Sitting of 23 May 1977

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

    Welsh Assembly
    Mr. Biffenasked the Secretary of State for Wales what representations he has received from Welsh local authorities requesting separate legislation for the establishment of a Welsh Assembly.
    The Secretary of State for Wales (Mr. John Morris): One, Sir, from Cardiff City-Council.
    Mr. Biffen: Notwithstanding the modesty of the number of requests that the right hon. and learned Gentleman has received, will he add his own voice to the growing number within this House who believe that any Welsh legislative assembly is an issue pre-eminently suitable for a separate piece of legislation?
    Mr. Morris: I am always glad to hear of the hon. Gentleman's interest in Wales. I must tell him that he will have to await the statements by my right hon. Friend the Lord President of the Council.
    Mr. Gwynfor Evans: Is the Secretary of State aware that the Wales TUC has consistently stood not just for the kind of executive body that the Government favour but for a legislature that would have the full ecenomic powers of which the Government spoke in their manifesto?
    Mr. Morris: No one is more well aware than I am of the views of the Wales TUC. If we are to have devolution, it is imperative that the Labour Government remain in office. I was sad to see the hon. Gentleman in the Opposition Lobby on the vote of confidence in the Government.
    Mr. Ioan Evans: When my right hon. and learned Friend is considering this issue, will he note the representations that have been made by the Labour, Liberal and Conservative Parties? Will he bear in mind that in the recent local elections the nationalists did very badly and lost three seats in my constituency alone, a fact that they did not publicise in their reports?
    Mr. Morris: I am sure that all hon. Members are aware of the situation in the local elections. My right hon. Friend the Lord President of the Council will take full account of all representations.
    Mr. Geraint Howells: Does the Secretary of State agree that if the devolution proposals are to be meaningful we need two separate Bills, one for Wales and one for Scotland, running concurrently in the next Session?
    Mr. Morris: The hon. Member has made that point before. It will be taken into account.

    Public Bodies (Parliamentary Questions)
    Mr. Wyn Robertsasked the Secretary of State for Wales if he will now answer Questions relating to the Welsh Development Agency, the Land Authority for Wales and similar bodies.
    The Under-Secretary of State for Wales (Mr. Alec Jones): My right hon. and learned Friend will answer such Questions where they relate to matters of Government policy or the use of his statutory powers. I do not exercise close supervision over the day-to-day administration of the bodies concerned, and I am following long-standing practice in saying that Questions relating to such matters should be addressed to the bodies themselves.
    Mr. Roberts: Is the hon. Gentleman aware that the Questions that I put to him about the Land Authority, which he refused to answer, did not deal with day-to-day matters but dealt with the operations of the Land Authority on an annual basis? Are the Government aware that the refusal of the Welsh Office to answer Questions about these bodies and the decision to treat them in the same way as nationalised industries is contrary to the spirit of the assurances we were

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    given when we were dealing with the legislation setting up the bodies? Irrespective of whether the hon. Gentleman intends to answer Questions about these bodies, can he tell us why, when we table Questions that he refuses to answer and that are passed on to the bodies concerned, we have to write to the respective chairmen asking for replies?
    Mr. Alec Jones: Perhaps I should make it clear that my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands), when dealing with this specific point in the Committee proceedings on the Community Land Bill, said:
    "For any action he may take"
    —that is, my right hon. and learned Friend—
    "in the way of a direction, be it specific or general, to the Land Authority he will be answerable to this House, through Question Time and so on."—[Official Report, Standing Committee G, 12th June 1975; c. 992.]
    My hon. Friend was quite clear and said in that Committee what I have said in my earlier reply, that questions of direction are the sort that will be answered. I draw the attention of the hon. Gentleman to the fact that the first report of the Land Authority was laid before Parliament on 10th March 1977.
    Mr. Wigley: Does the Minister not find it anomalous that he and his right hon. and learned Frend are only too willing to make announcements about new advance factories whereas they will not answer Questions about the activities of the Welsh Development Agency? Does he accept that one of the regrettable things is that the Government's political involvement in the detail of decision-making on the location of advance factories is much too great, particularly in view of the fact that the Government do not accept responsibility to hon. Members for such matters in the House?
    Mr. Alec Jones: The hon. Gentleman is wrong. Clearly there are certain functions of these bodies which Parliament has made subject to the approval of the Secretary of State. Advance factories and derelict land clearance are such functions. In such cases it is right and proper that the agreement of my right hon. and learned Friend should be sought.
    Sir Raymond Gower: Will the Minister bear in mind that these are not private
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    enterprise bodies that are responsive to competition or any competitive element? On the other hand, throughout the passage of the Bill the Minister was at pains to take credit for the fact that these bodies would be highly democratic, in the sense that he would answer for them in the House and be subject to questioning. It now appears that that is not to be so.
    Mr. Alec Jones: I think that the hon. Gentleman is completely mistaken. If he looks through the Committee reports, he will see that the Minister, my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands), who took the Bill through Committee on behalf of the Welsh Office, said quite clearly under what conditions my right hon. and learned Friend would be answerable to the House for these questions. We are following the well-established practice of a number of Governments. A similar body is the Highlands and Islands Development Board. Questions on day-to-day matters in respect of that body are not answerable in the House.

    European Community (Agriculture Commissioner)
    Mr. Geraint Howellsasked the Secretary of State for Wales when he next intends to meet the EEC Commissioner with responsibilities for agriculture.
    Mr. John Morris: I have no plans to meet Mr. Gundelach in the immediate future.
    Mr. Howells: Does the right hon. and learned Gentleman agree that the ruling of the European Court over the weekend to forbid the Government to pay the subsidy to pig producers in Wales will have a disastrous effect on the industry? What plans has he in mind, short term and long term, to help the pig industry in Wales?
    Mr. Morris: My right hon. Friend and I are conscious of the real difficulties of the pig sector. My right hon. Friend has done his utmost to try to help it. I have not yet seen the text of the judgment delivered in the court on Saturday, but my right hon. Friend and I, and other ministerial colleagues, will consider the matter as soon as may be.
    Mr. Kinnock: Is my right hon. and learned Friend aware that resentment

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    against various policies of the Common Market goes way beyond the unfortunate case of pig breeders in Wales and extends to every household and every consumer—indeed, to all those who are now faced with ever-rising prices? Will he tell Mr. Gundelach that it is fast becoming the majority opinion in this country that we made an absolutely crazy mistake to stay in the Common Market and that a great deal of support is being given to the idea of withdrawal from the CAP?
    Mr. Morris: That does not arise from the Question put by the hon. Member for Cardigan (Mr. Howells). We may differ on whether it was right to stay in the EEC, but I can assure the House that my right hon. Friend the Minister of Agriculture, Fisheries and Food will do his utmost for the whole of British agriculture and for the consumer.
    Mr. Gwynfor Evans: When the right hon. and learned Gentleman meets the Commissioner will he make clear to him that one of the main anxieties of farmers in Wales these days is the future of the boards, especially the Milk Marketing Board? Will he make it clear that the Government will not tolerate their disappearance, or even their erosion?
    Mr. Morris: I can assure the hon. Gentleman on that score. Time after time my right hon. Friend has made it abundantly clear where the Government stand on the future of the Milk Marketing Board. It is an organisation that has brought immense good to Wales over a long period. I know its significance as well as anyone.
    Mr. Roy Hughes: Does my right hon. and learned Friend agree that the chickens are now coming home to roost for British farmers who supported British entry into the Common Market? Does he agree that we had a perfectly efficient agriculture industry, giving a fair deal both for the consumer and for the farmer? Is it not time that the Government give notice that we shall contract out of the common agricultural policy?
    Mr. Morris: I am not sure whether chickens coming home to roost arise from a Question about pigs. I am confident that my right hon. Friend the Minister of Agriculture, Fisheries and Food will do his utmost both for agriculture
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    and the consumer, who is dependent upon agriculture.
    Mr. Marten: As the pigs are now coming back into their pig sties, as it were, is this not a good example of the need for a national agricultural policy so that we may do what we think is right for British pig producers?
    Mr. Morris: We know the stand that the hon. Gentleman has taken on the whole issue of the CAP. I can assure the hon. Gentleman that in this case my right hon. Friend was seeking to do his utmost to help the pig industry.

    Mentally Handicapped Persons
    Mr. Moonmanasked the Secretary of State for Wales if he will publish in the Official Report details of the scales of services and facilities in Wales for the mentally sick and handicapped as compared with the rest of the United Kingdom.
    The Under-Secretary of State for Wales (Mr. Barry Jones): Information relating to Wales is already published in "Health and Personal Social Services Statistics for Wales" and the "Digest of Welsh Statistics". Key indicators can be found in "Regional Statistics No. 12". All these documents are in the Library. More comprehensive information for Wales will be contained in "Hospital Psychiatric Services for Wales", the first issue of which will be available in July. A copy of this will also be placed in the Library.
    Mr. Moonman: I am grateful for the bibliography. Does my hon. Friend appreciate that the all-party parliamentary committee on mental health is deeply concerned that there are gaps in the services throughout the country, including Wales? Has my hon. Friend taken the opportunity of discussing these matters in Wales with the Secretary of State for Social Services? If so, what has been the outcome?
    Mr. Barry Jones: In the Welsh Office we are deeply concerned about the future of services for the handicapped and the mentally ill. I can assure my hon. Friend that I am never slow to ram home the message when I meet the area health authority chairmen every month in Wales. This sector of our hospital community

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    must have more and more resources and more and more of our time.
    Mr. D. E. Thomas: However concerned the hon. Gentleman may be, will he explain why the White Paper "Better Services for the Mentally Ill" does not apply to Wales? When can we expect initiatives from his Department in place of the White Paper?
    Mr. Barry Jones: Why should the Welsh Office not have policies that are separate and different from England from time to time? My right hon. and learned Friend has already indicated his priority. Only last month he gave £200,000 for the mentally ill and handicapped, most of which has gone into West Wales at St. David's Hospital.

    Building Industry
    Mr. Kinnockasked the Secretary of State for Wales what representations he has received from workers and employees in the building industry in Wales concerning the need to stimulate spending and employment in building and construction.
    Mr. Alec Jones: I have met the National Federation of Building Trade Employers and the Union of Construction and Allied Trades and I share the concern expressed by the Joint Advisory Committee for the Building and Construction Industry in Wales. My right hon. and learned Friend was, therefore, pleased to announce last Wednesday an addition of £5¾ million over the next two years to the expenditure programmes within his responsibility. This will all be spent on construction projects.
    Mr. Kinnock: I am grateful for that answer, especially for the extra finances to flow into building and construction and for the review taking place of housing expenditure among local authorities. Does my hon. Friend agree that in order to stimulate the sort of improvement and the employment that we need a great deal more finance will have to be allocated to combat unemployment and to ensure that the pace of improvement of housing stock and the development of new houses set by previous Labour Governments is well and truly sustained by this Government?
    Mr. Alec Jones: I agree that there are man spheres of public life in which it
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    would be desirable to increase public expenditure if we had earned the money before we spent it. Within the capital resources available we have sought to allow each local authority to take its own decisions—namely, whether it will spend money on building new houses or on improving them.
    Mr. Wyn Roberts: Is the hon. Gentleman aware that the £5 million contribution over two years is minimal and will have little effect? Has he looked into the effect on unemployment of the denial of the 714 certificate to small builders, very often on the ground that they have been unemployed at some time over the past three years?
    Mr. Alec Jones: There has been a lengthy debate in the House on 714 certificates. When I met the National Federation of Building Trade Employers in Cardiff I took up this issue and was able to ensure that certificates would be granted to those who up to that time had found some difficulty in obtaining them. The £5¾ million is an extra £5¾ million. I am sure that when the allocations are made known—they will be announced within the next few days—many parts of Wales will consider the £5¾ million extremely valuable.
    Mr. Wigley: Does the hon. Gentleman accept that the £5¾ million, while welcome in itself, is a very small sum compared with the cutbacks that the Government announced some time ago? Does he not think it outrageous that at a time when 15,000 construction workers are unemployed in Wales there should be 60,000 families waiting for council houses and a seriously deteriorating situation in respect of house repairs? What action are the Government going to take?
    Mr. Alec Jones: In answer to a question last week I announced the setting up of a working party to consider expenditure on housing in Wales. The need for the working party to be set up was that last year many housing authorities in Wales, for various reasons, were unable to spend the moneys that we had allocated to them. I understand the hon. Gentleman's desire to throw stones at the Government, but sometimes the stones need to be thrown much closer to home.
    Mr. Anderson: Clearly the new and welcome £5¾ million will have some effect

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    on employment. Has any estimate been made of the employment effects of a certain scale of investment?
    Mr. Alec Jones: I should have to have notice of that question. However, my right hon. and learned Friend is anxious to ensure that the extra £5¾ million is spent on projects that will aid the construction industry in Wales.

    Newport
    Mr. Roy Hughesasked the Secretary of State for Wales if he will make an official visit to Newport.
    Mr. John Morris: I have no immediate plans to do so.
    Mr. Hughes: Will my right hon. and learned Friend direct his attention once again to the closure of the Westinghouse factory and the bus depot at Newport, and also, now, to another brainwave on the part of the management of the British Steel Corporation, to close the pipe mill at Llanwern? Is it not time for the Welsh Office to counteract these measures by urging development area status for Newport, bearing in mind that for a very long time other industrial centres in Wales have had relatively better unemployment figures?
    Mr. Morris: I respect the advocacy of my hon. Friend, over a long time of development area status for Newport, but it is a matter for my right hon. Friend the Secretary of State for Industry. Obviously the closure of the pipe mill is a matter of great concern, but I understand that if the closure is confirmed every effort will be made by the BSC to find alternative jobs in the area and in other parts of the tubes division. Any closure hurts, and no one other than my hon. Friend is more concerned than I to ensure that new industry goes to the area.

    Port Talbot Steelworks (Strike)
    Mr. Ifor Daviesasked the Secretary of State for Wales what is the estimated cost of the strike at the Port Talbot steelworks.
    Mr. Michael Robertsasked the Secretary of State for Wales if he will make a statement about the economic consequences of the strike at BSC, Port Talbot.
    Mr. John Morris: Although this is primarily a matter for my right hon. Friend the Secretary of State for Industry, I understand that the cost to the British Steel Corporation up to 21st May was about £13 million. This does not take into account the very substantial costs there will be of restarting operations and overcoming the disruption brought about by the strike, or of the import costs and losses of export earnings.
    Mr. Davies: Is my right hon. and learned Friend aware that this disastrous strike, which has very little, if any, public support, will have a serious effect on the tinplate industry in my constituency and on industry in the whole of West Wales? Is he aware of the ominous trend whereby the British Steel Corporation has decided to hold up its development plans? In view of the seriousness of the situation, will my right hon. and learned Friend consider convening a meeting between the head office of the union, its officials, and the BSC to explore the possibility of finding a basis upon which work may be resumed?
    Mr. Morris: I understand fully the force of my hon. Friend's comments. During the strike I have done what I could as a local Member of Parliament to see whether there could be some movement by the parties in the interests of the whole area. I appeal earnestly to those on strike to respond to the appeal of the TUC steel committee. In my opinion, it would not be helpful to say more at this stage. I trust that hon. Members will wait to see what transpires from a meeting which I hope will take place this week.
    Mr. Roberts: What is the estimated cost of the strike to the many small businesses dependent on the steel industry, particularly the haulage and maintenance businesses and construction companies?
    Mr. Morris: The cost cannot be calculated. Plainly it is additional to the sum that I have mentioned. But the whole area will suffer until the matter is resolved. I trust that the House will note my comment that it would be best at this stage to await developments this week.
    Mr. Anderson: My right hon. and learned Friend will know from his local knowledge that it is a question of the

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    effect not only on exports but on the economy of the whole of South-West Wales. He will realise that his initiatives in trying to work behind the scenes to bring peace are known to his colleagues locally. Does he agree that Wedensday's meeting is likely to provide the best way out on a basis of dignity for all concerned in this sad dispute?
    Mr. Morris: I am sure that my hon. Friend's remarks will be noted.
    Mr. Nicholas Edwards: I associate myself and my colleagues with the appeal of the Secretary of State for a satisfactory outcome to this very sad dispute. However, bearing in mind the serious consequences for many other companies in this part of Wales and the implications of the BSC's announcement of postponement of the £835 million investment, can the right hon. and learned Gentleman assure the House that he or the Secretary of State for Industry will give further information to the House at the earliest opportunity and will keep us informed of developments?
    Mr. Morris: That is a matter for my right hon. Friend. Let us see what happens in the course of the week.
    Sir A. Meyer: Does the Secretary of State agree that these unhappy events greatly strengthen the case for maintaining Shotton in full production as a balancing plant?
    Mr. Morris: I do not think that that adds one iota to improving the situation. I have asked the House to see what happens in the week. Anything said now will not help matters.

    Regional Policies
    Sir A. Meyerasked the Secretary of State for Wales whether he is satisfied with present Government regional policies as they affect Wales.
    Mr. John Morris: Yes, Sir.
    Sir A. Meyer: I am glad that the Secretary of State is so pleased. Is he aware that there is dismay in my constituency at the already visible consequences of being deprived of regional incentives that are available to every adjoining area and that, in view of the catastrophic employment situation in my constituency, he must devise some measures of direct aid
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    even if, for the time being, we cannot have full development area status?
    Mr. Morris: I know that the hon. Gentleman wants even wider development area status—[Interruption.] It seems that does not; he rejects it. Perhaps he forgets that Mold, which is in his constituency, comes within the new development area. I have gone to the trouble of reading his famous speech about Slough, in which he advocated bigger and better Sloughs for Welshmen who might have to be exported because of the lack of employment. He said, about the granting of development area status:
    "All that this does is to shift puddles of unemployment from one place to another, rather like councils in South-East England trying to move gipsies from the area of one council into the area of an adjoining council."—[Official Report, Welsh Grand Committee. 28th April 1971; c. 30.]
    I hope that the hon. Gentleman will consult the Clwyd County Council, which, much as it welcomes the Government's recent statement, is advocating greater development area status.
    Mr. Tom Ellis: Is my right hon. and learned Friend aware that many people, not only in Wales and Scotland but in the regions of England, are becoming aware of the advantages likely to accrue to Wales in terms of political clout and regional development by the establishment of the Welsh Assembly? Will he urge on his right hon. Friends the need to institute the Assembly as soon as possible?
    Mr. Morris: I am sure that my hon. Friend will await the statement in due course by my right hon. Friend the Lord President of the Council.
    Mr. Grist: The right hon. and learned Gentleman has quoted the speech of my hon. Friend the Member for Flint, West (Sir A. Meyer). Will he remember what he said in his last election address, to the effect that without jobs there was no reason for young people to stay in Wales? What does he have to say about that now?
    Mr. Morris: The Government, faced with one of the deepest recessions that the world has experienced for a long time, are using every weapon at their disposal to ensure that there are jobs in Wales.
    Mr. Nicholas Edwards: Would the right hon. and learned Gentleman consider the powerful speech made on this subject last week by my hon. Friend the Member for Flint, West (Sir A. Meyer), in which he drew attention to the anomoly that tourist aid is confined to development areas and that the needs of tourism should be separately identified and should not necessarily coincide with the industrial arguments, and the case advanced on that occasion by the Minister about the industrial needs of the area?
    Mr. Morris: I am sure that that can be looked at. I read the hon. Gentleman's speech and the reply. It can be pursued to see whether anything can be done. However, I assure the hon. Gentleman that we are doing what we can to help his area, and so is the Welsh Development Agency. I give as examples the recent announcement about derelict land schemes and that organisation taking a share in a company in the Rhyl area. We wrote in December to Rhuddlan council about the development of the Rhyl promenade and its application for European aid. We are still awaiting an answer.
    Mr. D. E. Thomas: Does the right hon. and learned Gentleman accept that the announcement that he made two years ago about special development area status for parts of Gwynedd has had a minimal effect on the employment problems of the area? There are still 10 empty advance factories in my constituency.
    Mr. Morris: I am deeply aware of that. No one is more conscious than I of the need to look at every possible opportunity to see what further can be done with regard to special development areas. In the Budget the Chancellor announced one part of the help, which I think will be valued in due course.
    Sir A. Meyer: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Secretary of State's reply. I beg to give notice that I shall seek to raise the matter on the Adjournment.

    International Conferences
    Mr. GwynforEvans asked the Secretary of State for Wales what is his
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    policy regarding the representation of Wales at international conferences.
    Mr. John Morris: The Welsh Office is represented at international conferences whenever it is appropriate to do so.
    Mr. Evans: Is the right hon. and learned Gentleman aware that during the 25-year reign of Her Majesty Queen Elizabeth II the British Empire has been transformed into a Commonwealth of 36 separate and equal nations? Although Wales is older than any one of those nations, we have no comparable status with any of them. Will the Minister at least now make amends by giving us something like observer status at the coming Commonwealth Conference?
    Mr. Morris: The hon. Gentleman really has disclosed his full hand today. He is a separatist first and last, and the sooner he makes that abundantly clear to the people of Wales the better. He really stands for an independent Wales, and it does him no good going about Wales saying that he does not. That is what he stands for, and the people of Wales should know it.
    Mr. Kinnock: My right hon. and learned Friend does the hon. Member for Carmarthen (Mr. Evans) an injustice. The hon. Gentleman is not for an independent Wales; he is obviously for an observer status Wales. With regard to international conferences and associations, can my right hon. and learned Friend tell me whether he has any up-to-date details about the great sheep deal between Plaid Cymru and Colonel Gaddafi, and whether there has been any development in the last 10 months on that score? Will my right hon. and learned Friend embrace the idea of internationals at Wembley and inform the Football Association that while it may be used to sterile national anthems, many of us want to sing ours on great sporting occasions, and we shall be singing it next Tuesday?
    Mr. Morris: I have every sympathy with my hon. Friend on the second part of his Question. I recall a famous occasion at Twickenham in March 1974 when our anthem was not played officially, and I and my right hon. and learned Friend the Lord Chancellor stood up when the anthem was sung unofficially, and from that moment we saw progress being made. [Interruption.] No, we won.

