it was the fundamental design of the boat that rendered it unseaworthy.
  What is to happen? There are two problems here. The first is the general principle of public money being put into vessels of this kind. The second is what is to happen in this particular case.
  Dealing first with this particular case, during the Christmas Recess I went along with another Member of Parliament, who has a constituency interest, to see the Chairman of the Herring Industry Board. He received us courteously and assured us that the test report would show that the
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  boat was basically completely stable and that any problem was that of added equipment on the boat deck. Both assurances turned out to be inaccurate because the boat is not inherently stable according to the report of the three authorities.
  It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, That this House do now adjourn.—[Miss Margaret Jackson.]
  Mr. Mackintosh: Neither of these two assurances turned out to be accurate because all three authorities say that the boat is not stable and none of them draw attention to any subsequent additions on the deck. All draw attention to the basic construction of the vessel.
  So there is this basic problem and certain difficulties have to be faced. First, is it satisfactory that large sums of public money should be given in grant and loan on fishing boats when no adequate check is being made that this money is being spent on boats that are inherently seaworthy? I know that stability is a difficult problem. I know that there are probably some boats which have fished for years successfully which, if tested, would prove to be unstable. I know that it would cause great difficulty if the new standards were to be imposed across the whole fishing fleet. Nevertheless, surely with new boats, on which public money is being spent, there should be a more adequate check than just the view of the builder himself, who has a vested interest in the stability of the ship.
  We want an external check on the stability of the boat and one ought not to have to wait for disasters such as the total loss of the "Trident" for the kind of external check we want to be made. In this situation, one ought not to give out certificates that a boat coincides with, or meets, minimum requirements when there has been no check other than that of the builder.
  I now turn to the particular case of my constituent, Mr. Johnstone. When I visited the Herring Industry Board, it clearly felt a certain sympathy with Mr. Johnstone. It certainly felt that there was some case in which a relationship of trust between him and the board had

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  been breached and it suggested that if the boat were cut in half—quite how one does this I do not know—and lengthened by 11 ft and a box keel added, the boat would become seaworthy and stable. This is interesting in view of what was said to me by the board, that the proposals for improvement made no mention of removing deck gear. So this argument that it was deck gear added subsequently goes by the board because if that had caused instability it could just be taken off. But the Herring Industry Board said that there had to be fundamental changes in the design of the vessel, that is to say, lengthening by 11 ft. and the addition of a box keel at a cost of £22,000. I take it that the Herring Industry Board feels some responsibility for letting this situation arise, because it was prepared to grant immediately 30 per cent. of the cost of this alteration and a moratorium on the interest on the boat.
  But the problem goes far further than this as far as my constituent is concerned. At first the marine architects said that this particular change would not be suitable. Later, the marine architects said that if, in fact, the boat were lengthened but, instead of a box keel, the fuel tanks and water tanks were altered, that would have a lowering effect on the centre of gravity of the ship and it would then become seaworthy.
  On this point, I think that the paragraph in the original letter from the marine architects hits the nail on the head as far as this ship is concerned. It says:
  "There are various alternative ways of improving the stability. If money was available these could be undertaken. The unfortunate aspect, however, is that the crew has lost confidence in the boat and we doubt if any changes, no matter how effective, will restore this. … We are trying to find someone to buy her to overcome this problem and our friends and agents throughout Europe are doing their best. So far, unfortunately, we have had no success. There is a big demand for this size and type of fishing boat but apparently"
  —indeed, understandably—
  "the first question any interested party asks is the reason for the sale, and on being told interest vanishes despite our assurances that the stability could be made satisfactory".
  The simple situation is that no man will go to sea in this boat, and no one will buy this boat because all know that the sister
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  ship sank and that it is fundamentally unstable.
  So my constituent's life savings are wrapped up in a fundamentally unsaleable boat, which had a certificate of seaworthiness which was checked inadequately or checked by no one. I feel a sense of unease that this man has not been treated fairly, though I appreciate that the HIB now feels that it should do something—though quite what, I know not—to try to help him.
  My worries about this case, therefore, are genuine and serious. I am pointing the finger at no one. I know that my hon. Friend the Under-Secretary has no direct responsibility and that the boards concerned have done everything possible to encourage fishing and to build up the Scottish fishing fleet. But this very sad episode has put its finger on two particular problems, which I repeat. The first is that grant and loan is being given without adequate supervision of the seaworthiness of the boats. The second is that as a result, in this particular case, an unfortunate pair of skippers have lost their life savings, without any possibility—as far as one can see at present—of any restitution or compensation.
  I draw the attention of the Government to this matter in the hope that something can be done, although perhaps not within the present rules, to ameliorate the situation.
  10.7 p.m.
  The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): My hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) has given a very clear account of his constituent's difficulties. I certainly appreciate his concern. I am sure that he believes, as I do, that there are two occupations which he probably never has any ambition to follow—one is mining and the other is fishing. In other words, I have a great admiration for people who go to sea in fishing vessels. My hon. Friend is accurately representing the difficulty which we all face here, because as well as being courageous and very experienced people, once there is a hoodoo or an element of superstition in the minds of fishermen it becomes a serious problem. Therefore, I appreciate the point that my hon. Friend has made.

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  I should like to make three small points. I am not sure that the figures given by my hon. Friend about grant and loan are absolutely precise, but they are near enough for it not to matter. I do not know that my hon. Friend is very sound on the point he makes when he says that it should be some kind of naval architect who checks a specification.
  Mr. Mackintosh: A marine architect.
  Mr. Brown: Or a marine architect. Although it is not, strictly speaking, involved in this matter, just as a general observation I would say that an architect designs a house, but it is usually the quantity surveyor who checks at the end of the day that the specification has been complied with. However, my hon. Friend has fairly stated the case.
  As I am sure the House will appreciate and understand, my difficulty is that I am somewhat confined in any reply that I can make. The construction of this vessel was a commercial transaction between the buyer—the fisherman—and the seller—the boatyard. It would be quite wrong of me to say anything which could possibly be interpreted as prejudicial to the respective positions of the owners, the designer, or the builder. Moreover, the "Silver Lining" is a sister ship of the "Trident", as my hon. Friend said, and the House will recall with sadness the disappearance of the "Trident" with all crew last October.
  Again as the House will know—my hon. Friend having referred to it—an inquiry has been ordered by my right hon. Friend the Secretary of State for Trade. Obviously, that means that to some extent I have to tread more warily than normal tonight. If there are any detailed points which I do not cover, I shall write to my hon. Friend or discuss them with him in as helpful a way as possible.
  Mention has been made of the rôle of the Herring Industry Board and of Departments, and I think that it would be useful if I set out the actual position here. Parliament provides funds for the giving of grants and loans for the construction and improvement of fishing vessels. The day-to-day administration of these arrangements has, however, been given by Parliament to the Herring Industry Board and the White Fish Authority. The rôle of Ministers is to lay
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  down the basic framework within which the authorities administer the schemes, and Ministers are, of course, responsible for broad questions relating to whether the funds advanced to the authorities are used in accordance with the wishes of Parliament. Ministers are not, however, responsible for the action taken by the authorities in particular cases.
  Ministers ensure that there are safeguards within the arrangements—this was my hon. Friend's point—so as to ensure the proper use of public funds. It is, for example, in order to protect public funds that the statutory grants scheme requires the board to approve the building contract. Again, to safeguard the public investment the board employs surveyors in order to ensure that construction is in accordance with the specification, that the workmanship is satisfactory and that payments are made to the builder at the proper time. Thus, as a result of these safeguards the board is closely involved in the construction of the vessel. On account of its expertise and experience it also—as one would expect—attempts to give advice to the fishermen in an era of ever-growing complexity in vessels. It is no rôle of the board, however, to attempt to guarantee the completed vessel, as such. My hon. Friend suggested that it should be, but at the moment that is not necessarily the case.
  Perhaps here I should make some general observations on standards of stability for fishing vessels in relation to the particular interests of the Herring Industry Board and the Department of Trade. As long age as November 1968 the Intergovernmental Maritime Consultative Organisation, through its Maritime safety Committee, published its recommended standards for the intact stability of fishing vessels. The United Kingdom had been prominent in the international discussions which led to the establishment of these standards and the Department of Trade. As long ago as November 1968 national findings domestically by passing them on to United Kingdom fishing vessel owners and builders with the recommendation that they be adopted. In addition, partly as a means of further testing the recommended standards and partly to honour the relevant recommendation in the Holland-Martin Report of 1969, the Department of Trade continued its investigations into the stability standards of

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  existing distant water trawlers, bringing a few near and middle water vessels into the investigation at the same time.
  An almost complete degree of compliance with the international standards was found in all vessels thus investigated and those for which data was subsequently submitted voluntarily by owners. The HIB, since the IMCO recommendations were published, has ensured that the specification for a new vessel requires the IMCO standard of stability to be met. This was done for "Silver Lining". In practice, however, the skipper was not happy with the vessel's handling and approached the Department of Trade, which readily agreed to help with the necessary calculations. The required information was still awaited at the time of the sad casualty to the "Trident". Meanwhile, the skipper and the builders have had their own investigations made.
  I can now inform the House that the Department of Trade has just completed its calculations on "Silver Lining" and is examining the results. Although in certain conditions the international standards of stability will not be met, a number of alternative methods by which they could be met suggest themselves. The Department of Trade findings are being collated for urgent presentations to all the parties directly involved—
  Mr. Mackintosh: My hon. Friend says that the only interest of the Department is to see that public funds are properly spent—but that it does not deal with individual cases. In this case, an IMCO certificate was given to this vessel. The Department's test has shown that the vessel did not meet these standards. Is the Department satisfied when public funds are given to boats—as a general principle, not in specific cases—and the certificate is given to boats when subsequent detailed tests show that they do not meet these standards? Is my hon. Friend not worried about this? What will he do about it?
  Mr. Brown: Obviously I am worried about it. I do not suppose that either of us would be here if we were not worried about it. Because there has been an inquiry and because the findings have not yet been made available, I think that there should be a pause. There will be no question of covering up—there is
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  nothing to cover up, and the very relevant and pertinent point that my hon. Friend has made will certain be looked into and answered in great detail.
  There is never an absolute guarantee that something which, on paper, is up to standard will turn out to be so when it is on the water. I am not an expert and I do not know whether my hon. Friend sails a boat, but I am sure that these things can happen. There is no accounting for it. It does not destroy the general argument on the provisions that have been made. United Kingdom Departments are aware of the need to get up to this international standard and it is accepted by the trade.
  I am suggesting that there should be a pause in this specific case.
  The Chairman of the Herring Industry Board has assured me that he will do all he can within the limits of his powers to secure a satisfactory outcome for Mr. Johnstone and Mr. Bruce. The chairman will be calling an early meeting of all the interested parties in the near future. This is the way to seek a solution to this difficult problem. I hope that some satisfactory solution to the difficulties of these fishermen will emerge. My Department will continue to give any help it can.
  My hon. Friend has spoken in general terms of the responsibility of the board for public investment. If we look at the picture as a whole, we see that since 1953 the board has been involved in the construction of 183 vessels of varying types. This is, however, the first occasion on which a problem of seaworthiness has arisen. That is no reason to be complacent. Any one accident or tragedy should give us all food for thought. Nevertheless, by any standard of efficiency I claim it is a good record. In the light of such a record it is not surprising that there have been no complaints from the industry about the board's administration on this score.
  Having said that, however, I know that the board would agree that there may be areas in which procedures could usefully be reviewed, and I know that the board would be only too glad to discuss any problems with the industry.
  I am not making any comment on the legality or otherwise of the situation. It is a fair assumption that there exists a

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  kind of paternalistic atmosphere where, while the board has its direct statutory responsibilities, in the past fishermen generally may have assumed that it was responsible when, in fact, it was not directly responsible in that statutory sense. After a system has been working and everybody seems quite happy with it, when something different occurs, obviously everybody starts looking at whose fault it is, who is responsible, and where the legal liability lies. It is in this context that everyone will want to review the procedures and the problems that have arisen from this incident.
  As I have already said, the work of the Department of Trade on the stability of fishing vessels has hitherto been carried out on a voluntary basis. I am glad to say that my right hon. Friend the Secretary of State for Trade will shortly bring in a most comprehensive set of regulations governing the safety of fishing vessels, including the stability of vessels of 12 metres and upwards in length. This statutory backing to the existing practice of the Herring Industry Board and the White Fish Authority in relation to new vessels should be a useful measure in promoting the safety of our fishing fleet.
  I ask my hon. Friend to accept that in good faith the Chairman of the Herring Industry Board has given an assurance that he will call a meeting of all the
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  interested parties. I certainly approve of that. I regard it as the way to proceed, and, given good will and understanding in a difficult situation, I believe that the outcome will be valuable. There are two possibilities—one, a legal battle, and two, an attempt to sell a vessel to the fishing communities. My hon. Friend has already said that if there is an attempt to sell something which has not been cleared there could be problems for the owner, and I do not believe that any of us would wish to contemplate a state of affairs which created difficulty for any one of the interested parties.
  I hope that my hon. Friend accepts the assurance that there will be a helpful meeting in an effort to seek a solution, and will recognise our concern for the owners, as well as the responsibility which we have in the Department. If confidence has been lost by those who work in the industry in either the board or a certain type of vessel, we should fail in our responsibility if we did not seek ways and means of restoring that confidence. It is that which is uppermost in our minds, as well as the desire to do justice to the constituent so well represented by my hon. Friend tonight.
  Question put and agreed to.
  Adjourned accordingly at twenty minutes past Ten o'clock.

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

LORD PITT OF HAMPSTEAD
David Thomas Pitt, Esquire, having been created Baron Pitt of Hampstead, of Hampstead in Greater London and Hampstead in Grenada, for life—Was, in his robes, introduced between the Lord Morris of Kenwood and the Baroness Llewelyn-Davies of Hastoe.
The Lord Chelmer—Took the Oath.

IMMIGRANTS: VOUCHER SCHEME
2.45 p.m.
Lord AVEBURY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows :
To ask Her Majesty's Government how many vouchers they plan to issue to United Kingdom passport holders wishing to come to Britain under the special quota voucher scheme during 1975, and whether they will give a breakdown of the total into the numbers allocated to India, Kenya, Tanzania and other countries respectively.
The MINISTER of STATE, HOME OFFICE (Lord Harris of Greenwich): My Lords, my right honourable friend announced in another place on 6th February that the rate of issue of special vouchers to United Kingdom passport holders would be increased this year from 3,500 to 5,000. It is not the practice to disclose the allocation to individual countries.
Lord AVEBURY: My Lords, while not accepting the justice of the policy of denying admission to the United Kingdom to our own passport holders, is the Minister aware that the advance from
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3,500 to 5,000 is at least a step in the right direction? May I ask him whether the argument against giving detailed figures was always that if the allocation was much too small to satisfy the requirements of the countries concerned, there might be disputes between them about the size of the allocation in relation to the total? So if he now thinks that 5,000 is an adequate figure, what conceivable reasons could there be for maintaining the confidentiality of this information?
Lord HARRIS of GREENWICH: My Lords, I appreciated the welcome—though it was a guarded welcome—given by the noble Lord to my right honour-able friend's Statement in another place. With regard to the second part of his question, this is a policy which has been pursued by the present Government as it was by their predecessors. There are obviously substantial problems about doing this, and that is why both Governments have taken the view that it is inappropriate to publish these figures.
Baroness ELLES: My Lords, can the Minister inform the House whether he is in favour of the process of Africanisation which is going on in East African countries? Since we accept responsibility for United Kingdom passport holders coming into this country, what measures are the Government taking to protect those who have to remain there? No doubt the Government are aware of the considerable discrimination against Asians in East African countries, particularly in regard to housing and employment.
Lord HARRIS of GREENWICH: My Lords, the present Government have many responsibilities, but the Africanisa-tion policy of governments in Africa is clearly not one of them. Undoubtedly, this policy has caused a considerable amount of hardship and that is why the present Government have taken this decision.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, the noble Lord said that the Government have no responsibility but surely they have a responsibility for protecting the interests of British subjects anywhere, whether or not they are in African countries and whether or not they are of Asian origin?

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Surely the noble Lord was a little un-guarded when he made that statement.
Lord HARRIS of GREENWICH: My Lords, I should not have thought that I was unguarded at all. I suspect that this was similar to a line taken by the noble and learned Lord, Lord Hailsham of Saint Marylebone, when in Office. The position is that the United Kingdom Government have a responsibility to look after the interests of people holding United Kingdom passports. We are clearly not responsible for policies pursued by Governments in African countries. I should have thought the noble and learned Lord would have agreed with that.
Lord BROCKWAY: My Lords, while welcoming the Statement of the right honourable gentleman the Home Secretary, may I ask whether, in view of the statement by the right honourable gentleman the Home Secretary on 29th June about the unacceptability of sex discrimination in immigration laws, this decision means that women who hold British passports will be allowed to accept these vouchers to come to this country? Secondly, may I ask whether the dependants of voucher holders will be allowed to enter this country in a different manner from the present practice by which they have to go back to make a new application?
Lord HARRIS of GREENWICH: My Lords, the position on the latter point of the supplementary question of the noble Lord, Lord Brockway, is that it is estimated that each of the special voucher holders has three dependants who are allowed into this country. On the first point raised by the noble Lord, I cannot answer his question offhand, but I shall look into the point.
Lord HALE: My Lords, would the noble Lord. Lord Harris of Greenwich, confirm that so far as Kenya is concerned, Mr. Kenyatta—who is facing a real problem—has leaned over backwards not to indulge in unnecessary discrimination, and has been under criticism from his own people? Is the noble Lord further aware that when Mr. Kenyatta dies a very considerable problem may arise there, whoever his successor may be?
Lord HARRIS of GREENWICH: My Lords, there are a number of problems
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facing passport holders in East Africa. It is not appropriate for me to distinguish between one country and another. There are grave problems facing the passport holders in East Africa ; certainly in Uganda that is the case. We shall do everything we can to assist them. That is why my right honourable friend has made this Statement.
Lord AVEBURY: My Lords, does the noble Lord recall that the exception to the rule that figures are never divulged for individual countries arose in the case of India, where under the previous allo-cation a special 500 were given to the United Kingdom passport holders formerly resident in East African coun-tries, who had gone there temporarily? Could the noble Lord at least tell me how many of the 5,000 referred to by the right honourable gentleman the Home Secretary last week are citizens in India?
Lord HARRIS of GREENWICH: My Lords, I have indicated that it is not the practice to disclose the allocation to individual countries. I am afraid that applies to India as elsewhere.

PUBLIC HOUSE RENTS
Lord CASTLE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether their attention has been drawn to the exorbitant increases in rents being proposed by major brewery groups to their tenants and, if so, what action they propose to take to prevent the unacceptable rise in the price of beer which could result.
Lord JACQUES: My Lords, Her Majesty's Government have received a number of letters from Members of Parliament and the licensed trade drawing attention to the effect on the price of beer of higher rents which may become payable on the decontrol of business rents. Increases in rents are an allowable cost under the Price Code and may therefore be passed on to the consumer in higher prices. But, when spread over a whole year's sales, this should not lead to large increases in the price of beer.
Lord CASTLE: My Lords, I thank my noble friend for his Answer, but I

1071
wonder whether he realises how utterly unacceptable it is. I wonder whether he would accompany me on—
Several Noble Lords: A pub crawl!
Lord CASTLE: —some field work on the Buckinghamshire/Oxfordshire boundary, where he would find that the brewers were proposing to the landlords that their rents should be increased from £400 to £2,600, from £300 to £1,900 and from £600 to £5,000. Do the Government regard this as a state of affairs which they cannot remedy? Also, does the noble Lord realise that the tenants with whom I have spoken say that a 3p increase in the price of a pint is imminent, and that by next year we must face the utterly unacceptable possibility of a 25p pint of beer?
Lord JACQUES: My Lords, I should be pleased to accompany the noble Lord, Lord Castle, on any such field work as he has mentioned—and I am not particular as to county! I wonder whether he is aware that there is a code of practice which is agreed by the brewers and their tenants, and which has the blessing of the Government? This code of practice deals with security of tenure and rents, and provides also that where there is any difference of opinion as to rents, there shall be fair and reasonable negotiation and, in the last analysis, arbitration if need be. The Government hope that this fair and reasonable approach to the problem will be sustained by the industry, and they have no reason to believe that it is not.
Lord SLATER: My Lords, with regard to the matter raised by my noble friend Lord Castle, is my noble friend aware that there is sheer exploitation? I must admit that I am a teetotaller, but, nevertheless, one has to face up to reality. Is the noble Lord aware that we cannot help noticing the cheers and jeers coming from those noble Lords who frequent these places more than I do? It is sheer exploitation.
Lord JACQUES: My Lords, one has to bear two things in mind. First, in the past it was the practice of brewers to ask their tenants for nominal rents, and to charge them a little higher price for the beer. In the recent past, however, the tendency has been to charge for
1072
the beer and the rent at market prices. Therefore, that is a factor which probably has some influence. Secondly, it has to be borne in mind that an increase in rent may be high in relation to the present rent, but extremely low in relation to the turnover.
Lord HARVEY of PRESTBURY: My Lords, would it not be helpful if the noble Lord, Lord Castle, gave the figure for one-star houses as well as for five-star houses?
The LORD PRIVY SEAL (Lord Shepherd): My Lords, the noble Lord, Lord Harvey of Prestbury, has been long enough in your Lordships' House to know that questions are put to this Bench, and not to the Benches behind.
Lord MAYBRAY-KING: My Lords, is the noble Lord aware, in spite of all he has said about the negotiations, that the power is in the hands of the brewers, and not in the hands of the publicans? Is he also aware that the swingeing in-crease proposed in rents, mentioned by the noble Lord, Lord Castle, calls for some intervention on the part of the Government?
Lord JACQUES: My Lords, I know of the details only as they affect one brewer. There are 600 tenancies which are subject to rent increase, and only two have gone to arbitration. The arbitrator is a completely independent man appointed by the President of the Royal Institution of Chartered Surveyors.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, will the noble Lord coyly admit to the House, and explain to his noble friend behind him, that if the price of beer proves to be un-acceptably high the Government have it in their power to apply their own exploitation of the opportunity by reducing the rate of tax?
Lord JACQUES: My Lords, I suspect that the Government will do that in exactly the same way as the last Government did it.
Lord PEDDIE: My Lords, would the noble Lord agree that the position could be improved if more power were given to tenants to obtain the freeholds of their public houses, instead of being tied?
Lord CASTLE: My Lords, would my noble friend reassure the noble Lord,

1073
Lord Harvey of Prestbury, that I have not dealt with any five-star houses. I was quoting purely and simply the tenants of village pubs who feel they are being subjected to rapacious demands by the brewer, and pointing out that the working people of this country will suffer very severely.
Lord SHEPHERD: My Lords, this is a matter for an interesting debate on another occasion, but I suggest that we now move to the next Question.

THE TURNER BEQUEST
3 p.m.
Lord REIGATE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what consideration has been given to the permanent display of the Turner bequest at Somerset House.
Lord STRABOLGI: My Lords, as already announced by my honourable friend the Minister for the Arts in another place on 23rd July last, the Fine Rooms in Somerset House are to be the home of the new Theatre Museum.
Lord REIGATE: My Lords, while expressing gratitude to the noble Lord for that information, which I think was already fairly well-known, may I ask whether he has noticed that since then there have been many expressions of opinion that this site is not suitable for the Theatre Museum, in view of the absence of storage space, and that there are suggestions that the National Theatre Museum would do better in another site such as Covent Garden? Will Her Majesty's Government consider negotiating on that subject with the GLC?
Lord STRABOLGI: My Lords, the Government's commitment stems from the announcement made on behalf of the Secretary of State for the Environment and the Paymaster General of the previous Administration in reply to a Question in another place on 24th May 1973. This decision is supported by the present Government.
The EARL of HALSBURY: My Lords, could the noble Lord undertake on behalf of Her Majesty's Government
1074
that, before the pros and cons of either reopening or not reopening this issue are considered, the matter will be referred to the Standing Commision on Museums and Galleries, which is the properly appointed body competent to advise Her Majesty's Government on any matter of this kind?
Lord STRABOLGI: My Lords, I will certainly bring what was said by the noble Earl to the attention of my honourable friend. I may say that even among art experts it is arguable whether works of art of one painter are better shown en masse, in contrast to being set in the historical context of art in their time. This is not a matter on which the Government would wish to form a view.
The Earl of HALSBURY: My Lords, although that may be true, would the noble Lord agree that Her Majesty's Government have advisers in this matter, and some very interesting suggestions as to alternative disposal of Somerset House are now in the public domain, to the point where it has been the subject of the noble Lord's Question this afternoon?
Lord STRABOLGI: My Lords, design work is now proceeding on the project for the Theatre Museum to open at Somerset House in the middle of next year. The present cost of this, of course, would be far less than if, for example, it went to the floral market at Covent Garden, which is an alternative suggestion; this would cost, including air conditioning, about half a million pounds.
Viscount NORWICH: My Lords, are the Government aware that the British Theatre Museum, of which for over 10 years I had the honour to be Chairman, are deeply grateful to successive Govern-ments—this Government and its predeces-sor—for having made available these marvellous rooms at Somerset House? They would be equally grateful if some other alternative site could be found which, although perhaps not so classically beautiful, might be even more suitable for their purpose, but unless and until such a building is found the Theatre Museum, which has existed for some 20 years with-out any roof at all over its head and working on a budget of some £5,000 a year, must ask that its prior claim be respected.
Lord STRABOLGI: Yes, my Lords, I am sure the Government are very grateful for what the noble Viscount has said. There is at present no national Theatre Museum. This Museum will bring together very splendid collections from the Victoria and Albert Museum and Leighton House, as well as the Diaghilev collection recently acquired for the nation and the Enthoven collection. I may say, with regard to Somerset House and the Turners, that it is not considered suitable. For one thing the floors are too weak to sustain large crowds; secondly, the windows are too large; and, thirdly, there is far too much plaster work on the walls to allow many of the 19,000 paintings to be hung.
Baroness LEE of ASHERIDGE: My Lords, is my noble friend aware that I take his point that it might not be desirable to have the entire works of Turner gathered together in one collection? But would he agree that it would be a wonderful experience for us to have them all collected? Then we might be able to allocate them to various Embassies abroad and to other public buildings. Would he also agree with me that it really is disgraceful that so many of them are being kept in permanent storage?
Lord STRABOLGI: My Lords, as my noble friend is aware, of course, from the time when she was Minister, the Turner paintings are the property of the Trustees of the national Institutions, to whom they were given as a result of the settlement of Turner's will, and by whom they are effectively cared for and shown. The Government have no power to deprive those Trustees of their holdings, and they have no intention to seek such powers. Indeed, I may say it would need legislation; it would mean changing the National Gallery and Tate Gallery Act 1954 and the British Museum Act 1963. Going on the attitude of the Chairman of the Trustees of the National Gallery, when they were asked to loan six of their important Turners, including "The Fighting Téméraire", to the exhibition at Burlington House and refused to loan them even for temporary exhibition, I doubt whether they would be prepared to give up their holdings for permanent display somewhere else.
Baroness LEE of ASHERIDGE: My Lords, is the Minister aware that I man-
1076
aged to prise one splendid Turner painting for one of our embassies abroad? It may not be right to assume that either the Tate or National Galleries will be permanently deaf to the appeal that Turners, which they themselves are not in a position to present to the public, should be loaned, if not permanently for substantial periods, to other public buildings at home and abroad.
Lord STRABOLGI: Yes, my Lords. Certainly, under the National Gallery and Tate Gallery Act 1954 it is possible for Turners to be loaned to museums and embassies abroad. Indeed during the term of my noble friend's office I think there were two Turners in the British Embassy in Washington and one in the British Embassy in Paris. I may say that I think Turner's work will benefit greatly from the extension to the National Gallery, which is to open this year, to the Tate Gallery, which is to open next year, and to the British Museum which is in the planning stage. All of these will enable us to show far more of Turner's work.
Lord SLATER: My Lords, will my noble friend agree with me that we are supposed to be representing what is known as the United Kingdom? Is he aware that we are constantly being reminded in this House that we are representative of the United Kingdom? In view of his answer in regard to the site, may I ask what investigation took place to see whether a suitable site could be found for this national collection outside the metropolis?
Lord STRABOLGI: My Lords, we try to disperse Turner's works as much as possible, and there are, I am glad to say, some in the National Gallery of Scotland. With regard to my noble friend's interesting point that we should look at other sites for a Turner museum, the Government are not persuaded that a Turner museum is in the best interests of Turner.
Lord REIGATE: My Lords, when the noble Lord refers to the fact that the site in Somerset House is not suitable for large crowds, is he anticipating that there will be only minimum attendance for the national Theatre Museum? Would he also please give reconsideration to the plea of the noble Earl, Lord

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Halsbury, and ask the Standing Commission to look at this whole matter again? It is a question not just of the Turners, but of the best use of these rooms.
Lord STRABOLGI: My Lords, with regard to the noble Lord's first point, the question of the floors at Somerset House, they will not be strong enough to hold large crowds. It is intended to put show cases in the middle of the floors, which I am informed are far lighter and will not take up so much weight. On the second point, of course we will take note of what the noble Earl has said, as we always take note of what noble Lords say in all parts of the House, but I may say that the Government do not intend to go back on their commit-ment.