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    With regard to the sheep selling in Libya, I have responsibility for a whole host of issues but the activities of Plaid Cymru in the silly season of August, when it announced this international foray, is not one of them. It is odd that since August 1974 there has been complete and stunning silence with regard to the Libyan adventure.

    Housing (Local Authority Purchases)
    Mr. Wigleyasked the Secretary of State for Wales if he will review the criteria relative to the purchase of existing housing stock by local housing authorities, with particular regard to helping authorities in areas where second and holiday homes are prevalent to buy houses that come on the market and let them to local people on the waiting list for council housing.
    Mr. Alec Jones: Housing authorities already have adequate powers under the Housing Acts to acquire existing properties to meet housing needs in their areas. The main block allocations given to housing authorities in Wales for 1977–78 can be spent on these acquisitions at the discretion of the authorities.
    Mr. Wigley: Is the Minister aware of the difficulties experienced in areas such as Dwyfor, Arfon and other parts of Gwynedd because of the pressure of the second-home market on house prices and the comparability between the market price and the district valuation? In view of his answer, can he give an assurance that he will meet representatives of the district councils in those areas to discuss the matter further?
    Mr. Alec Jones: I am always willing to meet district councils in Wales on any aspect of housing policy. I remind the hon. Gentleman that since May 1976 the councils have had the power to use their own valuers. But it is true that market value remains the prime consideration. I do not think that the hon. Gentleman is really suggesting that local authorities should be paying above the market price for these properties, otherwise not only the local authorities but the incoming tenants would suffer.

    Maytree School, Swansea (Autistic Unit)
    Mr. Andersonasked the Secretary of State for Wales whether he is now able
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    to announce starting and expected completion dates of the proposed West Glamorgan residential autistic unit at Maytree School, Morriston, Swansea.
    Mr. Barry Jones: In view of its importance this unit will be included among the projects to be financed out of the additional public expenditure of £5¾ million announced by my right hon. and learned Friend last week. Subject to formal approval of the plans and cost on tender, the scheme will be undertaken within this year's school building programme. I would expect the work to be completed by about February 1979.
    Mr. Anderson: As my hon. Friend well knows, there is currently no special educational unit in Wales catering specifically for autistic children and adolescents, but parents have done an immense amount of work to get this off the ground. Therefore, the announcement today that resources have been found will be greatly welcomed in the whole of South Wales.
    Mr. Speaker: That is a very good statement but a very poor Question.

    Numeracy and Literacy (Report)
    Mr. NicholasEdwards asked the Secretary of State for Wales what action he proposes to take following publication of the CBI Report on standards of numeracy and literacy in Wales.
    Mr. Barry Jones: I welcome this publication as one of many useful contributions on education in our schools. All such contributions are being borne in mind as work proceeds on the consultative document that my right hon. Friend the Secretary of State for Education and Science and my right hon. and learned Friend hope to publish in the summer.
    Mr. Edwards: Is it not highly disturbing that there should have been this sharp decline in the levels of educational attainment, so that apparently large numbers of young people are now leaving the schools without the basic skills necessary for jobs in industry and elsewhere? Will the Minister ensure that action is taken to deal with this situation, and will he tell us whether he proposes to do anything about the specific recommendations contained in this excellent report?
    Mr. Barry Jones: The inquiry that I have commissioned into the examination

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    achievements of school leavers in Wales is almost completed and it is my intention to seek the views of educational interests shortly on this matter. With regard to the specific publication, we have been grateful for it because it adds to the great debate which the Prime Minister has started and which, in part, we shall be concluding with the Green Paper published in the summer.
    Mr. Roderick: Before taking any action, will my hon. Friend carefully consider the contents of the CBI Report and whether it has examined the same category of person as it had previously, since the individual expectations of our young people are so much higher today that people who would go into the kind of jobs envisaged are likely to have a different standard?
    Mr. Barry Jones: I agree with my hon. Friend in all that he has said. There is a gulf between our schools and industry. We have to bridge that gulf. It is a fact that the report has in part been criticised by some of the teachers' organisations.

    A470 (Improvements)
    Mr. Ioan Evansasked the Secretary of State for Wales what improvements to the South Wales-North Wales Trunk Road (A 470) have been carried out over the past 10 years; and what proposal he has for further improvement of the route.
    Mr. Barry Jones: Twenty-two schemes, each valued at over £50,000, have been completed since January 1967, at a total cost of over £28 million. A further 38 schemes, valued at about £62 million, are in progress of being prepared.
    Mr. Evans: I thank my hon. Friend for that reply. I am glad to know that the Government are giving priority to this road as well as to the east-west link, which will improve the link-up with England. With regard to the development of the A470, will my hon. Friend bear in mind the need for a bypass at Abercynon and a link road in the Cynon Valley at Aberdare because of the traffic congestion?
    Mr. Barry Jones: I shall bear that in mind. I ought to tell my hon. Friend that this road scheme would seem to be the responsibility of the Mid-Glamorgan
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    county authority, but it is aimed to start work on the next section of the new Cardiff-Merthyr trunk road between Abercynon and Pentrebach in 1981, at a likely cost of £23 million.

    Local Authority Mortgages
    Mr. D. E. Thomasasked the Secretary of State for Wales what allocation he intends to make to local housing authorities for mortgage lending in 1977–78; and what are the comparable figures for each year since 1974.
    Mr. Alec Jones: There is no separate allocation for mortgage lending in 1977–78, but the block allocations, amounting to almost £15 million, include provision for lending. Details were given in my reply to the hon. Member for Caernarvon (Mr. Wigley) on 6th April 1977. No specific allocations for lending were made until 1976–77, when the figure was £17·7 million, of which £14 million was taken up.
    Mr. Thomas: Is the Minister as satisfied now as he was a year ago that the building societies are coming in to fill the gap that has been caused by a reduction in mortgage lending by local authorities?
    Mr. Alec Jones: No, I am not satisfied now, nor was I satisfied then. What I indicated to the hon. Gentleman was that the extra £5 million that has been reserved for this purpose by the building societies will partly replace the cut that has been announced. I repeat that the extra £8½ million that the building societies have set aside for lending in Wales in 1977–78 will likewise be put to good use by local authorities in Wales. It is hoped that the money will be used for priority cases first.

  CIVIL SERVICE

    Dispersal
    Mr. MacGregorasked the Minister for the Civil Service whether, in the light of recent developments in Government policy on metropolitan areas, he will reconsider the need for a further review of the Civil Service dispersal proposals following the Hardman Report.
    The Minister of State, Civil Service Department (Mr. Charles R. Morris): The Government have recently reviewed

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    the dispersal programme announced in 1974. We have concluded that no useful purpose would be served by a further review.
    Mr. MacGregor: Does the Minister agree that there have been substantial changes in economic and financial conditions since the original decisions were made and, in particular, that recently the Government have made a fundamental change of policy in relation to the new towns, aimed at reattracting jobs to London instead of locating them elsewhere, and also on inner urban areas? In the light of all these matters, does the Minister not think that a serious reappraisal should be made and published to Parliament, so that the House can decide?
    Mr. Morris: We have conducted a review recently and are determined that the dispersal programme, as announced in July 1974, will go ahead. I have no wish to minimise the problem. Some places—particularly London, to which the hon. Gentleman referred—have been particularly badly hit by unemployment, but for Greater London the current unemployment rate is 4·1 per cent., compared with 10·5 per cent. for Merseyside, 9·1 per cent. for Glasgow, 7·5 per cent. for Teesside, and 6·1 per cent. for Cardiff.
    Mr. Christopher Price: The overall unemployment rate in Greater London may be 4·1 per cent., but is my hon. Friend aware that in pockets of London such as South-East London it is nearly double that figure? Is he aware that among my constituents there is very great bitterness that with an unemployment rate at this level there is a determination to press ahead with some of these idiotic schemes, such as, in particular, the removal of the Government Chemist to Cumbria, which means that skilled workers who need to deal with matters concerned largely with Heathrow Airport are to be sent hundreds of miles away?
    Mr. Morris: My hon. Friend is right to express the concern of his constituents about this matter. The problem in London is the contraction in manufacturing jobs and not wholly the contraction in service, clerical and administrative jobs. The shortage in the Scottish, Welsh and English regions is of jobs for all kinds.
    Mr. Tebbit: Will the Minister say perfectly clearly—just for a change—whether it is his intention that only the job will be moved or that the person who is doing the job will be moved? If it is the latter, it will do very little for those who are unemployed in the region. If it is the former, it will do very little for London.
    Mr. Morris: I assure the hon. Gentleman that essentially it is the jobs that will be moved. In terms of benefit to the community, I suggest that the hon. Gentleman looks at the successful dispersal operations that have taken place—first, the dispersal of the Royal Mint from Tower Hill to Llantrisant in South Wales and, secondly, the successful operation involving the dispersal of the Post Office Savings Bank to Cowglen in Scotland. Had there been no such dispersal there would have been 5,000 fewer jobs in Cowglen than there are at present.
    Mr. Canavanasked the Minister for the Civil Service when he next intends to visit Scotland to view possible locations for the dispersal of Civil Service jobs.
    Mr. Charles R. Morris: I intend to visit the Central Region of Scotland on the 27th May, but I should perhaps emphasise that the Government have at present no plans to locate further Civil Service work in Scotland, other than those that have already been announced. But, as and when opportunities occur, the claims of other places will be considered.
    Mr. Canavan: Bearing in mind that the male unemployment rate in some parts of Scotland, for example, in Kilsyth, in my constituency, is more than 20 per cent., is my hon. Friend aware that many people in Scotland will be very pleased about his reaffirmation today of the Government's commitment to disperse jobs to Scotland? Will he confirm that it is still under active consideration to disperse some jobs to the Central Region? My hon. Friend can be assured of the utmost co-operation on the part of the local authorities in that area.
    Mr. Morris: I look forward to having the opportunity of meeting my hon. Friend on his home ground and examining the facts that he has indicated to the House today.
    Mr. Anthony Grant: Does the Minister realise that the whole Hardman exercise has become pure pantomime, because the number of people dispersed to Scotland—where the hon. Member for West Stirlingshire (Mr. Canavan) comes from—in the past two years has been 0·02 per cent.? Why will he not face the fact that the Civil Service will not move from London? Why will he not scrap the whole thing and look at it again?
    Mr. Morris: The hon. Gentleman can produce whatever percentages he likes in terms of dispersal but he knows as well as I do that the Hardman proposals, which were announced in July 1974, envisaged a dispersal over the 10-year period 1974–84. The reasons for the increasing interest on the part of some hon. Members is that we are coming now to the dispersal operation itself, and the dispersal commitments will be honoured.

    Pay Research Unit
    Mr. Tim Rentonasked the Minister for the Civil Service whether he proposes to reactivate the Pay Research Unit in the Civil Service.
    Mr. Charles R. Morris: I explained to the hon. Member on 6th December that reactivation of the work undertaken by the Pay Research Unit before its suspension would be dependent on the future development of national pay policy. That remains the position.
    Mr. Renton: When will the Minister stop giving his well-known imitation of an ostrich, with his head buried firmly in the sand? Is it not true that in terms of occupational pensioners there are two nations—the inflation-proofed and the rest? Now that inflation is once again nearing the Labour norm of 20 per cent., is not this the right moment to reactivate the Pay Research Unit, as many civil servants themselves want, so that the value of inflation proofing can be established?
    Mr. Morris: The hon. Member is quite right in saying that many civil servants want the reactivation of the Pay Research Unit—but they want it for something slightly different from what the hon. Gentleman wants. He wants the unit's reactivation merely to consider the question of pensions. If we are to reactivate the Pay Research Unit, pensions are
    1008
    only one element in the general remuneration and salaries that civil servants receive. The reactivation should be considered only in the context of the Government's national pay policy.

    Trust House Forte Hotels
    Mr. Skinnerasked the Minister for the Civil Service on how many occasions the Hospitality Fund has been used to sponsor functions in Trust House Forte hotels.
    Mr. Charles R. Morris: The information is not readily available, since the Government Hospitality Fund does not record details of which commercial group a particular hotel belongs to.
    Mr. Skinner: I suppose that is why my hon. Friend finished in the mess that occurred a few weeks ago, when a Minister was faced with the choice of having to face a picket line, cross it, or go back whence he came.
    Would it not be more beneficial to remove the Hospitality Fund from any criticism by departmental Ministers making a declaration—say, to the Prime Minister this week—to the effect that on no future occasions will any Minister or official acting on behalf of his Ministry cross a picket line of any kind?
    Mr. Morris: The Civil Service Department and, certainly, the Government Hospitality Fund do not instruct any Minister in regard to the crossing of picket lines. I should have thought that the Government Hospitality Fund was taking a very reasonable approach to this issue by keeping in the forefront of its mind the basis on which Government hospitality is provided. The basis of Government hospitality is the promoting of good will. If there is an industrial dispute at an individual hotel which might give rise to embarrassment to guests of Her Majesty's Government, that is not the hotel that we would select for Government receptions and hospitality.
    Mr. Ronald Bell: Will the Minister be very careful not to follow the bad example of three of his colleagues in taking sides in industrial disputes recently, and will he not allow blackmail of the kind that is going on at, for example, the Randolph Hotel, Oxford to prevail against the operations of the Government?
    Mr. Morris: I have spent half my life taking sides in regard to industrial disputes. However, having said that, the Government Hospitality Fund is in no way involved in blackmail and would not wish to associate itself with any such charges. I have explained the basis. Our concern is to prevent embarrassment to guests of Her Majesty's Government.
    Mr. Tebbit: The Minister said that this was not a matter of taking sides but of avoiding embarrassment to the Government's guests. If some bunch of thoroughgoing nasties, such as the National Front, had an embarrassing picket line outside a hotel, would the Government not expect its guests to go through that line?
    Mr. Morris: Government hospitality would certainly take account of any picket lines, or demonstrations of any sort that were calculated to embarrass guests of the Government.

  DEVOLUTION
  Mr. Canavanasked the Lord President of the Council whether he is now able to make a statement about reintroduction of a Bill on devolution.
  Mr. Tim Rentonasked the Lord President of the Council when he proposes to bring forward new proposals for the decentralisation of government in the United Kingdom.
  The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): Consultations are nearing completion and I hope to make a statement shortly.
  Mr. Canavan: As the Tories have turned a full somersault by completely ditching devolution, and the separatists in the Scottish National Party seem to have taken leave of their senses by saying that they will support the Tory-Unionists in any vote of confidence, will the Lord President make a special plea to all Labour Members to support devolution, which is the policy of the Labour Party, instead of being identified with the reactionary ideas that were expressed at the Tory cattle show in Perth a fortnight ago?
  Mr. Foot: My hon. Friend has expressed the matter so succinctly that I would not wish to embroider it at all. Of
  1010
  course, he is a greater authority on the Perth Show than I am.
  Mr. Renton: Anticipating the state-men that the Lord President intends to make to the House, will he say whether he envisages any devolution legislation allowing for local tax-raising powers? If that is his intention, will it be acceptable to the Lib-Lab coalition?
  Mr. Foot: The question of marginal tax arrangements or others affecting taxation is one concept that we promised to reconsider. We have been reconsidering it in our discussions, but I am not yet in a position to make a statement.
  Mrs. Bain: Instead of listening to the rantings of his hon. Friend the Member for West Stirlingshire (Mr. Canavan), will the Lord President say whether he has considered the very constructive points put forward by the Scottish National Party in previous debates? Also, will he say whether, in his opinion, it is logical for the House to continue to support a Bill that provides no fund-raising powers and does not strengthen the powers that were outlined in the previous Bill?
  Mr. Foot: The representations made to me by the Scottish National Party included the presentation of a draft Bill. In my opinion that draft Bill has not the faintest chance of getting through this House of Commons or any House of Commons. It is a sheer propaganda exercise on the part of the SNP. If members of the Scottish National Party really want to see a devolution measure get through the House, they will consider the measures that we shall bring forward again.
  Mr. Anderson: Does my right hon. Friend agree that in advance of his statement there are two things that must be made crystal clear—that there is no prospect of any progress being made on devolution this Session, and that the Bill that we have discussed is now dead.
  Mr. Foot: I do not accept what my hon. Friend says. It is difficult to make progress on such a Bill in this Session, but the proposals that we shall bring forward to the House will be an indication of our determination to proceed with devolution along the lines of the promise that we made during the last election. I hope that I shall have my hon. Friend's support in carrying out that commitment.
  Mr. Wigley: In view of the Government's likely capitulation to the Liberals on the question of two Bills, will the right hon. Gentleman ensure that, as the Labour Party commitment on devolution for Wales has been in existence 10 years longer than that for Scotland, our Bill will have priority over that for Scotland?
  Mr. Foot: The hon. Member will have to argue that out with the hon. Members next to whom he sits and with whom he occasionally agrees. The Government commitment to devolution for Wales is as strong as their commitment to Scotland, and we believe that both measures should come forward.

  EUROPEAN COMMUNITY (BUDGET)
  Mr. Spearingasked the Lord President of the Council what are the current arrangements for debate in the House of Commons of the annual budget of the European Economic Community.
  Mr. Foot: At each stage of the Community budget procedure the relevant documents are deposited as soon as they are received. In the past the Scrutiny Committee has recommended them for debate, and such debates have taken place as soon as possible. Last year, following a change in the timetable for consideration of the 1977 budget, introduced largely at United Kingdom instigation, it was possible for the House to debate the preliminary draft budget before decisions were taken on it by the Council of Ministers. This new timetable will also be followed this year.
  Mr. Spearing: I thank my right hon. Friend for that reply and I thank the Government for making improved arrangements for the discussion of the budget. Will he confirm that, whatever the view of the House, we have no control over the EEC taxation of the people of this country or the manner in which moneys for agricultural support are expended? Is it not a fact that despite Government policies we already have an element of a federal system?
  Mr. Foot: I would not call it a federal system, but undoubtedly we have a system that removes certain powers from the House. That was debated at considerable length during the passage
  1012
  through the House of the European Communities Act. Since then we have had an opportunity to ensure that, despite the limitations on the powers of this House, we do the best we possibly can to retain powers and see whether procedures can be improved. The Select Committee is looking at this matter. I hope that its discussions and its report—and I understand that my hon. Friend is submitting evidence to the Committee—will help us to improve our procedures.
  Mr. Marten: If it is not federalism, is it not crypto-federalism? Shall we have an opportunity to debate the decision of the European Court on pigs? Will the Lord President say whether the Government have a new policy about pigs?
  Mr. Foot: As the hon. Member knows, there is a constitutional exchange proceeding on this matter. The European Court has made some comments about the action by the British Government. Obviously the matter raises an important question about pigs, but it also raises an important question about the constitution. These are matters that should be carefully considered by the House.

  PARLIAMENTARY PROCEDURE
  Mr. Skinnerasked the Lord President of the Council what further steps he is taking to reform the legislature at Westminster.
  Mr. Foot: The Select Committee on Procedure is currently engaged on a major study of the procedures of this House. As regards the other place, the Government will continue to keep the position under review.
  Mr. Skinner: Is my right hon. Friend aware that people outside are amazed by the fact that Parliament always wants to change things outside but never wants to change things inside? This has been witnessed by local government reform, health service reorganisation, the reorganisation of the water boards, and a thousand and one other things. Why does the Lord President not look at some of his past speeches and introduce a measure to get rid of patronage? If he did so, we would not have things like the Peter Jay affair. We could also get rid of the honours

  1013
  system, which is another sleazy business, and the House of Lords. This would renew the faith of a lot of people who vote Labour at the elections.
  Mr. Foot: I do believe that there should be some changes in the way in which this House conducts its procedures. Also, I think there should be some changes in another place, although I would not exactly specify them here and now. [HON. MEMBERS: "Why not?"] I gave evidence to the Select Committee that is examining these matters. I hope that my hon. Friend will study carefully the suggestions that I made on all these questions, because they embrace most of the matters that he has raised.
  Mr. Ronald Bell: Coming back to the more practical matters, will the Lord President consider raising with the Select Committee the possibility of rationing the number of Questions that are orally answered per Member per Session? This would mean that those who did receive Oral Answers would raise more topical issues than is the case at present.
  Mr. Foot: Any question of rearranging Questions could go to the Sessional Committee. If the hon. and learned Member wishes to submit suggestions to the General Procedure Committee, these will be taken into account.
  Mr. Lipton: As a gesture of parliamentary independence on the part of the House of Commons will my right hon. Friend, in the Jubilee celebrations, bring back the Cromwell statue to its original place, and possibly include a few apt quotations from the speeches at the battle of Dunbar?
  Mr. Foot: I agree that it would be a good idea to have the statue back in its place for this occasion. I should like to see a statue of John Lilburne next to it, so that we had a proper representation of the Commonwealth period.