BUSINESS
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, since the House is expected to sit late this evening may I say that dinners will be available tonight, and may I add that they will also be available on Thursday next.
CRIMINAL PROCEDURE (SCOTLAND) BILL [H.L.]
Report received.

OFFSHORE PETROLEUM DEVELOPMENT (SCOTLAND) BILL
3.10 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (LORD HUGHES): 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 Hughes.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Earl of LISTOWEL in the Chair.]
Clause 1 [Acquisition of land for purposes connected with offshore petroleum]:
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No.l:
Page 1, line 8, leave out from ("Scotland") to end of line 9 and insert—
(" for purposes relating to coastal works and installations required for the extraction, movement and storage of offshore petroleum.")
The noble Lord said: Clause 1 is the kernel of this Bill, and this Amendment queries the whole scope of the Bill and gives us an opportunity to consider it carefully. The Bill is to enable the Government to acquire land compulsorily, and it is at present drafted to cover anything related to offshore petroleum, whether the installations and works are inland or whether they are on the coast of Scotland. We must therefore ask what the Bill is needed for. The Amendment seeks to narrow the scope of the Bill to projects which are urgent and which might be held up by the normal procedures.
I start by saying that we agree with the Government on the need to get as much oil as possible from the North Sea and other parts of our Continental Shelf up to 1981, and that thereafter, when we should have reached self-sufficiency, we should expect depletion rates to be decided upon. In the meantime we must avoid unwarranted delays, in order not only to get this new source of energy but to secure the great improvement in our balance of payments which is possible. We believe that delays can occur with certain categories of project needed to get the oil from below the seabed, but we believe that these delays are more likely to occur when there are public inquiries associated with planning procedures. Where there have been no inquiries, where under the Town and Country Planning Acts planning permission has been granted by a Minister after written representations, little, if any, delay has occurred. In Scotland planning permission for as many as eight sites for building production platforms for North Sea oil was granted without the need for inquiries and caused no delay to the operations from the end of 1971 until February 1974.
To put this matter into perspective in discussing this particular question of installations and works, I must make it clear that the main delay in achieving the attainable programme in the next five years which is facing us now arises from general uncertainty being caused by the Government's policy, the effects of taxation, and the proposals for 51 per cent. Goverment participation. It is clear that

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companies are causing a slowdown and reduction in their plans because of this uncertainty. I fear that it could well be that some platforms may not be necessary for some of the smaller oil fields should the companies who are now waiting to see what the Government decide conclude that it is not worth their while to develop those fields. The Wall Street Journal a few days ago reported that international companies and their British subsidiaries were cutting back because of that uncertainty and because of the withdrawal of financing by the banks. So our target year for self- sufficiency, which I think is still 1980, may unfortunately have to be deferred.
It is against that background that we must consider the wording of Clause 1. Subsection (1) sets out a wide range of projects and associated plant and installations connected with the offshore oil industry. Subsection (2) mentions particular categories which are to qualify for expedited acquisition under subsection (5). However, it is subsection (1) which is so very wide, as at present drafted. The noble Lord, Lord Balogh, in the winding-up speech on Second Reading at column 442, pointed out that the sites for building semi-submersible and fixed concrete structures are to be found only in Scotland. That was why, he was explaining, this Bill was restricted to Scotland. But if the Bill were dealing only with those particular projects—building semi-submersible and fixed concrete structures, for which, I agree, there are only a few places where the conditions make it possible—then it would be quite unnecessary to set out the wide range of categories to be dealt with in this Bill as in subsection (1).
For example, this subsection would cover in its application the site of a factory inland, perhaps near Stirling, making pumps for offshore oil which might be used on land and not at sea. It would also cover a pipeline on land—not a pipeline coming to a terminal on the shore—because the pipeline would be pumping offshore oil. It would also appear to cover an office building in Dundee, provided that the office building was connected with offshore oil. We believe that matters such as these have not caused problems of the kind with which this Bill sets out to deal. The
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problems which have arisen have come from coastal sites, the difficulty in obtaining the kind of coastal site required for particular projects, and there are also those connected with projects for the production of oil, its extraction, transport, and storing. The problems have not arisen from exploration. Therefore, my Amendment seeks to exclude the word "exploration".
Exploration is carried out by rigs and drill ships which are, in turn, served by supply vessels. I hope that we can use the word "rig" here in its true sense —that is to say, as a mobile drilling unit—and not confuse it with production platforms, which are the massive structures to be permanently installed at a point in the seabed, each of them controlling 20 to 30 wells for the whole of their lives. Those stationary platforms are sometimes loosely referred to as "rigs". I shall try to distinguish exploration rigs, for which there has been no trouble in finding building sites. They can be built in ordinary shipyards. Incidentally, not many of them are being built in this country. The main one is at Clydebank by the Marathon Company, which started building them with Government help about three or four years ago.
There were opportunities for Britain to start on the rig production business when gas was found in the early 1960s in the Southern basin of the North Sea, but in fact British industry has not gone in for building rigs, and this market has been obtained by the Americans and others. If we were to build rigs we would not require the kind of sites which platforms need, the very exacting conditions. They can be built in most ordinary shipyards. Other vessels and structures connected with exploration have not caused the difficulties which we discussed on Second Reading. Therefore I think the kind of installation and works which we are con-sidering in this Bill are as described in my Amendment; the sites required are coastal sites and they are related to the production of oil and not to exploration.
The pipeline terminals present difficulties—that is accepted—but they, again, are connected with the production and flow of offshore oil. I agree with the Govern-ment that we must be ready for the coming of a new technology. We must be ready for concrete platforms—which have presented the immediate difficulties—to be suc-

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ceeded by yet further technological advances; the building of their successors may also demand exacting conditions at coastal sites. But that does not mean that some accelerated procedure should be introduced by Parliament in order to cover almost everything connected with offshore oil.
My Amendment would restrict the scope of the Bill to coastal sites needed for works and installations related to the production of oil. This would cover platform building, and not only the concrete platforms which have produced the difficulties of the last two years; it would also cover terminals. I accept that there can be complexes of piers required at terminals and also transshipment facilities seaward of the low water mark. I welcome the arrangements that are being made later in the Bill to designate the areas. This will help to fill in a gap which exists at present in our arrangements. I also accept that storage and pumping will require facilities at the coast which also might need an accelerated procedure in order to ensure that the oil which we so badly need in the next five years is not held up. It would be ludicrous if all the other arrangements were made and the platforms were put in position, and then because of some holdup in planning permission the oil could not be brought ashore because the terminal could not be built or finished in time.
I recognise that if this Amendment were accepted there would be consequential changes in subsection (2) of the clause, but I have not gone into the consequential arrangements because I think the Amendment itself is perfectly clear. I would include subsection (2)(d), because I believe that the immediate facilities required at a coastal site to cover urgent housing and so on should be included as part of an area which would be covered by this Bill rather than somewhere 30 miles inland connected with pumping oil in a pipeline well away from the sea.
In later Amendments we have put down our alternative proposals which we believe would, in a democratic way and with full discussion and consideration, help to reduce delays which occur in planning procedures. We believe that these are the real delays which are likely to be met. We consider that this clause—which
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seeks compulsory acquisition and does not deal with planning procedures—is much too wide as at present drafted. Although, naturally, one wants to be ready for the changes which occur so rapidly in this new industry, I cannot believe that all the points I have mentioned—such as an office in Dundee and a pumping station in the middle of the countryside—need to be covered by the Bill. I beg to move.
3.25 p.m.
Lord HUGHES: I thought for one moment, when the noble Lord was talking about the purposes of this clause, that he had slipped back ten years in time because the rather fanciful fears which were introduced about the pumping station 30 miles inland and the office block in Dundee were the kind of arguments which were used when, from this Bench, I was supporting the Highlands and Islands Development Board Bill. Noble Lords opposite then pointed out the wide powers which that Board had and said that it would not even exclude the possibility of acquiring by compulsion land right here in the City of London; it was not confined to acquisitions in Scotland. In fact, none of the fears which were then voiced—it was implied that this was really a back door method of enabling nationalisation to take place in various directions both inside and outside Scotland—has to date been justified. It is rather interesting that the Highlands and Islands Development Board has never had occasion to use the compulsory powers of acquisition; it has always managed to act by agreement.
Lord CAMPBELL of CROY: I am grateful to the noble Lord for giving way; I apologise for interrupting him so soon. I would say only that that is what we prophesied at the time—that we did not think the powers would ever be used— but surely it is the job of Parliament to ensure that the Executive does not ask for powers which will never be used.
Lord HUGHES: I am afraid that the noble Lord's memory deceives him; that was not the argument, certainly in this House. It was argued in this House that these sweeping powers were being given to Government, and fear was expressed about their use in exactly the same way as the noble Lord has expressed fears about the use of these powers. The noble Lord seems also to have a misconception about

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the different purposes in Clause 1. He accepts the need for the expedited procedure for certain of these projects in connection with the development of offshore oil, but he does not think it is necessary that these powers should be available throughout the whole range. The Amendment takes the section relating to those functions for which the expedited powers are provided and confines the powers of the clause to these sections alone. If the purpose of the Amendment is to ensure that only land on the coast can be acquired, then, for that purpose, it is defective in itself. Under the Amendment it would still be possible, for example, to acquire an inland site provided it could be shown that it was needed for a purpose relating to "coastal work ".
I must say to the noble Lord, Lord Campbell of Croy, that the kind of language which I am to use would be exactly the same as he would be using if he were standing here and I were sitting over there. It is the kind of thing which he, as Secretary of State for Scotland, has done so often. It is the kind of thing which does not change with Government; the facts do not change because Governments change. The expression :
" coastal works and installations required for the extraction, movement and storage of offshore petroleum "
is very obscure. The adjective "coastal" appears to govern "installations" as well as "works ", but this must obviously be wrong since, for example, platforms are not "coastal"; they are in the sea. But he does not want to stop these proceedings applying, for example, to platform work. The word "coastal" itself is very imprecise; at what distance from the sea do "works" have to be before they cease to be "coastal". The expression, "extraction, movement and storage", is too narrow. For example, it would not cover the land requirements of developments connected with exploration, drilling, or of separation and treatment plants at shore terminals.
I feel that I must return to my initial words, that to a certain extent this Amendment derives from unjustifiable fears that the Government have sweeping land nationalisation plans. The way in which from the beginning the Government have proceeded with this Bill has shown that they are concerned simply to
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ensure that crucial developments are not held up because sites cannot be made available. The wording of subsection (1) is designed to give some elbow room in terms of the purposes for which land can be acquired. We are legislating in a field of rapidly moving technology and one where, as the noble Lords will readily recognise, other factors are also subject to change. The noble Lord, Lord Campbell of Croy, recognised this. Because of his past connection with this subject at the Scottish Office, he himself knows how difficult it is to be precise for very far ahead, simply because everybody concerned, not only the companies who are doing the work at sea but also the Government in their attempt to legislate for it, are working in fields which are totally new. If we are to confine ourselves in too narrow a way we may find that we shall add to doubts which exist. I will not follow the noble Lord into his ramble into the taxation field, which can hardly be regarded as part of the purpose of this Bill. But for whatever reasons there may be doubts, certainly we ought not deliberately to add to them by narrowing our legislation more than is necessary.
The general purpose of the Bill has been welcomed. There have been doubts, and, I would be the first to agree, genuine doubts, as to the best way of expediting procedure. The noble Lord, Lord Campbell of Croy, when he was Secretary of State, took the line that the way to do so was by shortening the planning procedures. The Government have taken the line that the normal planning procedures should not be interfered with and that the way to shorten the procedure was at the resulting stage on acquisition. Once planning procedures have been gone through, at least those who have an interest in land which may be the subject of compulsory acquisition procedures have had the opportunity of participating, if they so wished, at the earlier stage. I do not understand why the noble Lord still persists in the argument that the planning procedure is the correct way of shortening procedures, because he has pointed out how little the planning procedures have interfered with the number of sites at present available.
If we examine the whole procedure, we shall find that in four out of five cases—or, shall we say, four-fifths of

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the cases—the record is exceptionally good. The one thing about which the noble Lord has no cause to feel that he can be criticised is the speed with which the planning procedure for this operation went through at the time he was Secretary of State for Scotland. We are seeking to improve on this performance. it is well known that there are delays in relation to planning procedures which the public do not understand, but the position is much exaggerated. There were 41,000 planning applications in Scotland last year, and only a few hundred of them were the subject of inquiry. The Secretary of State has had inquiries made, as well as consultations, with many authorities concerned, including the Law Society, the Faculty of Advocates, about methods of expediting planning procedures at the present time, cutting out needless delays, but always bearing in mind that we must not interfere with the rights of people at the planning stage. If this is done, then it is much more reasonable that we should be able to use this expedited procedure in these particular cases and in the wider field— this is the elbow room to which I have referred—where we may not need the expedited procedure but may find it necessary to ensure that sites are available.
For these reasons the clause is drawn in these terms. Therefore I cannot recommend your Lordships to narrow the purposes of the clause and, as the noble Lord has indicated, of the entire Bill in the way which would be effected if this Amendment were accepted. I am certain that on reflection the noble Lord himself would not wish to do so. Moreover the Amendment as now drafted would be totally unacceptable because the courts would find it impossible to interpret. I have no doubt that, given a big enough team of draftsmen and the will to encourage them something might be made of it, but as it stands it would be an absolute disaster if that proposition were incorporated into the Bill. It would then be much better to tear up the Bill from the beginning and tell the oil people that they would just have to get on with it.
Lord WYNNE-JONES: If this Amendment were carried, would it not mean that nothing could be done in the way of compulsory acquisition except at
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the coastal point of installation or work? That surely would mean that the whole of the pipeline which runs now, I believe, from Cruden Bay to Grangemouth would not in any respect at all come under this Bill. Yet surely that is part of the whole scheme. If at any time it were necessary for any particular reason to have access to that pipeline, and that had to be done by acquiring land somewhere by the pipeline, this Bill would allow it but the Amendment would absolutely ban it. The Amendment would mean that the Bill would be restricted entirely to the coastal region, and yet the pipeline is not coastal.
Lord HUGHES: If those remarks are directed to me, they bring me to the point which I have made: that there is no definition of "coastal". If we do not know how far out to sea is meant by "coastal", by the same token we do not know how far inland to go in defining "coastal ". Coastal is certainly not just the point where the land stops and the sea begins, otherwise it would be impossible to do anything at all. It would be just a line drawn on the map. That is one of the major defects of the Amendment: it uses a terminology which it would be incapable of applying on the ground.
Lord FOOT: May I take the opportunity offered by the moving of this Amendment to raise a more general point about subsections (1) and (2) which I hope is certainly not irrelevant to the Amendment and has a bearing upon it. One of the things which has caused me some anxiety, as I listened to what has been said this afternoon, is that there appears to be something anomalous about subsections (1) and (2) when one considers them together. First, subsection (1) gives the Secretary of State this power to acquire land
" for any purpose relating to exploration for or exploitation of offshore petroleum".
When we go on to subsection (2) we do not find the words "those purposes are (a), (b), (c), (d) and so on", but we find the words:
"The purposes mentioned in subsection (1) above include in particular "—
and then they set out the various purposes under headings (a), (b), (c) and (d). To my mind, that seems to imply clearly that subsection (1) includes purposes which are not included in paragraphs (a),

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(b), (c) and (d) of subsection (2). If that is true, what are those purposes? If there are purposes which are not included in paragraphs (a), (b), (c) and (d) of subsection (2), it seems clear, when one goes on to look at the further provisions of the clause, that the expedited acquisition order procedure could not be used in relation to purposes other than the ones specified in paragraphs (a),(b),(c) and (d). It is not simply a legal point as I see it. If the Government really want to define in clear terms what powers they are seeking to take to rewrite Clause 1, what would be the objection if they were to say that the Secretary of State "may acquire by agreement or compulsorily any land in Scotland for any of the purposes set out in subsection (2) below "?
Lord CAMPBELL of CROY: I must just point out to the noble Lord that that is, in fact, the purpose of the next Amendment.
3.40 p.m.
Lord FOOT: I read the next Amendment and hoped that that was its purpose; if so, I shall be glad to give it any support I can. But though I may have read it rather cursorily, it did not seem to me to cover the point I had in mind. Perhaps we can come to that later on. However, I should like to ask the noble Lord, Lord Hughes, what would be the objection to rewriting the subsection in the way I have suggested. In that way, we should all know precisely what powers the Secretary of State was seeking to acquire, and should have a precise definition of the purposes of subsection (2). Unless the Government have something up their sleeves, have something to conceal or are seeking powers for some purpose of which we know nothing, what is the difficulty of limiting the purposes at present defined in subsection (2)?
Viscount DILHORNE: Before the noble Lord, Lord Hughes, replies, may I ask one question relating to the Amendment? If I understood the noble Lord correctly, he based his opposition to the Amendment mainly on the use of the word "coastal" and the imprecise nature of the interpretation which might be given to it. Would he have any objection if the Amendment under consideration were drafted in a different order so that it read,
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"for purposes relating to installations required for the extraction, movement and storage of offshore petroleum and to coastal works"?
The Duke of ATHOLL: The noble Lord, Lord Wynne-Jones, sought to cast doubt on my noble friend's Amendment by saying that it did not cover pipelines, but, so far as I know, no company has ever had to use compulsory powers to acquire wayleaves for pipelines in Scotland. If they needed to, I seem to remember that three or four years ago we passed a Bill which enables wayleaves to be compulsorily acquired for this purpose. Normally, the coastal installations—if I may use that word—would take so much longer to erect that there could well be time, if there were an awkward owner who would not let them through, for the wayleaves for the pipelines to be acquired under the Pipelines Act. The noble Lord said that if the Amendment were carried the maintenance of these pipelines might be difficult if one encountered an awkward landowner, but I believe that every time a company acquires a wayleave for a pipeline one condition is that it shall have the right to go on the land in the future, in order to maintain, repair and do anything else that may be necessary to the pipeline. So I cannot see that that would produce any difficulty at all.
Lord CAMPBELL of CROY: Perhaps it would be convenient if I replied at this stage to one or two of the points that have been made on my Amendment. First, it is clear from what the noble Lord, Lord Hughes, said—and I think he has made the position very clear for us— that the Government are seeking powers to cover a huge range of activities; indeed, virtually everything related to off-shore oil. When I made my statement in another place a year ago, I made it clear that we were seeking to restrict the powers taken to certain special categories where special procedures would be needed in order to ensure that projects were not held up, as a result of which we might lose the very valuable production of a year or two from important oilfields.
The noble Lord referred to the Highlands Development Bill, with which I was concerned in another place, and we raised some objections there. The Committee might be amused to recall that we pointed out that that Bill referred to the whole of the country—for example, the

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Highlands Development Bill gave compulsory powers to acquire land in Cornwall or Kent—and we felt, as Parliamentarians do on such occasions, that those powers were not needed. Some of us in another place said at the time that we did not think that the Highlands Development Board would ever use those compulsory powers even in Scotland, and I think that in only one case recently— that of the Island of Raasay—has it invoked compulsory powers. I think that that was a justifiable case; but, otherwise, the Board has not sought to use the powers. My complaint about the present Bill is that for no apparent reason —although it covers such a wide range of matters—it is restricted to Scotland, though one or two of the particularly difficult projects, such as a terminal, might appear in Wales. However, we shall come to that later.
As regards the drafting, I hoped I had made it clear that I was not suggesting that my drafting was immaculate. All I was concerned with was to make my intention clear, because the Amendment would certainly need to be redrafted with consequential Amendments if the Government accept the intention. I think that I have succeeded in making clear what is the intention, and I feel that if I had achieved the correct language by resorting to the help of many draftsmen, and if I had not used the word "coastal", we should probably have ended up with your Lordships finding the Amendment much more difficult to understand. As regards the planning procedures, we shall come to those later. I was referring to the eight occasions when there were no inquiries; the planning procedures work quickly when there is no inquiry. It is the public inquiry system, as it exists at present, which can lead to very long delays. I am glad the noble Lord accepts that very little time was lost at Ardyne Point, Ardersier, Nigg Bay, Methil and other places where steel—or steel and concrete in the case of Ardyne Point— platforms are now being built. These were dealt with in a matter of days or weeks.
The noble Lord, Lord Wynne-Jones, talked about pipelines. I am glad to be able to tell him that the pipeline from Cruden Bay to Grangemouth has already been laid, and if not completed is as nearly complete as can be. There has been
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no difficulty at all and, as my noble friend the Duke of Atholl pointed out, there never has been any difficulty, because pipeline legislation already exists for the overland route. I should just add that we already have experience of this, because a pipeline was laid over 20 years ago from Finnart to Grangemouth and has caused no trouble, and it is now very difficult to see where it is below the ground.
Lord WYNNE-JONES: I appreciate what the noble Lord, Lord Campbell of Croy, has said and also what the noble Duke, the Duke of Atholl, said. It is perfectly true that the pipeline is laid and that only wayleaves were required. I was referring not to the laying of the line, but to the possibility that there might be a requirement at some time in the future for a different sort of installation. For example, it might be necessary to put a station inland to link a pipeline from the Brent field to the Forties field. In that case, it might be necessary to have an inland station and that would not, I think, be covered just by a wayleave.
Lord CAMPBELL of CROY: I can say only that that kind of problem has not so far caused delay and, from what I can see, it would be unlikely to cause delay, compared with the question of building production platforms for which only very special sites can be available, and the question of pipeline terminals and trans-shipment points. The noble Lord, Lord Foot, raised a point with which we particularly agree, but, as that is coming up on the next Amendment it would probably be best to deal with it then.
Lord HUGHES: I should like to come in now before I forget the points to which I have to reply. The Government almost seem to have moved across the Floor temporarily. I wanted to reply to the noble Lord, Lord Foot, before we got too far away from his point. He referred to the wording of subsection (1) and the difference between that and subsection (2), and then went on to refer to subsection (5).
The Government have no ulterior motive in this. The point is that the items listed in subsection (2) are already known to be the part of the operation for which the expedited procedure is most likely to

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be needed. What the Government cannot say with certainty in this field—where so many of us are operating totally in the dark—is that these are the only purposes for which acquisition might be required as a means of speeding-up. There are two ways in which the industry can be helped; the acquisition of sites, either compulsorily or by agreement, to help the operation to go along, and the acquisition by the special procedure, the expedited procedure.
If they had something up their sleeve, the obvious thing would have been just to say, "Item 1", and then to have sought expedited procedure for any occasion when the Government thought it was necessary. We did not think that that was right. It is only in this limited field of which we know at the present time, and, so far as we can foresee, this field should cover the area where the expedited procedure would be justified; and outwith that there may be other occasions where we want to acquire the land. But not knowing just how widely these might range at the present time, it would be quite wrong to say that the expedited procedure was necessary.
The other point to which I wish to refer at this stage was that raised by the noble and learned Viscount, Lord Dilhorne. I did not base my objections solely on the definition of the word "coastal", without seeing in writing what it was; without obtaining an opinion from the noble and learned Lord on the effect—once he himself saw the definition in writing—I am not certain that it would necessarily be helpful. He still used the words "coastal works" and—
Viscount DILHORNE: The words "coastal works" would come at the very end, so the word "coastal" would not cover installations,et cetera.
Lord HUGHES: Yes, but it does not alter the fact that we still have to define what "coastal" is: how far out to sea would a coastal works be; how far inland would a coastal works be? I can just imagine that if we allowed this Amendment to go through, in anything like its present form, the noble and learned Lord and his colleagues might have a most enjoyable time, sometime in the future,
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in trying to determine how far from what Parliament thought it was doing it had actually succeeded in doing.
Lord CRAIGTON: Both in another place and here, the noble Lord, from what he has just said, seems to assume that one of the justifications for expedited procedure, which is not really so very democratic, is that the preliminary hearing is a full democratic procedure which gives everybody an opportunity to give all the information. This was a question that I asked him on Second Reading at column 399 when I said:
"I do not believe that the preliminary planning application can in fact be adequate ventilation or safeguard prior to an expedited acquisition order, if only because, according to my information, if 1973 and the first half of 1974 is any guide, 66 out of the 184 planning applications were called in by the Secretary of State and did not go to public inquiry at all."—[Official Report, 28/1/75; col. 399.]
As I understand it, if the inquiry is called in it need not be held locally. There is no real chance for affected residents, or amenity bodies, or other third parties, to be consulted at all. This seems to bear very importantly on the question of our view of expedited acquisition procedure. I gave the noble Lord, Lord Hughes, a note that I would ask this question, and I should be very glad to have an answer.
Lord HUGHES: Yes, the noble Lord did tell me the other day that he wanted to raise this matter so that my answer could be on the Record. It is right that I should make it perfectly clear that a decision by the Secretary of State to call in an application for his own consent does not in any way alter the possible procedure. It is just as easy for an inquiry to be held on something which is called in by the Secretary of State as on something which proceeds in the ordinary way, through a local planning committee, and which provides the right to an appeal. Of oil applications which were called in by the Secretary of State, in two cases a decision was reached without an inquiry being held, and in the third one of fame, or notoriety, depending on how one looks at it—Drumbuie —an inquiry was held. I want to make it clear beyond any doubt whatsoever that the calling in of an application by the Secretary of State is not in any way intended as a means of short-circuiting

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the procedure. It is generally done where the application will be dealing with something of more than local interest, and where the Secretary of State calls in the matter, so that considerations other than those which might be expected to be considered merely by the local planning committee will be brought into bear. But it does not mean that the procedures in planning are short-circuited in that way. In fact, it could have the very opposite effect: because of the desire to have the matter looked at from a wider view than that which would be done locally, it might, if anything, increase the possibility of an inquiry being held.
Lord CAMPBELL of CROY: It is clear that the Government are not to be influenced by this debate, but I hope that none the less they will consider the alternative which comes up in the next Amendment. Could I add to what the noble Lord has just said about inquiries, because the last time he spoke about this matter, on Second Reading, there were two or three remarks suggesting that when the Secretary of State called in an application it meant there would be no inquiry. Certainly when I was Secretary of State there were occasions when, to save time and at the wish of everybody concerned, the application was called in, but then an inquiry was held, because it was the most convenient and best way of handling it. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.58 p.m.
Lord STRATHCONA and MOUNT ROYAL Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 2:
Page 1, leave out lines 9 to 11.
The noble Lord said: I hardly think it is necessary for me to speak to this Amendment since the noble and learned Lord, Lord Foot, has really done the job for me—and a great deal more effectively than I could have done. We were a little dubious about the drafting in this Amendment and it may well be that a lawyer of the quality of the noble and learned Lord, Lord Foot, could have done it more completely and more effectively than we have done. The thinking here, of course, is very similar to that behind the Amendment moved by my noble friend Lord Campbell of Croy. I still say, as we have said before—we said it on Second
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Reading—that the Government are not consistent throughout the Bill, on the one hand in restricting its scope to Scotland, and, on the other hand, saying: "We cannot see what is going to happen technically so we must include everything that we can possibly imagine could conceivably happen in the technical field."
I do not want to repeat the argument. We have had it before. I did not, frankly, understand the noble Lord, Lord Hughes, in his answer just now to the noble and learned Lord, Lord Foot. As I understand it, however, the expedited acquisition orders can apply only to the purposes in subsection (2), whereas the Government have the power under the Bill to acquire land for the other purposes, whatever they may be, under subsection (1), but not under an acquisition order. Perhaps this is the point the noble Lord was getting at. I hope I have understood him correctly. Perhaps he can confirm this for us in a moment. But I think we come back to this general principle, that Members of both Houses of Parliament —and Oppositions in particular—are here to ensure that Governments do not take powers which they do not need.
It is proper that Parliament should not trust Government. I do not wish to sound offensive to the noble Lord, who has always been most reasonable with all of us, but the fact is that some of his colleagues in this Governmenet are such that I think we can legitimately have fears. There are very strong influences from members of other organisations and it is not inconceivable to imagine a gentleman like Mr. Reid getting at Mr. Benn and inducing the Government to take over land for purposes which are not specified here and which we cannot all envisage. Can the noble Lord deny that they would have powers, as the Bill now stands, to do those things under that kind of pressure? If he cannot; then I believe he should listen to what the noble Lord, Lord Foot, has said. I beg to move.
Lord FOOT: Might I intervene to apologise to the noble Lord for having usurped his Amendment and spoken to it in advance? I see now that the noble Lord, Lord Campbell of Croy, was right in saying that I was addressing myself to that Amendment. The reason I did not realise that the noble Lord, Lord