BRITISH LEYLAND (NEWSPAPER REPORT)
Mr. Wrigglesworth: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
1014
"the action of the Daily Mail in publishing a forged letter purporting to implicate the Government and the National Enterprise Board in allegations of bribery by British Leyland".
The matter I seek leave to have debated is specific. It is the publication of a pernicious forged letter which it was claimed had been written by Lord Ryder, Chairman of the NEB, to Mr. Alex Park, chief executive of British Leyland. The letter sought to give the impression that the Government, Lord Ryder and Mr. Park condoned, indeed approved, a worldwide web of bribery and conspiracy run by British Leyland to defraud foreign Governments. The Secretary of State for Industry made a statement about the matter last Thursday, but the revelation that the letter is a forgery has been made since the House rose on Friday.
This is a matter of the utmost importance. The House will remember the repercussions of the Lockheed scandal for countries such as Japan and Holland. Had the letter been genuine, it would almost certainly have led to the resignation of my right hon. Friend the Secretary of State for Industry. It might even have led to the downfall of the Government.
As the International Herald Tribune pointed out last week, the allegations were made only 11 days after our Prime Minister signed a pledge, made at Downing Street by the major nations of the West, aimed at stamping out international corruption. If the letter had been true, this country and Government would have been seen throughout the world to have acted dishonestly and dishonourably, to have attempted deliberately to mislead and cheat our partners in the West.
In addition, the letter could also damage our export performance. In all these circumstances there was a clear obligation on the Daily Mail to check—indeed, to double check—the authenticity of the letter. In my view, the Daily Mail did not do so adequately, and it is therefore guilty of gross irresponsibility.
I believe that the matter is urgent because it is difficult to expunge the memory of a filthy smear of this sort. Speedy action is needed if this matter is nor to be allowed to fester. In addition, the House needs to consider the position of the newspaper and the editor who allowed these allegations to be published.
This is not the first time that the Daily Mail has published a forged letter.

1015
Should this newspaper be allowed to publish such documents with impunity? Should a Select Committee of this House be established to go into the whole matter?
I believe that the House should give urgent consideration to these weighty matters. It is not possible to raise them by other means, as the recess begins on Friday. Therefore, I earnestly appeal to you, Mr. Speaker, to allow them to be considered under Standing Order No. 9.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purposes of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the action of the Daily Mail in publishing a forged letter purporting to implicate the Government and the National Enterprise Board in allegations of bribery by British Leyland".
As the House knows, I am directed to take into account all the factors set out in the Standing Order, but to give no reason for my decision. It is not for me to decide whether this matter should be debated, but whether it should have precedence today or tomorrow.
I have given careful consideration to the representations made by the hon. Gentleman, but I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.
Mr. Mendelson: On a point of order, Mr. Speaker. In view of the opinion expressed when the Standing Order was changed, namely, that an earlier opportunity should be provided to discuss urgent matters, and the hope that that widened opportunity, which has been agreed by the House, should be employed before the country's interest is lost in such matters, is it not possible for you to consider whether a matter such as this, which could stain the honour of the Head of one of Her Majesty's Departments and impede the conduct of Her Majesty's general affairs, should be debated before the relevant time has passed? In other words, will you not reconsider your decision?
Mr. Corbett: On a point or order, Mr. Speaker—
Mr. Speaker: I hope that the hon. Gentleman has a point of order and is not rising to ask me to change my mind. [An HON. MEMBER: "Why not?"] Because I have given my ruling, and the rule stands.
Mr. Corbett: Is there any advice you can give, Mr. Speaker, on how a Member of Parliament, representing a constituency that contains a British Leyland subsidiary employing 1,100 of my constituents, can obtain your protection against the irresponsible actions of the editor of a national newspaper? I in no way seek to question your ruling, but I am asking whether there is any way open to an hon. Member to see that this matter is brought into the open.
Mr. Speaker: I am quite sure that the hon. Gentleman knows the parliamentary means that are open to him, and I cannot add to them.

PIG SUBSIDY (EUROPEAN COURT RULING)
Mr. Torney: On another point of order, Mr. Speaker. Will you please advise me how I can secure a debate on an issue affecting sovereignty and a decision challenged by the EEC? The EEC has ordered our Ministry of Agriculture to withdraw the pig subsidy to British farmers, a Government subsidy. Can you advise me how this important decision, which threatens the pig and bacon industry, may be debated in the House before the recess?
Mr. Lee: Further to that point of order, Mr. Speaker. Could you also rule whether, as a consequence of the decision by the European Court, the Government, and possibly parliament, are in contempt of the court? Will you issue a directive to the Serjeant at Arms to bar the way of the tipstaff if he should come to this House to arrest the Minister or any other person seeking to carry out the functions of the Government in defiance of the Community's order? Will you take that course so that the House may know the position, and so that we know whether you may be in the same peril as was your predecessor, Mr. Speaker Lenthall, many years ago?
Mr. Skinner Mr. Skinner rose—
Mr. Speaker: Is this on the same point of order?
Mr. Skinner: I was wondering, Mr. Speaker, whether you could offer some advice to many of my hon. Friends—
Mr. Speaker: Is the hon. Gentleman seeking to raise a point of order?
Mr. Skinner: I shall do so eventually.
Mr. Speaker: Perhaps the hon. Gentleman will come to the point.
Mr. Skinner: The point relates to the fact that hon. Members will be able to raise the important matters to which reference has been made if they care to stay for the debate later in the week on the motion to adjourn for the Whitsun Recess. They can then raise to their heart's content all the subjects they like.
Mr. Speaker: Not for the first time, the hon. Gentleman has given us some advice.
Hon. Members who raised matters earlier will appreciate that I allowed them to make their points, but there is nothing I can do about the arrangement of business.

BILL PRESENTED
  TICKET TOUTS
  Mr. Gwilym Roberts Mr. Gwilym Roberts presented a Bill to prohibit the sale of tickets for sports and entertainments at a price above their original price; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 15th July and to be printed. [Bill 123.]

BROADCASTING
Mr. Speaker: Before we turn to the main debate, I must point out that it is clear from the long list of right hon. and hon. Members who have indicated that they hope to catch my eye during the course of the debate that they will not all be able to do so. The list of people who wish to speak is long and that makes the need for shorter speeches all the more important.
3.40 p.m.
The Secretary of State for the Home Department (Mr. Merlyn Rees): I beg to move,
That this House takes note of the Report of the Annan Committee on the Future of Broadcasting (Command Paper No. 6753).
I look forward this afternoon to a wide-ranging debate on the Annan Report on the Future of Broadcasting. I should like to preface my remarks by repeating my thanks to Lord Annan and his Committee for the outstanding service that they have rendered.
When I announced the publication of the report on 24th March, I said that I hoped that it would be discussed inside and outside Parliament and that I should welcome comments from anyone who felt they had a contribution to make. We have already received a large number of letters, most of them, I might add, about the Committee's proposals for local radio. I am glad to see that a number of organisations are holding conferences and seminars on the report and that there is a continuing debate on the future of broadcasting on radio and television.
However, the centre pieces of the process of consultations on the report are, of course, the debates in both Houses of Parliament. One thing that emerges from the report itself, and from the debate that has so far taken place on it, is that the Government were right to institute the inquiry in the first place. I was pleased to see that this was acknowledged by Lord Carrington in the debate in another place last week.
What are the next steps? The period of consultation ends at the beginning of July. I shall then take stock of all that has been said about the report and formulate proposals for the future structure of broadcasting, which I can put to Parliament. It may be that a White or

1019
Green Paper will be an appropriate form in which to announce my proposals. Obviously legislation of one kind or another will be necessary to deal with the future structure, but in any event the IBA Act, under which the Independent Broadcasting Authority is constituted, and also the BBC's Charter expire in July 1979.
I note that views on the report have already been expressed by the Conservative Party. I must proceed on the basis, however, that there is a wide variety of views on the future of broadcasting in all parties and inside and outside Parliament; and my aim is to consider all of them before reaching any decisions.
What impressed me most about the report—and Lord Annan articulated the point at the end of his recent Fleming Memorial Lecture—is what the Committee did not recommend. It did not recommend any fundamental change in the constitutional arrangements for broadcasting in this country.
In fact the Committee's views on this are reflected in its first recommendation:
"Broadcasting services should continue to be provided as public services and should continue to be the responsibility of public authorities. These authorities"
—of which, of course, it recommends two in addition to the BBC and the IBA—
"should be independent of Government in the day to day conduct of their business."
I can think of no more succinct summary of the existing constitutional arrangements for broadcasting in this country—arrangements that have been endorsed by successive Governments and that I take this opportunity to endorse on behalf of the present Government.
It might be worth reflecting on this recommendation because in doing so I may be able to indicate the way in which I approach the report in my capacity as Home Secretary. The concepts of a public service and of a public authority are fundamental to broadcasting in this country. They date from the earliest years of broadcasting and they embody the solution that we in this country have adopted to the problem of reconciling valid, yet conflicting, claims to control broadcasting.
On the one hand, as the Committee said
1020
"However broadcasting is organised Governments in the last resort have responsibilities for the use of the radio spectrum".
On the other hand, we have also recognised in this country that broadcasting is too important to be left to anyone, or to any group—including the Government of the day, but not forgetting interest groups of various kinds—who might be tempted to use it for their own ends. We have therefore vested control over the output and management of broadcasting in public authorities accountable through the Home Secretary to Parliament. This concept has proved its worth over the past 50 years and, as I have said, the Government believe, with the Committee, that it should be retained.
This of itself is a tribute to the existing broadcasting authorities. The Committee has paid them the compliment of judging their respective performances by only the highest standards. And in the end the Committee has been able to say, in relation to the BBC:
"we conclude that the public is getting good value for its licence fee";
and in relation to the IBA:
"the achievement and success of the British system of organising commercial broadcasting ought not to go unrecorded".
I come now to my approach to the Annan Report. Under the constitutional arrangements that I have described, my primary function as Home Secretary is to ensure that the framework of broadcasting in this country is the best that can be devised to ensure that broadcasting is as good as it can be.
A large part of the report is devoted to the consideration of what the framework should be. There are also comments and recommendations in the report that do call for action not so much by Government as by the broadcasting authorities and the broadcasters themselves.
In saying this I do not mean to inhibit our debate this afternoon. This House has the right and the duty to express its views on these matters, and I know that these views will be considered carefully by the broadcasting authorities.
As I said earlier, the main question with which I shall be faced at the end of the period of consultations on the report is what will be the best structure for broadcasting for the next decade or so—possibly up to the turn of the century.

1021
When the Annan Committee came to consider this question, it did two things. First, it tried to see what the future held in technological terms—and here the Committee had in mind, for example, teletext; the possibilities of additional local and national radio services and of a fifth or sixth television channel; and the possibilities which broadcasting by satellite might hold.
Secondly, the Committee tried to see what kinds of services people would want in the future—and here it saw the likelihood of increasing demands for a larger number and a greater variety of broadcast material. From this view the Committee derived what it called "four requisites for good broadcasting"—flexibility, diversity, editorial independence and public accountability. The first is that the structure of broadcasting should be flexible enough to accommodate the kinds of changes and development which the Committee foresaw. The second is that the structure must permit and encourage diversity.
As I said on 24th March, I accept these objectives. This does not mean, however, that I necessarily accept the structural changes recommended by the Committee to achieve them. There are other possibilities, many of them discussed in the report, and I shall want to consider all of them in the light of the report and in the light of the comments on it.
The other two requirements that the Committee identified for good broadcasting, and that I have also accepted, are part and parcel of the Committee's endorsement of the existing constitutional arrangements: the requirements are editorial independence and public accountability. The Committee felt that there was room for improvement as regards both of them. On the latter, the Committee felt that the broadcasting organisations should be made
"more responsive to the opinions of the public"
and many of the Committee's recommendations are directed towards this goal.
I judge that there is a substantial measure of agreement about the four requisites or principles that the Committee identified. However, as Mr. John
1022
Grist observed in a recent article in The Listener,
"it is in the working out of these principles into organisations that there is room and need for debate."
While the Committee recommended that the BBC and the IBA should continue basically in their present form, its two most important recommendations, which it saw as strengthening the flexibility and diversity of broadcasting, are those for the establishment of the Local Broadcasting Authority and for the establishment of the Open Broadcasting Authority. It would be a mistake, however, to think solely in terms of institutions. Our first task must be to reach a view on what kinds of services we want to see provided by local radio and on the fourth television channel.
So far as local radio is concerned, the Committee's view of the kind of service which should be provided will command a good deal of respect. In its view, a local radio station should
"help to create opportunities in a community. It should be used by those who want to communicate…Local stations should help to bring the community together."
On this last point, I would observe that local radio can play a vital part in bringing together the new communities which have been formed by local government reorganisation.
The first question that occurs to me is, what do we mean by "local" and "community" in the context of local radio? The answer to this question has important implications in frequency terms and in financial terms, and also, I suspect, in terms of the amount of local material which could be generated.
Another important question is to do with competition in local radio. I would make two points here. First, we must remember that even in an area in which there is only one local radio station, that station will be in competition with the national radio services provided by the BBC. Secondly, I wonder how much room there is, at any rate in the smaller areas, for competition between more than one local radio station as regards the element of their output which is genuinely local.
If, as I am sure, there is a wide measure of agreement that local radio is here to stay, the question then arises whether we need new institutional

1023
arrangements. The Committee felt that a single authority would in the long run be more successful than the perpetuation of the present duopoly; and also that this authority should be neither the BBC nor the IBA, but a new authority.
The options seem to be, first to create a new authority as the Committee recommended; secondly, to extend the existing pattern so that as many places as possible receive both a BBC and an independent local radio service; thirdly, to allocate different parts of the country to the BBC and the IBA for local radio purposes; or fourthly, to hand local radio over entirely to either the BBC or the IBA.
The choice is not easy, and I particularly want to hear what people have to say about various options.
I also want to hear what people have to say about the other major decision with which I shall be confronted, the question of the fourth channel. Again, I start with the question of what kind of service do we want. The Annan Committee obviously wanted a different service. It wanted programmes which
"say something new in new ways",
and it believed that both the pool of talent and the demand from the public was large enough to support such a service.
Could the service they had in mind be provided by independent television? The Committee was clear that the fourth channel could not operate without a substantial contribution from independent television. It felt, however, that the kind of diversity it was after was more likely in the long run to be provided by a separate authority "publishing" material from a variety of sources, including the independent television companies, than by independent television as it is now organised. I note that in their evidence to the Annan Committee, the Independent Television Companies Association also envisaged a new institution, a Television Foundation, which they proposed would have a share of the fourth channel and which would have, in relation to this share, a rôle not dissimilar from that which the Committee proposed for the OBA.
The biggest question mark that hangs over the proposals seems to me to be their financial viability. The Committee
1024
itself recognised that a fourth channel service of the kind it had in mind would have to await an improvement in the economic climate. But the question remains whether such a service could pay its way even then without a rather larger contribution from the public purse than the Committee envisaged.
As my noble Friend said last week in another place, we do not find the report wholly reassuring on this aspect. We are quite clear, however, that we cannot have the fourth channel for nothing—even if we simply handed it over to independent television. A new service cannot be provided without additional resources, and it is quite clear that some part of the necessary finance would have to be provided, certainly in the short term, either directly or indirectly by the taxpayer.
Another aspect of the proposals with which I have found some difficulty is the suggestion in the report that the requirement that controversial matters should be treated with due impartiality might be relaxed in the case of the OBA. I can see that a case might be made out for relaxing the requirement of "proper balance". This, in a sense, is implicit in the Committee's concept of the service which it thinks should be provided on the fourth channel. But what about the requirement of
"due impartiality in the treatment of controversial matters"?
As I read the report, the Committee seemed to feel that this requirement should be dispensed with. Perhaps this is also implicit in its view of the rôle of the proposed authority as a publisher of other people's material. But it amounts to a fairly radical change in the traditional responsibilities of the broadcasting authorities. There can be no doubt that it would indeed be
"an experiment in new ways of exercising responsibility for broadcasting".
Like all experiments, it would carry risks and the question to which we shall have to give the most careful consideration is whether, with a medium as important as television, they are risks we can afford to take.
The House will appreciate that I am personally much concerned about what has been said on the relationship between television and the Welsh language. I should like therefore to underline what

1025
my noble Friend said last week in another place. The Government have reaffirmed their commitment to the project for a fourth channel in Wales, in the Welsh language. The House will appreciate that in the present economic climate provision cannot yet be made for the necessary expenditure. However, officials in the Home and Welsh Offices are about to begin discussions with the broadcasting authorities on how progress might be made so that, when the necessary funds are available, an immediate start can be made.
There is one other matter that I have noted has been discussed since we published the report, namely that of regionalism. Everyone rightly feels that it would be wrong for the broadcasting authorities to be too metropolitan in their outlook. They must have proper links with the regions and with the artistic talent that is not based in London. The Committee went so far as to suggest that the IBA should be renamed the Regional Television Authority. It is true that the IBA derives strength from the fact that it is an amalgam of regional companies, but it provides a national network and it has been suggested that the proposed new title does not correctly convey the way in which the IBA works.
There is a different problem with the BBC. It, too, has its regional base and the report is clear that its three network production centres in England—in Birmingham, Bristol and Manchester—should continue.
The Annan Committee had doubts whether the eight regional television centres in England which produce weekday evening regional news and magazine programmes should continue in their present form. The Committee does not come down in favour of abolition but it suggests a possible change of function so that they can concentrate on local news programmes. The House will not expect me to express views on this matter, which is for the BBC, but I am sure everyone will agree that some form of BBC regional organisation and a means of providing a local news service is essential to the health of its progress.
I turn now to the Committee's recommendations for improving the responsiveness of the broadcasting authorities and of the broadcasters to the public at
1026
large. The Committee rejected the idea of a Broadcasting Council or some other form of tribunal of taste set above the authorities, as it were, to police them, and I am bound to say that I find the arguments against placing a new body over the existing authorities to be powerful ones.
How, then, can the broadcasters be made more responsive? What the Committee has suggested is that there should be a system of public hearings conducted, on the one hand, by the broadcasting authorities themselves—and here I should acknowledge that the authorities already conduct some public hearings—and, on the other, by a new body which it called the Public Enquiry Board for Broadcasting.
I can see the attraction in the idea of public hearings, but I must tell the House that I do not think we should be justified in creating a new organisation unless we were satisfied that this was clearly the only effective way to meet a demonstrable need.
What I am clear about, however, is that there is public concern about a number of issues in broadcasting—and I mention programme content again because this seems to me to be the most important; that this concern must not be ignored; and that means must be found, if they are not already to hand, to enable this concern to be expressed.
I come finally to a particular aspect of concern relating to programmes, namely, concern about the arrangements for dealing with complaints of misrepresentation and unfair treatment in programmes. The Annan Committee concluded from the evidence it received that—and I quote from paragraph 6.16—
"if the Broadcasting Authorities themselves appoint such bodies"—
that is, bodies to handle complaints—
"however impartial they may be, the public and complainants will never be convinced that an independent judgment is being given."
This is a substantial argument—and not just in the broadcasting field. The Committee went on to recommend a single independent Broadcasting Complaints Commission to deal with the complaints about misrepresentation and unfairness. It thought the commission should have powers to require the broadcasters to publish its adjudications and, where

1027
appropriate, to broadcast an apology. These are attractive proposals from my point of view and for which I think I detect a fair measure of support.
I shall be urged, I know, not only to accept the Committee's recommendations for such a commission but to extend its remit to cover complaints about programme content generally. On this, I would only say at this stage that I share the Annan Committee's view that there is an important distinction to be drawn between complaints of misrepresentation and unfairness, on the one hand, and complaints about programme content generally, on the other. As my noble Friend the Minister of State remarked in another place last week, the former seem to us to be susceptible to the kind of quasi-judicial treatment and—what is more important—to the kinds of remedies proposed by the Committee, whereas such an approach in the case of the latter would seriously detract from the responsibilities of the broadcasting authorities.
I have attempted to indicate the way in which I shall be approaching the report and the comments which are being made on it. The debate this afternoon is an important part of the discussion.
Mr. Alexander W. Lyon: My right hon. Friend is clearly coming to his peroration, and perhaps I can get in one point which he has omitted but which is of great concern to most people in relation to broadcasting—the price of the licence fee. The Home Affairs Group, of which I am Chairman, took an almost unanimous view that no further increase in the licence fee was justified and that any increase must come about through advertising or out of a levy on independent programmes. I hope that my right hon. Friend will take that into account.
Mr. Rees: I shall. I am not offering a view whether I agree with what my hon. Friend said. Given the size of the report, I felt that if I were to deal with every point that was raised I should take far too long. I do not deny that finance is important. Indeed, I said about the OBA that finance was of the greatest importance. If I catch your eye later this evening, Mr. Speaker, I shall try to pick up some of the points that hon. Members have made and which they consider important. I would rather do that later than do what Front Bench speakers
1028
usually do, and that is speak for too long. I hope to speak briefly this afternoon, but I shall take in the points that are made.
I look forward to continuing wide-ranging debates outside the House. This is not the time when the Government should reach their decisions. What we have to do is to listen and then to respond. We shall do so within the framework of public service broadcasting. We must be conscious of the decades that follow. People will change, their needs will change and, as I realised when I became Home Secretary and delved into this, the technology of broadcasting will change. Great changes are possible in the decades ahead. We must provide flexibility and take all those factors into account.
None of us underestimates the importance of broadcasting in our society. It is now integral to our way of life, both as individuals and as a community. We have in the twin concepts of public service broadcasting and of the broadcasting authority a firm and well-bred foundation on which to build for the future. We have in the Annan Report a vision of what the future might hold and how we might meet tomorrow's needs. However, in reaching decisions we cannot afford any mistakes. But, by the same token, we cannot afford to miss any opportunities. It is the job of the Government to listen and then to come back to the House with specific proposals.
4.7 p.m.
Mr. William Whitelaw: I join the Home Secretary in expressing thanks to Lord Annan and his Committee for all their hard work in producing a most important report.
My task is somewhat different from that of the Home Secretary. He said that it is the job of the Government to listen to the views expressed in this debate. It is my task, on behalf of the Opposition, to express some of our views, and some of my own personal views which might not accord with those of many of my colleagues.
I was one of those who were basically opposed to setting up the Annan Committee at all because I considered it unnecessary and possibly even dangerous to subject our system of broadcasting to regular root and branch reviews which occupy many people's scarce time and