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Campbell of Croy, was supporting the second Amendment was that his name was not attached to it. I thought that he had a preference for his own. I will not repeat anything that I said earlier, but I should like to endorse what that noble Lord has just said to us.
Lord HUGHES: I, too, do not want to be repetitive. The way the discussion went on the last Amendment has meant that we have, in large part, also discussed the second Amendment. The Government cannot accept the Amendment for the reason I have already stated; that it is unduly restrictive. The Government have deliberately restricted the new, and in ordinary circumstances difficult to justify, powers to those items in subsection (2) of the clause. If we have been subject to what I gather is called "binary", then the noble Lord would now be appearing to import "Reidery" into the discussion, although I am not certain that there is any connection between the two, or whether the particular Mr. Reid is the one we are talking about, for we have not heard of him for some time.
If that had been the intention, the clause could have been much simpler. All that would have been needed was to follow subsection (1) with the expedited procedure. There are known directions in which speed may be the vital thing. It is for these reasons that the expedited procedure is asked for; and it is in these connections, in subsection (2), that we are seeking it. There may be other uses for which we may require land in the future. Noble Lords will remember that quite a number of the operations which companies are carrying out are of a temporary nature. Some things are permanent—an oil refinery, for instance. For that reason, the Government in another place made it clear that these purposes did not include land for the purposes of erecting an oil refinery. When you put up an oil refinery you expect it to be there for the rest of its economic lifetime; you do not put up an oil refinery and expect to reremove it in 10 or 15 years' time.
But much of the operations in connection with the new oil industry are of a temporary nature. It would be difficult in some instances for companies to acquire land for that purpose; whereas the powers which the Government are
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seeking enable land to be acquired, adapted to the purpose, perhaps leased to the companies concerned and then, as the Bill makes provision, if the land is no longer needed, reinstated in due course to its original purpose. It is because we do not know how far it may be necessary to go beyond subsection (2) that we have taken these wider powers of acquisition.
I can assure the Committee—and I am certain that, without naming anyone, I speak for any of my colleagues in Government—that there is no hidden desire to acquire land ostensibly for purposes in connection with oil when what we really want is to acquire it for other purposes. In many cases, we will not have resort to compulsory purchase powers because the present owners will be only too glad to get rid of it. It is of not much use to them or to anybody else at present. To go back to the question of taking of powers wider than one is expected to need, unless I am wrong in my recollection the pipelines came under the 1962 Act and the noble Lord, Lord Campbell of Croy, said that there had been no need to use compulsory powers on any of that work. But the fact remains that in 1962 it was found desirable to include compulsory powers in case they should be necessary.
Here we are doing the same. We hope that compulsory powers will not be needed; we hope we will not need to acquire land; but we feel that it would be a great mistake to make the provisions so narrow as to discover at a time of urgency that we did not have the necessary powers, that the company concerned could not or would not go ahead and that, at the end of the day, the loss was the nation's. While I can understand the desire of Parliament not to move into any wider field than is absolutely necessary, we feel that to accept the Amendment would be to narrow the field in a way which would make it much too difficult for the industry to operate. I hope there-fore that noble Lords will be content to leave the Bill as it stands in this respect.
Lord FOOT: I should like to comment on two points. The first, which is a general constitutional point, is that it is natural always, as the noble Lord has said, for the Executive to ask for as much powers as it can possibly ask for; and, as was rightly said from the Opposition

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Benches, it is right also that Parliament should always question and seek to limit the powers that it confers upon the Executive. As a matter of general principle, I should have thought that the proper attitude for this House and the other place to adopt when asked to confer on the Secretary of State very wide powers for such things as the acquisition of land, would be to scrutinise closely the application made by the Executive for these powers. It ought to be possible for the Government, with the assistance of the draftsmen and everybody so concerned, to set down in plain language what are the powers sought. That is the first objection that I would still have against giving the Secretary of State these very wide powers in subsection (1), a sub-section which clearly includes something more than the powers conferred on him by subsection (2).
My second comment is this. The noble Lord said that the reason why it is so important to give the Secretary of State powers to acquire land in circumstances that we cannot now foresee under subsection (1), is that in the future we may suddenly find that we need to do something for a certain purpose which is not included in subsection (2); that it may be a matter of urgency and therefore it is necessary to acquire these powers now. But if such situations were to arise, if powers were sought for a purpose not specified in subsection (2) but included only in general, in subsection (1), then the Secretary of State would not have available to him the expedited procedure in order to overcome the urgency. The expedited acquisition procedure is available only for those specific purposes set out in subsection (2). If the noble Lord is arguing that a situation may arise where we want to do something that we have not foreseen and we want to do it urgently, then, as I see it, the Secretary of State will not be able to use the expedited procedure which, in the Bill, is made available only for the specific purposes listed in sub-section (2). It therefore seems that the noble Lord's argument is not only constitutionally defective, but also defective in fact, for the reasons I have attempted to describe. I hope, if I may say so, that the noble Lord, Lord Strathcona and Mount Royal, will carefully consider what I have said.
Lord LEE of NEWTON: Is there not logic in what the noble Lord, Lord Foot, has just said? It might be the case based on the contention that the Government are conditioning Clause 1 far too rigidly by what is implied in subsection (2). The noble Lord, Lord Foot, has said that the conditions referred to in sub-section (2) may not be available under the expedited procedure, if indeed there is a need for speed in their application. Although it is some time since I had anything to do with this subject, it seems to me that when there is a suggestion that the Government are taking too much in the way of powers and there may be an accusation of back-door nationalisation, is it not the case that within the Continental Shelf Act the Opposition nationalised the North Sea without saying too much about it?
I do not know how widely one uses the words in Clause 1, "any land in Scotland ". Do they mean land in territorial waters? We have already heard from the noble Lord, Lord Campbell of Croy, that the concrete platforms are offshore. I should therefore have thought that they are standing in land which is already in public ownership under the Continental Shelf Act. Therefore the Government are not asking for any increase in the powers they already have. I should like to know how far "any land" goes when applied to the rigs in the North Sea. Does it mean land which is already in public ownership? I do not want to get into the argument about whether we have found oil in Scottish territorial waters—that may be asking too much—but I should have thought there is a danger that if we are to be restricted as to the use of powers, and if the conditions laid down in subsection (2) are essential, that in a short period of time the Government will not be taking too much in the way of powers but will be taking actually none.
Lord HUGHES: I am afraid that I did not make myself sufficiently clear to the noble Lord, Lord Foot, and I accept full responsibility for that. But I tried to make clear that the Government were doing two things. First they were taking a power to acquire land for two purposes —that was the general power in subsection (1). But they were also taking for specified purposes the power to use an

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expedited procedure after the planning procedure to get that ownership into land. The powers specified in subsection (2) are powers for which it is known urgency may be the most vital factor—what has been called "the window in the North Sea", the limited period during which, for example, floatout can take place and can make all the difference between getting oil in one year and getting oil in another, and in terms of balance of payments in a whole year would involve £175 million. That is where the urgency arises and that is where the need for the expedited procedure arises The wider powers are not necessarily related to urgency but to being able to get land in circumstances in which the State could get it, when the company might not otherwise be able to get it.
So we have the double purpose. As my noble friend Lord Lee of Newton said, if the Government had been able to identify all the possible purposes lying ahead we could have had Clause 1 in two parts. We could have had the part as it stands where no need for expedited procedure arises and we could have a list of these other items where acquisition might be necessary but which would not need to be the subject of expedited powers. It is not possible at this stage to say what those other purposes might be. I have mentioned some possibilities, such as service leases; pipe-coating works and warehouse storage. These are not likely to be matters of urgency, but it might be if there were not powers to acquire the land this would mean that the operation could not go ahead at all, particularly in those parts of the operation which are of a more temporary nature.
If this Amendment were to be made, it would mean that the Bill would have a very limited purpose. If land were needed for purposes other than subsection (2)—the expedited procedure—and it could not be acquired in the ordinary way the Government would have to introduce completely new legislation to deal with that situation. While I accept that it is the duty of Parliament to scrutinise carefully the extent to which the Govern-ment are seeking powers and not to grant them on too wide a basis, I submit that it is equally the responsibility of Parlia-
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ment not so to restrict powers and define them in such a narrow way that it would need only one small part to go beyond the definition and the Government would be without powers and time would have to be found in the Parliamentary programme for yet further legislation.
If noble Lords opposite were to consult the oil industry and seek a definition of the various types of oil operation for which land might be required and might be suitable for State acquisition, either by compulsion or agreement, and seek to list those as a definition of the powers then obviously we would look at it. It is very difficult, but this is just the sort of thing we have tried to do and we found, and if we cannot in the first part give particular definitions of what may be needed, as we have done in the second part, the duty of the Government is to seek a general power in the knowledge that in the past these general powers have been used only for specific purposes. There is no precedent of a Government having obtained powers of this wide nature and then used them in any way which could not be defended in a particular case. This applies to any Government of any Party. For these reasons, I do not think we are asking the Committee for too wide powers and if this Amendment were to go into the Bill and remain in it I am quite certain that the oil industry and the country would have great cause to regret it.
Lord SHINWELL: I should like to say a couple of words in support of my noble friend. As I understand it, the Government are asking for two kinds of power. One comes within the context of the expedited procedure. That can be defined, as indeed it is. The other kind of power the Government are asking for does not come within the expedited procedure for the obvious reason that the purpose is not accurately defined.
The noble Lord, Lord Foot, with his legal acumen, which I regret I do not possess, argued that the Government should define their purpose in relation to the power they require which is not related to the expedited procedure. That is what I understood him to say. Sometimes it is very difficult to understand what the legal fraternity do say. That is why there is so much disputation in the courts.

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However, I do not want to enter into that subject. I have offered a few observations in support of the clarification given by my noble friend. This debate so far is reminiscent of those we had many years ago in the other place on the subject of the acquisition of the coal industry, the railways and so on. I had something to do with the introduction of legislation in connection with the acquisition of the coal industry and of electricity supply, and partly in relation to gas; and we had great difficulty in another place during discussions in Committee in dealing with teh argument adduced by the Opposition at the time that we were seeking extra powers. In other words, when we asked for the power to acquire the mining industry, which meant dealing with the production and distribution of coal, we recognised that it might possibly cause fragmentation of the coal industry as regards various oil products; and that the acquisition of land would be needed, among other things. That was objected to by the Opposition. They said, "If we must accept nationalisation, you can go so far and no further." It seems to me that the arguments which are being adduced by the Opposition today are pretty much along the same lines.
I was interested in an observation by the noble Lord, Lord Campbell of Croy. He remarked more than once, "We must declare our intent." But what is that intent? We really ought to know what they are driving at. It seems, if I have understood the argument correctly, that they want to prevent the Government from operating within compulsory powers. That means that the Executive could go much further than the Members of another place or of your Lordships' House might wish. But we are either to get this oil or we are not to get it. I would urge on your Lordships that we need to get it as speedily as possible. Why place obstacles in the way? Even if it should mean in the course of time acquisition without being able to specify the project, whether it be the acquisition of land or some other requirement for the purpose not so much of the production of the oil but of its distribution, I can see no reason why objection should be taken. I repeat that I have listened carefully to the arguments adduced by my noble friend. He has submitted them
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with the utmost clarity and I think he ought to be supported.
Lord WALLACE of CAMPSIE: I am provoked into rising to my feet since this subject refers to Scotland. The last time I spoke in this House your Lordships were very kind to me, and I will not detain you for very long today except to say that there is a view in the North—in the Glasgow and the Dundee Chambers of Commerce and certain other places— that it is of the utmost importance to get the oil reserves ashore at the earliest possible moment. This is transcendent. Up to now attempts to acquire certain parts of land in connection with oil have been frustrated or seriously delayed because of the very lengthy procedures which can be invoked. In my view, this can no longer be accepted and it means that we must override, if need be, private interests. I think, with respect, that this view will require to be accepted.
Lord HUGHES: I know there will be a certain amount of reluctance on the part of the noble Lord, Lord Strathcona, to withdraw the Amendment, particularly in view of the encouragement—or should I say incitement?—which he is getting from the noble Lord, Lord Foot, but I am genuinely not seeking to make a Party point when I say that it would be very adverse to the interests of the industry if the Bill were narrowed in this way. What I would suggest to the noble Lord is this: that if he will withdraw the Amendment and consider seeking to put in a definition similar to that in which the Government have defined the items for which the expedited procedure of acquisition could be applied, I certainly will ask my colleagues whether it is possible to agree to something on these lines. If, after consultation, he can offer something of that kind, I will certainly undertake not necessarily to accept the Amendment but at least to offer this help. If he can produce a list of items I will give him the help which would at least prevent my saying that the Amendment was technically defective. I have never found it desirable to make that criticism. In fact, it is in my brief to point out the technical defects of the Amendment but I preferred to oppose it on its merits. It did not seem to me that it was very useful to oppose it on the grounds that it was defective. If the noble Lord, after consideration, finds in

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fact that he cannot do what I suggest, then I should regret it, but I could not object to coming back to the Amendment as it stands at the next stage. However, I think there is at least an obligation on him to attempt to widen the narrow purposes of Clause 2 rather than narrow the purposes of Clause 1. When I say "widen the purposes of Clause 2", I mean for the purposes of Clause 1.
Lord STRATHCONA and MOUNT ROYAL: I must thank the noble Lord for his last intervention. We have had a good discussion of this issue, which contains quite a large point of principle. I am sure the noble Lord will not misunderstand me when I say that on the whole I prefer the advocacy of the noble Lord, Lord Foot, to his own. I was going to say that I regretted the Minister's rather rigid attitude, but then right at the end he showed a certain willingness at least to consider the point we are trying to make. He has given us a great many sincere undertakings on behalf of the Government. We shall read these with interest and shall consider most carefully the suggestion made by the noble Lord. Meanwhile, I think it is appropriate in the circumstances to beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.29 p.m.
Lord STRATHCONA and MOUNT ROYAL Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 3:
Page 2, line 8, at end insert (" nor shall they include land which is already being used for the purposes set out in subsection (1) above except by an order a draft of which has been laid before, and approved by resolution of, each House of Parliament.").
The noble Lord said: I shall try to deal more shortly with this one. This is really following up an undertaking given by the noble Lord during the Second Reading debate. It refers to the question of taking over the existing sites which are already being used for the purposes in the Bill. Again, we come back to a number of points we have already made this afternoon. The noble Lord said there was no intention on the part of the Government to take over existing sites if they were being properly run. I said at that time that the difficulty was to decide what is meant by that. The objection to the
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present situation, as I see it, is that it is up to the Government to decide what they mean by being properly run.
One, again, can conceive circumstances where there has been a strike, or there could be other special adverse circumstances which affect a site. As I understand the present situation, the Secretary of State can say: "This site is not being properly run. I therefore wish to take it over." What we are seeking to do in this Amendment is to say that this would be a highly exceptional situation. There is a very limited number of sites where this is already going on. Would it not be appropriate in those circumstances to come back to Parliament under the Affirmative procedure and ask for a special order in the rare cases where the Government claim that an existing site is not being properly operated? I beg to move.
Lord HUGHES: The difficulty is that at the beginning of this debate I keep getting briefs marked "Resist" and yet finding that the Amendments are being moved in a way which is perfectly reasonable. That is even more so in this case than in the previous two Amendments. But unfortunately the Amendment goes much further than the point to which the noble Lord, Lord Strathcona and Mount Royal, has spoken. On Second Reading I said that there would be no intention of interfering with sites which were working quite properly. May I give the kind of circumstances where this provision might be relevant? Someone has a site; he has used it properly for the purpose for which it was acquired, and then, perhaps because of the way in which the job was done, he gets no further business. The site is eminently desirable to be used for the purposes of the oil industry, but the man who has it and cannot make use of it is unwilling to part with it, whereas there may be others with orders ready to hand who could use it. These are circumstances in which it would obviously be in the interests of everybody, except the existing owner, that the land should be acquired compusorily. Remember, this situation would arise only because he had refused to dispose of the site by agreement.
An Affirmative Order would be required to be made before an existing site could be acquired. The Amendment would not only apply to a site which was

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being acquired by compulsion; it would also apply also to a site which was being acquired by agreement. It would also apply to an appropriation order: for example (and this point arises on another Amendment later on), a site which was in the possession of the State for one purpose but was sought for another. In each of these cases one would be coming to Parliament for an Affirmative Order. The intention is that there would be two ways of dealing with acquisitions. In the case of an expedited acquisition order provision is already made for the Affirmative Resolution procedure, for whatever purpose, by Clause 1(6). If there is need for compulsory acquisition but no degree of immediate urgency in the national interest it is open to the Secretary of State to make a compulsory purchase order under Clause 1(4). In this case the normal compulsory code will apply, and if there are valid objections the Secretary of State will have to call a public inquiry before making the order. There is no need for Parliamentary scrutiny in addition to a public inquiry. The need for the Parliamentary process under an expedited acquisition order arises because in that case there is no obligation to hold a public inquiry.
If the acquisition is by agreement, or if it is a transfer from one Government Department to another, there is obviously no need to come to Parliament and get an Affirmative Order. If it is under compulsory purchase in the ordinary way, there is no need to come here because the ordinary planning procedures will have applied, including an inquiry where there is objection. In the expedited case the Affirmative Order will apply. I tended to regard the Amendment as being more probing than otherwise, and I hope that, if I am right in that assumption, I have assured the noble Lord that the provisions he is seeking to make by this Amendment are in fact made in the Bill as it stands.
Lord STRATHCONA and MOUNT ROYAL: I am grateful to the noble Lord. I think he is saying that very few of the existing safeguards are abrogated by this clause as it stands and that therefore this Amendment is basically not giving any further safeguards to somebody operating an existing site beyond those he already enjoys at the present time. This was not my understanding of
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the way the Bill stood; but if he is saying that, then I am certainly satisfied to beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES (Baroness Tweedsmuir of Belhelvie): Before I call Amendment No. 4 I should point out to your Lordships that there is a misprint. It should read subsection (10), and not subsection (1).
4.37 p.m.
The DUKE of ATHOLL The DUKE of ATHOLL moved Amendment No. 4:
Page 2, line 15, at beginning insert—
("Subject to the provisions of subsection (10) of this section ").
The noble Duke said : I apologise for the misprint, if it were such; I have no idea whether it was a misprint or whether the error was my fault, but I am sure that those of your Lordships who are of a detective bent had no difficulty in realising what I was getting at. This is purely a paving Amendment for Amendment No. 7 also standing in my name on this clause. In addition, various other Amendments are down the broad effect of which is to put a time limit on this Bill. I do not go so far as that. The object of my two Amendments is just to put a time limit on parts of this Bill relating to the period during which the expedited acquisition orders can run.
The MINISTER of STATE, DEPARTMENT of ENERGY (Lord Balogh): May I intervene? May I suggest that we deal also with Amendments Nos. 34 and 33 now as they have the same intent, although they differ, as the noble Duke said, from his Amendment?
Lord CAMPBELL of CROY: We had considered that point, but as Amendments Nos. 34 and 33 deal with the duration of the whole Bill we think it would be more convenient if they could be dealt with separately.
The DUKE of ATHOLL: As I said, my Amendment seeks purely to limit the time during which the expedited acquisition orders can be made. It seeks to limit it to seven years after the passing of this Bill. There are two reasons why I should like to do this. First, I feel that within seven years we should have all the platform sites we need. I believe it

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is universally accepted that it is undesirable to have too many sites; that there can be too great a proliferation of them. Therefore I should have thought that any that were needed would have been started in seven years. Secondly, as the noble Lord, Lord Hughes, himself said in resisting a previous Amendment, in ordinary circumstances these powers would be difficult to justify. I believe that, in his own words, seven years should be long enough in the circumstances for the situation to have become ordinary again, instead of extraordinary as I am prepared to admit it probably is at the moment. There is a very close precedent for this in Section 2 of the Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947. This gave to local authorities expedited powers in urgent cases for a limited period of time. I feel that that Act is an exact parallel to what I want to do now. I beg to move.
Lord BALOGH: I think that this Amendment is based upon a misconception, from this point of view: that we do not really know how much oil there is in the North Sea and in various other waters under our jurisdiction. Some of the greatest experts in this field have recently stated—perhaps some of your Lordships will have seen the broadcast of the interview—that we shall not merely be self-sufficient by 1980 but that production will rise considerably after 1980 and will remain at a very high level, which means further production platforms and further rigs, until after the turn of the century. It seems to me, therefore, that this Amendment limits unduly the duration of these powers which, as we have seen, are necessary for the orderly development of the oil industry. This limitation would not be so bad if it were not for the reason that these oil investments are of immensely long duration. To limit this Bill to seven years, as the noble Duke has proposed, would import uncertainty and risk. Noble Lords opposite have always argued that the oil industry is a very risky business. I would ask the noble Duke to be good enough to withdraw his Amendment, because surely he does not want to make a risky business riskier.
The Duke of ATHOLL: I am not at all convinced by the argument of the noble
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Lord, because I had understood, though perhaps the noble Lord will again correct me if I am wrong, that these rigs take two years to build, that they are then launched and that they then make way for another rig on the same site. In seven years' time presumably we shall have as many sites for building these platforms as we want, and the object of my Amendment would be to restore the position as it now is in seven years' time. That does not mean that after seven years nobody will be able to build any rigs or platforms. All it means is that, after seven years, either they will have to acquire a site by agreement, and with planning permission, and if they acquire it compulsorily they will not be able to use this expedited acquisition order procedure, or they will have to build it on a site which already exists. I should have thought that that was eminently desirable.
As I have said before, we do not want sites to proliferate all round the coasts of Scotland. My Amendment is much narrower than the Amendments of my noble friend, Lord Campbell of Croy, and the noble Lord, Lord Belhaven and Stenton, that we shall look at later on, because it is limited to the expedited acquisition procedure and not to the Bill as a whole. I agree with the noble Lord that there are many parts to this Bill, and that it will probably be extremely useful for much longer than seven years. I am not an expert on Clauses 3 to 7, but I should have thought that they might well be useful. Personally I hope that we shall keep Clauses 8 and 9 for some time to come; I think they are extremely useful clauses. Therefore I cannot quite see why the noble Lord cannot agree to this Amendment, which seems to me to be very limited. I am in a difficult position because, like the noble Lord, I should have preferred my noble friend Lord Campbell of Croy and the noble Lord, Lord Belhaven and Stenton, to set out their reasons for Amendments Nos. 33 and 34 which come after my Amendment. If they would be prepared to say something before I decide what to do, I should be grateful.
Lord CAMPBELL of CROY: I apologise if my noble friend the Duke of Atholl was expecting us to take these Amendments with his Amendment, but we are suggesting that the whole Act

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should be renewable. Both Amendments Nos. 33 and 34 deal with a different point. I agree with what my noble friend has said. Perhaps I ought to reserve my main argument for the later Amendments, but the differences are that we are considering the whole Bill, and later the whole Act when it is enacted, and in the case of Amendment No. 33 making arrangements for it to be renewable for three years at a time.
Lord BELHAVEN and STENTON: As I have been asked by the noble Duke to speak, I can only repeat what the noble Lord, Lord Campbell of Croy, has just said; namely, that although in principle I agree with the noble Duke's Amendment, I think it does not go far enough. If the noble Duke will forgive me, may I reserve any arguments on the time limit to the Bill to the time when the Amendment of the noble Lord, Lord Campbell of Croy, is dealt with?
The DUKE of ATHOLL: In the light of what has been said, at this stage I am prepared to withdraw this Amendment. However, I reserve the right to return to it at a subsequent stage of the Bill.
Amendment, by leave, withdrawn.
4.47 p.m.
Lord HENLEY Lord HENLEY moved Amendment No. 5:
Page 2, line 26, leave out subsection (7).
The noble Lord said: Subsection (7) prevents a statutory instrument made under the Bill from being referred to a Select Committee. My Amendment is to leave out that subsection. There is no precedent for this subsection—or indeed, in so far as there is any precedent, I think I showed at Second Reading that it had no connection at all with this Bill. At Second Reading the noble Lord, Lord Hughes, argued that scrutiny of an order by a Select Committee was unnecessary because it would merely duplicate scrutiny which had already been carried out. I hope to convince your Lordships, particularly noble Lords on the other side of the House, that this is simply not so. The noble Lord, Lord Balogh, repeated the argument that Select Committee scrutiny was redundant, arguing that the planning procedures are preserved in their full rigour.
May we have a look at what that means in practice? Before the Secretary of State gives notice of his intention to acquire any land by means of an expedited acquisition order, the developer will have to obtain planning permission for the site. Under Section 32(5) of the Town and Country Planning (Scotland) Act 1972—and the same procedure applies under the English Act—before determining an application to develop which is referred to him under the call-in procedure (the call-in procedure is where he calls it in to make the decision himself) the Secretary of State shall afford an opportunity to an applicant for planning permission—or the local planning authority, if they wish it—to be heard by, or appear before, a person to be appointed by the Secretary of State for that purpose. The point I want to make, because I think that the noble Lord, Lord Hughes, gave the opposite impression, is that there is no obligation to hold a public inquiry.
However, under Section 28(2) of that same Act the Secretary of State has a general power to cause a local inquiry to be held. But in a case like this where national urgency is argued as the reason for having this procedure at all, a project which the Secretary of State considers calls for expedited procedure would be one that he would wish to deal with as expeditiously as possible at the planning stage. He can therefore call in the application; that is to say, he can direct that it be referred to him for decision.
This is where I take issue with what the noble Lord was saying to the noble Lord, Lord Craigton, earlier in his understanding of the call-in procedure. I shall review what I understand to be the procedure here and the noble Lord can correct me if I am wrong. It is important because I think the whole issue of redundancy in part depends upon this. The highest obligation that the Secretary of State has under the call-in procedure is no more than to order a hearing if the applicant or the local planning authority require it. It need not be held locally, and, indeed, it generally would not be held locally; it would not be a public inquiry and there is no opportunity for third parties to be heard at all. From my own point of view, this is very important indeed, because it makes it extremely difficult for amenity societies, and so on, to present their case.
Furthermore, it is open to the Secretary of State to suggest that this matter can be disposed of altogether, without any hearing at all, merely by written representations, and, indeed, again under circumstances like this where urgency is being pressed, a local planning authority might be under great pressure to accept the alleged urgency and to accept that there need be no inquiry and that the third party's hearing could be dealt with by written representations.
Lord HUGHES: The noble Lord has made a number of statements the justification for which I do not follow. He said that if the Secretary of State called in the matter and he had an inquiry then it would not be held locally and it would not be a public inquiry. What justification has the noble Lord for saying that? He has only to look at Drumbuie: that was local and it was public so why does the noble Lord say this? If he had said that it need not be, then I would have to admit that he was correct, but he is saying that it would not be.
Lord HENLEY: I am perfectly prepared to withdraw the words "it would not be" and to substitute the words "it need not be ", but it makes no difference to my argument, which is that the Secretary of State has powers here to behave in a way which I think is wrong. If I may now continue, in any case this amounts to a very unrigorous procedure and the noble Lord, Lord Balogh, said that the full rigour of the planning pro-cedures would be followed. I ask what this means: as I have suggested, the words "full rigour" mean a great deal less than they ought to mean. Because of that there is in Parliament a safety net; which is to say, that the order required to effect the expedited acquisition is subject to an Affirmative Resolution.
The Affirmative Resolution procedure is such that an Affirmative Resolution can be objected to; if the Special Orders Committee are of the opinion, among other things, that there has been no proper inquiry already, they can recommend that it goes before a Select Committee. The criteria which they have to follow, in order to make certain that there has not already been a proper inquiry, are very rigorous, as I said on Second Reading. Furthermore they are
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even more rigorous under the recommendations put forward by the Joint Select Committee under the chairmanship of the noble Lord, Lord Brooke—the Brooke Committee. Those criteria which must be followed—if there is to be a Select Inquiry before Parliament—are very stringent indeed. The safety net that should be there has been removed and this is what the Joint Select Committee under the noble Lord, Lord Brooke, recommended should not be done. The noble Lord's Joint Committee of both Houses of Parliament said that it was a most valuable procedure and that it should not be removed unless there was proper and adequate machinery elsewhere. There is no proper machinery in this Bill, which is the whole point of my argument. Furthermore, they said that ideally procedure of this kind, which the noble Lord wishes to cut out, should be followed in both Houses; but for the time being and for various reasons it was best operated by this House on behalf of Parliament as a whole—all the more reason why we should not cut it out of the Bill.
I shall be moving an Amendment dealing with this later. There is in the Schedule provision to this effect: that any representations which may be made with respect to an expedited acquisition order shall be considered by the Secretary of State but he shall not be obliged to cause any inquiry to be held or afford to any person an opportunity of being heard. Together with the unrigorous nature of certain aspects of the planning stage procedure, the removal of the safety net in your Lordships' House and this further Schedule, it adds up to a state of affairs in which the Secretary of State has powers to deal with third party objections to a planning application by written representations only. For this reason, it seems to me that it is absolutely vital that this subsection should be removed from the Bill.
As I have said, there is no precedent whatever for doing this; there is no proper machinery in the Bill which would take the place of this safety net procedure in your Lordships' House, and it seems to me that the Government are on very weak ground here. I hope when they answer me they will show that they are at least aware of the weakness of that ground and that what they are proposing to do is, as I said during the Second