1029
may well lead only to a prolonged period of uncertainty. But Lord Annan and his Committee have convinced me that I was wrong by producing a report which is not only lucid and readable but gives a chance to consider with the Committee the basic method by which we should regulate our broadcasting system in the future. That is surely valuable, because it enables us to stand back and review as a whole the relationship between Government, Parliament and viewers, on the one hand, and the broadcasting authorities, on the other, which has inevitably developed piecemeal over the years by trial and error.
As a start it is certainly encouraging, though never a reason for complacency, that after two and a half years of study Lord Annan himself believes that his report should be read as a massive vote of confidence in the British way of regulating our broadcasting system. He has also stated that at the end of its labours the Committee had no doubt that British broadcasting was the best in the world.
Against that background, it is important to consider not only the changes which the Annan Committee proposes but also those parts of the system which it recommends should be left as they are. Although these negative recommendations, as one might call them, have inevitably attracted far less publicity and comment, they are, in my judgment, probably the most important part of the report. I agree with much of what the Home Secretary said on this aspect. Before I come to the proposed changes, on which I find myself in some cases in disagreement with the Annan Committee, I want to say something about its support for the existing arrangements, with which in general I agree.
I was interested to note that Lord Annan and others believe that we have discovered the secret of regulating our broadcasting through independent authorities while preserving editorial independence. I hope and believe that we have, but preserving that balance is a most difficult operation and will always be subject to stresses and strains which we in this House have the duty to overcome.
First, we have to maintain the independence of the authorities from Government and Parliament against the background of the inevitable love-hate relationship between
1030
politicians and broadcasters. As politicians, we know—and if we do not, we ought to—the enormous power of television and radio as a means of communication. That power gives a temptation to us to interfere, and the more powerful the politician, the greater the temptation. It is a real danger from Governments—let us face it honestly, from any of us in Government, whatever our party. So Government and Parliament must unite in preserving the system of the basic independence of the broadcasting authorities as a means of protecting ourselves from doing our nation a great disservice.
I can claim considerable experience of this relationship between Government, Parliament and the broadcasting authorities. I have gained this experience as Opposition Chief Whip for six years, as Leader of the House of Commons for two years, as Chairman of the Conservative Party in the difficult broadcasting times leading up to and during a General Election, and as the longest-serving member of the inter-party committee on broadcasting. I have now survived in my membership of that committee all the directors-general and all the chairmen of both authorities, and still I am there. So I am entitled to say that I know something about it. As a result, I want to make a special plea for the maintenance of the strength of the independent authorities against political pressure.
Of course we have the right to complain—a right very extensively used. But the authorities must have the standing to resist when they believe us wrong, and also to admit their mistakes—something which weak authorities and weak people seldom have the courage to do. That is one of the main reasons why I support the majority of the Annan Committee in opposing the splitting up of the BBC, which would, I believe, inevitably weaken its position.
I am sure that if the BBC were to be split up, the independence of producers would suffer. I believe, too, that the BBC's international standing, based on the external services, would also suffer because people overseas would not understand why this organisation, which they so admire was suddenly to be split up.
Resistance to pressure and the maintenance of independence is also the reason why I support the present relationship

1031
between the Government and the BBC governors and the IBA board. The present method of appointment to both boards for a specific time with an option for reappointment seems to me to work satisfactorily. I am not sure that I would go as far as the Annan Committee in insisting on an affirmative resolution before the dismissal of the majority of a board on important policy grounds, because I do not believe that any Government could take such action without a parliamentary row and debate.
I can foresee difficulties arising which all concerned might regret if a debate had to take place whatever the situation. In my time in Parliament, I have had considerable experience of occasions when it has appeared to be sensible always to have a debate, but when the time has come for the debate to be held everyone on both sides of the House has wished desperately that it was not going to take place. I can foresee such a situation in this case, and I would not go as far as that recommendation by the Annan Committee.
The maintenance of independent authorities is also a major factor in continuing to finance the BBC through the licensing system. Here, I want to refer to what the hon. Member for York (Mr. Lyon) had to say on the matter. I know from personal experience the difficulty facing a Government in raising the licence fee, when they, as nearly always, are fighting inflation. But I find the arguments in the Annan Report against any other method of financing wholly convincing.
If, for example, the BBC were to be financed by general taxation, there would always be the temptation for any Government to encourage compliance with their views through greater rewards, or to punish the BBC for alleged misrepresentations or unfair treatment by financial cuts. I do not regard these dangers as wholly illusory. I have heard remarks by members of Governments of both parties leading me to the view that such arguments could take place, and if they did, they could lead to dangerous consequences.
In this connection, it is also important to point out that, after its exhaustive study, the Annan Committee concluded that the public are getting good value
1032
for the licence fee. The hon. Member for York suggests that it might be possible to change the licence fee, not by going on to general taxation but in some way through advertising. I believe that the essential difference between the BBC and the IBA and the independent television companies is that the BBC is not tied to any advertising revenue. I believe that the whole difference between the two systems, which is very important in our national broadcasting, would be considerably undermined if the position were in any way changed.
Mr. Clement Freud: Would not the right hon. Gentleman also agree that the important thing for the BBC is to know how much money it is going to receive in order that it can plan its programmes, and if, in any way, the income were dependent on the economic ups and downs of advertising, that would be totally impossible?
Mr. Whitelaw: I agree on that point.
In considering the question of the licence fee, there are those who suggest some form of indexing. But I would regard that as a recipe for over-much spending by the BBC and some relaxation of what I believe to be the very strict procedures it deals with, and has to deal with, because of the constraints of the licence fee. I would not in any way go down the index-link road. It is fair to say that we have gone down that road on other matters and that some of us have doubts as to the wisdom of such a course.
Therefore, I hope that we shall stick to the licence fee and settle it at reasonable intervals which will give the BBC the opportunity to plan ahead but will equally keep it restricted to what it can hope to achieve. I think that that is the best way of proceeding.
Mr. Eddie Loyden: I think that the right hon. Gentleman will carry most of the House with him on the question of the continuance of the issues that he has outlined. However, does he agree that that ought not to bring about a situation that is to the financial disadvantage of the BBC?
Mr. Whitelaw: It depends what one means by the phrase "to the financial disadvantage of the BBC." I think that it is inevitable that Governments will

1033 have to argue and wrestle with their own feelings before they decide on making increases in the licence fee from time to time. I believe that all of us ought honestly to consider—I say this while in Opposition, and I hope that it will be felt to be important—that where the Annan Committee says that the viewers are getting good value for their licence fee, it is reasonable to accept it. If we accept that proposition, we can proceed on a more sensible basis when we have to face what is inevitably the political difficulty and unhappiness of increasing the fee from time to time.
I do not know of a better system. I am reinforced by the fact that, having studied it very exhaustively, the Annan Committee could not find one either.
There are also certain aspects of the report concerning the independence of the authorities in their relationship with the public which conveniently fall to be dealt with in this part of my speech. I am greatly relieved—as I note, I think, was the Home Secretary—that the Committee has not proposed some overall broadcasting council, which would have meant inevitably more bureaucracy and more cost, for no obvious reason. I believe, as I shall make clear throughout my speech, in the maintenance of the existing authorities. I believe also that the Annan Committee's view that the IBA's control of the companies had over the years worked fairly and satisfactorily is right. Therefore, I would personally prefer to keep this position.
Rather in the same way, I cannot support the suggestion—and I think that the Home Secretary was of the same mind—for a Public Enquiry Board. Once again, there would be more bureaucracy and cost, just at a time when at any rate most people are seeking means of sensibly reducing public spending. Indeed, the Committee itself appeared to me somewhat to undermine its own proposal by its strong advocacy—with which I agree—of more public hearings in different parts of the country by the existing broadcasting authorities. Such hearings would give the viewers the chance to express their ideas and their feelings direct to the broadcasters, and so to the authorities. I would only hope that if such hearings take place they will be well attended, and that the many people who
1034
complain to us, as their Members of Parliament, and widely in other fields, will take the opportunity of attending the hearings and putting their particular proposals and ideas to those who are responsible for the actual broadcasting.
That needs to be said because so often in our society a great many people are very voluble and very interested, but when it comes actually to going somewhere and telling someone of their views, they suddenly achieve a remarkable degree of reticence, which we ourselves do not normally find. Therefore I hope that they will do that.
I hope also that these hearings will be encouraged particularly in some of the remote parts of the country where some of us and our constituents live, in conditions which are not so akin to savagery and barbarism as is frequently imagined by many of those who live south of Watford.
On the other hand, my opposition to new bodies does not extend to the Broadcasting Complaints Commission, covering both authorities, that the Committee proposed. I think that this very modest—I trust—extension of bureaucracy would be widely welcomed by the viewing public as giving them a thoroughly reasonable right.
Lastly in considering existing authorities and their independence, I want to comment on programme standards. There is no doubt that many of the viewing public are very concerned at the effect of broadcasting on values in our society, particularly when it comes to bad language, violence and sex. Those who sneer at Mrs. Whitehouse and her supporters are, I believe, very unwise. On the other hand, over-strict censorship and a refusal to admit to many facets of life as it is can, I believe, particularly with young people, frequently be counter-productive.
In this difficult area I am, however, quite certain about one point. We in this House should not set ourselves up as judges or censors in these matters. By all means let us pass on the views of our constituents to the broadcasting authorities. Let us complain ourselves. Let us argue with the authorities and the producers. But let them decide. If the Governors of the BBC and the members of the IBA Board fail in their duties to

1035
maintain the right balance in programme standards, let the Government, when it comes to appointments or reappointments, exercise their right and duty to make changes.
Let the Government, in considering appointments, try to attract men and women from as wide a spectrum in our society and from as many different age groups as possible. In this connection, I frankly cannot understand the Committee's proposal that the number of BBC Governors should be reduced from 12 to nine. It seems to me that this cuts totally across the idea of getting as broad a spectrum of people as possible, which would seem to me wholly desirable.
Here, however, I would sound one note of warning from experience. It is not as easy as is often imagined to attract men and women who live far from London and are busy earning their own living to give the time necessary to serve on the various boards. Efforts to attract people from different walks of life and different age groups frequently founder because of this problem, which has confronted all Governments over the years.
I turn to the particular recommendations that have attracted most discussion and controversy. First there is the proposal to give the fourth television channel to a new body, the Open Broadcasting Authority. Despite my basic dislike of new bodies, which lead to more bureaucracy and cost, I certainly appreciate the Committee's purpose. It wanted to ensure, as I understand it, that when a fourth channel was introduced it would provide programmes of different sorts, that minority interests would be catered for, and that independent producers would have greater opportunities. The thinking behind the proposal for the Open Broadcasting Authority was, therefore, both original and imaginative.
But alas, to my mind and to many other people—including again, as I understand it, the Home Secretary—it has a fatal flaw, as set out in paragraph 15.23 on the report, in page 237. Proposals for financing it simply do not stand up to examination. The paragraph on finance bears all the hallmarks of an almost desperate search for ideas. Some of the tentative suggestions might provide some money, although surely not enough. Others strain the imagination too far.
1036
For example, programmes produced by the CBI and the TUC for the benefit of their members would seem most unlikely to attract many viewers—if, indeed, the bodies concerned were prepared to spend the very considerable sums of money involved. From what both bodies say, and from what I understand one of those bodies says from time to time to the Labour Party, they do not seem to have sums of money of this size, so possibly they would not wish to continue along those lines.
Mr. John Mendelson: Without decrying that suggestion altogether, it is, however, a fact that in the United States a number of major trade unions finance programmes, and those programmes are both popular and successful.
Mr. Whitelaw: I do not wish to decry or laugh at the suggestion, but I think that it is extremely unlikely to be effective in our present society. It may be that the situation could change. Perhaps there would be difficulties. I have my suspicions, and I have no doubt that the hon. Member for Penistone (Mr. Mendelson) would have his own whether the bodies concerned would ever seek to embark on what would be a particularly hazardous course for them. Perhaps they might, but I have my doubts.
One then comes to the question of the education authorities—
Mr. Phillip Whitehead: The right hon. Gentleman has had his fun while talking about paragraph 15.23. If he turns the page and looks at paragraph 15.24 he will see that the rest of the programmes are to be financed by advertising organised in a different way—by block advertising.
Mr. Whitelaw: I accept that, and I hope that the hon. Member for Derby, North (Mr. Whitehead), whose contribution to the report I most certainly recognise, would not imagine what I have said is knocking the principle behind the Open Broadcasting Authority or the ideas put forward in the report. I intend to come to how I believe this matter should be met.
I do not believe that the particular methods of financing the proposals would work. I therefore want to turn to the other side of the coin and to say how I

1037
think the ideas of the Committee could be met in a different way. That is my purpose, and I hope that the hon. Member for Derby, North will recognise it. I would add that I doubt whether the educational budget, which is already very strained, would be a likely source of extra funds, as is proposed in paragraph 15.23.
I believe—and I am sure that the hon. Member for Derby, North recognises this—that the proposed new authority would be extremely reliant on the IBA and the ITV companies for many of the necessary transmission and technical services. It would therefore seem sensible to start the other way round, by giving the fourth channel to the IBA and ITV companies, which can immediately provide the necessary equipment and skills, but on conditions that would meet the Committee's main purpose.
In their evidence to the Annan Committee, the companies suggested that there should be an independent programme board which might allocate time to a television foundation. Their idea, to quote from the report, was that
"ITV2 earned the revenue and siphoned off part of it to subsidise programmes unlikely to be economic propositions on their own."
I believe that many people envisage that they would take over the Open University programmes from BBC. My hon. Friend the Member for Conway (Mr. Roberts), who has specific knowledge of this subject, will, if he catches the eye of the Chair, no doubt speak of the need for Welsh language programmes, which I understnad Harlech Television could certainly provide under these circumstances.
It has also been suggested to me that another method might be for the IBA to have a special board from its own members to deal with the fourth channel. Surely proposals such as these should be carefully considered, for in principle there can be little doubt—
Mr. Whitehead: They were.
Mr. Whitelaw: I note that the hon. Gentleman says that the proposals were carefully considered. I start from the same basis as the hon. Member for Derby, North does of providing different sorts of programme, but I believe that the way that I am proposing of reaching the goal that he and I seek is a better and a more likely one than his. That is the difference
1038
between us—not the purpose of particular programmes on a fourth channel. Surely there can be little doubt that ITV2 is the only means of using the fourth channel reasonably quickly, as the Committee itself accepted, and on a sure financial basis.
Mr. John Gorst: Will my right hon. Friend say, within the context of what he has said are his own views, whether he totally rejects the proposition of sponsored programmes in the American form, which the Committee rejected?
Mr. Whitelaw: Frankly, I have some doubts about embarking on sponsored programmes, as did the Annan Committee. I believe that many hon. Members and many people outside the House would also have doubts. It is reasonable to consider such programmes, but the Committee did not think that they were the best way of proceeding. I have grave doubts myself, but by all means, if it can be proved that they are a good way of proceeding, we should certainly consider them.
Surely it is true that ITV2 would provide an outlet for spare resources and equipment, and fresh opportunities for talent, which most people accept is at present unused. If a plan on the sort of basis that the ITV companies suggested—and which I would support—could be instituted, I would not feel so obsessed, as the Committee did, about this ogre of duopoly, which seems to have occupied the minds of Committee members to a considerable extent. Nor do I believe that the proposals that I have set out would be of great extra cost to the taxpayer.
I accept that there would inevitably be some diminution in the levy in the early years, but I doubt whether the cost to the taxpayer would be as great as the Home Secretary implied.
Then there is the future of local radio. Again, for reasons of bureaucracy and cost, I would not favour the proposal to set up a new authority, nor can I see why it should be necessary. As the IBA is at present constituted, it is perfectly capable of controlling local radio, and this was recognised by the Committee. No one should imagine that this new authority could simply be established by hiving off the local radio divisions of the IBA. That is flying in the face of all

1039
experience of setting up new authorities or new bodies in any sphere of national life. We all know quite a lot about that subject, and we all have experiences which we would be unwise to forget.
I have a more fundamental objection to the Committee's proposal, and on this point I find myself in complete agreement with the minority report of Mr. Tom Jackson. It happens that my constituency in Cumbria is served by BBC Radio Carlisle. I doubt whether the size of population would make a commercial radio station a viable commercial proposition. Be that as it may, Radio Carlisle has been immensely successful and has made itself part of the life of the community with, for example, farming broadcasts, special features of interest to old people, local discussion programmes and also—although possibly this might not commend itself to everyone—it gives considerable opportunities to local Members of Parliament to appear on its programmes.
My constituents would be furious if anyone threatened to deprive them of the type of service that Radio Carlisle provides, and I must tell the House that I would, too. When I read the Annan Committee Report I wondered whether I was incapable of seeing the wood because of the very large tree on my own doorstep, but since then I have talked to people who run BBC local radio. I have found that they have a real sense of mission in providing a true local community service. I am not in any way prepared to be put off this view by people who say "Oh, they have been trying to sell you a line". I have been in politics long enough, and enough people have tried to sell me a line over the past 20 years, to be somewhat proof against their activities.
I do not believe that they have been unreasonably trying to sell me a line. They have been stating what they believe about the particular service which they seek to provide, that it is a very real service in the sense of being a true local community service. That in its turn is something that commercial local radio, by its nature, would not provide because its advertisers would not support the kind of programmes that small minorities in a local community require.
I also support those who consider that it would be a great mistake in any event
1040
to deprive the BBC in any way of its regional functions and to allow it to retreat to its metropolitan base. There are those who feel that the licence fee should not be used to finance BBC local radio, but, for the reasons I have stated, I do not agree, particularly as the sums involved should be small. The BBC assures me that they are. There is some argument about this, but I am convinced that they are small and therefore I would not feel that factor to be a bar.
Equally, more commercial radio stations providing their particular type of programmes can be set up in other areas and would provide the service that many people require. Therefore I would accept some extension of both BBC and commercial local radio stations since I conclude that they provide totally different kinds of services and that both should be allowed to develop.
I know that some hon. Members might ask how many of both of these sorts of station I would be prepared to allow. Here I think I am entitled to retreat somewhat and say that I am not prepared to be tied down in advance on particular targets, as they must depend on financial circumstances. I should be quite happy to see all these sorts of station develop as and when we felt we had the resources to permit them to do so and as the BBC, in the terms of its licence fee, felt it had the necessary resources. That is a reasonable way to proceed, and I hope that that is what we shall do.
Sir Paul Bryan: Does my right hon. Friend recall a certain Postmaster-General, who has since wisely changed his name, telling us before there were any commercial radio stations that it was impossible to establish them because there were insufficient wavelengths, since when 20 of them and 20 BBC stations have sprung up?
Mr. Whitelaw: I accept what my hon. Friend so wisely says on these matters, about which he knows so much.
There is now an opportunity for us to face what has happened and to allow both sorts of station, providing their different sorts of services, to proceed and expand in different areas and to give more choice to audiences in those areas, which is what I believe should be the basic purpose of us all.