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Reading debate, constitutionally improper. It is a dangerous precedent and, if it were put into other Acts concerning not merely land and property but other less concrete rights, it would be very unfortunate indeed. I beg to move.
Viscount DILHORNE: It might be convenient if before the noble Lord, Lord Hughes, replies to this Amendment I were to give him the opportunity in the course of his reply of dealing with some of the points I wish to raise, which, perhaps, are a little different from some of the points raised by the noble Lord, Lord Henley, though I support him in thinking that it is really important as a constitutional matter that this subsection should be removed from the Bill.
As I understand it, the argument advanced is that individual rights are adequately protected by planning procedures, and, secondly, that to allow persons to continue to petition this House against hybrid orders would involve long proceedings. I venture to challenge both propositions. The first has been challenged by the noble Lord, Lord Henley, who has pointed out that although there can be inquiries it is not necessary; there is no right to an inquiry and the Secretary of State can call in a matter and can dispense with an inquiry. Most people will probably agree that some planning inquiries take a very long time indeed. At some inquiries, there is every opportunity of putting forward views and drawing attention to points. But no how matter protracted planning inquiries may be, in my submission to this Committee that affords no ground and no justification for what is proposed by this subsection.
Great emphasis is laid on the fact that this expedited procedure cannot be used unless planning permission is first obtained. So be it. That again gives no reason for abolishing petitions to this House against hybrid orders. Once planning permission is obtained, the Secretary of State can by-pass all the normal provisions relating to the acquisition of land if, in his opinion, the acquisition is a matter of urgency—and one suspects that the matter of urgency may arise either in delay in instituting planning proceedings, or because of the protracted nature of planning inquiries, et cetera. I should like to make it clear to the noble Lord that I am not seeking to criticise Her
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Majesty's Government for making provision for acquisition as a matter of urgency.
The normal procedure for acquisition has stood the test of time. It was introduced by the then Labour Government, so far as Scotland was concerned, by the Acquisition of Land (Scotland) Act of that year, referred to by the noble Duke. It is worth noting, as the noble Duke drew attention to it, that under that Act powers were contained—exercisable for a period of five years—for the speedy acquisition of land as a matter of urgency. What is significant in relation to this Bill is that those powers were taken as a matter of urgency without there being any attempt then to restrict or to abolish the right to petition against a hybrid order. Hybrid orders can be made under that Act. There was no such attempt. I am not aware that the failure then to restrict the right to petition this House has led to any inconvenience at all. I would ask the noble Lord, Lord Hughes, when he comes to reply, to say whether there is a single case where the exercise of the power to come to this House has delayed the speedy acquisition of land under that Section of that Act.
For the purpose of this Amendment, let me assume that the speedy acquisition is essential. In my view, that does not lead to the conclusion that the right to petition Parliament should be abolished. If the Secretary of State decides that the matter is one of urgency, then he has to serve notice of his intention to make an expedited acquisition order on every owner, occupier, lessee of land affected, and to advertise his proposal. Representations may be made to him but, as the noble Lord, Lord Henley, said, the Secretary of State is not bound to hold any inquiry. If the Secretary of State certifies that the requirements of that Schedule have been complied with, then that is that. If by mistake—and mistakes are sometimes innocently made—something has been done which has passed unnoticed and the Secretary of State gives his certificate, it cannot be put right. For instance, if the requirements to the Schedule have not been applied, if persons who should have received notice have not been given it, then if the Secretary of State gives his certificate—not being aware of those facts —that is the end of the matter. If one looks at the last paragraph of Schedule

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1, one sees that the jurisdiction of the court is ousted. The individual affected will not be able to challenge what has happened.
It is against that background, with the ousting of the jurisdiction of the courts, that I venture to suggest this subsection has to be judged. It is true that these expedited acquisition orders are subjected to the Affirmative Resolution procedure, but we all know that an Affirmative Resolution procedure does not allow of amendment of the order in any particular. We all realise that it is unlikely that an order dealing with a wide variety of matters—some of considerable import-ance—will not be affirmed by this House or by the other House because injustices, however much they may bear on individuals, have been perpetrated.
As I have shown, the Bill not only proposes to oust the jurisdiction of the courts, but also to deprive this House of the power it now has to remedy injustice, and to deprive the people of this country —in particular the people of Scotland—of their right to have recourse to this House. Unless the injustice is so great that the Affirmative Resolution is not passed, if this Amendment is included in the Bill then injustice cannot be put right. For many years—I have forgotten how long; I have not looked it up—it has been the established right of individuals to petition Parliament in relation to a Bill which affects private rights. When the practice grew up of doing by order what used to be done by Bill, it was recognised that that right of petitioning Parliament should be applied to hybrid orders. It was agreed that those petitions should be brought before this House and agreed between the two Houses. Our procedure laid down by Standing Order No. 216, which it is now proposed to make even tougher than it is at present, contains very considerable safeguards against frivolous petitions, or petitions designed to cause delay.
In the first place, when the order is laid before the House, it has to be considered by the Special Orders Committee. If that Committee come to the conclusion that it is a hybrid order, any petition against it has to be lodged within 10 days or, by special leave of the Chairman of the Committees, 14 days after that order is laid. I do not think the noble
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Lord, Lord Hughes, can regard that as very lengthy procedure. If there is a petition, then the matter comes before the Special Orders Committee, and the Committee have to consider the petition. They have also to consider whether the petition discloses substantial grounds of complaint—no frivolous petition will pass that. Secondly, the Committee have to consider whether the matter has been so dealt with upon a Departmental inquiry that further inquiry is unnecessary and, thirdly, whether the submissions in the petition could have been brought before a local inquiry, but were not. If the Special Orders Committee come to the conclusion that they were not brought before a local inquiry when they should have been, or that there has been a sufficient Departmental inquiry, or that there are no substantial grounds of complaint, the matter will end there and, I venture to suggest, within a very short time of the order being laid before this House.
The Special Orders Committee are required to go on to consider whether, having regard to the answers to the preceding questions and to the findings, if any, of these inquiries, and to the other circumstances of the case, there ought to be a further inquiry by Select Committee, and to report to the House accordingly. In reaching their conclusions on those questions, the Special Order Committee are required to take note of representations, but are not bound to hear counsel. They may, if they so wish; it is a matter within their own discretion. Up to that stage, the proceedings cannot take very long, I would suggest. It is only if something has gone seriously wrong that there will be any further hearing before a Committee of this House. That, surely, is a very considerable filter. With the juridiction of the courts being ousted, as I have said, does it not become even more important that this reserve power, this net should remain; that this reserve power of this House to remedy an injustice should be kept?
This is not the first time I have spoken on this subject, for this is not the first time that a Government has tried to get such a provision through this House. It is not the sort of provision that attracts much notice by Ministers when it is first inserted in a Bill If enacted it makes life much easier for administrators, for only

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in the event of an Affirmative Resolution not being carried will the order as drafted not go through. In 1965, an effort was made to get such a provision included in the Local Government Bill of that year. The noble Baroness, Lady Sharp, gave evidence before the Procedure Committee. No witness in opposition was heard by that Committee. Her powerful advocacy led that Committee to recommend that it should be done, but this House by a substantial majority rejected it. So the power to petition against hybrid orders under that Act remained. I want to ask the noble Lord, Lord Hughes—and I think we should be told: has the fact that the power remains to petition against hybrid orders under that Act caused any inconvenience at all? I do not believe it has. I can quote words which the noble Lord himself used.
Lord HUGHES: The noble and learned Viscount does not need to quote it. I have agreed it causes no inconvenience.
Viscount DILHORNE: I am very glad, but I am still going to quote the words he used in relation to an earlier Amendment, because I think they are pertinent. He said:
" None of the fears has yet been justified ".
None of the fears in relation to the petitioning of this House has yet been justified, and I do not think they will be. If there is any instance of inconvenience over the long years when this power has existed, that, surely, should be brought to the attention of this House. We should not be asked to remove what is a constitutional right of a citizen of the country on any hypothetical fears, on any argument that the matter will be sufficiently covered by planning permission, and so deprive the individual of his right of coming to Parliament.
Of course, the argument may be advanced that it is not necessary to have these powers if they are never used. I do not think there is much in that. It is a reserve power; it is a power to correct things if they go wrong. It should be kept for that reason. If it is seldom used it means that errors are seldom made. I cannot see that the deletion of this subsection will in any way impede the speedy acquisition of land as proposed by the clause of the Bill, and I am not prepared to accept that it will, unless the noble
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Lord, Lord Hughes, can give some instance of its having done so in the past. It is for those reasons that I support the noble Lord, Lord Henley.
Lord CAMPBELL of CROY: We on these Benches also support this Amendment. The noble and learned Viscount with all his experience has plainly expressed to us his view and given arguments supporting it. What the Government are appearing to do is to slash Parliamentary procedure instead of streamlining planning procedures. They are slashing the Special Orders Procedure, which is a precious safeguard. It could be likened to someone going on a tropical journey and equipping himself with an ice axe, the wrong implement, but then, none the less, hacking away at the mangroves, and in this case aiming to strike at the roots of a traditional Parliamentary procedure. The Special Orders procedure is being by-passed, if this Amendment is rejected, for expedited acquisition orders.
This is a House of Lords point, because we are acting on behalf of both Houses and would be on the lodging of a petition. The noble Lord, Lord Henley, has referred to the Brooke Committee on Delegated Legislation, which upheld the continuance of this procedure. In November last, soon after the Bill was published, the Director-General of the National Trust and the Director of the National Trust of Scotland wrote in The Times newspaper. They raised the question of inalienability, which, of course, would be dealt with by an Affirmative Resolution if inalienable land were in question. In that case, acquisition of inalienable land has to be approved by Parliament. The point of their letter was that this should be by the full procedure laid down and not by a truncated procedure. I will quote just a short extract:
" Up to now, even through two world wars, this has been protected by a special procedure, the right to petition Parliament and to have that petition decided by a joint committee of both Houses. The National Trusts rely on the wisdom of Parliament in taking final decisions in each separate case about the inalienability of their properties."
Clearly, they would be content if the matter were decided by Parliament using the prescribed procedure, and this need not be protracted. The noble and learned

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Viscount, Lord Dilhorne, has just told us about the procedure, and said that it need not take an inordinate amount of time. The urgency of getting our own oil supplies quickly is understood; it is understood in Parliament. I think there is only one small Party, the Scottish National Party, who are against getting our supplies quickly in the next five years. Neither the Special Orders Committee nor a Select Committee, should that be necessary, would cause the months of delay which, for example, the parties at an inquiry, with several learned counsel briefed, could effect.
I ask the Government to think again about this in their own best interests. I believe they will unnecessarily antagonise Parliament and the amenity bodies if they try to eliminate this procedure in order to deal with delays much less serious than the planning procedure delays, if no change is made in planning procedures. The precedent which could be set if this were included in this Bill would be very serious, because then there would be other Bills where Governments would say that the situation was so urgent and serious that the same truncation was essential in the national interest. We certainly do not believe this is so in the case of the present Bill. This is a House of Lords point, which was recognised by Members of the other place, and unless the Government can shift their attitude considerably on this I hope my noble friends will recognise this and will persist in supporting this Amendment.
The EARL of ONSLOW: I should like to ask the noble Lord, Lord Hughes, how can we who want the United Kingdom to stay united go to our Scots co-citizens, who also want to stay in the United Kingdom, and explain to them that the United Kingdom Parliament is taking away from them constitutional rights which it is not taking away from other citizens of the United Kingdom? Surely, the Scottish Nationalists, the people who want Scotland to go its own independent way, must be thanking God for the insensitivity of Her Majesty's Government.
Lord HUGHES: If I may take the easy one first, I shall take the point of the noble Earl, Lord Onslow. So far as I know, there is nothing in the Bill which
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distinguishes between Scots and any-body else who happens to be living in the United Kingdom, and who may have an interest in land affected by the Bill. It may have escaped his notice, although it has not escaped the notice of the Scottish National Party, that not all land in Scot-land is owned by Scots.
The EARL of ONSLOW: The Bill deals with land in Scotland. That is the point I am trying to make. We are taking away rights from people who own land in Scotland, and presumably the majority of them are Scots. We are not taking away these rights from people who own land in England and Wales.
Lord HUGHES: That is not what the noble Earl said. He said that we were inflicting things on Scots which we were not inflicting on other people. It relates to land in Scotland, and land in Scotland is not the sole ownership of Scots.
Lord BELHAVEN and STENTON: Could I come to the rescue of the noble Earl, Lord Onslow? I think that he was referring to the inhabitants of Scotland. The Scottish National Party is the Scottish national Party, and not the Scottish racialist Party, and the inhabitants of Scotland are the people affected by this Bill.
Lord HUGHES: I have no doubt that the noble Lord is right. Some people have difficulty at times in making the distinction to which he is drawing attention. May I go first to the mover of the Amendment, the noble Lord, Lord Henley? There is undoubtedly, as has been made quite evident by, first, the noble and learned Viscount, Lord Dilhorne, a very strong case to be made for the Amendment which he put forward, but I did not think that the noble Lord, Lord Henley, made it. He, in fact, attributed to the Government in these proceedings things which are not in the Bill. First of all, in my intervention he said that things would not be done, that an inquiry would not be held, that it would not be locally, and then he accepted my correction that it "might not" be held and "might be" held locally. The 1972 planning Act provides that only the applicant and the local authority need be heard, but the principles of the Franks Committee and the practice of successive Governments ensures that

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the inquiry is public and that it is local. That has been the procedure since the Franks Committee reported. There is nothing in the Bill which will alter that procedure.
Viscount DILHORNE: The noble Lord will agree that the Secretary of State can—I do not suggest that it is wrong—dispense with holding an inquiry?
Lord HUGHES: I shall come to that point if the noble and learned Viscount will allow me a little time. I am just about to touch on it, because the next note I have is that the noble Lord, Lord Henley, referred to what my noble friend Lord Balogh said in winding up the debate, when he stated that the full rigour of the planning procedure would be applied. The noble Lord, Lord Henley, went on to say, "The trouble is that the full rigour of the planning procedure is not applied, but it ought to be." In fact, there is no change in what is being done in the planning law at the present time. In the great majority of planning applications there is no inquiry, because there is no objection. In many cases where there are objections they are resolved locally. It is only in a minority of cases where inquiries are held.
What will be done under this Bill in relation to planning is the same as it otherwise would be. My difficulty in connection with planning is that at one time I have the noble Lord, Lord Henley, saying that the planning procedure does not go nearly far enough, and then the noble Lord, Lord Campbell of Croy, wanting to short circuit it in some way. They cannot both be right.
Lord SANDFORD: Streamline.
Lord HUGHES: Streamline or short circuit, it is the same thing. You want to eliminate part of the procedure, you want to cut it short, reduce the time that is taken in these planning inquiries. That does not need any alteration in the law. The Government have undertaken that, and within the next ten days or so we shall be putting out a circular to local authorities, drawing their attention to ways in which the procedure can be short circuited, or by which it can be streamlined without impairing the rights of individuals.
In these procedures we have gone as far as we can, and carrying with us
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the Law Society of Scotland and the Faculty of Advocates in the way in which the procedures will be streamlined, in order to reduce the time that is taken in the inquiries but without impairing rights. All that still applies in the Bill. The inference of the noble Lord, Lord Henley, seems to be that if the Secretary of State calls in a matter for his own decision, it is more likely than not that an inquiry will not be held. I suggest to noble Lords that it is, in fact, the other way round. It is because the calling in of an application by the Secretary of State recognises the wider than purely local considerations involved, that makes it more likely than an inquiry will be held.
I now come to the much more difficult task of attempting to reply to the noble and learned Viscount, Lord Dilhorne. He said that he was not criticising the need for speed, and I do not think that he did, because in fact he did not deal with the situation that calls for speed. He dealt with the generality of the hybrid procedure and the generality of the protection of the rights of the individual in petitioning Parliament. He referred to Scottish legislation under which there had been an attempt to get the hybrid procedure set aside.
Viscount DILHORNE: I was not referring to the Scottish Act setting aside the hybrid procedure. I referred, first of all, to the 1947 Act, which had powers of speedy acquisition without any attempt to destroy the hybrid petitioning procedure, and I think I referred to the Local Government Act of England.
Lord HUGHES: I beg the noble and learned Viscount's pardon that I should have translated it into Scotland when he was on a more general piece of territory. He asked whether I could say if there had been any difficulties caused by virtue of the fact that these procedures had not been available. I shook my head, and then got up and confirmed in words that there had, in fact, been no difficulty because these powers did not arise.
Viscount DILHORNE: I am sorry to interrupt the noble Lord again, but he said that these powers did not arise. The point is that the powers have been there the whole time, and the question I put to him was whether the existence of these powers had caused any difficulty. It is no answer

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to say that the powers did not arise. They have been there.
Lord HUGHES: I am willing to accept that. The fact that the powers were there did not cause any difficulty in these cases of acquisition of land. But we are dealing with a totally different situation here, or a potentially different situation. The Government are not seeking, as the noble and learned Viscount said, to abolish the right of petition to Parliament; they are not seeking to abolish the right to go to the courts; they are seeking, in certain specified circumstances detailed in Clause 1(2) of the Bill to abrogate these procedures in the special circumstances which exist. These special circumstances have not at any time applied to anything we have sought to do in the past.
If we had had an occasion in the past when it might have cost a £175 million deficit in our balance of payments if we had to wait four or five weeks, or months, or a year, whatever the period may be, and if it had been any of these periods in relation to the procedures to which the noble and learned Viscount refers, it would not have mattered ; we would not have lost £200 million by these delays. But if at any time this had been involved, then I suggest that long before now there would have been a request to Parliament for something of this kind to be done.
After all, we are still operating a pro-cedure first laid down 50 years ago in 1925. During the whole of that time it proved to be a satisfactory procedure for the protection of the rights of the individual, or the greater part, if not the whole part of the field, until the present time. But here we are dealing with a situation where we have to extract oil from the North Sea, and I agreed with the noble Lord, Lord Campbell of Croy, when he said that everybody except the Scottish National Party were accepting the need to extract as much oil as quickly as possible, certainly until the year 1980. Conditions in the North Sea are such that there is a limited time during which operations can be carried out. If one misses that opportunity, one can lose not just the weeks that the procedural events take but a whole year in relation to float-out. This, in the Government's view, is more than can reasonably be expected, particularly when the Government have gone out
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of their way to make certain that the planning procedures apply in full rather than that there should be any withdrawal of these powers.
If we accept the economic conditions of the country, the conditions under which the oil industry works, the need to get the oil as quickly as possible, the need to avoid any delay in getting it which can possibly be avoided, then this is the justification for a separate procedure. We are not seeking to abolish the right to petition Parliament; we are not seeking to apply the special procedure to the whole range of operations. We are applying it to a limited sphere of operations within the whole oil context. In doing that, we feel justified in substituting the Affirmative Resolution procedure for what was done. When the Bill came before another place in the first instance, the Negative Resolution procedure applied, and during the discussions in another place it was argued—and the Government accepted—that this was much too large a matter to be allowed to go through on Negative Resolution procedure. The Government, recognising the difficulties of Affirmative Resolution procedure, still altered the Bill and made it the Affirmative Resolution procedure. But, so that we do not lose all the benefits of the expedited procedure, this clause which we are now discussing was put into the Bill. The noble and learned, Viscount, Lord Dilhorne, started by referring to the ten days in the Bill. After that his arithmetic—
Viscount DILHORNE: I was not referring to the ten days in the Bill.
Lord HUGHES: The ten days in the Standing Order. After he left the ten days which was stated, the next stage would take a very short time and the stage after that would not take very long. With the best will in the world, I cannot add these two sentences together with the ten days and get a specific period out of them. I am willing to accept the basis on which the noble and learned Viscount is arguing but this need not, by any reasonable interpretation of the term— and what the Government would regard as a reasonable interpretation of the term —be a dangerously long period which would necessarily endanger what is taking place, given the time of year at which it happened. But if this should happen in the months of August or September how

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do we deal with it under these proceedings when the House is not sitting? Is it the intention that Parliament should be recalled for the period that the Committee would be considering this matter, or is it to be accepted that once one has missed the boat and cannot deal with it before the end of July one has to wait until October before one does anything about it? I know that it would be an unpopular proceeding if Parliament were recalled for the purposes of considering an Affirmative Resolution, but at least, if that were done, it would be a case of recalling Parliament for one or two days, not for some weeks or even months.
The DUKE of ATHOLL: The noble and learned Viscount, Lord Dilhorne, put the point beautifully, if I may say so. I was wondering how it was going to be dealt with if the Affirmative Resolution was required during the time that Parliament was in Recess, and I gather that it would be the Government's intention to recall Parliament.
Lord HUGHES: One would hope that it would not be necessary, but at least it is possible to a degree which would not arise in the other case. If one accepts the principle on which the noble and learned Viscount, Lord Dilhorne, argued his case, obviously the amendment ought to be made. On principle I cannot possibly disagree with him. But this is an exception to the principle which is sought, not a change in the constitutional procedure of Parliament—an exception for a very exceptional circumstance. If it is the wish of this House that the Government are not to have the opportunity of using that procedure in that way, given the fact that they have emphasised that they will go through ordinary planning procedures, I suggest that it puts the onus on the Secretary of State—where he has a discretion as to whether or not to hold a planning inquiry—very much more strongly to exercise his discretion in favour of an inquiry, when this is the basis on which the case has been made for abrogating or shortening the procedure at the subsequent stages. It is for Parliament to decide the way in which it ought to be done. But I suggest to your Lordships that what the Government have done in another place and what we are seeking to do here is to devise a method of helping the country to get the oil in the quickest possible way with the minimum inter-
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ference with the rights of private individuals. I am not suggesting that there is not a removal of individual private rights, but I suggest that it is the minimum interference which is consistent with private rights.
Finally, I do not intend to follow the noble Lord, Lord Campbell of Croy, with an ice axe through the jungles or the mangrove swamps in order to pick at the roots of Parliament. I do not think that, when he talks about inalienable land and the Parliamentary procedure, he is speaking to this Amendment. The special Parliamentary procedure which was referred to in relation to the National Trust is a different procedure altogether from what is contained in Standing Order 216. However, I do not think that it matters all that much because the principle about changing the procedures is fairly similar. We will be talking about inalienable land on another Amendment, so I do not propose to follow it at this stage. The Government are justified in what they are seeking to do in this case in the national interest and that interference with the rights of private individuals is the very minimum that can be effective for that purpose.
Viscount DILHORNE: May I reply to the noble Lord, Lord Hughes, because he devoted the greater part of his speech to what I said. I am not seeking to challenge the need for inserting in this Bill provisions for the speedy acquisition of land. There may be cases of urgency. I should think that a great many of them could be avoided, but I am not challenging that. A great deal of the noble Lord's speech was directed to the need for urgency. I find it difficult to accept the somewhat theoretical argument that foresight would be so lacking as to what is required to be done that one would have to have an Affirmative Resolution carried during a Parliamentary Recess in consequence of a recall of Parliament. Equally, I find it unconvincing to suppose that one would have to have a Select Committee sitting during a Recess to deal with these matters. There is some degree of foresight. If one accepts that there is a case for urgency, as I do, then what is the special necessity for abolishing this Special Orders procedure? The noble Lord was in this difficulty. For instance, he simply could not produce a single

1127
case where the existence of the right to petition Parliament against a hybrid Order had caused any delay at all. He asks this House to accept this matter as being so clear that no proof is needed; that if this power is retained the exercise of speedy powers of acquisition will be considerably delayed. In the light of past history I find that difficult to accept.
What does it mean? I may have confused the noble Lord by my reference to the Standing Order, but what I pointed out to start with was that anyone who wants to petition this House against that hybrid Order has to do it within ten days or, with the leave of the Chairman of Committees, within fourteen days of the laying of the Order. I cannot believe that the whole programme will be destroyed and millions lost because the time of fourteen days is given to lodge a Petition. I do not want to repeat it, but if there has been an inquiry and everything is satisfactory, the matter can be dealt with there and then by the procedures of the Special Orders Committee. I do not want to repeat what I have already said, but it seems to me that in his reply the noble Lord was dealing with the need for urgency and was not able to establish any real ground for saying that the retention of the power of this House to correct errors (if error there be) would in any way prevent matters from being dealt with promptly and speedily.
Viscount THURSO: I should like to make one further point to those of the noble and learned Viscount. The noble Lord, Lord Hughes, has not only not shown that there has been delay in the use of these procedures; to my mind he has not shown, either during the Second Reading of the Bill or in the debate this afternoon and this evening, that he will use the powers which he seeks in the Bill. Indeed, earlier in the debate he was at great pains to point out that such powers had never been used, although they had been given to the Highlands Development Board; that these powers which were in the hands of the Highlands Development Board (over half of the land area of Scotland and probably three-quarters of its coastline) had never been thought fit to be used during the whole of the time that the the Highland Development Board; that development of North Sea oil has been
1128
a subject of importance and exercising the minds of Government and Parliament. The noble Lord has not shown that there is any occasion upon which the acquisition of land for any of the purposes stated in the Bill would speed up the whining of oil from the North Sea. Indeed, I think that the whole need for legislation of this magnitude has passed and he can only require an Act of this kind as a form of threat, and such a threat, based on injustice or the removal of our constitutional rights, is not a form of threat which I should wish to put into the hands of any Government. I feel that the noble Lord has put a price tag on the cost of delay. Our freedoms and rights of appeal within the Constitution are matters almost without price and certainly worth a great deal more than the hypothetical price tag which he has constantly put on the hypothetical delays and the hypothetical need for which he has been asking.
The Duke of ATHOLL: I think I am right in saying that the last time a hybrid Order was referred to a sub-committee of the Special Orders Committee, concerned the Hoffman-Roche case, but in that case the sub-committee of the Special Orders Committee sat two, if not, three, times while this House was in Recess. That seemed to cause no difficulty. They did this in order to speed up the procedure.
Lord CAMPBELL of CROY: Two points have arisen from what the noble Lord, Lord Hughes, said. If he cannot reply immediately they will come up later on other debates, but they are immensely important in relation to our discussion. First there should be clarification on the question of inalienable land. It sounded as though this inalienable land would not be affected by what he proposes in subsection (7) of Clause 1, which we seek to eliminate by the Amendment. It is important that we should have clarification, even though he may propose to change the procedures in other parts of the Bill. Secondly, on the question of the time taken, a matter raised by the noble and learned Viscount, Lord Dilhorne, he has still not told us what he would consider to be an unacceptable amount of time. The amenity bodies consider that the Special Orders Procedure would not take more than twentyone days or very much longer if special

1129
questions arose. Can the noble Lord indicate what he would regard as an unacceptably long time?
Lord HUGHES: I will take first the point about inalienable land. I was not suggesting that this clause did not apply to inalienable land. What I pointed out was that, if taken out, the special procedure which was available to the National Trust is not the procedure which operates under hybrid Bills. There is a special procedure in relation to taking away inalienable land. This different procedure—I do not know whether it is a longer or a shorter procedure, but it is a special procedure—is available to, the National Trust, to certain public bodies, to local authorities and so on, who may be objecting. In relation to hybridity, it is the Standing Orders of the House which apply.
It is impossible for me to say what is an acceptable delay. It depends entirely when it happens. The noble and learned Viscount, Lord Dilhorne, said it must be a remarkable lack of foresight if this cannot be provided for; but Parliament at the best, is sitting for only two-thirds of the year, so there is at least one chance in three that it is impossible to avoid these things happening during the time that Parliament is not sitting. The initiating of these matters is not in the hands of the Government; it is in the hands of the applicants, of the oil companies; and if the situation arises that a decision is needed quickly, while it may be that a delay of two months at a particular time of the year is of no significance because it would not affect the "window" in the North Sea, there would be other times when a delay of two or three weeks could be vital. In fact this argument was put forward strongly earlier in the year as a justification why the Government should have proceeded with the Bill on planning procedures which the noble Lord, Lord Campbell of Croy, wished to introduce. It was then argued that a delay of weeks would be vital.
Lord CAMPBELL of CROY: The question was not a delay of weeks.
Lord HUGHES: Yes, a delay of weeks. If the noble Lord looks up what he said earlier in the year he will find that that is the period that was discussed. The period of the "window" may be
1130
a matter of two or three months or it may be only weeks; it depends whether the weather in the North Sea is good or bad. But, as I understand it, the position is that the cost of hiring barges and so on is so enormous that it comes to a point in time where, if they cannot be certain that float-out will occur at a particular place, then the hiring does not happen. The time lost, therefore, is to the next float-out period, and the possible loss of time is a year. While it is all very well for the Liberal Party to talk blithely about putting price tags on things and that £175 million is neither here nor there, Governments must take a more realistic view, so I make no apology for mentioning the price that such delay would cause.
I thought that the noble and learned Viscount, Lord Dilhorne, had been unfair to me when he said that I had not produced any evidence of harm being done with these powers; that with these powers still being there the absence of a subsection like this had caused us no trouble in the past. I agree, but I do not think he was fair when he ignored the fact that we are dealing with a totally different situation, in which we have a limited period of time. In some of the other cases, it might be undesirable if the Government wanted, say, to acquire land in 1974 but did not do so until 1975 or even 1976. The consequences might be only minor; it would merely be putting things back, but not to the extent that we are involved in the North Sea oil operations. I think, therefore, that the fact that we have been able to do things satisfactorily in other directions with the existing hybrid procedure is no argument against taking these limited powers in this limited field in this connection.
I suspect that the matter will go to a Division and in the ordinary course of events in your Lordships' House, when a Labour Government's proposals are divided on, the chances are not always very great that they will win. However, I am sincerely of the opinion that what the Government are asking is in the best interests of the country. I hope, therefore, that if there is to be a Division my friends will follow me with enthusiasm into the Lobby in support of what the Government propose should be in the Bill.
Lord AIREDALE:The Minister, in the course of his earlier speech, referred to the quite proper pressure being placed on the Minister to order a local public inquiry in an appropriate case. Surely, the best way of exerting that pressure on a Minister is to leave the Special Orders procedure alone, because, if a local inquiry has been held and an order eventually comes before the Special Orders Committee, that Committee can dispose of the matter summarily upon the very ground that a local inquiry has been held. That part of Standing Order No. 216 was read out by the noble and learned Viscount, Lord Dilhorne. The Committee could dispose of the matter easily on the ground that a local inquiry had been held and we want the Special Orders procedure left in in order to exert pressure on the Minister not to dispense with a local inquiry when such an inquiry ought to have been held.
Lord SHACKLETON: May I make an appeal to noble Lords on the other side of the Committee? It really is of vital interest—and perhaps I should declare an interest in this matter—for those who are involved that there should be a speeding-up of the procedure. If I may say so to the noble Duke, the Duke of Atholl, the Roche case, which he quoted, is the classic example of why this procedure should now be as the Government recommend.
The DUKE of ATHOLL: It was not the fault of the Special Orders Committee which, if my memory serves me right, sat throughout the Recess to deal with this as speedily as possible.
The EARL of PERTH: Could this point be cleared up? Is it, in fact, the case that while Parliament is in recess it is open to a Select Committee or a sub-committee of a Select Committee to consider a petition and come to a judgment, or is it not? The noble Lord, Lord Hughes, certainly gave me the impression that throughout the Recess it would not be possible for anything at all to happen.
The EARL of VERULAM: I apologise for making a maiden speech on what might be construed as a controversial subject. I should, however, like to ask the noble Lord, Lord Hughes, how he
1132
can ask us to ignore the noble and learned Viscount's point—which he admitted was, at any rate, technically valid—except by telling us that the liaison between the Government and the oil companies and the level of forward planning are so bad that a matter of ten days is of no significance whatsoever.
5.55 p.m.
Lord HUGHES: I am sorry that a maiden speech should have made on such a controversial subject, because had the noble Earl, Lord Verulam, conformed to the traditions of this House I ought to have indicated a special interest in him as I gather that one of his subsidiary titles takes him to Edinburgh, for he is also Lord Corstorphine. I can certainly congratulate him on his brevity, but I am sorry that he should have come in on a subject which I must regard as controversial. I hope that we shall hear him at greater length, and perhaps with thorough homework he may find a subject which will make it possible to congratulate him both on his brevity and on the content of his speech.
I do not think I can add anything to what has been said already. The Government's case is that there is a need for urgency at certain times. I do not know what is the answer to the question about the Recess. As I understand it, provided the Recess does not extend beyond a certain period the Select Committee can carry on, but during the Summer Recess some other special procedure would be required. I do not know. I am not an expert on the procedures of the House, but the information that I have is that the Affirmative Resolution procedure would certainly present Parliament with less difficulty in the Summer Recess than the other procedure. I would not be prepared to take it any further than that.
Had there not been subsequent interventions, I would have been content to rest on the intervention of my noble friend Lord Shackleton, because it expressed what the Government seek. The procedure is in the interests of the country and there are times—and Parliament has recognised this in the past— when the interests of the country must over-ride the interests of the individual. This, we believe, is a case where this is being done and we think that in the present Bill we have taken every possible