1041
My final point concerns cable and pay television. These did not seem to get sufficiently detailed consideration from the Annan Committee, but Lord De La Warr spoke with considerable knowledge about these matters in the other place. What he said impressed upon me the need for us to give far more thought to this subject in view of future technological developments. The Annan Committee attitude to pay TV seemed to me more restrictive than necessary.
I have grave doubts about entrusting future cable developments so much to that large monopoly, the Post Office, which does not always inspire in me, in all its activities, that complete confidence that I should like to have. I believe that we should give more encouragement in this important and developing area to the Cable Television Association of Great Britain which represents those who are engaged in it on a commercial basis. Surely our purpose here, as in the other areas, must be to provide the maximum choice to the viewer.
I conclude by summarising my basic theme. While I may disagree with some of the particular proposals by the Annan Committee, I strongly support its principles, its basic aims and the philosophy behind them. The Committee recognises that television and radio play a central and commanding rôle in the lives of our people. It makes it clear that Government and Parliament owe it to the nation to ensure that it has a broadcasting service which is well regulated and which preserves that degree of independence from Government which is vital in any democracy.
In stating these principal aims so clearly and convincingly the Annan Committee has given us a most valuable base from which to plan for the future of a British broadcasting system which must continue to be the best in the world.
4.46 p.m.
Mr. Ron Lewis: I am delighted to have the opportunity of following my parliamentary neighbour, the right hon. Member for Penrith and The Border (Mr. Whitelaw). I agree with many of his conclusions. What we are discussing now cuts right across party lines, which is different from the situation which existed more than 25 year ago
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when independent television was established.
As the right hon. Member for Penrith and The Border said, we in Carlisle have Border Television and Radio Carlisle. I am sorry that my hon. Friend the Member for Derby, North (Mr. Whitehead) appears to have left the Chamber because I wish to draw attention to a slur against journalists employed by Border Television contained in the Annan Report. The report says on page 154, paragraph 11.23:
"A major scandal is one thing. But we found dissatisfaction among journalists who worked for Border that the company would not touch the story of the plan for the city centre of Carlisle which they attributed to fear of upsetting vested interests. Regional television is not doing its duty by the public it serves if it does not ventilate disputes in local government. We are not asking for crusades. Even if officialdom is at first coy in putting its side of the case, reporters have a duty to be fair and to recollect that there are usually at least two sides to any dispute. But there is a weakness in some regional news coverage. This is a problem for the IBA, who must satisfy themselves that local items are being reported adequately by the television companies."
There is no evidence to suggest that there is any truth in that statement, and we can get no information as to its origin. Is this another Daily Mail story? Someone should apologise to the reporters of Border Television because I understand on good authority that they greatly resent the implications of that statement. This is something which should be cleared up at once.
What is good about the Annan Report overall is that it does not recommend any radical changes in the present structure or operation of British broadcasting. This means that after nearly three years of investigation Annan recognises that in ITV and BBC we have a broadcasting system better than anything to be found anywhere else in the world. That is to the credit of BBC and ITV.
It may be that our friends across the border, the Scottish nationalists, will be a little disappointed with what Annan has to say in that he recommends retaining three channels for Scotland. We in Carlisle appreciate that, because Border Television covers part of Scotland, to Dumfries and beyond. Naturally our people at Border Television are pleased that no change is recommended in Scotland. They will be able to continue

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giving their wonderful service to those just across the border.
I do not come down one way or the other on this issue. I certainly agree that to set up any new authority would be cumbersome and that a fourth channel would cost a great deal of money. On balance, I am inclined to the view that, since BBC has two channels, ITV should be given the opportunity of a second channel.
The right hon. Member for Penrith and The Border mentioned local broadcasting. I agree with him that Radio Carlisle has done a marvellous job during its few years of existence. I would not wish to see any new authority set up usurping the powers of Radio Carlisle. Most hon. Members will have received a circular letter from the Association of Independent Radio Contractors. It suggested that commercial radio—and I take my own county as an example—could be set up at Barrow, Workington and Carlisle. If that happened we would not get the good service which we are currently getting from Radio Carlisle. In some other parts of the country there may be a case for selectivity. I do not argue against this in heavily populated areas since it may produce revenue for the local station.
In future legislation dealing with local radio we shall have to consider the local provincial newspapers. If local broadcasting in my area was permitted to carry advertising it would have a serious effect on the circulation of the local newspaper. That is the last thing any of us wants to see. When ITV came in it had a great effect on advertising in our national newspapers.
Mr. Freud: May I tell the hon. Member that what he is saying is total nonsense? Before ITV came in, 17·1 per cent. of all national advertising expenditure went on newspaper advertising. After ITV had been going for 15 years the figure was 17·2 per cent. There was no difference whatever. If anything, the effect was to stimulate advertising in newspapers.
Mr. Lewis: The hon. Gentleman may be very good and clever at advertising dog meat but I am afraid that he has dropped the ball on this one. There was an effect on national newspapers. Some nationals closed. I am advised that if local radio
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stations are set up and carry advertising there will be an adverse effect on local newspapers. If we are to set up local ITV broadcasting stations it should be done on a selective basis, taking into consideration the population and geographical conditions.
Like the right hon. Member for Penrith and The Border, I come out in favour of Tom Jackson's report. In addition, the Methodist Church in Carlisle and district, meeting in synod a few weeks ago, passed a resolution—and the synod is in no sense political—supporting Tom Jackson's proposals. Therefore, I support the Jackson proposals.
The right hon. Member also referred to the content of programmes. We are custodians of the public good and should have some say in affairs when programmes which have an adverse effect upon society are being produced. I believe that there is too much violence on our television screens. This should be investigated. Another matter warranting attention—and I do not think that many hon. Members will agree with me here—is the fact that we have almost 1 million alcoholics in this country. Taking their families into consideration, that produces a substantial figure. We see too many programmes which act as an incentive to young people to drink alcohol. I want to see some Government curtailment of advertisements dealing with alcoholic beverages, as there was Government action a few years ago on tobacco advertising.
I hope that someone can clear up the position of the journalists in Border Television. I hope that in the days lying ahead, arising from this debate, we shall continue to ensure that our broadcasting system, ITV and BBC, will be the envy of the civilised world.
4.59 p.m.
Mr. Robert Cooke: In the Middle Ages the Church was against the printing press because it thought that it would enable the masses to acquire learning. So, too, Parliament and some Governments have been obsessed with the control of this comparatively new medium of broadcasting, radio and television. I take some pride in the fact that it is the Conservative Party which has widened the choice in both and which would do so yet again.

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I support the robust common sense expressed by my right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw) and I add my voice to those who have already rejected a third authority. As we see it, the Open Broadcasting Authority that Annan suggests is yet another costly bureaucracy. I believe that ITV 2 would be complementary to ITV 1 and would provide ample opportunity for anything that is worth seeing on television that is not now seen. The Annan type Open Broadcasting Authority would have to compete to survive, so by definition it could not succeed in Annan's aim of making it a complementary service.
I am confident that ITV 2 will provide a healthy challenge to the programme companies, especially the smaller companies. I must declare an interest in one of those companies. Some of the smaller companies are not too keen on ITV 2 as they see the disturbance of a settled world, but it must be recognised that there is an enormous amount of latent talent and much that is worth networking that at present does not reach a national audience. Nor should one forget the possible additional finance for the arts, both nationally and locally, that would flow from ITV 2.
If there is to be no break-up of the BBC, let it conduct its own shake-up. That such is needed is confirmed by the Francis Report which we read about in the Observer on Sunday and which is now confirmed in The Times.
I feel reasonably confident that the new Director-General, if supported by the Chairman and the Governors will achieve the necessary reconstruction. I suggest to the Secretary of State that on the expiry of the charter—perhaps I should make this suggestion to my right hon. Friend as I expect that he will be in charge by the expiry—we should have an Act of Parliament like the Television Act, which will continue the IBA. It is all very well for the BBC to have a renewable charter, but it does not give the House of Commons and Parliament the same opportunity to discuss the future of the BBC as we have with a Television Act, when we can go through the whole issue clause by clause with a fine toothcomb. I hope that my suggestion will be taken up by the next Government.
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Surely local radio choice could and would be widened and the gaps on the map filled by private enterprise. If I have to find something over which to disagree with my right hon. Friend this afternoon—perhaps we do not really disagree at all—is that I contend that there should be no extension of BBC local stations until private enterprise has at least had a fair whack, and perhaps even a few more whacks.
The BBC local radio stations are doing a fine job. I pay tribute to my local station. On many occasions I am invited to appear on it. The invitations are always to appear on a Sunday morning when I am miles away in the countryside. I make no complaint about that as I have the statutory invitation. Local radio is clearly doing a good job and should not wantonly be destroyed. However, private enterprise could do a good job to fill the gaps. Perhaps it may be given a freer rein than heretofore.
I support my right hon. Friend's idea of a single and independent Complaints Commission. The BBC's present board is a farce, and it knows it. The IBA sees programmes in advance. It sees the schedules and it sends for anything that it is worried about. At present that does not happen in the BBC. I am not suggesting that the Complaints Commission should be able to take that action, but I point to the BBC a way in which it could improve its responsibility by taking more trouble in advance.
The IBA also has the power of life and death over the programme companies—not so the BBC. We read that its reaction to criticism, to quote one journalist, is that of a hedgehog at bay. My wife tells me that to uncurl a curled hedgehog it is necessary to offer it a saucer of hot milk. I do not believe that the hot milk treatment would satisfy such as Mrs. Mary Whitehouse, and she represents a substantial segment of public opinion. There is no denying that that is the case. I support my right hon. Friend's idea of an independent Complaints Commission.
I hope that as a result of this debate we shall have wide public discussion. I hope that the Government will produce a document that we can discuss in advance of legislation. I hope that when

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we get legislation there will be plenty of time to discuss it. I hope that the legislation will contain no Public Enquiry Board with the periodic seven-year inquisition. I am reminded of the young child gardener who daily digs up his plants by the roots to see how they are getting on.
Broadcasting has now grown up and surely we should aim for the widest possible choice for the fourth channel. Even fifth and sixth channels are not impossible in the not too distant future. In that way there can be a wide clash of view not so different from the other means of communication that flourish in our democracy.
5.7 p.m.
Mr. Austin Mitchell: At the outset I declare an interest. Until a recent happy event, I worked for a commercial television company. Perhaps in some ways I wish that I still did. It would be nice to be considered eligible for an ambassadorship somewhere. I am a company director, albeit unpaid, of a commercial radio station. In some ways that sort of background is a disqualification for speaking on broadcasting. That is because in many respects all one needs to speak on broadcasting is a certain amount of prejudice.
Even watching a television programme is a disqualification. That is because television has become a universal whipping boy in situations such as these. It is a whipping boy that is blamed for every sort of social evil, from the ethics of the Daily Mail to the violence at Tory Party conferences when debates take place on hanging and flogging. It is almost as if it were some power which was dominating society and those in the industry. In fact, we are struck not by the malevolent influence of television but by its nervousness, caution and inhibitions.
It is appropriate that in a debate such as this hon. Members should air their views and prejudices about television. The Annan Report reflects a certain amount of prejudice about television, too. That is the prejudice of the very important person of the type who was on the Annan Committee. It is the prejudice of the intellectual. There were only two people on the Committee with relevant experience of television programming. That means that the Committee
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ignored what I understand to be the real needs of the industry.
Television is an industry that is no longer expanding. As a result, it finds itself in a log jam in terms of promotion and ability to implement programme ideas and to achieve programme ambitions. It is an industry that is logjammed by the failure to expand over recent years. It is a middle-aged industry that is posing as a young industry. It is an industry that is set in several grooves primarily by the heavy cost of producing programmes, which places a premium on safe and set formulae and the endless repetition of basic and safe formulae.
Television is far too centralised on London. That is particularly so in respect of the BBC. We are in no way replacing the position that used to obtain in our large cities, where competing local newspapers gave a drive and vigour to local opinion, provided employment locally, provided continuous machinery for inquiring into local problems and provided local news in their pages. The centralisation on London has drained the life from the regions and our large cities. These are the real problems of television and broadcasting generally.
However, the Committee was faced with another problem, namely, the problem of duopoly, which it seemed to regard as the greatest evil in television. I do not see why, because the duopoly has done very well and has helped us to provide in this country what is still the best television in the world. It has moderated the evils of competition and provided us with far better and far more important current affairs coverage than is the case in most comparable countries.
Because of its emphasis on the evils of what it saw as the duopoly, the Annan Committee wandered in a wrong direction by turning to the Open Broadcasting Authority as the sponsor of the fourth channel. I sympathise with the aim of the Committee, which is to achieve more diversity, but it cannot be achieved effectively through the Open Broadcasting Authority. There are problems about the Open Broadcasting Authority. The basic one is finance. If the programmes are financed by advertising, there is an implicit drive to appeal to mass audiences in order to compete with BBC1 and the IBA channel. Advertisers are not charities. Pressure would be put on the

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OBA, as pressure is put on commercial television, to increase its audiences.
The case put forward for sponsored programmes takes us on to very dangerous ground. I should hate to see a situation in which there was a programme on Guest, Keen and Nettlefold as a way of life or the Weltanschauung of ICI, because generally, with competition, money buys programming. It is dangerous to open the door to sponsored programming. It is difficult to define what the OBA would provide in terms of programmes, because the prescription in the Annan Report is vague. It says:
"Broadcasters will not be incapable of creating programmes of a different and intriguing kind."
After many years of competition in television, I cannot see what sort of programmes these
"programmes of a different and intriguing kind"
will be. Where are the sources of these outside programmes?
Programmes are, in modern terms, extremely expensive, and if these expensive programmes are to be financed by the Open Broadcasting Authority, it will be a factor which will push it into a competitive situation with the first two channels, which the Annan Committee wanted to avoid. Therefore, I do not see how it will provide the kind of programming that the Committee wants without successfully competing.
The basic problem with the Open Broadcasting Authority is the simple one of how it can be complementary without being controlled by the same authority which controls the IBA channel. In other words, to set up an Open Broadcasting Authority with the brief of providing complementary programmes is to give it an impossible rôle, because complementary programming can be carried through only by an authority which controls two channels. In the same way that BBC2 can be complementary to BBC1 and can provide a choice of viewing, so a second independent television authority could be complementary to the first. I cannot see that the OBA, because it would not be in control of the programme plans, could be genuinely complementary.
Mr. Whitehead: The intention was not that the OBA should be complementary
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to ITV1. If one wanted that, one would have ITV2. The intention was that the new channel should bring something new to the system and be complementary to the other three channels.
Mr. Mitchell: If it is to be new, it will be in competition with BBC1 and with the IBA's first channel. This is inevitable. Complementality is the only alternative to competition, otherwise we create a situation in which the OBA is perpetually programming for small minorities and small audiences, which is totally contrary to its brief. We shall not achieve diversity without complementary programming, and we shall not have complementary programming if we do not have one authority in charge of two channels so that it can provide a genuine choice.
It would be difficult for a television company to achieve a programme budget on the prospectus which the Annan Report puts forward for a second channel, let alone a second channel itself. The need is for speed, jobs and expansion of a deadlocked, log-jammed industry. Even if it comes in the form of a second independent broadcasting channel, expansion will provide jobs throughout the industry and it will lead to the breaking of logjams in the BBC as well as in the ITV, because people are regularly changing between the two broadcasting networks.
I do not wish to take much time in discussing local broadcasting, because although, according to the report, it is in a mess, it is not in as much of a mess as it would be if the Committee's prescription for local broadcasting were followed. If the BBC local radio stations were to become commercial stations, it would change the whole nature of the beast. If they were commercial radio stations appealing to mass audiences, they would become different sorts of radio stations.
Far better to have competition in as many localities as possible between commercial local radio stations and BBC local radio stations, because both types serve different audiences, both have different appeals and both treat local news differently. To argue that there is not enough local issues, news and interest to justify two competing stations is to demote and degrade the local interest

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which we all wish to serve. In most towns and cities there is sufficient basis for competition. Competition is the only way in which to serve local interests, just as in the past competing newspapers served local interests.
I wish to say a few words on the BBC's regional structure. One can agree with all the Annan criticisms of the BBC bureaucracy, because the BBC's problems are mainly problems of scale and bureaucracy. Surely the answer to bureaucracy and centralisation is not to cut off local roots in the form of the island sites that the BBC has been trying to develop to compete with commercial television. The answer is to encourage the BBC to expand its regional production and to integrate its regional production with its network production centres in the regions and to provide commercial television with competition similar to that which commercial radio provides to BBC local radio—competition for the benefit of both.
On those grounds, I must express my disappointment with the Annan Report.
5.17 p.m.
Sir Paul Bryan: I declare my interest as a director of Granada Television and of Greater Manchester Radio Ltd.
I join my right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw) in paying tribute to the Annan Committee for its monumental work. Time will show whether many of its recommendations are followed, but, to put its achievement at its lowest, the Committee has provided and brilliantly marshalled a mass of material on which the next Government can decide the future of broadcasting. It also provides a unique reference book for any student of broadcasting.
I agree with my right hon. Friend that the report is more important for that which it perpetuates and rejects than for that which it proposes to innovate. The balance of power between Government and the broadcasting organisations remains pretty well as it is, and surely that is sensible in the light of our success in this country compared with the free-for-all system in America and the Government-controlled systems in many other countries. The rejection of any super body
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leaves the main responsibilities for programmes well and truly on the shoulders of the IBA and the BBC.
Having paid tribute to the report, let us not make the mistake of over-valuing it. We must get its status in perspective. Annan can recommend, but it is for us in Parliament to decide what is to happen. The result of the next General Election will have much more bearing on the future of broadcasting than will the report. One of the main recommendations of the Pilkington Committee was that the IBA should collect all advertising revenue and that the companies, as programme makers, should be left on commission. Fortunately, the incoming Conservative Government would have none of it. Some of the Annan recommendations may be sunk in precisely the same way for precisely the same reason. Others of its recommendations, such as the one on local radio, would not get through this House, Whip or no Whip.
I shall concentrate my remarks on two subjects on which I am perhaps best qualified to speak—the fourth channel and local radio. The Committee agrees that ITV has the capacity, experience and expertise to provide the fourth television channel. Since only ITV is in a position to do so within a reasonable time, why, then, is this obvious solution wrong? I quote the Committee's answer from Chapter 15, paragraph 32, where it says:
"It is simply that in our belief an ITV 2 will result in worse television services than we have now because the BBC and ITV will engage in a self-destructive battle for the ratings."
This is a serious judgment and requires a serious answer. Assuming for the sake of argument, and only for the sake of argument, that the broadcasters long for "self-destructive battles", they still cannot have them. We here in Parliament will decide the kind of broadcasting we want and the IBA will see that our wishes are carried out.
In his Fleming Lecture Lord Annan said:
"If the new service were the responsibility of the IBA, how could the IBA resist pressure from the TV companies to allow them a considerable share of peak programming time on the new channel? "
This again, shows a surprising ignorance of the relative power of the IBA and the television companies. The IBA is a public body set up by Parliament to

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ensure compliance with its will. It awards franchises and approves the appointment of directors. No large shift of ownership takes place without its approval. Companies are obliged to submit their weekly schedules to the Authority and are expected to indicate any items which may prove sensitive or controversial.
The companies, as does Annan, think that the IBA is over-meticulous in its supervision of programmes. It has intervened countless times in the past to influence schedules. A well-known instance was when the IBA introduced the half-hour of news at 10 p.m. That was not favoured by the companies. The Authority insisted, and it has proved a great success. The IBA lays down such things as the minimum time that companies should devote to local programmes. As parliamentarians, we should acknowledge the very positive reaction of the IBA to the findings of the Select Committee on Independent Television. In the face of this actual history the idea of the IBA being pressurised by the companies is laughable.
If Parliament decides, as I hope it will, that ITV2 should be a channel weighted in favour of minorities, the IBA will certainly have the muscle to compel the companies to carry this out. In his lecture Lord Annan said:
"We thought the IBA did a fine job in seeing that commercial TV did not go the way of the American network."
This the Authority will continue to do.
But, apart from the strength of the IBA itself, equally compelling is the fact—perhaps this will convince the hon. Member for Derby, North (Mr. Whitehead) rather more—that it would not be in the companies' financial interest to try to turn ITV2 into another popular channel. The programmes so far suggested for ITV2 will for the first time bring within the reach of television advertising the section of the population with high incomes and low levels of viewing. The audience for ITV2 will be smaller in number and higher in purchasing power. It would become an advertising medium to many advertisers who up to now have been unable to reach these potential customers on television. To make ITV2 into yet another popular channel would merely fragment an audience which is already readily and economically available on ITV1.
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Ever since the possibility of a second channel began to be discussed, the companies have recognised that it could not be a replica of the first channel. This is all spelled out in their original evidence to Annan. Recently some hon. Members will have received a specimen schedule of what ITV2 will look like. If one examines the specimen schedule one will see that the programme portfolio is not very different from the type of programme that the Annan Committee recommends for the OBA. It is a difference not of philosophy but of practicality. There is also the important difference, which has also been mentioned by the hon. Member for Grimsby (Mr. Mitchell), that ITV2 would be twice as convenient and acceptable to the viewer because it would be complementary.
The programmes of the two channels would be complementary in time, which is of immense importance. It is no good an attractive programme beginning on one channel if one is watching one's favourite programme on another. They would be complementary, too, in subject matter, for the whole purpose of running two channels is to offer real choice and variety.
But in the final analysis the case for ITV2 is a broadcaster's and viewer's case. It stands to reason that a single popular channel on its own cannot take the same account of minority interests as could two complementary channels. With another channel, ITV could and would be as adventurous in its own way as the BBC, with its second channel. Operating within a single channel one cannot give full opportunity to the creative talent within the system.
Television is in danger of suffering all the faults of an ageing industry. Up to now periods of growth have served to keep television young and vigorous. There have been periods of swift expansion at intervals of four or five years—recruitment for ITV from 1955 to 1960, for BBC2 in 1964, for the new Yorkshire contractor in 1968 and for the extension of hours in 1972. These are the times when one gets infusions of young talent into the industry. Another such period is overdue, and only ITV2 can provide the growth in the reasonably near future.
The Annan Committee got itself into a great muddle in its preoccupation with duopoly and plurality. For your information, Mr. Deputy Speaker, in case you

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have not read the whole report, the sort of people who used to be pro the BBC monopoly are now anti-duopoly and pro-plurality. Having at the outset settled for plurality, they soon came up against the road block of the BBC, which clearly cried out for pluralisation but could not be dismembered for fear of what foreigners would think. Then they came to the ITV, which with its 15 companies plus the ITN is in itself a model of plurality. This should have pleased them very much; but then most of them found that they had a deep-down feeling against commercial broadcasting, so ITV had to be demoted to regional status.
However, since no one wants a £50 licence fee, one might as well accept that commercial broadcasting is with us for good and make the best of it. The best of it happens to be very good. It is good because the structure of ITV is good. Looking through the TV Times I see that this week's programmes on Yorkshire Television come from no fewer than 12 companies each one with its own very individual character and regional background. This diversity, unequalled by any other broadcasting authority in the world, is surely good in every way for the viewer. It must mean variety. It must stimulate quality in programmes, for all these programme makers are in various ways competing against each other in quality and ideas. The system is clearly good for those working in television, for it gives them a wide choice of jobs. All the system lacks is a second channel to widen still further the choice for the viewer and for the broadcaster.
Of all the chapters in the Annan Report, the one on local radio shows the least understanding of its subject. This is not surprising. Local radio is quite new to Britain and, I would guess, particularly new to the personnel of the Annan Committee. Furthermore, it is impossible to judge the merits of a local station on the strength of a three- or four-hour visit. One would have to stay in the locality for several days, listen for many hours, and talk a lot with local people, before it would be possible to get a feeling for the station and assess whether it had succeeded in establishing itself as a familiar and valued part of local life.
The chapter starts with the much quoted phrase:
"local radio is a mess".
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This may be the view from the heights of Annan after brief visits to several stations. I doubt whether the listener in, say, Manchester sees it that way. He or she has the choice of four national BBC channels, one BBC local station, and one independent local station. No listener in the world has a better choice. Our objective should be to make this choice available to many more people in many more places.
How can this be done? I see no reason why independent radio should not build up to 60 or more stations. Technically this is possible. Financially it is also possible. By good fortune the surplus profits in independent radio are paid back in the form of secondary rental to the IBA for use within the system. As the larger stations get more profitable and multiply, funds will build up which can be used to subsidise stations in towns too small to provide a viable audience. This is quite unlike the position in television where the Treasury makes sure that the TV levy comes straight out of the industry and into its own coffers.
Mr. Freud: Would the hon. Gentleman care to give the House the name of any local radio company which has paid back a levy? I believe that there is none.
Sir P. Bryan: Local radio has no such thing as a levy. Local radio has something called a secondary rental. As a station breaks into a profit, the surplus profits are paid to the IBA in the form of a secondary rental. We in Manchester are about to pay secondary rental. The earlier and more successful stations are beginning to pay the secondary rental. I have not the slightest doubt that many other local stations will follow. The resulting funds will be an admirable way of financing local radio for small towns.
I cannot understand the arguments in favour of the suggested monopoly authority for local broadcasting. The report tells us that the new authority, having no Other responsibilities, would give the local stations its undivided attention. But this is the last thing that they want or need. Once a station has established a good audience, it literally becomes part of the community. Unless it is obviously bad, it should be left alone to develop.
Unlike television, which always seems a little remote, local radio is subject to direct, unavoidable local accountability.

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If people do not like programmes, they walk in through the front door of the station and say so. The more usual and instant reaction of the listener is to pick up the telephone while the programme is on and give the producer a piece of his mind. Under such pressures a reasonably run station is bound to adjust to the special demands of local people.
Most stations broadcast 24 hours a day. The programme is always there. Local people are always appearing on it. The stations have their roots in the community they serve. They provide a public service without public expenditure. The very success of independent local radio shows that it is meeting local needs. One of the stations—Radio Clyde—claims that it now attracts more listening in its area than all the four BBC national networks put together.
When it comes to the financing of a local radio authority, the Annan Committee flies high into the realms of fantasy. The authority would presume as a start to take over 20 BBC local stations at a capital cost of at least £250,000 each, plus annual costs of probably much the same amount. Whence comes the money? There is talk of foundations and trusts and money raised from voluntary sources.
Lord Annan said in his Fleming Lecture:
"If a community wants local radio, there is a strong argument for saying that they ought to pay for it or organise the finance themselves."
Such prospects must surely be minimal in a country where people are used to getting their radio free of charge, paid for either by advertising or by the TV licence. Before the BBC local radio was launched the Postmaster-General of the day invited 80 local authorities to London to sound them on the possibility of raising local money for local stations. Even with the bait that those who paid would get the first stations, only eight were willing to pay anything and some of those never paid at all.
The final death blow to the idea of a local radio authority is the plain fact, as I have already said, that such a proposition would never get through the House of Commons. There must already be 300 Members of Parliament who have local radio stations in their constituencies.
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We have heard from my right hon. Friend the Member for Penrith and The Border and from the hon. Member for Carlisle (Mr. Lewis) that they are not particularly keen to see the end of their station. We are all beginning to discover that they are as important to us, or soon will be as important to us, as our local newspaper.
If a Member of Parliament has a truly local station with an established audience, he is unlikely to want to see his constituents upset by the station being shut down or taken over by a new authority in London. For the listener, the present arrangements have worked well. The IBA and the BBC have acquired considerable experience in supervising local radio. Almost nobody except the Annan Committee wants to see it changed.
5.37 p.m.
Mr. Eric Moonman: Unlike the hon. Member for Howden (Sir P. Bryan), I have few reservations about the report of the Annan Committee. It is a substantial and well-written document. It meets two of the points that are in the minds of many people, not only those who are connected with the communications industry but people in education and the political parties, who have to consider the whole development and utilisation of ideas.
The first priority which the Committee had to grapple with was an attempt to open up the BBC and the IBA—in other words, an attempt to see whether there is a way of meeting the current desire for participation and the exchange of information and a better way of effecting this exchange than exists at present. That is a significant point.
The second point is that the report recognises the balance which I believe has been maintained for a long time in the BBC. It is a balance of entertainment, due to the fact that there are 51 million people over the age of five in these islands who want to see different things at different times. A lot of them want pop music. A lot of them want to watch sport. Five million listen to Radio 3. Quite a lot every week, including some of the previous categories, want to watch "The Generation Game". Thirty-three million want to hear the news at night on BBC and IBA stations. These categories must be catered for. Yet they are not exclusive.

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It has been pointed out in the recent Haldane Memorial Lecture that there is a need to maintain a balance between that type of entertainment and the minority interest programmes, whether in music or politics.
The Annan Report is a remarkable one, in that it recognises a responsibility to come up with answers to these two areas—on the one hand, the need to open up these two institutions to greater public interest and scrutiny and, on the other hand, the need to attempt to maintain a balance between the very popular areas of entertainment and the minority interest areas.
My hon. Friend the Member for Grimsby (Mr. Mitchell) spoke of a log jam. Few people in the industry accept that even if there is a log jam it is anything like as serious as was suggested. There is no money problem. If there were, how does my hon. Friend explain the fact that a company with which my hon. Friend was associated—Trident—was able to find the resources to diversify its interests and buy a safari park only last week.
I shall relate my brief remarks to the fact that I was a member of the Labour Party working group on the people and the media, and we looked at the same general questions as the Committee. We did not go far enough in our analysis of the subject, because we did not have the resources of the Committee, but had we done so I think that we would probably have come up with the same conclusions.
Labour's approach to the media is, in general, simplistic. That is one of the problems that we face. Our attitude is "He who is not for us is against us". As a result, our policies relating to communications are rarely thought through. At National Executive Committee meetings or at conferences there is very little evidence that we have any real concern about the issues that have been raised by the Committee.
We do take a great deal of time on matters such as the abuse of privilege, the failure to treat ideas properly, the inevitable accusations of prejudice on the part of the broadcasting producers and interviewers and the newspaper writers and editors, and a suspicion of
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elitism within the BBC. When it comes to conference resolutions, however, it would be dishonest not to admit that we devote much less time to the areas that have been contained in the Committee's inquiry.
The future of broadcasting arouses much less excitement. Since the report was published there has been a reaction, but only in a few newspapers. The structure of broadcasting will never be an issue that will preoccupy large numbers of the population. Even on the Labour Party's working group to which I referred we ducked the intellectual issues in favour of platitudes.
The setting up of the Committee provided an opportunity for more weighty consideration of the subject, and it was welcomed by most members of the Labour Party with an interest in the media because we recognised that we did not have access to some of the necessary areas of information that may be available within the newspaper industry. When the Committee got under way I was worried that it would generate more light than heat, since the breadth of its terms of reference opened the door to opinions on all aspects of broadcasting from programme content to technical developments and from violence on television to cable services.
The precedents for the Committee were not encouraging. The Beveridge Report in 1951 advised against the introduction of commercial television and as we all know, in the event that advice was rejected. The Pilkington Committee in 1962 was concerned with the trivial nature of ITV. That Committee recommended that certain changes be made in structure and control, but when it came to the point the status quo prevailed. It is interesting that Annan endorses this rejection accepting that
"The individual companies are given an incentive to maximise revenue when they raise and spend it themselves."
I am concerned that the Annan Report might be allowed to lie on the shelf, gathering dust. However, in view of the Home Secretary's remarks in opening the debate that would seem not to be the case. Nevertheless, it is important to try to pursue some of the areas of inquiry, the suggestions and recommendations in the report.

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Central to the Annan Report is the question who controls broadcasting. Almost uniquely, broadcasting in this country is neither solely commercial and profit-making nor State-controlled. Even in its commercial manifestations it is regarded as a public service answerable to a public authority independent of the Government.
Annan's first recommendation is that this situation should continue and be reinforced by a Broadcasting Complaints Commission, a Public Enquiry Board for Broadcasting and a Telecommunications Advisory Committee. In its evidence to the Committee the Labour Party argued for a Communications Council to carry out the functions of all three bodies in relation to the mass media generally, including the Press. The arguments against such a monolith are powerful. Had the Labour Party's working group examined the Canadian system, which so impressed the Committee, I believe that we would have come up with a similar conclusion although I am still inclined to the view that complaints against the Press should be heard by the same independent body as complaints against the broadcasting media, especially as the new broadcasting complaints commission, as envisaged in the report, would be considerably more independent and less toothless than the Press Council. This seems to me to flow directly from the proposals that complaints from individuals and organisations who feel that they have been misrepresented should not be heard by the same body as complaints about taste, content or standard of programmes.
Responsibility towards individuals, their legal rights and their privacy, is of a different order from responsibility for general presentation because it requires specific sanctions or remedies. Its quasi-judicial nature does not accord with the more discursive activities which relate to research into, for example, the incidence of violence on television.
The principal advantage of the proposed Public Enquiry Board and the Telecommunications Advisory Committee is that they will preclude the need for any more Royal Commissions or committees of inquiry since they will keep under review constantly all those matters that have been referred successively to Beveridge, Pilkington and Annan, as well
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as inquiring into the specific topics at the request of the Home Secretary or one of the broadcasting authorities.
The right hon. Member for Penrith and The Border (Mr. Whitelaw), who spoke from the Opposition Front Bench, expressed anxiety about having a Public Enquiry Board. My response is that the Complaints Committee requires such a comprehensive review body to back it and to give it strength and point. There is some advantage in not having to set up a Royal Commission or a committee of inquiry, but having instead an ongoing inquiry board. That has great merit.
Mr. Whitelaw: The hon. Member referred to my speech. My fear is that such a board would become a permanent Royal Commission or, as he said, an ongoing inquiry which was permanently seeking to take out broadcasting by the roots and change it. That is why I prefer a hearing by the interested authorities in various parts of the country.
Mr. Moonman: Surely, the proposed board would avoid the wide terms of reference that were given to the Committee, and, instead, would concentrate on being an extension of the Complaints Commission, which the right hon. Member was supporting and which I, too, favour.
Things have not stood still during the three years since the Annan Committee was given its terms of reference and, inevitably, some situations have changed in that period. One of the striking features one notices when one looks at the terms of reference of the Committee is the way in which, in its recommendations, it has widened its discussions and reflected those considerable changes over the three-year period.
Given the unrealistic breadth of the inquiry, Annan has produced a remarkably well-reasoned report, with a fundamentally cohesive philosophy which has produced a minority view on a few specifics only. But it is questionable whether the Committee was fully competent to look at the technical side of broadcasting and therefore it is hardly surprising that trivialities have crept in—such as the rental companies' comment about customers complaining that TV sets had too many knobs with which to fiddle.
Labour will certainly welcome the Annan proposal for the fourth television

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channel. Annan has concluded that competition between the BBC and ITV has not benefited the public. Rather the intense competition for audiences has led to the two services becoming more alike and thus the choice of programmes at peak hours is restricted.
Leaving aside the doctrinnaire suspicions about competition held by some of my colleagues, which on occasions has led to a call to give the fourth channel of the BBC to minority interest programmes, such as "Open Door", Annan's proposal opens the door to "creative" television as well as to an extension of educational television and the Open University. The use made of the BBC's "Open Door" spot and the interest with which it has been received would justify the need for a channel on which there is no overall viewpoint but would give free expression to the individual approaches of organisations and producers.
The rôle of the new authority will need to be monitored, while the proposal that it should have no responsibility for the content of individual programmes is the only possible way to reintroduce creativity. There must be some responsibility for balance between sources of programmes or rights of reply, otherwise there is a danger that the channel will fall into the hands of sectional interests, or succumb to the highest bidder.
The financing of this channel and of local broadcasting stations and the new authority to run them is the weakest part of the report. I am sure that many people will share Tom Jackson's reservations on this point.
The Committee argued forcibly that the effect of allowing competition between the BBC and commercial radio will be to provide some areas with two or three local radio channels, while other areas, usually rural, will have none at all because of the shortage of available frequences. But we have only to look at the effect of the dependence of the newspaper industry on advertising revenue to see that it provides a most insecure basis for operation. If we take the struggles of The Guardian newspaper as an example, we see that few operators are likely to be found willing to set up the kind of trust envisaged by Annan. Local radio is thus likely to become a wholly commercial operation and, given the
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demand for the largest possible audience, will become trivial in content. I believe that Annan has allowed wishful thinking to dominate in that section of the report to the exclusion of reality.
By contrast, the chapter on programme standards and the incidence of violence and sexual promiscuity is one of the most balanced I have encountered. It makes a point which the Labour Party, above all, will welcome—namely, that the point at issue is that programme compilers and producers are out of touch with what ordinary people think.
The proposal for a formal requirement that members of production staff should take part in discussions with groups of listeners and viewers, either by going out to existing organisations or by groups brought together for the purpose, is a valuable contribution to the growing desire for a more participatory society. So, too, is the concern for regional approaches not only by broadcasters in Scotland, Wales and Northern Ireland, but in other areas which are conscious of a separate identity from that of London and the South-East.
The same balanced view is applied to access programmes and party political broadcasts, religious broadcasting and other areas where there can be conflict between the need to provide information and the need to show both sides of the question.
The Committee is critical of the media's tendency to present issues in terms of conflict—not just political conflict, but in such areas as consumer affairs. Again, this reflects some of the anxieties in the Labour movement. We should welcome the proposal for a booklet on interviewees' rights and the requirement that guidelines should be made public.
I found of interest the Committee's assessment that there was a communications failure in the BBC because of its over-bureaucratic nature, resulting in lack of leadership. In the light of the references in The Observer yesterday about the management, style and structure of the BBC, I believe that this is an area that requires further examination. I hope that my right hon. Friend the Home Secretary will give some attention to this matter. The Observer mentioned the autocratic way in which decisions were made in the BBC, and said that the report

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gave general support to complaints about remote bureaucratic decision making. One witness told the Committee of having to wait more than 20 months before he managed to persuade the Department concerned to withdraw a reprimand issued to a member of staff.
The area of management style and the way in which decisions are made appears to be typical of the way in which the large public institution has developed over the years. These institutions should seek to be more responsive to the outside world.
I believe that "Old Auntie BBC" will probably survive the Annan Report, as she has survived its predecessors. The Government should pay serious regard to the matters set out in the report and should try to encourage a warmer response than we have seen in the past. It would be nice if "Auntie BBC" responded to the justified criticisms of complacency instead of merely reacting to them, which has been the case following reports in the past.
Mr. Deputy Speaker (Sir Myer Galpern): I would remind hon. Members that there are still 20 hon. Members in the Chamber, who have been sitting patiently and faithfully through the whole of the debate. They could be accommodated because, as I know from my experience on both television and radio, the shorter the programme, the better the performance.
5.56 p.m.
Mr. Mark Carlisle: I take full note of your comments, Mr. Deputy Speaker.
All the contributors to the debate so far have spoken with great knowledge of television and radio. I cannot claim that degree of knowledge, nor can I claim any direct interest. My only justification for taking part in this debate is that I am a member of the General Advisory Council of the BBC. Perhaps I should also mention that the hon. Member for Durham (Mr. Hughes) and I attended a conference last weekend when we discussed the Annan Report.
I found the report fascinating and extremely readable. I agree with much of its contents, particularly what is said about the importance of independence,
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the diversity of programmes, the need to retain the present high standards of broadcasting, and the need for a greater awareness of public reaction. I also welcome the report's rejection of a broadcasting council, and I endorse the committee's view that it does not wish to see the BBC broken up. However, I do not go along with the Annan Committee in many of its recommendations. Having heard the contributions of the hon. Members for Grimsby (Mr. Mitchell) and Carlisle (Mr. Lewis), I think that Labour Members, too, share that view.
I do not believe that there is a need for the various new authorities recommended by Annan. I fear that inevitably they would lead to a general increase in bureaucracy. Let me take as an example the Public Enquiry Board. I was glad to hear the Home Secretary pour cold water on that suggestion. Despite what was said by the hon. Member for Basildon (Mr. Moonman), I regard such a board as a totally unnecessary concept. Of course the BBC and the IBA must be seen to be more responsible to the public, but surely the way to achieve that lies not in setting up a new board but in allowing the present organisations to work more effectively. The Governors of the BBC are trustees of the public interest. The IBA is in many ways in a similar capacity in regard to television. Therefore, rather than that we should set up a new board, I hope that those bodies will respond by becoming more responsive to what is being said.
I am all for the idea of public meetings—not only attended by Governors, but by members of the Board of Management of the BBC as well as by members of the Regional Advisory Council who could play a wider part in assessing the effects of programmes on the public. I believe that a Public Enquiry Board not only is unnecessary but contains positive dangers. If the board had power to look into any matter referred to it, it could take a totally different view from that of the Governors or of the IBA. There might be an incentive to indulge in greater political interference in the day-to-day running of the BBC.
A unified Complaints Commission is an urgent necessity, and I am delighted at what the Annan Report said about it.

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The present arrangements are totally inadequate. The BBC appears to accept no responsibility for reporting the results of its own complaints committee, and that seems to show that the committee really is not doing its work. I hope that the BBC and the IBA will get together to take an initiative and to set up immediately a Complaints Commission for the whole industry. The Commission should comprise people of a quality that will show them to be independent and should preferably be headed by a judicially qualified chairman.
Mr. Moonman: Would not such a Commission face the same sort of problems, hang-ups and ambiguities as are faced in the newspaper industry, where the Press Council does not attempt to deal adequately with all the problems that may arise in the future?
Mr. Carlisle: The Annan Report was rather more specific about the powers of a Complaints Commission than was the Press Council. The BBC and the IBA should take the initiative by going ahead and setting up something better than the present system. There should be a body to which people who have been unfairly criticised on television programmes should be able to go. I welcome the report's recommendation that the legal waiver that applies to the Press Council should not apply to such a body in the television industry.
I concede that there are difficulties, because those involved may not wish to give evidence to such a body when there may be a court case because someone has been severely libelled in a television programme—and we should not forget that television is a powerful medium. I do not see why such people should lose their legal rights by trying to obtain vindication from the Complaints Commission.
Turning now to local radio, like other hon. Members who have already spoken I do not believe that there is a need for a new authority. The real issue is whether the BBC should be involved in this area at all. I rather suspect that if we were starting from scratch a strong argument could be put forward that the BBC is basically a national body and that local radio should be left to the commercial field. However, the BBC is already involved and therefore it is probably right
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that it should be allowed to remain so. I cannot see the purpose of a new authority which would, in any event, probably become purely commercial. Commercial radio should be left to the IBA.
As for a fourth channel, I can only echo every word that was said by the hon. Member for Grimsby and by the Opposition spokesman. I do not believe that the broadcasting authority will be able to achieve everything that its sponsors have set out for it. The matter has not been thought through. If there is to be a fourth channel, it would be far more complementary to the present ones if it were given to the ITV than if it were given to a new authority.
I hope that I have kept my speech within the length of 10 minutes that has been requested by the Chair, but I should like to say one or two words about content. I agree with the hon. Member for Basildon that the part of the Annan Report that refers to sex and violence is one of the most balanced pieces of writing on that subject that one could have. There are lessons in it for the broadcasting authorities to learn. The report is frankly critical of the authorities and the authorities ought to realise that.
It is often claimed that the case about the relationship between broadcasting and violence in the media and real life has not been made. Broadcasters cannot shield themselves behind that justification. As long as that case is neither proved or disproved, the authorities have a responsibility to act as though that argument has been shown to be correct. I cannot believe that the media which is claimed to be so powerful in every other way—and which advertisers are so anxious to use to display their goods—cannot have some effect on the individual watching the programmes put out. If television works in advertising, I cannot believe that it does not affect violence in two ways. It affects the susceptible and emotionally immature and may invite repetition. For others, it may deaden their susceptibilities and sensibilities so that, in the end, it can do harm to one's threshold of violence generally.
On sex, the report has shown that there is concern about the volume of sex and swearing on television. It is true that television is seen in a different context—within the family—from films or books. Annan was right in making that point.
6.5 p.m.
Mr. Philip Whitehead: The hon. and learned Member for Run-corn (Mr. Carlisle) said that he did not come to us as an expert but, like a good lawyer, he has absorbed his brief and spoken persuasively. The hon. and learned Gentleman said that after a weekend of studying the Annan proposals he came to conclusions contrary to those of the Committee on many important matters. I can understand that, but the Committee has had almost three years to study the matter. I had the privilege of being a member of it. It went through all the arguments and, after thinking them through, arrived at conclusions that some hon. Members will say—because those conclusions agree with their own views or preconceptions—are ones of great wisdom and beyond dispute. On other matters, because the conclusions may challenge the preconceptions of hon. Members, some hon. Members may say that the report appears to be slapdash. However, if one follows through a certain logic in the way that we did—not just about the next year in broadcasting or about current problems but about the next 15 to 20 years, which was our remit—one finds that broadcasting will change fundamentally whether one likes it or not.
Lord Annan and his Committee spent an exhausting and exhaustive amount of time on the work. As a member of the Committee, I pay tribute to Lord Annan for his chairmanship, and also to the secretary to the Committee, Miss Goose, and the deputy secretary, Mr. Lyon, for their work in assimilating the enormous body of evidence that we had to consider.
Those who have said that the Committee did not look at some matters sufficiently must have overlooked the visits that it paid to various parts of the country, to Europe and across the Atlantic. It received about 23,000 letters from members of the public and those interested in the setting up of different channels.
In a rather glib and populist speech in the Lords last week Lord Willis said that the Committee had contained only two experts. He said that in a tone that left me in doubt whether he meant that that was two too many or 14 too few. The Committee contained people who were expert in a number of fields that matters that the Committee had to consider
1070 There were not only two television producers—of which I was one—but Professor Himmelweit, who was one of the pioneers of television research; Miss Lasky, an experienced broadcaster; Professor Sims, a leading expert in the new technology; and several other people, including Mr. Goldman, who are experts in setting up and running the kind of non-profit-making trust which was one of the new ideas that we tried to inject into the debate on broadcasting.
After three years, this wide range of people of varying political views and social backgrounds came to an almost unanimous conclusion about the route that broadcasting should take during the next 15 years. The Annan Report is not a prescription for instant action or an attempt to say that certain things are terribly wrong now and must be changed overnight or that certain other things must be introduced tomorrow. It is, rather, an attempt to say that innovations must be made during the next 10 to 15 years and that they must take account of the way in which broadcasting has already developed and the ways in which it might be restricted and restrained in the future if we do not introduce new ways of thinking about the form of the broadcasting industry and changes in society. The Committee had to take the longer view and that is the view contained in the report. Examples of this are the proposals for structural change as well as the chapters about standards and other matters. In making these proposals we may have upset the existing broadcasting authorities. Unlike our predecessors, we have made proposals that may lead to a slight diminution in the status, rôle, or band of frequencies controlled by the BBC and the IBA.
That is very difficult. Our predecessors did not do so. They took care to duck out on one side or the other. To borrow from Lady Bracknell, some members of the Committee may feel that to offend one half of the duopoly may be unfortunate, but to offend both may be downright careless.
So far in the debate, hon. Members have spoken, as they have every right to do, about the points that have been put to them and have argued the case for the existing system as that had been presented to them. However, many of these points do not look beyond the