1133
step to make certain that the interference with individuals' rights is kept to a minimum. We cannot go beyond that.
Lord HENLEY: I do not propose to withdraw the Amendment and I shall press it to a Division. I feel that the arguments of the noble Lord, Lord Hughes, are very unconvincing, as was the reason for what I considered to be an unnecessarily impassioned request to consider speed. Of course I agree that one must not be dilatory, but is the noble Lord really saying that, by retaining certain safeguards in our Parliamentary procedure which have never been done away with before, we shall lose millions overnight? I find this a most specious argument.
Lord HUGHES: The noble Lord asked me a question. I say, Yes, in certain circumstances, that is what would happen.
Lord HENLEY: I am sorry, I just cannot accept that. Nor can I understand why the noble Lord should be so passionate about retaining this procedure. If the proper procedures are as rigorous as he suggests, there will be no necessity
1134
for the Special Orders Committee to suggest that there should be a Select Committee, anyway. I think that the noble Lord misquoted me over the question of what the noble Lord, Lord Balogh, had said. He said that the full rigour of the planning stage would be complied with. What I think I demonstrated was that a most unrigorous state of affairs can emerge if certain things are not done, and that because of that the safety net of our special procedure must not be done away with. We were told in no uncertain terms that this was the case by the Joint Select Committee under the noble Lord, Lord Brooke.
We have been on this point for nearly an hour and a half, and I feel that I should be wasting your Lordships' time if I said any more. I think that everything that can be said has been said by this stage.
6.0 p.m.
On Question, Whether the said Amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 96 ; Not-Contents, 70.

CONTENTS

Aberdare, L.

Effingham, E.

Ogmore, L.

Ailsa, M.

Elliot of Harwood, B.

Onslow, E.

Airedale, L.

Elton, L.

Orr-Ewing, L.

Amulree, L.

Emmet of Amberley, B.

Pender, L.

Arran, E.

Foot, L.

Perth, E.

Atholl, D.

Gainford, L.

Platt, L.

Barrington, V.

Gladwyn, L.

Reigate, L.

Beaumont of Whitley, L.

Greenway, L.

Ruthven of Freeland, Ly.

Belhaven and Stenton, L.

Grenfell, L.

St. Aldwyn, E.

Berkeley, B.

Hailsham of Saint Marylebone, L.

St. Davids, V.

Bethell, L.

St. Helens, L.

Bledisloe, V.

Hawke, L.

St. Just, L.

Brougham and Vaux, L.

Henley, L. [Teller.]

Sandford, L.

Byers, L.

Home of the Hirsel, L.

Sandys, L.

Campbell of Croy, L.

Hood, V.

Selsdon, L.

Chelmer, L.

Hylton-Foster, B.

Sempill, Ly.

Chorley, L.

Ironside, L.

Sharpies, B.

Cork and Orrery, E.

Long, V.

Stamp, L.

Cottesloe, L.

Lyell, L.

Strathcona and Mount Royal, L.

Courtown, E.

Macleod of Borve, B.

Cowley, E.

Macpherson of Drumochter, L.

Stuart of Findhorn, V.

Craigton, L.

Margadale, L.

Thurlow, L.

Croft, L.

Meston, L.

Thurso, V.

Cromartie, E.

Monck, V.

Tranmere, L.

Daventry, V.

Monckton of Brenchley, V.

Trefgarne, L.

Davidson, V.

Monson, L.

Verulam, E.

de Cllfford, L.

Morris of Borth-y-Gest, L.

Vivian, L.

Denham, L. [Teller.]

Mowbray and Stourton, L.

Wade, L.

Derwent, L.

Netherthorpe, L.

Wakefield of Kendal, L.

Dilhorne, V.

Newall, L.

Wemyss, E.

Drumalbyn, L.

Northchurch, B.

Wigoder, L.

Dudley, E.

Norwich, V.

Windlesham, L.

Eccles, V.

Nugent of Guildford, L.

Young, B.

1135

NOT-CONTENTS

Ardwick, L.

Geddes of Epsom, L.

Morris of Kenwood, L.

Bacon, B.

Gordon-Walker, L.

Paget of Northampton, L.

Balogh, L.

Goronwyn-Roberts, L.

Peddie, L.

Beswick, L.

Hale, L.

Phillips, B.

Birk, B.

Hanworth, V.

Pitt of Hampstead.

Blyton, L.

Harris of Greenwich, L.

Popplewell, L.

Brockway, L.

Henderson, L.

Rhodes, L.

Bruce of Donington, L.

Houghton of Sowerby, L.

Shackleton, L.

Burton of Coventry, B.

Hoy, L.

Shepherd, L. (L. Privy Seal.)

Castle, L.

Hughes, L.

Shinwell, L.

Champion, L.

Jacques, L. [Teller.]

Slater, L.

Collison, L.

Kissin, L.

Snow, L.

Cooper of Stockton Heath, L.

Leatherland, L.

Stow Hill, L.

Crowther-Hunt, L.

Lee of Newton, L.

Strabolgi, L.

Darling of Hillsborough, L.

Llewelyn-Davies, L.

Stewart of Alvechurch, B.

Davies of Leek, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Taylor of Mansfield, L.

Donaldson of Kingsbridge, L.

Wallace of Campsie, L.

Douglas of Barloch, L.

Lloyd of Hampstead, L.

Wallace of Coslany, L.

Douglass of Cleveland, L.

Longford, E.

Wells-Pestell, L.

Elwyn-Jones, L. (L Chancellor.)

Lovell-Davis, L.

Wilson of Radcliffe,

Evans of Hungershall, L.

MacLeod of Funiary, L.

Winterbottom, L.

Fisher of Rednal, B.

Maelor, L.

Wootton of Abinger, B.

Gaitskell, B.

Mais, L.

Wynne-Jones, L.

Gardiner, L.

Melchett, L.

Resolved in the affirmative, and Amendment agreed to accordingly.
6.9 p.m.
Lord CRAIGTON Lord CRAIGTON moved Amendment No. 6:
Page 2, line 34, at end insert—
(" ( ) An expedited acquisition order shall not be made in respect of any land or part thereof which has been declared to be inalien-able by virtue of any enactment.")
The noble Lord said: As the result of the last Division, and as I understood the noble Lord, Lord Hughes, to say that he thought that the last Amendment did not apply to inalienable land, I propose to move this Amendment but not to press it to a Division, in order to give the National Trust of Scotland an opportunity to see whether the Amendment that your Lordships have just passed is in fact satisfactory to them. If it is not satisfactory, then I give notice that I shall take the opportunity of putting down a similar Amendment on another stage. With your Lordships' approval, I should like to discuss this Amendment with Amendment No. 29.
When the noble Lord, Lord Hughes, was speaking he said with great vigour that the predominant concern was that the interest of the country should be placed first. I want to show your Lordships that it is in the interest of the country that inalienable land should be saved from the dangers of the expedited acquisition procedure. When one says that, how
1136
much is one talking about? How much land? What is involved? That part of the property of the Trust that is involved is 40 miles, out of 6,400 miles of coastline. That 40 miles includes the cliffs of St. Kildare and similar quite unsuitable properties. Why, then, should one bother to take the trouble to put down these Amendments to free such a small quantity of land from the expedited acquisition procedure?—especially when one bears in mind that in the case of the Drambuie inquiry at planning stage it must have been a considerable point that the Drumbuie land was inalienable land, and that the Trust won their case at the planning stage. The National Trust for Scotland put virtually all their properties under the declaration of inalienability. The fact that they do this is the presumption on the part of the donors that the occupation of the property is for ever sacrosanct; that it belongs for ever to the National Trust unless a Parliamentary procedure which is hallowed by time and in which everyone has confidence is brought into play.
It is this point which makes it so vital that inalienablility should be left sacrosanct. There are safeguards before inalienability is declared. The Trust is widely representative: the cities, the district councils association, the Forestry Commission, the Scottish Touring Board, the Town Planning Institute and many elected members with diverse backgrounds which include the Scottish TUC and the political Parties. If, therefore, inalien-

1137
ability has to be broken—and it is recognised and has been recognised since 1947 that it might have to be broken in the public interest—there is already this legal procedure by which Parliament can break it. This Bill, at the best, does no more than substitute one type of Parliamentary decision for another. The price that you pay—and noble, Lords have spent nearly half an hour discussing this point—is the arrival just a little sooner at a decision. The noble and learned Viscount, Lord Dilhorne, gave examples that decision might not take as long as one feared. What is the decision about? It is about acquiring 40 miles out of 6,400 —1/60th part of the Scottish coastline. I put it to the Committee that it is extremely unlikely that this procedure would ever be applied to any more inalienable land. But the cost is the permanent and justified loss of confidence on the part of the donors.
I should not be speaking like this if I had not recently spoken to a very good and prominent citizen who told me that in his will he had just given all his properties to the National Trust and that if this Bill had gone through he would have felt that if the procedure were breached once, it could be breached again and he would not have donated that land. It is that loss of presumption that the land is going to be inviolate that will prevent land and property from being given to the National Trust in the future. Let us weigh these two interests: the certain loss of property and land against a minute risk that if any inalienable land is taken it is going to be needed to be taken. In any case, it can be taken a few months, or perhaps a few weeks sooner. To go back to what the noble Lord, Lord Hughes, said, the case has to stand or fall on its value in the country's interest. I put it to noble Lords that the interest of inalienable land comes first.
6.14 p.m.
Lord CHORLEY: I do not wish to repeat what I said on Second Reading on this point. I confess that I am a little disappointed that the noble Lord who put forward this Amendment has expressed the intention to withdraw it. I can understand that he should wish to consult the National Trust of Scotland, and he has reserved the right to put the Amendment down again at the next stage, so I do not propose to challenge his intention to with-
1138
draw it. There is one reason which I regard as of very considerable importance why this matter should be pressed. It is that the procedure in connection with the National Trust for contesting a decision on inalienable land rests on a Select Committee of both Houses of Parliament. As my noble friend Lord Hughes indicated earlier, that is very important because it means that, as happened on the only occasion when this particular procedure was invoked three or four years ago at Plymouth, Members of another place take part in the decision. This I regard as very important in connection either with the National Trust of England or with the National Trust of Scotland.
I have referred previously to that important case. It arose out of the gift by the late Lord Morley of his very beautiful park and house outside Plymouth. The only way of making the Plymouth by-pass was through the park or through the outlying part of Plymouth itself, which would have involved the pulling down of a great deal of property, including a church. After going into the matter with great care, the Select Committee of both Houses of Parliament decided that less harm would be done to the national interest by allowing the road to go through the park, provided that a number of very important safeguards were taken during the construction of the road. That was a most valuable safeguard which the Joint Select Committee retained. It had the effect of getting a landscaped road which, while it has done a great deal of damage to that beautiful park, has left a great deal of its beauties quite unimpaired. That is the only occasion since the National Trust Act was passed in 1906 (through a period of almost seventy years) that this procedure has been invoked. It shows that it is a very sound method of dealing with the situation.
I was sorry that my noble friend Lord Balogh, in winding up the other day, made references to the half-dozen cases, then he said perhaps ten, and eventually the Council of the National Trust was there—ipse dixit—to be taken; but he overlooked the fact that I had pointed out earlier in the afternoon that if it is felt that the decision of the Council in making the particular land inalienable is a wrong one, it can be challenged in the

1139
way I have described. It can be brought before the Select Committee of both Houses of Parliament who can make such inquiries and hear such evidence as they think fit. Obviously, the fact that this method was employed only once over all this period shows that it is a very sound way of doing things. I am surprised that the Government have insisted on this clause. My noble friend Lord Hughes said "the National Trust and other bodies "; but I should like to know which other bodies he means. I do not know of any other bodies except the two National Trusts which have this power to make land inalienable.
Lord HUGHES: I am afraid that I have not made that point clear. When I referred to the National Trust and other bodies and local authorities, it was to those who had resource to the Special Parliamentary Procedure; not to having a right to declare land inalienable.
Lord CHORLEY: The Special Parliamentary Procedure is quite a different thing. I would finish by saying that after listening to these arguments in another place and in this House I am sorry that the Government have not withdrawn this particular provision in the Bill. It looks almost as if they have been so upset by the Drumbuie inquiry—for, as I understand it, Drumbuie is the only place on the West Coast of Scotland where this sort of acquisition for the purposes of building could effectively take place—that they have put this subsection into this Bill in order to repeal, in effect, a decision come to by the Secretary of State himself after that inquiry. I hope that the noble Lord will be able to say that that is not so and that the Government will accept this Amendment.
Lord BELHAVEN and STENTON: I should like to support the Amendment. I think we should be careful before disturbing land owned by the National Trust on behalf of the nation. Furthermore, I do not think that in Parliament we should play around with words like "inalienable ". They should be seen to have the kind of meaning that the ordinary plain man or woman would expect them to have. We know that lawyers' meanings are sometimes a little different; but so far as the plain man
1140
understands it, "inalienable" means inalienable. As the noble Lord, Lord Craigton, said, there is very little land involved anyway. I simply cannot see the point of having this subsection in the Bill at all. I support the Amendment and I hope the Government will accept it.
6.31 p.m.
The EARL of WEMYSS and MARCH: I should like to say a word or two in support of the Amendment moved by my noble friend, Lord Craigton. I think enough has been said by him and by others here and on Second Reading to convince the Committee—and, I hope, to convince Her Majesty's Government— that this proposed attack on inalienable land, however theoretical and however unlikely to eventuate, is unnecessary. For the sake of inserting this totally unnecessary thin end of the wedge, a great deal of distress and anxiety is being caused, not only in Scotland, to a great many good people, so that it is likely that further munificence and gifts to either of the National Trusts in any part of the United Kingdom will thereby be inhibited. On a few special points, may I apologise sincerely to the noble Lord, Lord Balogh, that I was unable to be present to hear his interesting speech at the end of the Second Reading debate in this House on the 28th January. I would say, with great respect to the noble Lord, that he was not right when he said that the Trust is sometimes the judge in its own case. The whole point of the present situation concerning inalienable land is that if there is an apparent conflict between various parties in interpreting what is meant by the "national interest", it is Parliament, and only Parliament, the highest court in the land, which is the judge in the case. This would be true even if the Trust had acted in some case without sufficient care in declaring any land inalienable. I do not think anyone has ever suggested that we have acted without due care. I am sure that the Trust has and will in future act with the greatest caution before declaring inalienable any land which might possibly be wanted for oil development or for some other foreseeeable important need.
We are not complaining that this Bill fundamentally alters the place where the final judgment in these matters lies. Under the proposals of the Bill, this place will still be in Parliament. Parliament will be

1141
the judge in cases where inalienable land is required, or is thought to be required, under this Bill. We object to the unnecessary changing, the anxiety-making changing, for some rather unnecessary reason, of the established and well-known Parliamentary procedure which gives people confidence. There is no necessity, I submit, for a change at all.
Finally, I regret that it has been impossible to get any assurance by Her Majesty's Government that this sort of thing will not be done perhaps at some future time outside Scotland. During the Second Reading debate (in column 411 on the 28th January) I quoted what Mr. Bruce Millan had said: that this legislation will not be used as a precedent for similar provisions in other legislation. I said that I hoped that when the noble Lord, Lord Balogh, replied he would be able to confirm that and to say, in particular, that it would not be used as a precedent for legislating against the inalienability of National Trust land in any other part of the United Kingdom outwith Scotland. In reply I got a letter which the noble Lord, Lord Hughes, was kind enough to write me. He said he could only repeat Mr. Millan's assurance that the Government will not use Clause 12(3) as a precedent; but he said that he could not commit the Government to an undertaking relating to legislation for the same purposes applying to parts of the United Kingdom other than Scotland. Those noble Lords who are interested only in England, if there are any, and not in the United Kingdom as a whole, may be sure that the "red flag" is flying.
Lord CAMPBELL of CROY: Briefly, I wish to make it clear that I and my friends on the Front Bench support my noble friend Lord Craigton in this Amendment. The noble Lord, Lord Hughes, will realise from what I said on the last Amendment and in quoting the letter from the Director-General and the Director of the two National Trusts, that they were content provided that the particular procedure of a Joint Committee of both Houses of Parliament was retained and not short-circuited, as appears to be the intention in this Bill. The noble Earl, Lord Wemyss and March, has just confirmed this.
May I raise a point referred to by the noble Lord, Lord Chorley? It was not
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Drumbuie but Loch Carron, as a whole, where there were three or four sites which provided the special conditions he referred to and needed by the special concrete platform. What has happened—not unforeseen by many—was one of the sites has been selected and building is going ahead at Kishorn, five hours from Drumbuie and the other side of Loch Carron. I understand that the structures being built at Ardyne Point and Cambeltown in Kishorn, the Firth of Clyde area, will have to be towed round and the assembly finished in the waters of Loch Carron, because, as he said, that is the area where there are the conditions, including deep sheltered water, which are needed. I hope that the noble Lord, Lord Hughes will reply to his noble friend Lord Chorley and give him a clear confirmation that there is no question of applications for the particular Drumbuie site being reopened ; because that was turned down and Kishorn was accepted. So far we have been led to believe—and I speak of this because I was confronted with the problem before the present Government, and the noble Lord, Lord Hughes, has accepted this—that one site in that area was needed and there was no need to open the Drumbuie application again.
Lord CHORLEY: Does not the noble Lord see my point? As one site in this area had been accepted, there no longer was any point in continuing to have this subsection in the Bill unless someone said, "We will get Drambuie in the end"?
Lord CAMPBELL of CROY: I should say straightaway that I can see the Government's view that there could be similar situations elsewhere, but where inalienable land is concerned I do not know of any particular sites owned by the National Trust and inalienable which might at present provide the sort of conditions required. Presumably what the Government are providing for in this legislation is the possibility of inalienable land, or land made inalienable in the future, being the subject of a compulsory expedited acquisition order. What we are saying from these Benches is that, as we understand it, the National Trusts accept that it might be necessary in the vital and urgent national interest that such land should be acquired, but they do not think the normal safeguards and the procedure of including the Joint

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Committees of both Houses should be dispensed with in these cases.
The Earl of PERTH: Before the noble Lord, Lord Hughes, answers these various points, may I make a practical suggestion? I gather that we are talking about only forty miles, of which the greater part is of no particular or possible use from the point of view of any petroleum development. The land which we are talking about must be known both in its size, where it is and what are the probabilities of it ever being needed. If the need could be analysed, could it not be decided now that really and truly this large sledgehammer is not a necessary instrument so far as inalienable land held by the National Trust is concerned. So in respect of the land they have, knowing that that was the case, surely they could so arrange things that they could use the existing procedure rather than going to something else. Perhaps it might be all right for today, but what might happen in future on other land?
Surely the case of making the land inalienable is very difficult—and it is not only the National Trusts and a few bodies like them but the TUC, political Parties and so forth, who are represented on the body which decides whether or not the land should be inalienable. If it is difficult, surely it should be open to the Government, when such a declaration is being considered, to say that for this, that or the other reason this is the sort of site they might want. I suspect that under this representation the National Trust would not press the point and others who make the decision would say, "We do not agree with it". I wonder whether there is the prospect that there might be further inalienable land in relation to this measure.
The Earl of WEMYSS and MARCH: May I say a word in reply to my noble friend? I cannot of course commit the National Trust of Scotland indefinitely in the future, but I feel fairly sure that they will be very careful about any further declarations of inalienability where there is the slightest thought that the land might be needed for oil development. They would of course consult local authorities and others. This does not get away from the possible problem of land which has been declared inalien-
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able already, but I honestly submit that the likelihood of any land being wanted there, although not entirely absent, is so small that this proposed legislation, rightly referred to as a sledgehammer, should not be passed.
Lord HUGHES: I noticed that the noble Earl, Lord Perth, exercised the caution which he rather regretted in my letter when I said that I could not of course commit the Government in relation to other National Trust property. He said, "Let the English beware, the Red Flag is flying." I do not know whether that was meant in a political context or the sense of an auction sale, in both of which the Red Flag has a signifi-cance. He said that although he does not think such a thing would happen, of course he could not commit the National Trust.
I can see the situation. Just imagine that the National Trust was offered a piece of very attractive land, beautiful in its scenery, the sort of land they would wish to use every endeavour to protect. but on which there might be a conceivable oil site and the owner of which had a greater interest in preserving its beauty than getting any price for it, and he offered it to the National Trust on the condition that they made it inalienable. It would be very difficult for the National Trust not to accept the land in those circumstances and subject to that condition.
I think the noble Earl, Lord Wemyss, is perfectly correct in saying that he could not bind the Trust not to take any such decision in future. It may well be that this would be a decision they would want to take. I think he was not quite correct about inalienable land on one point: that is, when he said that it does not rest just with the National Trust; it is Parliament which has the final decision.
My attention has been directed to the National Trust for Scotland Order Confirmation Act 1935, that unless there is something in the Bill which qualifies Section 22(2), there is no Parliamentary consent necessary. The subsection says:
" Subject to the provisions of this section whenever after the commencement of this Order any lands or buildings shall become vested in the National Trust for Scotland the council may by resolution determine that such lands or buildings or such portions thereof as may be specified in such resolution are proper to be held for the benefit of the nation and such

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lands or buildings shall thereupon be so held by the National Trust for Scotland and shall be inalienable."
Unless there is something else in the Bill to which my attention has not been directed, there is no provision in the Bill for Parliament setting that aside. Is there such a provision?
Lord CRAIGTON: I think it was amended by the Act of 1947.
The Earl of WEMYSS and MARCH: Possibly there is a misunderstanding here. What I said a little while ago was that Parliament was the judge in the case—and by "case" I meant in any conflict that might arise about taking inalienable land for something else. I think the noble Lord, Lord Hughes, is quite right in saying that statutorily the National Trust for Scotland can declare land inalienable without Parliamentary consent. What I said more recently was that if not in the past, certainly in the future it is not going to do this without being very careful indeed. But that is not consulting Parliament.
Lord HUGHES: The debate throughout has been on a note of complete apology, and I do not propose to depart from that. I am just as much interested in protecting the lands of the National Trust of Scotland as any noble Lords who have taken part in this debate. That the Scottish Office is so can be gathered by the way we dealt with the Drumbuie —I must emphasise that it is Drumbuie, not Drambuie, which, there is no dispute at all, is an excellent liqueur.
I wish to inform my noble friend Lord Chorley that I do not think he does a service to the National Trust when he suggests as a possibility that what the Government are seeking to do is to find a way of reversing the decision taken on Drumbuie. The Secretary of Secretary of State has demonstrated that in given circumstances he accepts that there is a position where, even though it can be shown very strongly that in the national interest a piece of land should be used for oil purposes, the national interest in preserving an amenity can be even stronger. This happened in relation to Drumbuie. If the Secretary of State had wanted to take the easy way out inside Government, it would have been just as simple for him to take the decision
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that the national interest, so far as oil was concerned, overrode the interests of amenity. But he did not do so and he has no intention of overriding his own decision on this. Indeed, I doubt very much whether he would have the power to do so having taken that decision. So let there be no doubt about that. The decision that has been taken is final and there is no ulterior motive.
I wonder why it is that when Governments seek to do things of a general nature the first thought that seems to get into some people's minds is: "What are they up to that is not stated in the Bill?" In this case there is nothing. I am going to stick my neck out a little and say this—I may find I am promising something which my colleagues are unable to accept. If the references had been made only to the 40 miles or so of land which is presently inalienable, it might—and I will put it no stronger—be possible to accept the argument that it should be excepted. What we cannot do is place ourselves in the position of having to resort to Special Parliamentary procedures because somebody in the future makes the land inalienable. I think the way in which the case has been spoken to by the noble Lord, Lord Craigton, the noble Earl, Lord Wemyss, and the noble Earl, Lord Perth, does not want that position to be provided for. If it were possible to distinguish between what is there and what might be there in the future, then it is at least possible that we might be able to go a little further. As I say, I am sticking my neck out, and if I have to come back at the next stage and say: "I am sorry, I ought not to have said that", then I ask the House not to hold it against me. I am trying to be helpful but the final decision is not mine, of course: I am only one of the minor cogs.
Lord CRAIGTON: I am very grateful to the noble Lord, Lord Hughes, and I will stick my neck out a little here. I believe that if the noble Lord and his colleagues will look carefully at this and at the suggestion made by the noble Earl, Lord Perth, about a greater degree of consultation—which of course is greater in England now than it is in Scotland—I believe a formula can be found. If we can find a formula then the giving will go on; so I have never withdrawn an Amendment with greater

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pleasure. I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
Clause 1, as amended, agreed to.
Clause 2 [Extinction of rights affecting land]:
6.44 p.m.
The Duke of ATHOLL The Duke of ATHOLL moved Amendment No. 8:
Page 4, line 9, leave out "may" and insert "shall".
The noble Duke said: We seem to be getting back to familiar ground when the noble Lord, Lord Hughes, and I have a discussion on footpaths. I can assure him that this will be a friendly discussion, matching those on the same subject that we have had in the past. I hope it may be for the convenience of the Committee if I speak to Amendments Nos. 9 and 10 at the same time as Amendment No. 8, since they all bear on the same point.
When I read subsections (5) and (6) of Clause 2 of the Bill, I felt they must have been drafted by someone more familiar with English conditions than with Scottish ones, because in Scotland —although not, I believe, in England— the registration of rights of way by local authorities has hardly advanced at all. I think I am right in saying that in England it is obligatory on local authorities to register all rights of way within their areas, whereas in Scotland this is not so and very few local authorities have under-taken it as yet. There is a consequential difference in that Ordnance Survey maps in England show rights of way in red, and other footpaths in black, whereas in Scotland, because there is very little registration of rights of way, all footpaths are shown in black. I should therefore have thought that there was a practical difficulty regarding Clause 2(6), in that people would not necessarily know what was a right of way. That is my first point in putting down these three Amendments.
The second point is that very often a place is a popular one for walking. The English National Trust have had their Operation Neptune to try to secure as much of the coast as possible for the future benefit of the nation. The Scottish National Trust, as we have already heard,
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have not gone as far as that, but nevertheless it is universally recognised that, largely, the coast of Scotland is extremely beautiful and that many people like walking along the coastal footpaths which are not necessarily rights of way. I feel that in all cases these footpaths should be diverted and, if it is necessary to divert them in order to undertake operations under this Bill, alternative footpaths should be made as conveniently as possible to the coast, so that people may still go rambling along the coastline of Scotland. I cannot see that this would be very difficult.
I have no doubt that my Amendments are defective in some way—they nearly always are—but I am just opening this up now in order to get the Government's views, and see whether they could possibly give an undertaking that even if this is not written into the Bill they will, wherever possible, make it a condition of a local authority, or whoever it is, being able to acquire these sites, that they should provide a suitable footpath as conveniently as possible to the original path so that people may continue to wander around the coastline in the way they are used to. I should like to emphasise that the law of trespass in Scotland—if there is one, and I am sure there is—is not very often either observed or enforced. I beg to move.
Lord CHORLEY: I should very much like to support what the noble Duke says—
Lord HUGHES: Would the noble Lord allow me to speak first? I think it will help him. First, I wish to say that on this occasion I do not know whether or not the noble Duke is breaking his duck, but we can find no defect in the Amendments. They are technically perfect—so much so that I am prepared to accept the first of them. However, I cannot do the same, at least at this stage, for the other two, for reasons which I think the noble Duke will find are not unreasonable. I may say—and this is letting cats out of bags which perhaps I ought not to do—that at first my brief was to resist them all on the grounds that they are not necessary, but my reaction is to say, "If it is not necessary but does no harm, let us accept it ". This applies to Amendment No. 8.

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However, on the second and third Amendments, there is a fear that they may do harm. We queried whether adding the words "or footpath "would broaden the situation. The advice I have been given —and we consulted both the legal people and the draftsmen on the matter—is that the term "public rights of way" includes any footpath over which such a right exists. The words "or footpath" in that context are not necessary. I am not certain whether the next point has been raised by the noble Duke, but he certainly came near to it. If the noble Duke's concern is to ensure that a properly made-up path is provided in any case where the right of way stopped up under the powers of subsection (5) was a properly surfaced one, then the powers in Clause 10(1) of the Bill would authorise the Secretary of State to carry out the necessary works without further authority when providing the alternative right of way. Of course the Secretary of State would have to enter into an agreement with the owners of the land before proceeding with the works or acquiring the land.
The difficulty we have is that if we accept Amendments Nos. 9 and 10 we might be in difficulties in relation to the provisions of other enactments or throw doubt on them. For instance, Part III of the Countryside (Scotland) Act 1967 contains detailed provisions in relation to rights of way, which by definition includes footpaths and bridleways or a combination of those—and I think that is what the noble Duke was referring to when he spoke of past exchanges on the subject of footpaths. The term is also used in the Town & Country Planning (Scotland) Act 1972. Therefore, the fear of the draftsman is that if we alter the definition now in this provision it could throw doubts on the full value of the definition in these two previous Acts. As I know that the purpose of the noble Duke is to have these things protected, the last thing he would want to do in this Bill would be to risk limiting what is in two existing Acts of Parliament.
However, I should like to look at this matter again in the light of what the noble Duke has said and discuss it further to find out whether anything else can or need be done. If he does not move Amendments Nos. 9 and 10 I will write to him a little more fully, and he may decide that the matter is satisfactory or
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he may wish to return to it at the next stage.
Lord CHORLEY: I wanted to say only that these coastal footpaths are enormously used and liked by ramblers, of whom there are now tens of thousands in the British Isles. Recently I had the pleasure of visiting the Isle of Wight where a great deal has been done in that much built-up island to provide a coastal footpath all round the island. That is tremendously appreciated. Even in the depths of winter many people are found making use of it.
6.54 p.m.
Baroness ELLIOT of HARWOOD: I would add one word because in my local authority I am having great difficulty because a well-known footpath is in jeopardy as it is not supposed to be a right of way. I believe that technically it has never been designated a right of way. For a hundred years local inhabitants have used this path. It does not happen to be on the coast but in a lovely Border area. Great trouble is going on now because there is a technical difficulty over what is called a right of way and what is called a footpath. It would be a great help to anyone in the same position if both words were in the Bill. It may well be that what the noble Lord, Lord Hughes, says is correct—indeed, I am sure it is—and the right of way includes the footpath. But in the area to which I refer there is a great argument because it is said that it does not. There are threats to close gates and not to allow people through—in fact, it has been done —because it is said that the path is not a right of way; it has been used for a hundred years but has never been designated a right of way. There is a muddle here, and it would be very acceptable if both words could appear without endangering the sense of this clause in the Bill. I would support the use of both words.
Lord HUGHES: The noble Baroness, Lady Elliot of Harwood, said she did not doubt the accuracy of what I said. I assure her it must be perfectly accurate, not because I said it—I do not claim any knowledge whatsoever of this subject— but because it is highly professional advice and it has been cross-checked. Therefore, it is probably right. But I am

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a little surprised. One of the matters I raised when we were discussing the subject this morning was whether there was not some provision whereby, if it could be shown that the public had had unrestricted access for a period of years, a right of way could be established. I am told that at one time if it could be shown that a path had been used for 40 years, that was the position, and subsequently the period was reduced to 20 years. So a path can become a right of way by prescription. It is not necessary to produce the centenarians to prove a path is a right of way. If it can be established that it has been used for 20 years, I should think that, if the local authority wants to deal with it, there need be no particular difficulty.
Nevertheless, I am prepared to make the provision as strong as possible, and if on further examination this is found to be the right way to deal with it (we did not have a great deal of time in our preparatory discussions because it was well after 12 o'clock when this stage was reached) I would be at one with the noble Duke. But I am sure he would agree with me that if the effect of this was to weaken the general situation amendments should not be made.
The DUKE of ATHOLL: I thank the noble Lord, Lord Hughes, not only for accepting Amendment No. 8 but for his encouraging words about Amendments Nos. 9 and 10. I would say one further word about them. The Scottish Rights of Way Society have deposited with the Countryside Commission maps showing all the rights of way in Scotland which they claim as rights of way. These have not necessarily been agreed with the landowners concerned or with the local authorities. There are probably many foot-paths of the kind my noble friend Lady Elliot of Harwood was speaking about which are not on their maps and which therefore they do not claim as rights of way. I do not say they are the fountain of all knowledge on this subject, but they are the interested body which protects rights of way. It would be a pity if some footpaths along our coast which are regularly used—and I have seen their map of my particular estate and there are quite a few footpaths which are fairly regularly used which they do not claim as rights of way—are not replaced by
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alternative routes when sites were taken for these developments. I thank the noble Lord for accepting the first of my three Amendments and for saying he will look again at the other two.
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 11:
After Clause 2, insert the following new Clause—
Accelerated planning procedure in special circumstances.
"In the application of the provisions of the Town and Country Planning (Scotland) Act. 1972. the Secretary of State shall not be required to hold a public inquiry where—

(a) an application for planning permission or for change of use of land is related to coastal works or installation for the purposes of building offshore oil production platforms or of providing terminal facilities for supplies of offshore oil; and

(b) it appears to him that such an application should be considered as a matter of urgency."

The noble Lord said: I suggest it would be convenient if Amendment No. 42 were taken with this Amendment as it is simply to extend the Long Title of the Bill to allow for this new clause. Because of the view we have expressed from this side of your Lordships' Committee about the expedited acquisition procedure—that it is not the best way to reduce delays in the special urgent circumstances which the Government mention—it is only reasonable that we should show how we think the alternative system would operate. The question is how to avoid the many months of delay which public inquiries and a very restricted range of cases can cause.
The Government already accept that for similar public inquiries there can be delays—in fact, inordinate delays—and in referring to public inquiries for compulsory acquisition the Parliamentary Secretary to the Department of Energy said at column 310 on the 10th December in the debate in another place:
" It is well known that the major hold-up is the public inquiry procedure. It is a procedure that can be extremely time-consuming in the process of land acquisition ".
We agree with that. Situations can arise in typical forms such as this: first, applications to local authorities, together with any objections which are lodged, can be called in by the Secretary of State pro-vided they are of national importance.

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In the cases for which we think that there should be streamlining of the procedures and the kind of cases for which the Government are proposing the expedited acquisition procedure, where there is urgency and great national interest then the Secretary of State will probably call in such an application at an early stage.
Local authorities may grant permission; but there can be an appeal to the Secretary of State against the granting of that permission, and he has to take the final decision in a semi-judicial capacity. There is also the application to the Secretary of State for a change of use, a change of the development plan, and the Secre-tary of State can deal with this by an Article 8 direction or by approving an Amendment to the development plan.
Lord HUGHES: If I could—
Lord CAMPBELL of CROY: May I just deal with this point, because I am probably going to deal with the point which the noble Lord wishes to raise. At present the Secretary of State can settle a number of these matters without an inquiry. It is only in certain circumstances where there is a great weight of objection that the planning Acts have been interpreted in the past as meaning that the Secretary of State is obliged to hold an inquiry. I am not saying that he has to do so in all the circumstances I have mentioned, but these are the main ways in which the planning decisions come to him from the local authorities. As the noble Lord has said, many are dealt with by written representations, but where there is a tremendous weight of objection—for example, where an area that is recognised to be of great national beauty is involved—in the past the Secretary of State has felt obliged to hold an inquiry under the wording of the Planning Acts. I want to ask the Government whether they still accept this situation. One possible explanation for the Government's proposals in the Bill is that in the circumstances which we are discussing— the limited number of cases for which the expedited acquisition procedure is sought —the Government have decided that at the planning procedure stage, which precedes this, they just will not hold public inquiries. That would be an explanation, but we always considered that that could not be an interpretation of the present
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Acts. If one were to do away with public inquiries for certain cases, then one ought to seek a modernising adjustment to the Planning Acts—in Scotland the consolidated Planning Act of 1972.
I think that we are all agreed that we wish to speed-up the planning procedures. "Streamlining" was a word that I used. The previous Government took certain measures, such as introducing a corp of full-time reporters to take inquiries in Scotland. This had not happened before. They also introduced the system of recording by tapes; there were situations where proceedings were held up because the shorthand-writer was ill and there was nobody to transcribe the reporter's notes. All these possible causes of delay were examined so that the proceedings could be speeded-up. None the less, there is no doubt that, in what could become complicated proceedings, six to eight months might be involved in an inquiry. Perhaps four months would be taken up with the actual proceedings and adjournments of the oral hearings.
I am the first to say that this new clause is probably imperfectly drafted. I make no claims to the perfection which my noble friend the Duke of Atholl has attained on Amendment No. 9. Therefore it will save the time of your Lord-ships' if I suggest to the noble Lord that he does not simply find fault with the wording of the new clause, because my aim again is clarity of meaning so that your Lordships may see what is intended. If, in principle, the Government were persuaded to change the system, I have no doubt that they would be able to draft something much better. Therefore I will say at the start that I do not intend to defend the drafting. However, we believe that the streamlining of the planning procedures, which come before any compulsory acquisition procedures can be started, is a better alternative to what the Government are proposing.
May I ask the Government another question. If they are faced with an application which involves an area of Scotland which is of outstanding natural beauty and there is a massive weight of objection, with all or most of the amenity bodies concerned, do they intend to hold an inquiry? In the case of Kishorn they decided not to hold an inquiry, but as it is so close to Drambuie they felt that

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they could use the proceedings that had gone on there for many months. I under-stand that the parties also co-operated in agreeing to no further inquiry being held in that case. If, however, there was to be an urgent application of this kind in the national interest which involved some part of Scotland which is a long way from Loch Carron—I shall not go into the question of inalienability but confine my remarks to the other conditions of a thriving tourist industry which is in danger of being spoiled because it is a place of great natural beauty— what do the Government intend to do? We believe that to make a modernising change for a limited range of cases, as I have described, would be far preferable to eliminating the special Parliamentary procedures which the Govern-ment were seeking to do under subsection (7) of Clause 1. I beg to move.
Lord HUGHES: If this clause were added to the Bill, I think that the noble Lord, Lord Campbell of Croy, would recognise that it would completely change the character of the Bill which is before us. It would very largely seek to sub-stitute the Bill which did not reach Parliament for the Bill which is before Parliament. In fact, it would render invalid part of what we have already done. I cannot believe that anybody who was seeking to protect the public interest would wish to see in the same Bill a procedure which could eliminate public inquiries at the planning stage and eliminate them at the compulsory purchase order stage as well.
Lord CAMPBELL of CROY: I entirely agree. I tried to indicate that this was an alternative. If this were accepted, then the Parliamentary procedures would not need to be amended.
Lord HUGHES: No, but we would have a devil of a job tidying up the Bill at Report stage, taking out what we had put in already! There are two completely different approaches to this problem. Both the previous Administration and the present Administration are in agreement that there are certain circumstances when to follow through all the cumbersome procedures which have applied in the past could create an impossible delay. The Government have chosen to deal with it in the way which is set
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out in the Bill. This is an alternative way of dealing with it, and we think that the method which has been adopted by the Government involves the least interference with public rights and individual rights.
The effect of the new clause would be to make it unnecessary in the specified circumstances to hold public inquiries under the provisions of the Town and Country Planning (Scotland) Act 1972, which leave the Secretary of State no discretion as to whether or not to hold an inquiry. I sought to intervene very early in the remarks made by the noble Lord, Lord Campbell of Croy, because I thought he said—but I may have missed out some words of his statement and this is what wanted to clarify—that if the local authority granted a planning application there could then be an appeal to the Secretary of State. Is that what the noble Lord said?
Lord CAMPBELL of CROY: I under-stand that there are situations in which there could be an appeal.
Lord HUGHES: The normal position is that when a local planning authority has granted a planning application which is in accordance with the approved development plan, there is in fact no appeal against the local authority's decision. This could be one of the circum-stances when the Secretary of State would call it in for his own consideration, because it would keep the matter more open than if the local authority were considered as fitting into their own approved development plan. In these circumstances there is, in fact, no appeal; the decision of the local authority is final unless there is an appeal to the Court of Session within a specified period, because the procedure has been faulty in some way. But that seldom happens.
Under some sections of the 1972 Act the Secretary of State is obliged to hold an inquiry. For example, if there are objections to a proposed amendment to the development plan, an inquiry must be held; if the Secretary of State calls in an application for planning permission for his own decision, and either the applicant or the planning authority requests a hearing, there must be a public inquiry; or if there is an appeal against the refusal of planning permission and the parties do not agree to put their cases to the Secretary

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of State by written submission, there must be a public inquiry. The effect of these three is that almost certainly in any case of major public interest a public inquiry must be held. So what the Amendment would do is to alter that position.
In other matters the Secretary of State has discretion over the holding of an inquiry. The making of a direction under Article 8 of the General Development Order, enabling the planning authority to grant planning permission for development which is not in accordance with the approved development plan, comes into this category. Article 8 directions account for quite a high proportion of oil-related planning references to the Secretary of State. I can quote the figures. Twelve Article 8 directions were concerned and in only two cases was it necessary to hold a public inquiry; namely, Portavadie and Dunnet Bay. In these cases the Secretary of State is not obliged to hold an inquiry, although he will do so if there are substantial objections and he considers that an inquiry is necessary.
So we have three directions in which the Secretary of State has no option and when a public inquiry must be held. When the Government say that the planning procedure will be adhered to before the expedited procedure on compulsory acquisition, it covers these first three sets of conditions. Secondly, in the case of an Article 8 direction, although the Secretary of State is not obliged to hold an inquiry the practice has been— and I am sure it was so in the time of the noble Lord, Lord Campbell of Croy, and it certainly is so with the present Secretary of State—that where there are substantial objections he will normally consider that an inquiry is necessary.
The new clause would not affect these discretionary inquiries; it would still be the position that the Secretary of State could or could not, as he thought proper. It would give the Secretary of State discretion in cases where he is at present obliged to hold an inquiry. But how many serious delays to oil-related developments have arisen, because the Secretary of State was obliged, without any choice in the matter, to hold a public inquiry? The delays which have arisen have usually been the result of discretionary
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inquiries into applications for Article 8 directions.
Leaving aside the practical question of delay, there is a vital issue of principle here. The Government have repeatedly stated in relation to this Bill that it is our intention not to interfere in any way with the planning process. If we were to do this it would be tearing up all the undertakings which the Government have given in another place. The noble Lord will say that, of course, we are taking the other aspect out because if this goes in the other part—in relation to compulsory purchase—must come out. It is essential that the decisions as to where major developments should take place are reached in a fair and open manner. Even if we gave the Secretary of State complete discretion over the holding of planning inquiries, it is in the nature of this Government's policy that public inquiries will continue to be held where they are necessary, despite the risks of delay, as happens at present with discretionary inquiries into Article 8 directions. It is significant that in the Bill we are providing an expedited procedure for the acquisition of land only once the planning issues have been settled.
I may be over-simplifying when I say this, but I think that if we allow the planning procedure to go ahead with the inquiry in cases of importance or major interest, the whole range of matters is covered. The owner of the land which may be the subject of compulsory acquisition has the opportunity at that stage of coming in, but it is not only the owner of the land—other people are in at this stage. If we cut out the inquiries, then we have to rest on the compulsory purchase inquiry and that does not cover the wide general interest. So I hope I am not exaggerating the position when I say that the procedure in this clause could lead to just as much expedition as the procedure that the Government are adopting. It may be neither better nor worse; it may be as good or it may not be. I would not argue one way or the other on that, but certainly it would eliminate the public inquiry on the widest possible basis and substitute the public inquiry on the narrower basis of compulsory purchase, which we do not think is in the interests either of amenity or of other issues of national concern.

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We accept that the process of ordinary planning procedures has given rise to delay, but I should like to repeat what I said at the earlier stage. The attitude of the public to planning procedures is governed by the Drambuie inquiry, the Turnhouse inquiry and so on—those which take a long time. But, as I said, there were 41,000 planning decisions last year and I believe that less than 500 of those were the subject of further proceedings of any sort. So in the great majority of cases the procedure is perfectly proper. But in considering that small number— the ones which hit the headlines and sometimes the ones which are very important, particularly the oil rig ones—we do not wish to take up any time that can be avoided without prejudice to the interests seeking to have the inquiry.
The noble Lord has referred to the improvement in these procedures during his time at the Scottish Office, and as a result of the decision then made we are now in the position of having four full-time Reporters in Scotland. At the present time, we are engaged in interviews which we hope will result in increasing the number of full-time Reporters to eight. This, in itself, will make a tremendous difference because, as the noble Lord, Lord Campbell of Croy, would be the first to recognise, one of the big difficulties at the present time, and the reason why he took the decision that there should be full-time Reporters, was the time one had to wait for the advocate who was acting as a part-time Reporter to find the time to take up the case, and the extent to which it was sometimes interfered with, because he had other jobs to do; the time that elapsed before he could get down to putting his findings on paper, and the time when he could find an opportunity to submit his recommendations. The full-time Reporter does not have any such outside calls upon his time. That decision we wholeheartedly support. If we could say that the decision of the noble Lord, Lord Campbell of Croy, was responsible for the first four being appointed, then we could not give it better backing than to say now that we are seeking to add another four. If we can get others and it proves necessary, eight is not necessarily the end of the day. But we are going further.
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We have had the report of a discussion group which included representatives from the Faculty of Advocates, the Law Society of Scotland and the Scottish Committee of the Council on Tribunals which the Secretary of State invited to consider public inquiry procedures. As a result we are about to issue a memorandum setting out a new code of guidance for taking public inquiries. This code will preserve the Franks principles of openness, fairness and impartiality, yet if properly and consistently practised by all concerned it will considerably reduce the time, and therefore the cost and formality, of public inquiries. On these procedures, we have gone as far as we can go if we are to carry the law with us. What is going out has the support of the Faculty of Advocates and the Law Society of Scotland. We would have wished to go further, but when we see how this works at the next stage these people may be more forthcoming. What will be coming out in the next ten days will cut down the time spent in the inquiry, but will not cut out the fair hearing of people's views.
For all these reasons, I think that the procedure in the Bill will save as much time as would be saved if this clause were put in. It means less interference with the general rights to consider these major schemes than if we did the shortening at the expense of cutting out a certain number of public inquiries. The noble Lord asked whether it was the Government's intention not to hold public inquiries in certain cases. If I had put that question to him when he was Secretary of State, he would have said, "I cannot possibly give any such assurance ". I must say the same to him. All the evidence of the intention of the Government on this matter is that, given the expedited procedure on compulsory purchase, there is an obligation not to withhold a public inquiry where it is obviously in the public interest that this should be held. Where disagreements can be resolved—as happens in so many cases where objections are withdrawn because of discussion taking place—this will continue to be done.
Sometimes this is regarded as a cause of delay; someone makes an application and some time elapses before a decision is taken, because there is much negotiation. Sometimes the negotiation is successful and all the objections are resolved.

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but sometimes it is not completely successful and, after all the negotiations that took place, the public inquiry still goes ahead. In such cases as this, people say, "Why has it taken all this time to decide that a public inquiry will be held?". This is unavoidable unless we are to ride over public interests.
I hope that the noble Lord, Lord Campbell of Croy, will feel, having taken this opportunity of explaining the alternative way of working—a way which the Government do not find acceptable—that he must at least concede the fact that it is possible that our method will save as much time as that suggested. As Governments are entitled to have their preferences in the way they present legislation, the noble Lord cannot expect me to accept this Amendment when it has no conceivable advantages in time saving.
Lord CAMPBELL of CROY: Of course, I have no intention of pressing this Amendment which, as the noble Lord has said would almost be a wrecking one at this stage of the Bill. But it has given the Government the opportunity to state their intentions. I am grateful to the noble Lord for having gone so far in indicating the kinds of inquiries which will have to be held because they are obligatory, and also for speaking of others as discretionary. I am also grateful to him for accepting that in the discretionary category there are some circumstances in which the Secretary of State would be virtually compelled to hold an inquiry. The noble Lord mentioned Dunnet Bay, where I felt an inquiry was necessary because many of the amenity bodies, such as the Countryside Commission and others, were objecting. That might have delayed—it did not, in fact, do so, but it took many months—production there if the company had not been doubtful about where they were going, and had not made up their minds before my decision was announced.
Ardyne Point; another example of where it was difficult to decide whether or not an inquiry was needed. There were not many objections. It is a beautiful part of the Firth of Clyde, but objections were not very great in number and it was possible to give planning permission without an inquiry in a very short space of time. This has now expanded to three berths, and has been hailed as
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a success because the platforms of concrete and steel are being built there. Had an inquiry been necessary, work would only just be starting today—nearly two years later. So there are not the number of cases that the noble Lord mentioned which do not go to inquiry, because the first platform building sites were easy ones. The steel platforms did not require difficult sites, and it was possible for people to go to places which were not bird sanctuaries, or which were not objectionable for some other reason.
Lord HUGHES: The reason why they were not difficult was that the sites were already zoned for industrial development, and the decision could be taken by the local authority within the development plan. If they granted it, there was no appeal against their decision.
Lord CAMPBELL of CROY: I do not wish to contradict, but the first two were Nigg Bay and Ardersier both within 20 miles of my own home. Both were Article 8 directions, if my memory serves me correctly.
Lord HUGHES: I am thinking of the Fife one.
Lord CAMPBELL of CROY: Yes, that was a simple one because it was an industrial area on the Forth. I was not even mentioning that as one of the possibilities. Also, when numbers are mentioned of planning cases, this is in a different category from the garages, the by-passes of villages and the normal run of planning applications. Unfortunately, the kind of platforms now being required, and the types that may be required in future, can be built only in certain places. Regrettably, those places have been found to be places of great natural beauty, or places where the community as very sparse and the social impact could be very harmful. I know the Government have been saying for months that they are not intending to alter planning procedures. We think this is a pity. The fact that the Government have been saying this means that they cannot change their minds now, and the noble Lord said that. Despite the improvement in machinery which the noble Lord mentioned, I do not see how difficult inquiries can fail to take several months. That is still the problem we have

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to face. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 3 [Designated sea areas] :
7.30 p.m.
Lord HENLEY Lord HENLEY moved Amendment No. 12 :
Page 4, line 31. leave out from ("shall") to end of line 32 and insert (" not be made unless a draft of it has been laid before, and approved by resolution of, each House of Parliament.")
The noble Lord said: This clause deals with designated sea areas and my Amendment seeks to change from Negative Resolution to Affirmative Resolution any Order dealing with designated sea areas. There may be very good reasons why the Government did not change this particular Order from Negative Resolution to Affirmative Resolution, as they did when dealing with expedited acquisition orders. The Government changed their original intention of having a Negative Resolution on expedited acquisition orders due to pressure in another place in order, if I may say so, to prevent the Secretary of State riding roughshod over conservation and amenity interests. Why was the same change not made here? As I say, there may be very good reasons. I beg to move.
Lord HUGHES: I think there are good reasons, and I am fairly certain that the noble Lord, Lord Henley, will not be disagreeing with me when I have stated them. The purpose of the Amendment is to make the sea designation orders subject to the Affirmative Resolution procedure, as he said. Since they apply to specific areas of sea, the Orders might become hybrid and then be subject to the Lords Hybrid Special Orders procedure about which we have had a great deal to say already. That is not certain. It may not be so. Similar Amendments to make it affirmative rather than negative were debated and rejected in another place.
The reasons why we did not substitute Affirmative for Negative procedure were these. Unlike an expedited acquisition order, a sea designation order does not of itself directly affect the property or interests of any person. No immediate consequences flow from the order, unless someone is already carrying out relevant
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operations in the area. Admittedly, an order is a necessary preliminary to the making of regulations and the granting of licences. However, these are not so much concerned with authorising opera-tions as with the control and regulation of developments which could otherwise take place in an uncontrolled and unregulated way. The purpose of making an order is, therefore, to provide an administrative framework, and for this type of instrument the Negative Resolution procedure is most appropriate.
In the previous case the precedents were all on the side of the noble Lord, Lord Henley. In this case, I am happy to say, the precedents are all on my side. But I do not want to found too greatly on that, because I never like to find that we cannot do something in legislation because it has not been done before. After all, if we had always followed that we would never have had any legislation at all. The precedents are these. The following are examples of orders which can be made under existing legislation subject to annulment by either House, whose effect is to designate an area of sea or land for the exercise of special powers. Sea Fish (Conservation) Act 1967: Orders under Sections 4, 5 and 6 restricting fishing by licensed boats in specified sea areas, and prohibiting the landing of fish caught in specified areas. Local Employment Act 1972: Orders under Sections 1 and 18 declaring part of the country to be a development area, or revoking that status. New Towns (Scotland) Act 1968: Orders under Sections 1 and 46 designating the site of a New Town, but only if objected to by the planning authority for the area.
The precise method of designating areas has not yet been settled. We want to discuss with local authorities, harbour authorities, the fishing interests and any others affected, where it might be helpful to consider how the power might be used. Let us take Loch Fyne as an example, since it contains several stretches of deep water suitable for completing the fabrication of concrete platforms and may be an area to which the provisions of the Bill will be applied. Depending on the views of the local people, it might be sensible to designate at the outset a large area of the Loch so as to have a co-ordinated system of controls. Alternatively, local opinion might prefer that the designation orders

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should be made only in relation to specific areas of water as the need arose. We would wish to consider these possibilities, but in the latter case we might need a number of orders. It would seem rather heavy handed to make each of them subject to Affirmative Resolution procedure. I hope, therefore, that as the purpose of this is to be helpful in generally preventing undue noise, undue nuisance, preserving amenity and the method by which we are going to consult all the interests concerned—the precedents which are there— the noble Lord will accept that the Negative Resolution procedure is not an unsatisfactory way of dealing with these sea designation orders.
Lord HENLEY: I thank the noble Lord very much. His arguments seem to me to be satisfactory. I apologise to your Lordships for not having noticed that this was debated in another place. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
Clause 4 [Licences in relation to operations in designated sea areas.]:
7.36 p.m.
The DEPUTY CHAIRMAN of COMMITTEES: The next Amendment should be numbered 13.
The Earl of CROMARTIE: I think possibly the noble Lord opposite will agree with me that as well as the harbour authority, which may or may not exist in the area of operations, it is important that the relevant local authority and river purification board should be consulted. In the cases I am thinking of it would of course at present be the county council, and in the near future will be district and regional councils. I beg to move.
Amendment moved—
Page 5, line 14, at end insert (" and the relevant local authority and the river purifica-tion board ").—(The Earl of Cromartie.)
Lord HUGHES: I had noted that the Amendment was not numbered, and I thought perhaps it was because the noble Earl was superstitious. He would have been justified, because what it says at the top of my brief is "Resist". The effect of the Amendment would be to require the Secretary of State to consult with the relevant local authority and the river purification board before granting a
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licence. It would not have any effect in an area such as Loch Carron and the Inner Sound of Rassay because they do not have a harbour authority.
Clause 3 provides for statutory consultation by the Secretary of State with local authorities before a sea designation order is made. That seems to us to be the right stage at which to involve the authority, and those in another place considered that this consultation should be on a statutory basis. At that stage the kind of relevant operations that are likely to be carried on in the area will be known. The views of the local authorities on the most suitable locations for offshore operations and shore bases, and on the kind of restrictions that should apply to the conduct of the operations can then be sought and taken into account. Thereafter it should not be necessary for the Secretary of State to be statutorily required to approach the local authorities every time he issues a new licence, though of course there would be nothing to stop him from consulting them if unforeseen circumstances arose, and he would, as a matter of good administrative practice, do so. As the noble Lord, Lord Campbell of Croy, would be prepared to assure me, it is not a part of the ordinary procedure of Secretaries of State for Scotland to search out ways of making difficulties for themselves; they in fact try to make life easier. Good administrative practice is normally followed.
He would also consult the river purification board if, for example, there was any question of a discharge of effluent to tidal waters within their area of jurisdiction; just as he would consult the Post Office and the Electricity Board if there was any risk to their submarine cables, the ferry operators if their routes were interfered with, no doubt the local yacht clubs, if their racing courses were likely to be affected. This is all good administrative practice, but it does not have to be spelt out in the Bill. These various interests will not be affected on every single occasion when a licence is issued. A harbour authority is, however, in a special position. It has general responsibility for control and protection of navigation in its area, and it is almost inconceivable that any licence would not have implications for a harbour authority. Therefore, it seems right that they should always be consulted. I hope I have said

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sufficient to persuade the noble Earl. Lord Cromartie, that the point he has in mind is adequately taken care of without this Amendment being made.
The Earl of CROMARTIE: I should like to thank the Minister for his reply. I find it perfectly satisfactory. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clause 5 [Terms and effect, etc. of licences under s. 4]:
7.40 p.m.
The Earl of CROMARTIE The Earl of CROMARTIE moved Amendment No. 14:
Page 6, line 4, after (" a ") insert (" public community or ").
The noble Earl said: The clause quite correctly gives a right of compensation to a private owner, but it might well occur that a publicly-owned area can be in the same position, and I consider that it is right that this clause be amended to include such an area. I am thinking of land which is taken over, say, by a county council, or possibly by a village community. I beg to move.
Lord BALOGH: When the Bill was under consideration in the other place, Amendments seeking to provide compensation for the loss of public fishing rights were debated at some considerable length. So far as interference with fishing in designated sea areas is concerned, the Government have no reason to believe that the Bill poses any greater threat to the fishing industry than already arises from the carrying out of works authorised under existing harbours legislation. That legislation does not provide compensation for loss of public fishing rights, so we should be introducing a new principle if we provide for such compensation in this Bill. This question of compensation in respect of fishing rights raises difficult issues which arise over the whole extent of off-shore oil operations and go well beyond the problems raised by this Bill, which will affect only waters close inshore. Even if compensation for loss of public fishing rights were desirable in principle, there are considerable practical difficulties in evolving a fair and workable scheme for the establishment of bona fide claims and for the assessment of compensation. The
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Government fully recognise the difficulties, and these questions are now being examined by the Fisheries and Offshore Oil Consultative Group with a view to assessing the impact on fishing, so that consideration can be given to the point of principle involved.
As a result of consultations within the Fisheries and Offshore Oil Consultative Group, the United Kingdom Offshore Operators Association has already, for example, agreed in principle to the pro-visions of compensation for damage to gear from oil-related debris. Details are being worked out. This will be a voluntary scheme, and will not rely on legis-lation to make it work. The Bill already does much to protect the interests of fishermen. This is one of the purposes behind designated sea areas, which are intended to control operations through licensing and regulations so as to cause the minimum disturbance to other sea users. The Secretary of State must, under Clause 3(1), consult with the fishermen's organisations before he makes a sea designation order; he can impose licence conditions which take account of matters affecting fishing; and he can make regulations for the specific purpose of protecting fishing.
So far as the next Amendment is concerned, it is not entirely clear what other "public community" rights might be interfered with by sea-based relevant operations. The noble Earl may have in mind crofters' rights or udal rights, but the subsection relates only to such rights where they exist "in the sea or seabed" (see subsection (3)). The general principle still, however, holds good, that it is impracticable to compensate people for the loss of what are essentially public rights.
Lord BELHAVEN and STENTON: I rise to support the noble Earl. I also have an Amendment down which, though it says something different, means the same as this Amendment. I shall speak to this Amendment and not move my Amendment. I put my Amendment down basically because I thought that there was an important point of principle here which ought to be discussed in your Lordships' House. The noble Lord, Lord Hughes, was kind enough to write to me putting the Government's position on it very reasonably, and I have also read the debate on Report stage in another place.