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present situation to the next two or three years when we must review the licensing agreement with the BBC and the Independent Broadcasting Act for ITV and commercial radio. I shall try to persuade hon. Members that if this thinking is followed through, many of these points will lead to the sort of conclusion reached by the Committee.
My hon. Friend the Member for Basildon (Mr. Moonman) has said in print and in the debate that the Labour Party study group on which we both served perhaps reached rather foolish conclusions because it did not sit or argue for long enough and did not cover enough of the span of opinions and reservation. This is what the Committee attempted to do.
I hope that this House will do better in our debate than did another place last week when there was a sonorous procession of lords on the boards delivering the views of and arguing on behalf of vested interests. They have every right to do that, but the debate so far has been largely mediated by the broadcasting authorities who have, to an extent, been challenged by the proposals in the report. The authentic view of the sections of the community that we hoped to involve in the decision-making process in broadcasting and the practices of broadcasters has been absent. That public view has not been sufficiently heard in the argument so far.
Mr. Freud: Does the hon. Gentleman feel that because the report is on the future of broadcasting it should reserve unto itself the right to suggest things that are totally impracticable and beyond our current economic means?
Mr. Whitehead: No, but I regard that as a slightly tendentious question. The practicality or otherwise of what is proposed must be judged against the social and economic climate of this country over the next 10 or 15 years. If the hon. Gentleman or any other hon. Member feels that he can foreclose every decision in the debate in terms of the present political and economic situation, he is doing a great disservice to broadcasting. We have to look beyond that.
The philosophy of the report is one of pluralism and this has been welcomed on both sides of the House. That is why the Committee rejects the notion of a
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dominant executive broadcasting council superimposed on broadcasting but separated from broadcasters. Such a body would be a return to another kind of monopoly in another form as would the direct rule of some Minister in Parliament if broadcasters were made responsible to him. We reiterated—and this is the negative aspect of the report—that the notion of authorities responsible to Parliament should not only be continued, but extended and that there should be new authorities as well as existing ones.
The report had four interdependent principles. The essence of the matter is editorial independence. That is the essence of any free broadcasting system, but it has to be balanced by public accountability and involvement. The diversity that we seek can be brought about only in a flexible system that adapts to developments in our society and technology that do not necessarily fit the imperatives of our great broadcasting institutions. I do not deny that they are great institutions, and that they have given the State and society some service and will give more, but will they fit the patterns that we need in future? If we were examining only their stewardship so far, we could say—as indeed we did say—that we have the best broadcasting system in the world. But we are trying to look at the future as well.
For the future, the first thing to get right is a proper counter balance between broadcasters and society. Anyone who has been exposed for three years to the public's view of broadcasting can have no doubt that there is disquiet and even outrage in the minds of many members of the public at the indifference of the broadcasting elite to the many fears and worries about radio and television.
There is also disquiet about the way in which many decisions about how television and radio should develop have been handled. That is why we want an amalgamated and independent complaints council. It would be a saving on bureaucracy and not an addition to it and most hon. Members have welcomed the suggestion. It would not be a tribunal of taste, but a real means of redress in cases of malpractise. That is why we want a Public Enquiry Board for broadcasting to look at the performances of the authorities. Various members have belittled this

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aspect of the report and asked why we should pull up the roots, but this is precisely the argument advanced against a setting up of the Annan Committee and the right hon. Member for Penrith and The Border (Mr. Whitelaw) has admitted that he was mistaken in his original view and that he now welcomes the establishment of the Committee.
One of the problems that the Committee faced and that we felt as strongly in the third year as in the first year was that we were not sufficiently well informed and that we had not been backed up by proper research into what we were looking at. We were an ad hoc inquiry and we knew that there might or might not be another in 15 years' time. Given the great complexity of broadcasting, that is not sufficient.
That is the case for a Public Enquiry Board that could involve the public through public hearings rather than through questions by hon. Members that are fobbed off by Ministers as they must do. The establishment of such a board is the way to enable the public to have its say in confrontation with those who have the exercise of power of broadcasters or broadcasting authorities responsible to Parliament. This body would be small and would have a trigger mechanism that would mean that any inquiries carried out beyond those into the performance of the authorities, would have to be asked for by the Secretary of State. They would not come about as a result of a greedy bureaucracy seeking, in some over-weaning manner, to extend its remit.
I apologise for going on at some length, but I have felt at times in the debate as though I were taking on single handed the whole House and all the parties in it.
The BBC does not believe, as did the Committee, that small is beautiful. We have been attacked for complaining that the Corporation is top-heavy in managerial fat while also cutting away its base in local radio and its roots in the community.
I want to take the House through the Committee's thinking on this. The BBC holds sway over an immense span of frequencies. All except external services have to be paid for by the licence fee. In inflationary times, that is hideously stretched. The BBC cannot do everything
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with it and already it has had to turn covertly to other methods of financing, some of which are dubious in terms of the licence fee and the public service ethic. However, the BBC wants to do everything. It has a territorial imperative as the only rationale of the organisation. Its theme song is, as Lord Annan said, the same as Ethel Merman's—"Anything you can do, I can do better". Internationally, nationally, regionally and locally—the BBC wants to be there doing the lot.
Some of my hon. Friends think that by advocating that the licence fee should continue, the Committee has copped out and that we should have said that it should go. I put this case as the Devil's advocate in the Committee, but the view of the Committee, which is persuasively argued in the report, is that the fee should stay. The corollary is that it can pay only for the number of services that more or less equates with what the public and our constituents will accept having to pay for.
The BBC has been saying that it is not in financial difficulties and that it is even expanding its services in local radio, but we shall soon hear the rattle of the begging bowl when the Corporation comes to the House asking for the licence fee to be raised. The Committee took the view that some services are beyond what it is reasonable to expect the licence fee to pay for. Some of us wanted to go further. We made a case for separating BBC radio and television and a minority of six had this recommendation written into the main body of the report. Our case was that these services, which are largely separate in practice, could develop in their own way without the desperate attempts to fit everything into a common BBC mould, which now occupy much of the time of that otiose bureaucracy that has already been attacked in the debate.
There are two ways in which to deal with this. One is to federate, to turn it into an imitation ITV. But if one accepts the BBC as a national instrument of broadcasting and that it has a centralised planning structure and that many advantages flow from that, the only real practical change is to separate radio and television and have two separate services run as two separate public corporations

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built out from under the kind of bureaucracy that lies across them both, attempting to co-ordinate and hold them together. That is what the minority of the Committee wanted.
The majority of the Committee settled for exhortation. They said that they accept that there is a problem, but their view was paraphrased by the hon. Member for Howden (Sir P. Bryan) who said that we cannot split the BBC because foreigners will not like it. The political case is against it, though it can be overwhelmingly argued organisationally and structurally. That may be so, but when I look at the suppression of the Francis Report, and at the evidence that the BBC will not change its ways nor change the immense top-heaviness of its top echelons of management, I believe that my view and that of the minority on the Annan Committee is right.
We do not intend to cut the BBC off from its roots in the country, where local radio exists, but this must be the only plant organism to grow roots 50 years after the stem. The BBC managed for a long time without local radio stations. Indeed, initially it argued passionately against them. Now the BBC has local radio stations and it wants to keep them.
The Committee took a different view. Its view was that we need a new authority upon which local radio can develop. There are good stations, and some not so good. There are good stations in both sections of the system. Some of the smallest are some of the best. One mentions Radio Blackburn and Swansea Sound. It is not right to advance in the future with the BBC and commercial stations competing in every locality. It is not right for the competition to go on for ever and a day while many areas and many communities, which are communities of interest rather than of locality, have no local radio.
The BBC's proposals for local radio exclude Scotland and Wales. The BBC, in saying how much it loves local radio, has skated over this fact, just as it did over the fact that for much of the time local stations broadcast and transmit network material and not genuine local output.
Mr. Gwynfor Evans: I heard recently of the great success that
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the BBC has had with local radio in Wales. It got hold of an outside broadcast unit from the Irish-speaking part of the Irish network and put that Welsh programme over to several towns and villages in Wales. The streets were empty because people were so anxious to hear the programme. The BBC is extremely interested in Wales having a local as well as a national network.
Mr. Whitehead: I am not sure that the retransmission of Irish programmes in Wales is what I would call local radio, although I can see that it might be an Irish definition of local radio.
I should like to see many more of the communities in this country being able to receive at least one service of local radio. The idea of having the LBA, which would also look after the development of cable services and local television, is to see that there was some reasonable spread of these precious facilities for all the communities.
I have been heartened by the response of the public to our report, because the public, where they have been able to get a word in edgeways, have written to us to say that, for example, there might be a case in London for having a station that can be run by the black community and which will broadcast to them. It would broadcast to a particular group within this great metropolitan sprawl. Other, smaller communities have said that they like the idea of non-profit-making local stations that are financed partly by local advertising. In most areas local newspapers are flourishing in a way that the national Press cannot, and local advertising would mix this revenue with support from other services.
I leave a last thought in the minds of those who challenged the financial viability of our proposals for local radio. Why cannot the BBC enter into a relationship that is not one of ownership and colonial domination with many local stations? Why cannot the BBC have local services and pay local broadcasters as an alternative to owning them outright, settling them as miniature broadcasting houses in the community, which is what we have today?
That is what I say to my hon. Friend the Member for Carlisle (Mr. Lewis) and others who have spoken movingly about what their services mean to them.

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I do not want to see them all swept away in a miasma of pop and prattle, but there are new ways of running local broadcasting that can be tried. One has only to look at the way in which the cable services were begun and have developed. One knows of Swindon Viewpoint. We see new ways of communities running their own services, raising revenue for them and being responsible for them. The whole service grows out of the community.
I now come to my last word, and that is on the fourth channel. The proposals of the Committee have been derided and dismissed by those who in this debate have spoken for the companies and ITV. There has been a great howl of protest from those who cannot bear to share in a facility that they want to control. They have been aided and abetted by an outburst from the hon. Member for Aldershot (Mr. Critchley). Before he had even read the report he called it a dog's breakfast.
Mr. Julian Critchley: I know that the hon. Gentleman has been saving that crack for some time, and perhaps I deserved it. I read the story of the Annan Report which was fully reported in The Observer.
Mr. Whitehead: The hon. Gentleman read a leak from a preliminary draft of the report, and a highly selective one. He did not wait for the report. I see that as a result of his action on this matter he has at last been promoted to the Opposition Front Bench. Perhaps he feels that that was a worth while way of proceeding. Perhaps that is how the Conservative Party seeks out talent in its ranks—those who cannot wait for things to be published before commenting.
The national debate has to be more informed in these matters. We are not dismissive of ITV. Contrary to Pilkington, we praised it. We thought that its strength lay in the regional identity of most of the companies. We want to see that preserved in the network system which has a national and an international reputation. We are glad to see that the companies have brought something of the flavour of their localities to what they produce. Even ATV has been able to fit in amongst such distinguished Midlanders as Moses and Edward VII the
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Clayhanger series made by Stella Richman.
I mention Miss Richman because she is one of the independent producers who gave evidence to the Annan Committee, as many others did, and argued the case for the foundation that we want to see. These producers argued the case because they felt that it was more than just having an ITV 2 complementary to ÏTV 1.
There are other ways in which to meet the demand for work to match talent, argued by the hon. Member for Grimsby (Mr. Mitchell) who, like his wife, works in the commercial sector of television. One way to do this is to have the OBA, which operates as a publisher, on a loose rein which allows much of the new talent to come through. What has happened to that talent in the past, whether Television Reporters International, Kestrel Films, or many other small companies, is that they have been brushed aside by the duopoly.
The right hon. Member for Penrith and The Border said that it would be right to have ITV 2, but on conditions—and we waited to hear what his conditions were. Out they came, and we discovered that they were the conditions set out by ITCA! ITCA said in its statement after the report that the views of the Committee were divergent and were the result of inconsistencies and disagreements on the Committee, and that the report was settled on the basis of compromise. That is not true. The proposals on the fourth channel were the unanimous view of the Committee. They were the view of every member of the Committee who felt that there should be something new in broadcasting.
What should come into the system is a new way of looking at programmes, new ways of involving the community, and different arrangements for and different ways of paying for them. I believe that we could do it. Giving ITV another channel will not do it, given the kind of scheduling that there would be, which would only fit in with ITV1 and have an effect on the BBC's two channels as well. I do not believe that we can go on with that kind of competition, which is what we were referring to when we spoke of the straitjacket of monopoly.
I want to see a new channel run by a new authority, not set up if necessary for even five years or more. It could

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exploit many of the other creative outlets in the country which lack exposure to a wider medium through television. It could end the hypocrisy whereby we currently have sponsorship on channels that are supposed to be free of it, by making that sponsorship overt and not covert. It could begin to lead us to the world that is coming anyway, where building the mass audience complementarily on both channels—making sure that one does not lose a single viewer—between 6 p.m. and 11 p.m., is not the only preoccupation.
Like it or not, developments in our society will take broadcasting in the direction that Annan foretells. Whatever the House decides, we should not try to force broadcasting into a straitjacket, and graft everything new into the existing pattern. We have to look at the new technologies. We have to look at their implications for our society as it is and at the implications for the generation growing up—our children, who will be as literate and as versatile in these new media of communications as we have been in print.
The new way forward will mean that the old hierarchical way of doing things—the old preconceptions of television society and scheduling—will not stand up any more. There will be new forms of broadcasting. For example, I hope that one of those new forms will be the televising of the proceedings in this House, so that, instead of addressing 20 hon. Members who are waiting for me to sit down, I can address the nation at large.
This new approach was the keynote of the Annan Report—pluralism, more outlets, different ways of seeing and hearing, more innovation. That is the best way of rooting our broadcasting in all the communities of our society and helping the progressive spread and extension of our democracy in the years ahead.
6.32 p.m.
Mr. Wyn Roberts: The hon. Member for Derby, North (Mr. Whitehead) has given us a concentrated refresher course in the contents of the Annan Report, but he has left me in some doubt whether it should be called the Annan Report. Perhaps it should be called the "Whitehead Report". One thing we do know about the report—
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that it has been praised for its robust and ebullient style, and that characteristic was, I believe, transmitted to it by Lord Annan himself.
The report's venturous quality is not confined to the words and phrases which make the report so readable, as many hon. Members have said, even if its comments are not always totally justifiable. This quality also inspires the recommendations, which are imaginative and exciting in their way, even if they achieve that characteristic at the cost of a divorce from reality. What we have to do is to check those recommendations against the facts of broadcasting life as they are, and, as the hon. Member for Derby, North said, as they are likely to be. But I am sure that our conceptions of the future will all be different, all be highly individualistic. There is no time to talk about many aspects of the report, and I shall concentrate on one or two.
There is, first, the recommendation that the fourth channel be allocated to the Open Broadcasting Authority for the use of independent producers, the Open University, and the existing broadcasting authorities. This recommendation is, I believe, inseparable from the rejection of ITV 2 as a possible recipient of the fourth channel on the ground that the establishment of a second ITV channel would perpetuate the duopoly that we have heard so much about and exacerbate the battle for ratings. I think that the thinking not only of the Annan Committee but of the BBC—which, with typical acumen, supplied, along with others, the crux of the Open Broadcasting Authority idea—is erratic in this area.
In my view, the battle for viewers would probably be far sharper and more brutal if there were three contenders in the field rather than two, especially when the third would be a complete newcomer which had to survive and flourish. I am glad to see that the noble Lord, Lord Willis took much the same view in the other place in their debate, and I think that the hon. Member for Grimsby (Mr. Mitchell) was thinking along the same lines.
Let us take, for example, the, since Saturday, very topical world of sport, which has witnessed some of the most expensive skirmishes between the BBC and the IBA in the past. The Annan

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Committee on page 348 suggests that commercial sponsors of sporting events might
"put their programme proposals to the Open Broadcasting Authority and…provide the necessary finance for these programmes".
Of course they might. But it would be after rival bids from the BBC and the IBA for some of those events had reached staggering heights. The OBA might indeed be an outrageous success in rating terms if it went into battle with a will and with abundant risk capital. But I doubt whether the Government would supply that risk capital, or whether anyone else would.
In any case, is it that kind of authority that the would-be creators of the OBA really have in mind? Is that what any of us have in mind—an outrageously successful service in terms of ratings? I doubt it. Such a success would upset the balance of the broadcasting services which the Annan Committee would like to preserve—two popular channels, BBC 1 and ITV, with two minority channels in BBC 2 and the OBA.
So the odds are that if the OBA were to come into existence, it would be severely handicapped in one way or another, and if such were the circumstances of its birth it is questionable whether it could survive. The public expect a fully fledged fourth channel service, and to secure such a service from a completely fresh external source would seem to me to be a very tall order. After all, we are talking about 60 hours or more of television a week, week in and week out, and that takes a lot of organising, financing and supervising.
I do not think that the publishing parallel is really applicable. It costs a man little to sit down and write a book; it costs a great deal to make a television programme. With abundant resources, the OBA might be able to commission programmes on a grand scale and reject them if they were not up to standard. But even the Annan Committee is horrified at the wastefulness of such an editorial process. Indeed,
"something is seriously wrong with communications if this happens more than once in a decade",
it says of a commissioned programme which goes through all the stages of production
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but is not transmitted. Nevertheless, that is the essence of publishing. A copious supply of material on offer is matched by a total freedom to reject.
My conclusion is that, to run a successful television service, one must have a sustained, professional source of good basic programming; the backbone of a schedule must be there, and the only reliable existing source, as far as I can see, is Independent Television, which has spare capacity and resources. ITV has proposed a completementary service, which is not of itself competitive, as my hon. Friend the Member for Howden (Sir P. Bryan) pointed out. It is true that it means the perpetuation of the duopoly, but I suggest that a duopoly is likely to result in saner competition than a tripoly, which is what the OBA would involve.
I want to make a few comments about the fourth channel in Wales. Hon. Members will be aware that the Crawford Committee recommended that a fourth channel in Wales be brought into use as soon as possible to provide a service comprising some 25 hours of Welsh language programmes, derived from the BBC and HTV, which is the local independent television contractor. Following the acceptance in principle of this recommendation, the Government set up the Siberry Working Party, which outlined how the Welsh service might be established in practice. The Annan Committee
"recommend that the proposals of the Siberry Working Party should be implemented as soon as the Government can find the necessary finance."
The report goes on to say that eventually the Open Broadcasting Authority might take responsibility for the fourth channel in Wales as elsewhere.
We, as a party, suggest that the responsibility for the fourth channel in Wales, as elsewhere, should rest with the IBA. The question may well be asked, how we on our part reconcile this recommendation with the Crawford and Siberry recommendations. The first point to make is that under Annan the transmission of the fourth channel service is to be an IBA responsibility, so there is no change there. The outstanding questions, therefore, are whether the IBA should also control the scheduling of the service in Wales, and, if it is to do so, whether the schedule should include BBC Welsh programmes as well as HTV's, as recommended by

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Crawford, accepted by the Government and now endorsed by Annan.
Crawford and the Government envisaged joint control by the BBC and ITV, while Annan thought in terms of joint control as temporary and of final control by the OBA. The different broadcasting organisations will have different views on these issues. Nowhere in its evidence to Annan does the IBA state that if it were given the fourth channel in Wales it would incorporate the BBC's Welsh language programmes. The IBA view might well be that the BBC also had two channels and should put its Welsh language output on one of them. It is also a moot point whether the BBC would wish to place its programmes on an ITV controlled channel, although there is no fundamental reason why it should not do so provided that these programmes were properly identified.
We must consider this matter from the public's point of view rather than that of broadcasters. The non-Welsh-speaking majority of viewers and the Welsh-speaking minority both want the Welsh language programmes placed in a separate channel. However, there is a valid point in the Annan Committee's statement on page 414, that,
"if all Welsh language programmes were banished to the fourth channel…we think it would be the worse for the Welsh language and the heritage of Wales."
I suggest that the proper solution is for both BBC and HTV Welsh programmes to be transmitted on the fourth channel under the control of the IBA and for the BBC to continue transmitting selected programmes on its main Welsh channel and thus maintain the Welsh language presence on that channel in accordance with the Annan recommendation. This would be a fair distribution of responsibilities between the broadcasting authorities. ITV 1 and BBC 1 and BBC 2 would be clear of Welsh language programmes. BBC Wales would carry a selection, and the bulk would be on ITV 2—that is, the fourth channel. The IBA would bear the capital and operating costs of transmission, while the BBC and HTV would bear their own production costs, as they do now. HTV would also have to bear the costs of ITV 2 programmes taken from the network.
As to increasing the output of Welsh language programmes to 25 hours a week,
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as recommended by Siberry, even before the service starts, I disagree with this Siberry recommendation. It would require considerable extra expenditure and special provision would have to be made for it, but the increased output is not necessary to establish a Welsh fourth channel service as such. My view is that we should begin with what we already have by way of programming, and then increase output after the service has been established. The majority agree that a separate service is urgently needed in Wales. There is no doubt that the quickest way to get this is by allocating the fourth channel to the IBA, which has the resources to provide it before the end of the decade.
Finally, I want to comment very briefly on local radio. I do not think that the Committee fully appreciated the part played by competition betwen the BBC and the IBA in securing the present extent of coverage. We still have a long way to go before this popular form of service is within the reach of all the communities that can sustain it. That, I believe, is the strongest argument for leaving things as they are. Let the competition between the two broadcasting authorities continue.
In Wales, we have only one local radio station, the commercial station at Swansea, which is commended in the report. We could sustain other stations in Wales—at Cardiff, for example, which is the only capital city in the United Kingdom without its own radio station. There are other areas, notably the North-East of Wales, which could support a local radio station.
Annan approves of competition in excellence, and so do I. The broadcasters' challenge is not to give people what they want or what they ought to have but to give them what they have not dreamed of—as Shakespeare did—and, to give them their due, some of our best broadcasters in the BBC and ITV have also tried to do just that.
6.48 p.m.
Mr. Mark Hughes: I should like to take off from the point at which the hon. Member for Conway (Mr. Roberts) finished. In terms of local radio, I think that in this House I probably have a unique experience, in that Radio Carlisle, which was mentioned by the right hon. Member for Penrith and The