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The principle involved here is very simple. It is that those who are deprived of their livelihood, or whose livelihood is affected by the activities of oil companies or other people, should be compensated, whether they actually use land or property or merely have the right to fish in a certain area which is open to the whole public, although on the other hand the whole public has possibly not invested £30,000 or more in buying a boat and the necessary tackle. I appreciate that the Government are in difficulties here and that it is an unprecedented situation to try to quantify public rights. On the other hand, I might call Lord Balogh's attention to a rather ingenious Amendment in another place produced by my honourable friend the Member for East Dundee, who is much cleverer than I am. The Amendment is not canonical, and I do not think that anybody wants to be dogmatic about how this ought to be done, but I think it would be of great comfort to the inshore fishermen and other people affected by the possible loss of public rights if they were assured by the Government and those in authority that at any rate some scheme was being sought whereby loss of this sort could be compensated.
Finally, may I deal with one argument urged by the Government in the other place. It was urged there that if inshore fishermen were compensated it would create an anomaly, as deep-sea fishermen would not also be compensated. I can only say that we already have an anomaly in that owners of salmon rivers and other private rights are already compensated, whereas no one dependent on the open sea, whether inshore or deep sea, is to be compensated at all. Surely if we do justice to one group of fishermen, or one group of people, we cannot be doing wrong merely because we have not yet come up with a workable scheme for another group.
I would conclude by saying that what I should wish from this Amendment is a serious commitment from the Government that they will give urgent consideration to the point of principle involved in this matter. Even if they say that it is unworkable, I hope that they will concede the common justice of the case that these people have and therefore do their best to try to work out some scheme whereby
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they could be compensated. Again I would refer the Government to the ingenious scheme produced in another place by my honourable friend the Member for Dundee, East.
Lord BALOGH: I thought that I had explained that the Amendment was fully considered in another place and there was a long discussion. I do not agree with the noble Lord that he is in any way second to his friends in the Lower House. The particular Amendment to which he refers does not stand up to examination. It is an extremely difficult problem. We agree that an unprecedented situation has been created for fishermen, but the matter is being considered by the Fisheries Consultative Group, and the very fact that my right honourable friend is in close touch with the fishery representatives should perhaps give solace to the noble Lord, even if I cannot accept his Amendment.
The Earl of CROMARTIE: I thank the Minister for his answer. I am satisfied that this has not been forgotten and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6 [Regulations for protection and control of operations in designated sea areas]:
7.52 p.m.
Lord BALOGH Lord BALOGH moved Amendment No. 16:
Page 7. line 2, after "persons" insert "and the movement of any vehicles or vessels".
The noble Lord said: May I move this Amendment in the name of my noble friend. This is a drafting Amendment relating to the Government Amendment to Clause 7(2). Its purpose is to amplify the description of matters with respect to which the Secretary of State may under Clause 6(1) make regulations for designated sea areas. Its effect is to make clear that regulations may be made for the purpose of regulating the movement of vessels in the designated area. A power of this kind—which is generally available to harbour authorities—may be necessary to enable the Secretary of State to exercise the degree of control necessary for the mutual protection of safety of "relevant

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operations" and other traffic in the area. I beg to move.
On Question, Amendment agreed to.
Clause 6, as amended, agreed to.
Clause 7 [Execution and enforcement of regulations, etc. in designated sea areas]:
Lord BALOGH Lord BALOGH moved Amendment No. 17:
Page 7, line 32, at end insert—
" For the purpose of executing or enforcing regulations made under section 6 of this Act, any officer or servant of the Secretary of State or of a harbour authority or local authority to whom the powers of the Secretary of State have been delegated under subsection (1) above may. if authorised to execute or enforce the said regulations,

(a) at any reasonable time board or enter any vessel, platform or other installation located in a designated sea area ;

(b) if the person in charge of the said vessel, platform or other installation cannot be found or if he negects or refuses to do anything reasonably required for the purpose of execution or enforcement of the said regulations, himself (at the expense of the owner) do anything reasonably required for that purpose, including the removal of any vessel."

The noble Lord said: May I with permission move this Amendment in the name of my noble friend. The purpose of this Amendment is to broaden the powers of Clause 7 regarding the enforcement of regulations in designated sea areas so as to give a specific power to board vessels. The arrangements envisaged under Clause 7 as at present drafted are of the nature of "policing powers" to enable the Secretary of State (or a delegated authority) to ensure a surveillance over the area for the purpose of enforcing and ensuring compliance with the regulations. But they give no express power to board vessels for that purpose. Our legal advice is that such powers, if required, should be stated expressly.
The power might be necessary where, for instance, a ship which had broken down was obstructing operations and its owners refused to move it. The owners would be guilty of an offence under the regulations and be liable to a fine but the more immediate need would be to remove the obstruction. Similar powers might be necessary in relation to platforms or other installations located in the designated sea areas, for instance, to ensure
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that a regulation regarding pollution was being observed. The Amendment would give to the Secretary of State powers similar to those available in prescribed circumstances to regulating and enforcement authorities of one kind or another under other legislation for instance under the Harbours Act 1964 and the Harbours Docks and Piers Clauses Act 1847, the Sea Fisheries Act 1968 and the Dumping at Sea Act 1974. I beg to move.
On Question, Amendment agreed to.
Clause 7, as amended, agreed to.
Clause 8 [Reinstatement of land held under Act]:
Lord CRAIGTON Lord CRAIGTON moved Amendment No. 18:
Page 8, line 11, at end insert "and such other bodies ".
The noble Lord said: By leave of your Lordships, I would move this Amendment in the name of the noble Duke who has, as so many Scotsmen at this hour, to catch a train to the far frozen North. I should like to move Amendment No. 18 but not with it, at this stage, Amendment No. 19. There is an important point here which I think the Department must have missed in drafting this Bill. The Secre-tary of State, if he considers that land is no longer needed, reinstates it to the condition it was before,
"… after consulting such local authorities as appear to him to be concerned."
Before reinstatement is carried out he consults,
"… with such other bodies as he considers appropriate."
My noble friend wanted to say—and I quite agree with him—that before deciding to reinstate, the Secretary of State should consult not only local authorities who appear to be concerned but also "such other bodies" as appear to him to be concerned. This seems to be an entirely reasonable provision and I beg to move.
Baroness ELLIOT of HARWOOD: I should like to support this Amendment. Knowing as I do all the work of local authorities I know that there is quite a lot of activity and interest among people who are not on local authorities but on preservation societies or in other groups interested in such a thing as the reinstatement of land. It would be most valuable

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if their opinions were taken before any decision was made. It would be a mistake if local authorities only were consulted because, although it is true that they represent a very large section of the population, there are other interests which have every right to be considered and brought in here. I support the Amendment very strongly indeed.
Lord BALOGH: The Government accept this Amendment, and, as the hour is late, I shall not enlarge on the reason why they do so. It has clarified the drafting without substantially changing the effect and, therefore, we accept it. May I say to the noble Lord that we would also accept Amendment No. 19, if he were to move it.
On Question, Amendment No. 18 agreed to.
Lord CRAIGTON: I am grateful to the noble Lord and I beg to move Amendment No. 19.
Amendment moved—
Page 8, leave out lines 13 to 15.—(Lord Craigton.)
On Question, Amendment No. 19 agreed to.
Lord STRATHCONA and MOUNT ROYAL Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 20:
Page 8, line 19, after "aforesaid" insert "which purpose shall be specified in an order a draft of which has been laid before, and approved by resolution of, each House of Parliament"
The noble Lord said: I had some difficulty in drafting this Amendment. It is intended to follow a point made on Second Reading by which we were seeking to apply the Affirmative Parliamentary procedure to any scheme to change the use of land which has been compulsorily acquired. We are not disputing that there are cases where land has been taken over—for instance, a platform building site has been developed—and a considerable amount of disturbance has taken place in what might be called the social fabric; this becomes adapted to the change and therefore one can imagine circumstances in which it may be unfortunate to try to change it back again. One can imagine circumstances in which some kind of provision, such as is provided by this clause, is desirable, but there are two points.
The first point is that by its very nature platform building is a long drawn out process and it is most unlikely that there would be anything but a fairly long warning before a site was no longer required for building concrete platforms. Therefore there is no danger that a local authority, and, indeed, the Government, would not have reasonable time in which to realise that this employment was going to be phased out. One is on a two-year building programme here so one would have plenty of time to consider it. Bearing in mind that the land has been compulsorily acquired for one purpose, we are now suggesting that without any further ado it should be used for another purpose. There seems to me to be no good reason why the Government should not come back to Parliament and get an order for change of use. I beg to move.
Lord BALOGH: The noble Lord's expression "without further ado", would appear from my brief to be an overstatement. Clause 8 (2) provides that the Secretary of State need not carry out reinstatement of land which is no longer required for the purposes of the Bill if he is satisfied, after consulting local authorities and other bodies, that the land should be used for a different purpose or should not, for any other reason, be reinstated. The Amendment requires any different purpose for which it is intended that the land should be used to be specified in an Order and approved by Resolution of each House of Parliament. There are already extensive controls over the use to which the land could be put as an alternative to reinstatement. First, the Secretary of State must consult local authorities and other bodies concerned, such as the Nature Conservancy Council and the Countryside Commission for Scotland. Then any material change of use of the land, or works on the land, would come within the scope of the Town and Country Planning law. With a few minor exceptions it would involve the intending developer in applying for planning permission. Even if the proposed development were to be carried out by a Government Department which does not need planning permission, there is a procedure applying whereby the proposals are notified to the planning authority for its observations and whereby publicity can be given to the proposals and, if necessary, a public inquiry can be held.

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The noble Lord is suggesting that all this is not enough and that the scarce time of Parliament should be taken up by what is essentially a local planning matter. There is a very important distinction to be drawn between compulsory acquisition of land under an expedited acquisition order and the making of a change of use in land already in the ownership of the Secretary of State. In the former case someone is about to be deprived of the land he owns or occupies and it is right that such action should be subject to the most stringent safeguards. Where change of use is concerned, that sort of direct effect on the rights of the individual does not arise and it is really a matter to be sorted out between the planning authority and the Secretary of State, with a public inquiry if necessary. After hearing the explanation which I have given, I hope the noble Lord will feel able to withdraw his Amendment.
Lord STRATHCONA and MOUNT ROYAL: I am grateful to the noble Lord for those explanations. I am not entirely convinced, but I do not think there is any need for me to press the matter. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 8, as amended, agreed to.
Clause 9 [Arrangements to ensure reinstatement of other land developed for purposes connected with offshore petroleum]:
8.4 p.m.
Lord BALOGH Lord BALOGH moved Amendment No. 21:
Page 8, line 30, leave out (" under section 27(1)(b) of the Town and Country Planning (Scotland) Act 1972").
The noble Lord said: I move this Amendment with Amendment No. 22 and in the name of my noble friend. When the clause in its present form was debated in another place the Government took the view that "a specified period "—an expression used in Section 27(l)(b) of the 1972 Planning Act—did not have to be expressed as a number of months or years and that, for instance, it could be a period contingent upon certain events. Counter-arguments, however, were advanced that under the
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present drafting of the Bill such a condition would have to relate to a period specified in terms of numbers of months or years and thus would be completely unrealistic in its application to an oil development of unknown duration. In particular, it was suggested that a condition could be imposed under Section 26 of the 1972 Act. The Government undertook to review the matter.
While not agreeing with that very narrow interpretation of "specific period ", we accept that it is desirable to clarify that the use of the power in Clause 9 is not restricted to circumstances where it is possible to specify in advance an exact period of time in a planning condition. Our Amendment seeks to achieve this aim. We hope that it will assist planning authorities in imposing a requirement under Clause 9 when the planning condition to which it relates is expressed in terms of a period of years or some other less narrowly defined specific period. We seek to achieve this situation simply by removing the words which have given rise to the doubts. The third Amendment has the purpose of ensuring that a requirement under Clause 9 might be enforced if it were a condition of the planning consent to which it relates. This would enable a planning authority to take enforcement action under the machinery provided in Part V of the 1972 Planning Act, where a developer attempted to start work in accordance with the planning permission without first making arrangements, to the authority's satisfaction, for providing or guaranteeing the reinstatement funds. I beg to move.
On Question, Amendment agreed to.
Lord CRAIGTON Lord CRAIGTON moved Amendment No. 23:
Page 8, line 33, leave out (" may ") and insert ("shall").
The noble Lord said: In this Amendment my noble friend the Duke of Atholl has said that satisfactory arrangements must obviously be made. Would it not be right that they should be obligatory, instead of at the desire or otherwise of the authority? In the short time available to me I have tried to think of some case in which the authority would not desire to make satisfactory arrangements for rein-statement. I have been unable to think of one. I know that my noble friend and I will be glad to hear the Minister's reply. I beg to move.
Lord BALOGH: The noble Duke's Amendments are Nos. 23, 26 and 27. The effect of these would be to leave planning authorities no choice as to whether they require guarantee arrangements; they would be obliged to insist upon such arrangements every time they granted planning permission for oil-related development with reinstatement conditions attached. What is at present a power would become a duty. Clause 9, as at present drafted, is already quite rigorous in its application. The Secretary of State is given power to direct the planning authority to impose a guarantee requirement. He must approve any such arrangements and can give general or specific directions to planning authorities about the exercise of the powers. However, the planning authority will have responsibility for imposing planning conditions and ensuring that they are carried out. Under the Town and Country Planning (Scotland) Act 1972, planning authorities have extensive powers to enforce planning conditions. If a developer defaults and fails to carry out reinstatement the authority can do the work itself and recover the cost from the developer.
The problem arises where the developer has meanwhile gone bankrupt or is for any other reason not accessible for recovery of the debt. It is this circumstance which Clause 9 is designed to cover. A planning authority will generally be the best judge as to whether a guarantee is needed. The Secretary of State can keep an eye on things and intervene as necessary. However, this Amendment would deny the planning authority any discretion in the matter. We doubt whether the Amendment would be welcomed by the local authorities. It attempts to restrict the scope of local decision-making by elected bodies. It could lead to guarantee requirements being imposed where they are not really needed because the scale or duration of development is of a limited kind. I therefore hope that the noble Lord will feel able to withdraw the Amendment in the name of the noble Duke.
Lord CRAIGTON: I am in a difficulty. The noble Lord, Lord Balogh, read so fast that I did not hear his answer. I thought he said that the Amendment would deny any discretion
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whatever to the planning authority, but I believe he was discussing Amendments Nos. 23, 26 and 27 together. Am I right?
Lord BALOGH: Yes.
Lord CRAIGTON: Amendment No. 26 says that no requirement may be imposed except with the approval of the Secretary of State, which means that the local authorities have very little discretion. My noble friend wants to say that the approval of the Secretary of State shall be obtained for any arrangement entered into. In other words, my noble friend wants to do exactly what I think I understood the noble Lord, Lord Balogh, to say; that is, give the local authorities more, and not less, discretion. One arranges this first and then one applies to the Secretary of State; whereas, under the noble Lord's suggestion, the Secretary of State says, "I will tell you what to do." I do not want to prolong the proceedings, but I am in a difficulty about this.
Lord BALOGH: It is the word "shall ". The wording is,
"The approval of the Secretary of State shall be obtained for any arrangement".
Lord CRAIGTON: I give the noble Lord the point about "shall". I do not think my noble friend would argue about that. It is the taking of Amendment No. 23 together with No. 26 which I find difficult to understand.
Lord BALOGH: I suggest that we could sort this out at the next stage of the Bill. Reinforcements have just arrived, and I shall gladly hand over to my noble friend if the noble Lord so desires.
Lord CRAIGTON: The point at issue is that I do not think that Amendments Nos. 23, 24 and 26 are on the same point. What I should like to do is to withdraw the Amendment and formally move No. 26 in the hope that the noble Lord, Lord Hughes, can tell me whether or not that gives the local authorities more or less discretion.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES (The Earl of Cork and Orrery): Amendments Nos. 24 and 25 are in the wrong order. I must therefore call Amendment No. 25 before Amendment No. 24.
Lord HUGHES: I think that Amendment No. 24 was discussed with Nos. 21 and 22. I beg to move.
Amendment moved—
Page 8, line 38, at end insert "and any such requirement shall have effect as if it were a further condition of the grant of planning permission, and shall be enforceable accordingly."—[Lord Hughes.]
Lord CAMPBELL of CROY: As the noble Lord, Lord Hughes, was not in the Chamber earlier, I should just say that as this is consequential on Amendment No. 21 we do not wish to raise any further argument against it.
On Question, Amendment agreed to.
Lord CRATGTON Lord CRATGTON moved Amendment No. 26:
Page 8, line 39, leave out subsection (2) and insert—
" (2) The approval of the Secretary of State shall be obtained for any arrangement entered into under subsection (1) above."
The noble Lord said: I have already spoken to this Amendment, and I wish only to hear what the noble Lord, Lord Hughes, has to say about it. I beg to move.
Lord HUGHES: My noble friend Lord Balogh said that reinforcements had arrived. I had been out for the purpose of securing reinforcements and am not sure whether it is an advantage when one comes back. Amendments Nos. 26 and 27 go together, as I understand it, and the effect would be to leave planning authorities no choice as to whether to require guarantee arrangements. They would be obliged to insist on such arrangements every time they granted planning permission for oil related development with a reinstatement condition attached. What is at present a power would become a duty.
Clause 9 as at present drafted is already quite rigorous in its application. The Secretary of State is given power to direct a planning authority to impose a guarantee requirement, he must approve any such arrangements, and he can give general or specific directions to planning authorities about the exercise of these powers. However, the planning authority itself will have the responsibility for imposing planning conditions and ensuring that they are carried out. Planning authorities have extensive powers under
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the Town and Country Planning (Scotland) Act 1972 to enforce planning conditions. If a developer defaults and fails to carry out reinstatement, the authority can do the work themselves and recover the cost from the developer. The problem arises if the developer has meanwhile gone bankrupt, or is for any other reason not accessible for the recovery of the debt. It is this circumstance which Clause 9 is designed to cover.
The planning authority will generally be the best judge as to whether a guarantee is needed. The Secretary of State can keep an eye on things and intervene if necessary. The Amendment would, how-ever, deny the planning authority any discretion in the matter. We doubt whether the Amendment would be welcomed by local authorities. It attempts to restrict the scope of local decision-making by elected bodies. It could lead to guarantee requirements being imposed where they are not really needed at all, because the scale or duration of development is very limited.
If the position is that a local authority decides to require guarantees to be effected, the Secretary of State has the power to say whether or not these are acceptable. So the position in which a local authority takes the initiative in the matter is covered. If there is any danger that the local authority will not seek to obtain a guarantee in circumstances where it would seem to the Secretary of State that this ought to be done, then the Secretary of State can issue a direction that they should seek such guarantees; and, clearly, in such circumstances the question of his approval would not arise, because he would not direct a local authority to do something of which he would not in due course approve. So we think that it is better to give the local authorities discretion, and to work on the basis that local authorities act responsibly in matters of this kind, particularly as the Secretary of State has power to direct them to do so in the odd case in which they would not be acting as the Secretary of State felt was necessary.
Lord CRAIGTON: I am grateful to the noble Lord. He was much clearer than the brief and I understand the point. Though, on behalf of my noble friend, I must reserve the right to look at this

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again, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 9, as amended, stand part of the Bill?
Lord STRATHCONA and MOUNT ROYAL: We got into a slight muddle in the earlier discussions, and I intended to raise one or two points on Amendment No. 21. It is simply that there is a certain amount of unhappiness in certain quarters that there may be some undesirable effects from some of the financial requirements and sanctions which will be imposed on these planning permissions. The real point is this. Can the noble Lord give us any undertakings as to whom he will consult before provisions of this kind are made? Will he consult the firms who are likely to seek planning permission? Will he consult with the owners of the land, or the applicants if they are different persons? If the noble Lord could give us some reassurance on this matter at this stage, it might save a little trouble later on.
Lord HUGHES: In view of the fact that this assurance for which I am being asked is in relation to something which was discussed when I was not here, I would, with the consent of the noble Lord, Lord Strathcona and Mount Royal, prefer to read what has been said and write to him on the matter. I shall do so in ample time, so that if he feels it necessary to come back to this matter at the next stage he will not be in any way prevented from doing so.
Lord STRATHCONA and MOUNT ROYAL: That would be most satisfactory.
Clause 9, as amended, agreed to.
Clauses 10 and 11 agreed to.
Clause 12 [Supplementary provisions as to acquisition and appropriation of land] :
Lord STRATHCONA and MOUNT ROYAL Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 28:
Page 10, line 35, leave out subsection (2).
The noble Lord said: This is purely a probing Amendment to invite the noble Lord to explain to the Committee, if he can, what is intended by this magnificent piece of gobbledygook, which is quite unintelligible to the ordinary man and,
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indeed, to some lawyers. If the noble Lord can convince us that there is a useful purpose served by this magnificent piece of prose, perhaps he will give us an undertaking that he will see whether he can re-draft it in intelligible language at a later stage in our proceedings. I beg to move.
Lord BALOGH: I shall try, according to my feeble efforts, to give that enlightenment. There are likely to be cases where land which is suitable for one of the purposes of the Bill and is acceptable in planning terms happens to be already in the ownership of the Secretary of State and held for another use. In these circumstances, it would be quite unreasonable if the Secretary of State were unable to use the land for the oil-related purpose because he had no specific power to "acquire" it for that new use. A power of appropriation is therefore necessary, and is well pre-cedented in local government and plan-ning legislation.
The proposed platform site at Portavadie is a case in point. The land there is in the ownership of the Forestry Commission, and the title is held in the name of the Secretary of State for Scotland as Forestry Minister. To enable the land to be developed as a platform site, a formal Minute of Appropriation under Clause 12 will be required because it is for a different purpose. In this way the land concerned would become subject to the other provisions of the Bill—most importantly the rehabilitation provisions, which it would otherwise not have. I hope that my gobbledygook English did not prevent the noble Lord from following this point.
Baroness ELLIOT of HARWOOD: The noble Lord's gobbledygook English is very good indeed, but for a perfectly ordinary person like myself reading this Bill—and one who is interested in it—it still seems to me that this clause is very badly drafted. There should be at least two sections to it. I should like to suggest to the noble Lord that, in spite of the fact that he has read out the brief prepared for him by the Scottish Office, the matter is not at all clear. I quite realise that the Secretary of State may have two functions—he may be the Minister for the Forestry Commission and he may also be Minister with responsibility for oil. But that is not at all clear in the Bill. If the noble

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Lord, or the noble Lord, Lord Hughes, would take this matter back, look at it again, and produce it in perfectly simple English, which could be done quite easily, it would be appreciated.
Lord HUGHES: I am surprised. This is very good draftsmen's English. After you have read it a second time, it is perfectly clear as to what it means. I admit that at first it is a little difficult, but the second time round it comes quite easy. My noble friend has explained the position, and the example he gave of the Forestry Commission is a perfect example of the sort of case. If we did not have this we would have the ridiculous position of the Secretary of State not being able to transfer to himself land which he had for forestry purposes because he wanted it for another purpose altogether.
Lord STRATHCONA and MOUNT ROYAL: I am grateful to the noble Lord. He has made a perfect case for saying that something is needed. I am very disappointed, and indeed surprised and somewhat shocked, that he should support this incredible phraseology, and that he is quite unwilling to look at it again to see whether he could not make it clear. I think we should be ashamed to pass legislation with clauses like this. I am not going to press this Amendment, but I really believe that this is the kind of thing that gets Parliament a thoroughly bad name.
Lord HUGHES: That may well be so —I should not like to dispute it. But if the noble Lord is going to start blushing for this one, then he is about ten years late in starting his blushes, because we have been doing this all along. But I will undertake to find out whether it can be made simpler and yet keep the same purpose. One of the difficulties of these legal matters—and I can now say this now that the noble and learned Viscount, Lord Dilhorne, is no longer with us—is that when you make it sufficiently simple for the layman you seem to create enormous problems for the lawyers, and the draftsmen have in mind the fact that at the end of the day what is important is that lawyers understand what we are doing.
Lord BROWN: I am not totally unfamiliar with this problem, but I would point out to my noble friend on the Front Bench that Clause 12(1) is one sentence and it is at least 130 words. A few full stops would help and I think they could be incorporated in it.
Lord HUGHES: If all that is wanted are a few commas and full stops, I can look at it more easily, but I thought that it was the language rather than the punctuation which was in doubt.
Lord STRATHCONA and MOUNT ROYAL: I am more interested in the language in Clause 12(2) than I am in the full stops in 12(1). The noble Lord has said that he will have a look at it and we could not ask for fairer than that. I should be happy to see something that was clearer, even if it used a few more words; but I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 12 shall stand part of the Bill?
Lord CAMPBELL of CROY: I wanted to make one inquiry and this is the appropriate stage to do so. What provisions are there, if any, for when land is no longer needed for the purposes of this Bill? Are the Government allowing for this, or have they no intention of making provision for it in this Bill?
Lord HUGHES: Is this not the point which has been covered elsewhere in connection with reinstatement, or is it a different point which the noble Lord is raising? We make provision that when the land is no longer required for the purposes of the Bill it may be reinstated in certain cases to its former condition.
Lord CAMPBELL of CROY: This is a separate point. I will not press the noble Lord now. Perhaps the noble Lord will look into it and it can be dealt with at a later stage. My point is not re-instatement, because that occurs in certain cases, particularly coastal sites, where it is necessary to restore not necessarily to exactly the same conditions as obtained when the site was first acquired, but to remove any dereliction which the industry has caused and generally to make the site a good amenity site. I was asking about the question of ownership: how long would the Government propose to continue to own the land when there is no

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further use for it, when the platform has been built and the companies have disappeared? I realise that I have asked the noble Lord this at rather short notice. I just wanted to raise this point at this stage and, if he would like to give a considered reply, I should be perfectly ready to accept that.
Lord HUGHES: At first glance, having looked at this while the noble Lord was speaking, I should have thought that the normal procedure applies in this case, but I should like to take advantage of the opportunity which the noble Lord has given me and look into this matter. If the normal procedure is being followed, or if it is a different procedure I shall, in either event, write to him to let him know.
Clause 12 agreed to.
Clause 13 [Compensation for adjoining owners and exclusion of actions for nuisance]:
8.30 p.m.
Lord STRATHCONA and MOUNT ROYAL Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 30:
Page 11, line 5, after ("works)") insert ("other than section 1(6) thereof")
The noble Lord said: With permission, I should like to speak also to Amendment No. 31: Page 11, line 10, leave out sub-section (2). Amendment No. 30 is paving the way for Amendment No. 31. I think I understand the point which is raised here. In another place on Second Reading the Minister, Mr. John Smith, speaking on this point, said that this would debar a payment for compensation under the 1973 Act from bringing an action for nuisance or applying for an interdict to stop the operation complained of, and he agreed to have another look at the matter.
The point here is, for instance, that river fishermen might be more interested in continuing to maintain their fishing rights and to receive compensation for loss of those rights. Later in the proceedings in another place the matter was dealt with rather hastily in the middle of the night in Committee and the Government at that point gave as the principal reason for resisting an Amendment to leave out subsection (2), Section 1(6) of the 1973 Act, whereby compensation is not payable unless immunity from actions for nuisance have been conferred from the authority.
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That is why I say that Amendment No. 30 is paving the way for Amendment No. 31.
One can imagine circumstances in which landowners or others may want to stop damage being done or harm inflicted rather than to claim compensation. There is the further point that certain special interests could be gravely affected by what we call the relevant operations, and I understand that those people would be debarred from a nuisance action but not entitled to compensation under the Land Compensation Act. I am further advised that it might not strictly speaking be necessary to have Amendment No. 30, since the Secretary of State has power in applying the 1973 Act to do so
" with such modifications as appear to him to be necessary ".
So it may be that the excuse he gave of Section 1(6) of that Act was not in fact the relevant reason for eliminating sub-section (2) as suggested by Amendment No. 31. I know this is not a very simple matter to explain, but I hope that I have put over the essential points to the noble Lord, Lord Hughes.
Lord HUGHES: This matter came up rather late in my briefing session this morning and to begin with I did not understand it. But I went into it fairly thoroughly and now I know the answer fairly well so I do not think I need bother reading the rather long story I have before me. The 1973 Act gives a choice. One may either have compensation under Section 6(1) or may raise an action for nuisance, but one cannot do both. The effect of the Amendment would in fact be to do that. If we made these Amendments, the person concerned would be entitled to compensation and also entitled, as an alternative, to raise an action for nuisance. The story I got said: "However, the noble Lord wants to be able to have his cake and to eat it. He wants people affected by relevant sections under the Bill to have compensation under the 1973 Act and also to be able to raise an action for nuisance in the courts."
That is not what the noble Lord said, but it is the effect of these Amendments. The position is that in the general run of things the choice must frequently be made; one can either have compensation or the right to raise an action for nuisance. As there is a time saving

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element necessary in this, it was decided not to give choice but to eliminate the right to action for nuisance and to allow compensation. If the Amendment were carried, the person would be able to obtain compensation and also to go to the court. That would be carrying the matter too far.
Lord STATHCONA and MOUNT ROYAL: I am willing to withdraw both Amendments, but I certainly did not in-tend to have my cake and eat it and give opportunities for persons to do both those things. However, I fear that in taking away the right of action for nuisance we shall also have deprived certain people of the right to compensation. I am no lawyer but I am sure the noble Lord, Lord Hughes, agrees that this is not his intention. If he can assure me that all relevant parties will be entitled to compensation, I certainly will withdraw the Amendment. But of course I shall reserve my position if I am advised that we have both got it wrong.
Lord HUGHES: All that has gone wrong is the right of action for nuisance. The right to compensation is preserved.
Amendment, by leave, withdrawn.
Clause 13 agreed to.
Clause 14 [Power to require information as to interests in land]:
8.41 p.m.
Lord CRAIGTON Lord CRAIGTON moved Amendment No. 32:
Page 11, line 23, at end insert:
" without good reason ".
The noble Lord said: My noble friend the Duke of Atholl put forward this Amendment which would provide that after the words:
" Any person who, having been required in pursuance of this section to give any information, fails to give that information shall be guilty of an offence ",
there should be added, "without good reason". That would be more acceptable. I hope that the noble Lord, Lord Hughes, may feel disposed to accept the Amendment.
Lord HUGHES: The optimism of the noble Lord, Lord Craigton, is totally un-justified. In fact we are founding on a
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precedent and he may be founding on an earlier precedent of the noble Lord, Lord Campbell of Croy, in Section 270 of the Town and Country Planning (Scotland) Act 1972. I do not think the noble Lord, Lord Craigton, or the noble Duke, the Duke of Atholl, has anything to worry about, because this kind of information is needed by the Secretary of State to enable him to serve notice on the owner of land, and any person interested in the land. Those persons are entitled to know what the Secretary of State intends in relation to their land, and it is obviously important that the Secretary of State should be able to find who they are. This is not an onerous provision. The occupier or landlord is merely required to state the nature of his own interest and the names of others known to him as having an interest. If he does not know of anyone else with an interest, no obligation is placed on him. I think the noble Duke felt that this was placing an obligation on the owner to search for information which he would have to prove in some way. But all the person has to do is show that he has given all the information known to him and that is a complete defence.
Lord CRAIGTON: With that explanation, reserving the rights of my noble friend the Duke of Atholl, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 14 agreed to.
Clauses 15 to 19 agreed to.
Clause 20 [Short title, interpretation and extent]:
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 33:
Page 14, line 39, at end insert:
" ( ) This Act shall cease to have effect on the last day of 1980 unless its continuance in force is extended by three years at a time by statutory instruments, the drafts of which have been laid before, and approved by resolution of, each House of Parliament."
The noble Lord said: Earlier today there was a limited discussion about whether there should be a date set for the termination of a small and very important part of the Bill, subsection (2) of Clause 1, concerned with the expedited acquisition orders. The Amendment which I now move refers to the whole

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Bill, because it will not be required forever. I am sure the Government recognise that this is a Bill of limited operation, and I believe that the pattern of platforms, not only in the North Sea but in other areas around our coasts, and of pipelines will be known by about 1980, even if they are not completed by then. None the less, the Amendment proposes that the Bill should be renewable and extended by three years at a time, so that Parliament can consider the situation and what needs to be done.
I recognise that there are bound to be new situations and that different legislation will probably be needed to replace parts of this Bill. Again, I say that my drafting is not intended to be immaculate. This is a probing Amendment, so the noble Lord, Lord Hughes, need not take up the time of the Committee in explaining how my Amendment would be defective; but it indicates a way in which this question could be dealt with. I was concerned not only with the expedited acquisition order part of the Bill, which was dealt with by my noble friend the Duke of Atholl, but also with other parts, including Clause 1 which has a great deal to do with everything con-nected with the offshore oil industry. There is bound to be a time when it will no longer be necessary for these powers to continue. I know that the noble Lord, Lord Hughes, has said that these powers are unlikely to be needed, and I agree that they will be seldom needed. A time will come in a few years when they will not be needed at all.
Lord BELHAVEN and STENTON: If I may intervene at this point, it seems to me that this Amendment has essentially the same purpose as my Amendment which follows it. Basically, I find myself in agreement with the noble Lord, Lord Campbell of Croy, on this, if not on other matters. I think the powers given in the Bill to the Secretary of State, albeit that the Bill has been considerably amended, are still very far reaching and, to some extent are the sort of powers given to a Government only in time of war or State of Emergency. I say that advisedly, knowing that some people say that the Bill is already out of date.
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I think it was said by the noble Viscount, Lord Thurso, on Second Reading that we might as well throw it into the wastepaper basket. Whether or not that is so, the expedited acquisition orders give powers to the Secretary of State which I do not think should continue indefinitely. Although these powers have been explained by the Government Front Bench as being virtually harmless— and the noble Lord, Lord Henley, who is not at present in his place said that I thought they were harmless—I did not say that on Second Reading. I said I thought the Government's explanation of the expedited procedure made it out to seem harmless—which is something quite different.
Lord HUGHES: I wish to follow the example of the noble Lords, Lord Campbell of Croy and Lord Belhaven and Stenton, and be brief on this matter. I think the basis is that we would not wish to accept either of these Amend-ments which represent a basic misconception of the purposes of the Bill. Some of the purposes, undoubtedly, are of a fairly temporary nature. If we had to choose between two evils, we should prefer the Amendment put forward by the noble Lord, Lord Campbell of Croy which at least enables the measure to be carried on for three years at a time; whereas that in the name of the noble Lord, Lord Belhaven and Stenton, would chop it off finally in 1985.
I think perhaps Lord Campbell of Croy may be with us in his thinking on the matter by consideration of the Bill he would have put forward. That Bill would have been of a more temporary character than this and, because of its limitation, would not cover the same wide ambit as does the present Bill. I do not know whether it would have included such a limitation; but it might well have been justified in that case. The development of the North Sea oilfields will continue beyond 1980, and every time a new estimate comes out it appears to have more desirable prospects; although I noticed that a certain professor in Aberdeen seemed to be disagreeing with one overseas. I do not wish to be unpatriotic, but I believe it turns out that the Scot is wrong. It may well be that as the search moves into deeper waters and as research

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and experience progress, new techniques will evolve.
We could not, for instance, say that there would be no new pipelines and landfalls required after 1980. The problem about doing anything of this kind is that we import a new element of uncertainty. As we are getting nearer to 1980, people will say we had better wait. We do not know whether the Parliament of 1980 will renew the Act for another three years; and it is not inconceivable, as we get to 1983, that the same situation would arise. I see no difficulty in not having a terminal period because the nature of the Bill is that it enables these powers to be used in certain circumstances. It would be like many other Bills before it and it would no longer be something which was being used.
The effect of the Amendment proposed by the noble Lord, Lord Campbell of Croy, would be to bring the whole "shooting match" to an end, in 1980, in 1983 or in 1986. I think we must rest on the basis that when the Bill is no longer being used, it will become a dead letter and at some subsequent point it will be removed from the Statute Book. But so long as it serves a useful purpose, it would be a mistake to introduce into it that element of doubt which would be there if people asked: "Will Parliament extend the Bill for another three years?" For these reasons, I would invite the noble Lord, Lord Campbell of Croy, not to press this Amendment.
Lord BELHAVEN and STENTON: If I might just intervene before the noble Lord speaks, it could be for the convenience of the Committee, because it would save me the trouble of speaking to my own Amendment. I wish to say only a few sentences. I shall study what the noble Lord, Lord Hughes, has said. I agree that we really do not want to cut out the reinstatement part of the Bill. The Bill, like the curate's egg, is good in parts. As I say, I shall study carefully what the noble Lord has said and reserve the right possibly to move another Amendment at Report stage.
Lord CAMPBELL of CROY: The noble Lord, Lord Hughes, has guessed that in our Bill we were intending to have terminal arrangements of this kind in the streamlining of planning procedure that
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we were proposing. As regards the reinstatement provisions, as we see the position these would govern agreements, arrangements and conditions of planning permission—one of the effects of the Amendments made this afternoon—and all these things would have been started before the Act came to an end. Their effect would continue for years ahead, payments would have to be made into a fund and so on. So I do not think the eventual reinstatement need have been jeopardised by the fact that the Act itself would terminate. However, in view of what the noble Lord has said, I beg leave to with-draw the Amendment.
Amendment, by leave, withdrawn.
Clause 20 agreed to.
In the Schedules:
Schedule 1 [Making and revocation of expedited acquisition orders]:
8.52 p.m.
Lord CRAIGTON Lord CRAIGTON moved Amendment No. 35:
Page 15, line 26, at end insert "and on which the notice or notices erected under sub-paragraph (2) above were first displayed."
The noble Lord said: My noble friend the Duke of Atholl has proposed a point here which I hope will appeal to noble Lords opposite. My noble friend agrees entirely that a notice should be displayed, or be made operative so that action may be taken on it, for 21 days after it has been put into the newspaper. But no one knows better than my noble friend that in remote areas it will take a day or two more to affix the notices. Therefore, for those who have to affix notices as required, 21 days seems to be a shortish time and it would be fair to give the same provision for displaying notices as the 21 days for publishing the notices. This is a simple point and I hope that the noble Lord is able to agree with it. I see a smile on his face and I hope he means to approve it. I beg to move.
Lord BALOGH: I fear that I am not able to accept this Amendment, and I shall try to explain why. The Amendment provides that representations against an expedited acquisition order should be made within 21 days of the date of publishing a notice and affixing such a notice on the land. The Amendment makes sense only if a notice were always affixed to a

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conspicuous object on the land on the same day that a similar notice was first published in the newspapers. It would not always be possible to ensure that these events happened on the same date. For example, the local paper might come out on a Saturday, whereas the notice on the land might appear on either the preceding Friday or the following Monday. To take account of this possibility, the wording of the Amendment would have to be different, along the lines of "which-ever date was the later ", or "whichever date was the earlier." There should be some such definition of the relationship between the publication in the Press and the affixing of the notice to an object on the land.
The date of publication has been chosen because it is clear and unequivocal. A copy of the newspaper with the date on it can be produced as evidence. The Secretary of State would always try to ensure that notices on the land would always appear on the same day as the advertisement, or as near the day as possible, but an Amendment of this kind would only cause confusion. Perhaps the noble Duke will get in touch with us and we will try to sort out this matter. In the meantime, perhaps the noble Lord will be prepared to withdraw the Amendment.
Lord CRAIGTON: I am grateful to the noble Lord for what he has said, and in view of his remarks I shall ask my noble friend to put in " 28 days " instead of " 21 days ", which will meet all cases. Having said that, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES (The Earl of Cork and Orrery): Before calling Amendment No. 36. I should point out that if that Amendment is agreed to I shall not be able to call Amendment No. 37.
8.58 p.m.
Lord HENLEY Lord HENLEY moved Amendment No. 36:
Page 15, line 28, leave out from " representations " to " inquiry " in line 30 and insert " and shall cause a public inquiry to be held: pro-vided that if the Secretary of State is satisfied that such representations are frivolous or vexatious or have been adequately inquired into under the procedures for obtaining planning permission under Part III of the Town and
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Country Planning (Scotland) Act 1972 then he shall not be obliged to cause any further ".
The noble Lord said: Schedule 1 deals with the making of expedited acquisition orders. Before making an expedited acquisition order, the Secretary of State has to do certain things, one of which is to,
"… state that representations in writing with respect to the proposed order may be made to the Secretary of State …".
Well and good. Then it goes on to say:
" If any representations with respect to the proposed order are duly made the Secretary of State shall consider those representations ".
That is all right. Then it goes on again:
"… but the Secretary of State shall not be obliged to cause any inquiry to be held or afford to any person an opportunity of being heard."
Those are astounding words, and I can suppose only that they exist in some other Act, because otherwise I cannot think how anybody could have thought up such a state of affairs. My Amendment seeks to substitute for the wording that the Secretary of State need not be obliged to cause any inquiry to be held certain other words which seem to me to be reasonable. I hope they will appeal to noble Lords opposite. I am saying that there should be such an inquiry, unless the representations are frivolous or vexatious or that the matter has already been looked into adequately.
A good deal of what has been said with regard to adequate inquiry was explored under my earlier Amendment. I drew attention to these provisions under the Schedule because it seemed to me they almost amounted to an outrage if the Government were to refuse proper and full procedures under the hybrid Special Orders. At this stage, we have reversed that decision of the Government and I shall be very glad to know what the Government feel about my proposal that we should make this a little more reasonable, or so it seems to me, than what the Bill states. I beg to move.
Lord HUGHES: Does the noble Lord, Lord Craigton, wish to speak to Amendment No. 37, because I believe these Amendments are alternatives?
Lord CRAIGTON: The noble Lord, Lord Craigton, would rather wait to see what happens!
Lord HUGHES: In that case, I am placed in the position that I shall reply to what the noble Lord, Lord Henley, has said, and reply to what the noble Lord, Lord Craigton, has not said, in anticipation that he might yet say it. The Amendments are very similar but not exactly the same in their effects. The effect of the Amendments would be to introduce statutory public inquiries into the procedure for making expedited acquisition orders. The Amendment which the noble Lord, Lord Craigton, I hope will not find it necessary to move would leave the Secretary of State with complete discretion whether to hold an inquiry, whereas the Amendment which has just been moved by the noble Lord, Lord Henley, would oblige the Secretary of State to hold an inquiry if representations had been made unless (a) he was satisfied that the representations were frivolous or vexatious, or (b) he was satisfied that the representations had been adequately inquired into under the procedures for obtaining planning permission.
I do not like referring to drafting errors, as I have made quite clear, but unfortunately there is a major drafting error in the Amendment of the noble Lord, Lord Henley, because in view of the fact that it refers to a further inquiry not being necessary, this opens the door to the fact that it would not exempt the Secretary of State from holding an inquiry into frivolous or vexatious representations, which is the very opposite of what the noble Lord wants to do. If the Amend- ment were otherwise acceptable, that would not need to be an obstacle, because it could be cured to make the Amendment work in the way the noble Lord intended. The Government are not opposed to the principle that an owner or occupier of land should be able to argue in public his case against its compulsory purchase. That is a valuable right of the individual in a democracy. However, it has to be weighed against other considerations, and, as the noble Lord, Lord Henley, recognises, we must to a certain extent be retracing some of the ground already covered in the earlier discussion.
The need to get the North Sea oil ashore is considerable and we want to avoid delay where it can possibly be reasonably avoided. Public inquiries take time. A compulsory purchase order
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which is subject to a public inquiry rarely takes less than six months—this is common knowledge—and sometimes it can take very much longer than this. There are circumstances in relation to North Sea oil development where, in the Government's judgment, delays of this kind are wholly unacceptable. It is to avoid these delays that we have provided the expedited procedure under the Bill, and the central feature of it is that it does away with the need for a public inquiry and substitutes other safeguards instead—Parliamentary scrutiny by the Affirmative Resolution Procedure and a requirement for prior planning permission. On this subject of prior planning permission, I cannot visualise the circum-stance where an owner of land is so concerned about the effects that a compulsory purchase order would have upon him that he would not have so organised his affairs that the public inquiry would have already taken place at the planning stage and his objections would have been wholly stated.
Lord HENLEY: May I interrupt the noble Lord for a moment? I hope he will not forget that it is not only the owner of land I am concerned with, even if that owner is the National Trust; I am concerned also with the position of third parties, and third parties often comprise bodies such as amenity societies which are at great risk when it comes to making representations against Ministerial orders.
Lord HUGHES: If the objection of these bodies is to the use of the land, the proper place to make it is at the public inquiry into the planning procedures, not the inquiry as to whether or not the land should be acquired by compulsion.
Lord HENLEY: But I have already, I thought, at an earlier stage made the point—and I do not think it can be denied—that so far as a third party is concerned he often cannot make any point except by a written representation. It is no good saying that he will be heard, because any hearing so far as he is concerned can be avoided by the Secretary of State.
Lord HUGHES: Not if the public inquiry has taken place at the planning procedure. One of the difficulties is to stop the man at the back of the hall

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from having his say at the public inquiry under planning procedures—
Lord HENLEY: But—
Lord HUGHES: —and one of the defects (if the noble Lord will permit me to finish) of the procedure we did not like in the Bill of the previous Administration was that it was going to tighten that up very much.
Lord HENLEY: I have nothing to say for the previous Administration's Bill. I did not like at all their ideas of tightening up, as they called it, the planning procedures. I want to have the full rigour, as the noble Lord does, of the planning procedures. What I am saying is that it is all very well to say that a third party should argue all this at a public inquiry— and there is the man at the back getting up and saying so—but the Secretary of State can make it impossible for there to be a public inquiry. This is the whole point of what I am trying to say.
Lord HUGHES: Yes; but the noble Lord is completely overlooking the fact that the whole basis for the Government's wishing to use the accelerated procedure, the expedited procedure, on compulsory purchase is that they made certain that the planning procedures were carried out in the earlier stage. We wish to avoid duplication and going over the same ground. It is not right that the person who is objecting and wants to have his say in relation to the use of the land should choose not to do so at the planning inquiry but seek to do so on the question of whether or not there is a case for taking the land out of ownership against the will of the owner, which is basically a matter between the authority seeking to acquire the land and the owner seeking to prevent it.
Lord HENLEY: I am sorry to keep interrupting the noble Lord, but really this will not do. What I argued before is that in a case where somebody could have complained and did not any further inquiry would be stopped by the Special Procedures Committee.
Lord HUGHES: If these Amendments are carried, we shall be carrying through compulsory purchase procedures under virtually the present situation, and it can take six months or more to get a com-
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pulsory purchase order through an inquiry. That is what, in fact, the noble Lord wants to happen; he wants provision for an inquiry to take place. If we were to accept these Amendments, we might as well throw the whole of the expedited acquisition order procedure out of the window, because it would be rendered useless. As the Bill stands, the Secretary of State could, if he chose, hold an informal hearing. If we accepted the Amendment proposed by the noble Lord, Lord Craigton, that informal hearing would be replaced by a statutory inquiry, with all the delays that that would entail. However, the noble Lord, Lord Craigton, gives a discretion; the Secretary of State does not need to hold a public inquiry. But if we accepted the Amendment of the noble Lord, Lord Craigton, it would be either a public inquiry or nothing at all.
Having regard to the fact that this is an extension of what has taken place at the planning procedure stage, in many cases the most equitable way of dealing with the matter is to enable the objector to the compulsory purchase order the opportunity of the informal hearing, which almost certainly would be held by somebody appointed by the Secretary of State for doing so—probably one of the full-time reporters. This would enable adequate representations to be made in this informal way. At the most it might take a week, or perhaps two weeks, which, except in the worst pos-sible circumstances, would not be unacceptable. If we accepted the noble Lord's Amendment, it might be that the Secretary of State would feel that the situation was such that it could not justify the possible delay of six months or more through going for the statutory public inquiry. He would therefore have to say, " No, there will be no inquiry ", and that would mean nothing at all. This would put the objector in a worse position than he would be in under the Bill, because the Secretary of State would not have the choice of holding the informal hearing.
The Amendment which the noble Lord, Lord Henley, moves goes even further. In many instances the granting of planning permission would have been preceded by a public inquiry. However, as he points out, that would not always be the case. Where there has not been a planning inquiry the Amendment would

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make a public inquiry into the expedited acquisition order obligatory and this would completely defeat the purpose of the expedited procedure. I read into all that the noble Lord, Lord Henley, has said that it is his intention to seek to improve the protection of the indivi-dual and to protect the public interest by the procedures which he is stating; but if his Amendment were to go in, it would be virtually a wrecking Amendment of the Bill, and that is the last thing which I suspect the noble Lord has in mind.
Lord HENLEY: I accept a good deal of the argument which the noble Lord has put forward. I accept that my Amendment is defective in two points. One is purely drafting, which could be got over. The other is that it would make an inquiry obligatory; and that is the last thing that I want to do. Nevertheless, I think that the noble Lord's argument will stand up only if the Government do not introduce legislation in another place to defeat the Amendment which was carried this afternoon. I hope the hybrid Special Orders Procedure will remain as a safety net, because I think that the Government are on weak ground here. I am most disappointed that noble Lords on the other side of the House view this as a Party issue and do not see that it is a very important constitutional issue, Only the noble Lord, Lord Chorley, has supported me. If, however, it stands up and the Government do not seek to reverse it, then I should be perfectly prepared to accept the arguments which the noble Lord, Lord Hughes, has put forward against my Amendment. I see the force of all his arguments and probably the right thing for me to do would be to withdraw my Amendment now, find out exactly what the Government are thinking of with regard to the position of safeguards, and then either re-introduce it at a later stage or try to draft a better Amendment at a later stage.
What I am seeking to do is this. I have said already that I totally reject these arguments of urgency; that I think the arguments put forward are specious, that they are, frankly, nonsense and that how-ever much one may wish, on economic grounds, to get the Bill through as quickly as possible—and I accept all of that—to seek to diminish the safeguards
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in Parliament not only for individuals but for bodies of individuals who are trying to protect what we must protect is a very great mistake. As I say, probably the best thing for me to do at the moment is to withdraw my Amendment, which is defective in certain respects, hear a little further argument from the noble Lord, Lord Craigton, on the question of " may " as opposed to " shall ", and then possibly come back at a later stage. I do not know whether the Opposition Front Bench would like to join in on that point or whether I should seek leave to withdraw my Amendment now. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.14 p.m.
Lord CRAIGTON Lord CRAIGTON moved Amendment No. 37 :
Page 15, line 28, leave out from (" representations ; ") to (" inquiry") in line 30 and insert (" and the Secretary of State may, but shall not be obliged to, cause an ").
The noble Lord said: The noble Lord, Lord Hughes, proceeded to discuss my Amendment with the one before it without giving me any warning that he was going to do so. He leaves me in a number of difficulties because he started off by saying that they were similar. I shall be glad to be corrected, but I do not think they are similar at all. The noble Lord says that under the Bill as it stands the Secretary of State does not cause public inquiries to be held, but as I read the Queen's English it says:
the Secretary of State … shall not be obliged to cause an "
inquiry. He is not obliged to cause an inquiry, but it does not say that he shall not cause an inquiry.
The noble Lord, Lord Hughes, may not know it, but this clause has caused a great deal of alarm, despondency and almost offence in its wording. One is used to the Secretary of State having powers, but this is locking the door and giving the Secretary of State the key. I want the Bill to do no more than lock the door and leave the key in the door. The Secretary of State now is not obliged to hold an inquiry. I want to keep that fact, but I want to put him in the posi-tion of saying to me, if I have a claim to make, not as he could here, virtually, " No, I will not hold an inquiry "; I want

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him to say, in the words which I was going to use, "I, the Secretary of State, may, but I am not obliged to, and I am extremely sorry, but for the reasons given by the noble Lord, Lord Hughes, in the Committee stage in the House of Lords some time ago the matter was too urgent to accept the delay that would be caused by an inquiry ". In other words, what I want to say is the same thing but in far more courteous terms and in a form acceptable to the public, because to my mind the present words are not acceptable. It is seldom that I have found such a complete negative as this. Clearly, from his brief the noble Lord, Lord Hughes, can do no more than say " No "; but I do ask him just to say that he will consider what I have said and let us see what happens before the next stage. I beg to move.
Lord HUGHES: I will be brief in dealing with this matter. On the point about the Secretary of State's having discretion not to hold an inquiry, there is no difficulty between the noble Lord, Lord Craigton, and myself. The point to which I have already referred is the fact that the intention of this Amendment may be to put it more politely than in the language of the Bill, but the effect of it really is to limit the Secretary of State's discretion if he thinks there is the possibility of an inquiry being unlikely to change the situation and the alternative is to have no inquiry at all. In those circumstances he is likely to exercise his discretion not to hold an inquiry. But as the Bill stands, the Secretary of State's alternative to a refusal for an inquiry is not a long-delayed public inquiry but the possibility of a more informal type of hearing which would not be time wasting. So although the noble Lord may be importing a degree of politeness into the Bill, he is in fact removing from it the possibility of a hearing of a sort. I do not think that is desirable.
I think the Secretary of State's having a choice between no hearing and an informal hearing is reasonable. I certainly undertake to look at this point and to see whether we can pursue the position on the basis that the Secretary of State's discretion is as I have stated but to find out whether it can be put forward in the more acceptable wording asked for by the noble Lord, Lord Craigton. That is as far as I can possibly go tonight, and
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I hope the noble Lord will find that at least I am not locking the door and throwing away the key.
Lord CRAIGTON: I am grateful to the noble Lord. I still do not think that the question of " representations" and the words I wanted to add have any bearing whatever one on the other. But since the noble Lord has said that he will look at it, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Schedule 1 agreed to.
Remaining Schedules agreed to.
House resumed: Bill reported with the Amendments.

SOCIAL SECURITY (CONSEQUENTIAL PROVISIONS) BILL [H.L.]
Message from the Commons, That they concur with the Resolution of this House of Wednesday last that the Bill be referred to the Joint Committee on Consolidation Bills.
  NATIONAL PARKS: EXCHEQUER GRANTS
  NATIONAL PARKS: EXCHEQUER GRANTS
  TYNESIDE RAPID TRANSIT SYSTEM
  TYNESIDE RAPID TRANSIT SYSTEM
  PRISONERS: NUMBERS AND ORIGINS
  PRISONERS: NUMBERS AND ORIGINS
  FLIGHT-TIME LIMITATIONS
  FLIGHT-TIME LIMITATIONS
  EEC FINANCIAL ASSISTANCE
  EEC FINANCIAL ASSISTANCE