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Border (Mr. Whitelaw) and my hon. Friend the Member for Carlisle (Mr. Lewis), started its existence as Radio Durham, and I had the entertaining problem of being responsible for its closure and transference to Carlisle. Therefore, as one who has seen a local radio station closed around his ears, let me say that I had two letters from disgruntled constituents who were appalled at its loss, and not one other comment of any sort. It may not have had long enough to put down the roots that clearly exist now. However, it sometimes worries me that there is a mythology of deep roots in the locality—which means that a lot of noise is made by a relatively few very interested persons.
Mr. Kenneth Lewis: Surely the hon. Gentleman does not determine his attitude on the basis of his mail. In normal activities in society nowadays, there is an inertia everywhere, but it does not necessarily mean that because people do not write they do not miss a local radio, or anything else.
Mr. Hughes: I determine my attitude in that respect no more than I would judge the hon. Gentleman's learning on broadcasts of "Rutland Weekend Television".
There is now, however, in the North-East a proliferation of public and commerical provision which cannot be justified in terms of the mass coverage required for local radio in the country. Those same constituents, having lost BBC Radio Durham, are now provided with two commercial radio stations on medium wave and two BBC stations, whereas vast areas of the country have no immediate prospect of local radio.
If that is what Annan means by saying that there is a mess, I cannot do other than agree. I do not know why BBC television coverage in the North-East should be wholly inadequate compared with that available from Leeds, Manchester, Birmingham or Bristol. BBC television produced from the Newcastle centre lets the North-East down badly.
On radio, the BBC is in competition with Radio Metro in Newcastle, and is losing some of its clientele. Radio Newcastle, although it may not care for Shostakovich, is at least prepared to go that way. What worries me, when listening
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to the protagonists of the independent broadcasts and the BBC, is that we are getting very near to the stage where we accept that BBC radio is for a socially distinct, older group that would not be seen dead listening to pop and would leave that for the commercial stations. The impression given by some people working for the BBC is that commercial radio just blares out pop 24 hours a day with minuscule pretence at doing anything else. Both of these views are caricatures of reality. Is it an accident that Oxford has a BBC station while Reading has a commercial station?
Do we not see a risk in future, when allocating a commercial station to one area and BBC local radio to another, that there will be a mirroring of this ability to call up certain expressly social group pressures to bring in a BBC station? The ratio of BBC stations to universities appears to be relatively high, whereas the distribution of commercial stations appears to be rather more free flowing.
I wish to mention the problem of Scotland, which was raised by the Scottish representative on the General Advisory Council of the BBC. Annan seems to be extremely weak in this area. Apart from Radio Clyde, there is no local radio, either BBC or anything else, in the whole of Scotland. The assumption is made too readily that Scottish radio is local radio. It is not. In terms of the Scottish National Party it is, I suspect, a national radio in embryo, but in terms of the rest of British broadcasting it is separate regional broadcasting. I would welcome an increase in the independence given to regional broadcasting.
Mr. George Reid: The BBC is now broadcasting local radio from Aberdeen, Inverness and Greenock and has two very useful community experiments in Orkney and Shetland.
Mr. Hughes: I meant commercial radio stations other than Clyde. Radio Clyde is the only commercial station.
Mr. Reid: There are four.
Mr. Hughes: When did they start? I withdraw all that section of my speech, having been misinformed. I hope that I shall be better informed in turning to the problem of licence fees.

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I am sure that no hon. Member would welcome the prospect of having to go to his constituents and announcing an increase in the licence fee of perhaps £25 or £30 until the intricacies of pensioners in warden-controlled accommodation, and the benefits which they now enjoy, can be resolved. I note that the Annan Report recommends that the privileges enjoyed by pensioners in warden-controlled accommodation should be allowed quietly to fade away and die, while any new pensioner going into that sort of accommodation would have to pay the full cost of the licence fee. That solution does not appear to have much political wisdom associated with it.
As we move more towards households with two television sets and a high outlay on the annual licence fee, I urge the House to consider carefully whether licensing is the best way of raising revenue for the BBC. I do not think that the BBC's fears of losing independence of editorial control are as strong as its fears of losing money if it becomes politically inescapable that we cannot recommend higher licence fees in a period of inflation because that would give a great boost to inflation. I am not satisfied that the licence fee is the only possible way of financing the BBC.
I close by repeating that in looking at regional and local radio—allowing that I made a right codswallop of my efforts on Scotland—the concept of affiliate stations with the ability to plug into the BBC or other network material seems to offer the one hope of the vast majority of people in this country being given access to local radio. There is a difference between local and regional radio. But there will probably have to be some sort of mixture of moneys. I would prefer the affiliate status to the proposals formulated by the local broadcasting authority, but I think that the fourth channel may have to go to ITV.
6.56 p.m.
Mr. Clement Freud: This is a subject on which I think all Opposition spokesmen on broadcasting must have had a great deal or correspondence. I cannot remember getting more mail on any subject since a friend of mine entered my name on cards promising insurance
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benefits of £4,155 at the age of 65 and I was beleaguered by every insurance company in Britain.
The extraordinary thing in this case was that the correspondence on broadcasting that came my way all derived from official bodies. I did not receive a single letter from what could loosely be called a private human being. Each letter had as its subject one of those paragraphs at the end of which the Annan Report stated "We thus recommend…" and each time the report "thus recommended" anything at all, whether on local radio, cable or whatever, interested parties wrote with very good reasons because they felt—and in some cases I felt, too—that the Annan Committee should have made its recommendation the other way.
It cannot be easy, when given a brief on the future of broadcasting, to get it absolutely right by determining what is practicable now, what is impracticable now, and what should be practicable in the future. I think that perhaps the main argument—and it was on this point that I interrupted the hon. Member for Derby, North (Mr. Whitehead), who was a member of the Committee—was that the Committee tended to fail to recommend alternatives because it felt that in five or 10 years' time there would be a solution.
This is where I would argue with the Annan Report. After all there are periodic reviews of the franchises of independent television companies, and as ITV is almost ready to go ahead with ITV2, I see no great harm in giving it a chance to do so. The OBA will take five or 10 years to set up, and it could be given the franchise if ITV2 is found to be unsatisfactory.
In the same way, I think that the argument against cable television, which was based on the fact that there were too many kinds of cable television, is fallacious. It is wrong to suggest that we should stop the growth of cable television until we can define what system would be the most advantageous for the country as a whole. Surely the whole strength of British industry lies in the fact that there are different and differing systems, which should be allowed to grow so that people may eventually discover which is the most successful?

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It cannot be said often enough that the Annan Report was an absolutely smashing one, that it was well argued and readable, and that there was barely a boring chapter in it. If it cost £250,000 to produce, and even if it will cost £61,000 more to print, it is worth every penny. It is time that the House differentiated between a good report such as this and the fearful junk, in the same coloured jackets, that we obtain from the Vote Office on other, more frequent occasions.
I wish to comment on the arguments about the creation of the OBA versus ITV 2. This argument seems to have very little validity. It has been said that if the IBA gets control of the fourth channel, it might be able to direct television advertising at a compact minority of the public. I do not see that that would be a bad thing. It is not a bad idea to have commercials that go to people who might buy the product being advertised.
The other argument to which I wish to refer is that which says that the new channel would knock out newspapers. The hon. Member for Carlisle (Mr. Lewis), who made a quick entrance and a somewhat faster retreat, said that if ITV 2 came into being local newspapers would die. There is no evidence to support that suggestion, as the Committee recognised. People with commercial experience who worried about whether ITV, when it was introduced, would kill newspapers have now accepted that the share of total advertising commanded by newspapers has remained roughly the same over the last 20 years.
There is the argument concerning local radio and the new Authority to be set up to administer the IBA and local BBC companies. The Annan Report said that local radio was in a mess, and that was a pretty fair remark to make. I am not sure that it meant that local radio was in a mess in the way in which the Government Front Bench or the Liberal Party are in a mess. It meant simply that local radio was in a mess because the small independent companies have to pay far too much towards supporting the bureaucracy of the IBA and that in the unlikely event of their making any extra money they would have to pay a secondary rental from that money.
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Local radio is in a mess because frequencies and wave lengths are being jammed together to leave room for the fire service and the police. Anyone who is expert on the subject will readily admit that there is plenty of space in the air for the creation of 60 BBC and 60 commercial companies without spoiling or impeding the work of the fire or police services to whose broadcasts we are not, of course, allowed to listen, because that is illegal.
One of the points that has not been mentioned is that the BBC has to have local correspondents in order to carry out the designated work of the Corporation. Under the charter it is obliged to give a national picture of life in this country. If the BBC has an office in each county town from which reporters transmit broadcasts or simply information on tape to Broadcasting House, it is not a bad thing to use those local people to provide the local community with a few hours a day of information directed specifically and solely at that community.
We in East Anglia have possibly the most successful of all local independent radio stations. It is Radio Orwell, which I believe secures an audience of 73 per cent. of all the people in the area who listen to the radio and who tune in for about an hour a day, and there would be no reason why the presence of BBC Ipswich would not provide an incentive to both companies to give even better service.
The hon. and learned Member for Runcorn (Mr. Carlisle) mentioned the question of violence. The report states that there seems to be too much violence, and certainly too much unnecessary violence on television. In a mammoth Robin Day talk-in programme recently Mrs. Whitehouse was given a great deal of prominence when she said how totally unnecessary this violence was. Nevertheless, people should relate what goes on in the world to the violence of television drama. I can think of nothing more idiotic than for a news item about Sharpeville, Kent State University, Manchester United supporters going home, or a report from Ulster, Vietnam or some other trouble spot, to be followed by a fictional police drama depicting a non-belligerent policeman. It makes no sense to have seen an Old Trafford baton charge followed by a policeman on a

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drama programme saying "Excuse me, Sir. I hope you won't mind too much if I take a pair of handcuffs from my pocket and place them around your wrists. I should like to warn you that this could be painful and perhaps you would care to wrap a handkerchief around your wrist in order that they will not chafe."
We are living in violent times. Drama on television must have some resemblance to the type of violence which exists in real life. If not, we are living in cloud-cuckoo land and the whole strength of television drama lies in the fact that it can be, should be, tries to be, believed. Very few people believe in mollycoddling by the average policeman.
I think that perhaps the most irrelevant part of the Annan Report was the comparison between ITN and the BBC news and current affairs programmes. Sterile stuff, that with about as much relevance as comparing the services of different escort agencies. I am sure that hon. Members will know that all escort agencies actually employ the same women. All agencies have the names of the same escorts on their lists—
Mr. Ron Lewis: How does the hon. Member know?
Mr. Freud: I was coming to that. I once did an interesting article for a monthly magazine which has now gone out of business which asked me to compare the efficiency of the different escort agencies. For four days I went out with ladies supplied by the different agencies and for three days it was the same person.
There is so much cross-germination between ITN and BBC news and current affairs programmes, so many reporters, camera men and producers who move from one to another, that in a report about the future of broadcasting it seemed that a little less time might have been spent on as negative and sterile a point as this comparative study.
What I am consistently opposed to—and I believe that my life as a sports writer gave me a greater insight into this than that possessed by other hon. Members—is the duplication of events by ITV and BBC. There can be nothing more shaming than for a sports writer to go to Tokyo or Mexico to cover a world title fight or something else which has
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been bought by both BBC and ITV and to have to witness fights between colleagues of his own nationality intimidating one another in an effort to get a new angle on the same event.
I realise that in the case of party political broadcasts it is important, if someone wants to be seen at all—or to put it another way, if someone does not wish to be switched off—to give the viewer no alternative other than to watch that broadcast. For sporting events, the Cup Final or perhaps the Olympic Games, there is nothing gained by having the event on all channels at the same time. We believe in competition, and there is certainly no competition there.
I come now to the argument in the Annan Report about comparative merits between spot advertising and block advertising. I accept that it is a good idea that things that have not yet been tried on television ought to be tried. Although we are, without much argument, the best producers of television anywhere in the world, we have not reached a position where no one will catch up with us. But we learnt enough from the disastrous advertising magazine experience to know that to have a solid lump of, say, 25 minutes of advertising is an open invitation to people to switch off.
If we are to say "Let us provide competition in television financed by advertisements which are reasonably harmless" people will buy those expensive spots simply because the viewers will not dare switch off in case they miss the resumption of the programme. I do not believe in natural breaks any more than anyone else in this House, but it is simplistic to believe that if we have an Open Broadcasting Authority people will switch it on to see 25 minutes of solid commercials. They will not, and I do not believe that that is any way to finance a new, alternative authority.
On the subject of authorities, it is quite right that someone, somewhere, should be responsible for everything that goes out to the public, but we do already have two authorities that work pretty well. Surely the idea should be to make those authorities work better rather than create yet more authorities which will be even more expensive, which will give manifestations of even greater patronage and simply create another tier of bureaucracy.

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There has been some criticism of BBC Governors, who are immensely powerful, yet I doubt whether many people, with the possible exception of the hon. Member for Devizes (Mr. Morrison)—whose wife served on the Committee—know very much about them. By and large if we ask someone "Who are BBC Governors?" the answer will be "Anonymous geriatric fuddy-duddies". Oddly enough, it is one of the offices of patronage most coveted, although for the past 17 years Governors of the BBC have been paid the same amount—£1,000 per annum. If we want the BBC to work better we are lucky that we have people prepared to work as hard as the Governors work, often for a couple of days a week to do the job properly. The Home Secretary might think again about these most under-rewarded people. I am sure that they do not want more money but I equally am sure that, like all of us, they could do with a research assistant or two to make their responsible jobs a little more pleasant and manageable.
7.16 p.m.
Mr. George Reid: As the Annan Committee probably discovered to its cost, everyone is an expert on broadcasting these days. That may or may not be the fate of the House tonight. It is well for me, therefore, to confine my remarks to Scotland, and to the creative openings available to producers there, though I hope that they will have some bearing on the situation in the English regions.
The Scottish National Party seeks the same freedom for Scots broadcasting as it does for the Scots people. We seek the right to make and transmit programmes according to Scots priorities. The party wishes to end the provincialism from which much of the current Scots output suffers, to ensure a richer, much more creative programme service, and to strengthen and invigorate the Scottish nation's democratic life. Hon. Members may say "Fine, that is a perfectly reasonable objective." The problem is that it is not happening.
For a nation that claims to have invented television, through John Logie Baird, we have not had much success in its utilisation. Although we have production staff of high ability in Scotland, although there have been recent attempts
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to go for quality, as Annan recognised, much of the present production is trivial and homespun. Why should that be? What has the Annan Committee to say about the particularly Scots situation? Not much.
If I were a British nationalist I should find much of interest in the Committee's report, and I could say that it had done a fundamentally good job of going into the basics of broadcasting.
I agree with Annan on ITV2—that what the United Kingdom needs at present is not more broadcasting but a better standard of broadcasting. I am afraid that if the channel goes to ITV there will be a drop in quality if the advertising base is not wide enough—an upset in the delicate balance between BBC1 and BBC2 and ITV1—and ITV2, if created, might become the station for the "filler", the old films and the repeats. I agree with Annan on the democratisation of the industry and greater public consultation. I agree on pay TV.
I have my doubts about both a Complaints Commission and a Public Enquiry Board being set up since two bodies might fudge a clear line of democratic accountability. The Committee is badly wrong in terms of the Independent Broadcasting Authority, because it is a mistake in nomenclature to try to change the name to the Regional Broadcasting Authority. Such a title does not take account of the network back-up available throughout that channel. The report is completely wrong in terms of setting up a Local Broadcasting Authority. I cannot see what is wrong with the BBC and the IRC both continuing to provide local community radio services on exactly the present model.
Not many of these points have a bearing on the current Scots' situation, however. Why? Because Annan dipped into Scotland only briefly. He gave only a few grudging answers. It is certainly right that the Broadcasting Council for Scotland should be given a "modest" amount of capital expenditure in its own right. It is right that the Controller of BBC Scotland should be able to play his schedules according to Scots priorities. It is right, I believe, to praise Grampian and Border Television for the notable programmes that they have put out and the exceptional service that they have given to the local community. Perhaps

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it is right to look with a rather "gley" eye on the Scottish Television situation. It is not right to say then, as Annan did, that he did not know what to do about the STV situation, and turn the whole business lamely over to the IBA for solution.
The report might be fine on the coffee tables of Highgate and Hampstead, but I do not think, given the fact that Scotland is relegated to the status of a "national region", whatever that might mean, that it is the end of the story for Scots' broadcasting.
I give two reasons for saying that. First, the Committee steadfastly rules out the possibility of a Scots broadcasting authority being set up responsible to the Scots Assembly. However, it has to concede that Scots broadcasters will have to have a touch-point with the Assembly or Scots Parliament as soon as it is set up.
I give three examples. The Committee has to concede that Scots Assembly Ministers will have the same right to interrupt programmes for announcements that United Kingdom Ministers have at present. It has to concede that the Assembly will have the right to debate broadcasting within the Scots dimension. It has to concede that Members of the Scots Assembly will receive copies of the reports of all the various broadcasting authorities and that they will be consulted on the shape of the Open Broadcasting Authority in Scotland.
It is naive to expect a Scots Assembly to go through all the speechifying, the debates and the process of consultation and then meekly to sit back and let the Home Office and the Departments of Education and Industry and Trade take all the decisions. I do not believe that it will happen in that way.
Secondly, and for the record, let me say that the concomitant of Scotland gaining its independence is an independent broadcasting service north of the border.
Mr. Jim Craigen: Would that be a monopoly rather than a duopoly?
Mr. Reid: If the hon. Gentleman will bear with me, I shall answer that point in full later. I tackle, first, the position as it stands now. I shall go on to what could be done under a Scots Assembly and then I shall advance what should be done under a Scots Parliament.
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I must admit immediately that Scotland is not an easy country in which to broadcast. The terrain is difficult. The licence base, the advertising base, and the population base are small. It is not easy to achieve blanket radio and television penetration. However, there are still far too many "white" spots in Scottish broadcasting, especially in those remote spots that are most dependent on the media for entertainment and knowledge of the outside world. The need for good reception is in direct proportion to the remoteness of the area served. That is especially true in areas with oil-related developments where social amenities are few and where there has been a large influx of population in recent years. In such areas the need is obviously intensified.
I welcome what the Committee has to say about the extension of UHF and VHF radio coverage to the Borders, the islands and the far north. That must be a prime objective—the first media objective in Scotland. However, none of these modifications will do much to improve the quality of Scots broadcasting or get to the root of the malaise. I want to consider some of the reasons for it. As someone who has worked as a producer for "national" television in England and for "regional" television in Scotland, I suggest that there are five or six reasons.
The first reason is that Scottish television—I use the word in its generic sense—at present resides in limbo-land. Both our television channels have to attempt to provide a national service with largely regional resources. That puts tremendous pressure on channel controllers to programme right across the board. They have to put out Scots news, Scots current affairs, Scots politics and Scots information services. At the same time they have an inbuilt obligation to provide for a variety of specific Scots interest groups—for example, Scots education, religion, agriculture, law, industry and the arts. The pressures are not present on regional television companies in the North-East or the South-West to the same degree. Against that background, resources, staff and cash are spread extremely thinly.
Second, there is still intense schedule competition. The Scots viewer gets a diet of similar fare at peak hours. There is a great tendency to match like with like. In the national network channels I think that there is a fair case for saying that

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these days a programme scheduler has become more important than a programme producer. The ITV scheduler is anxious to gain an audience for the advertiser. The BBC scheduler is anxious to maintain a parity audience with ITV. As a result, there are problems with standards. Scots programmes tend to get squeezed out of peak hours, and budgets drop accordingly. Most of us would like to see far greater facilities for retaining opt-outs.
For example, if "World in Action", an excellent programme, is showing a programme dealing purely with Merseyside, that will not be of great relevance to the Scots. In those circumstances the Scottish controllers should be able to pull out and put in a Scots programme in peak viewing hours.
Given the fact that budgets, cash, resources and facilities are spread thinly, Scotland's wealth of creative ability is sucked south to London, Manchester or Leeds—the centres where the major network programmes are to be found.
Then there are the London dippers-in who arrive abruptly in Scotland. As a Scots broadcaster, I find it offensive that many of the major programmes on Scots oil, which is keeping the United Kingdom afloat at present, are done by people who are not resident in Scotland. They do not know the situation intimately, but are flown up for three or four days, from south of the border. These are some of the basic problems now facing Scots broadcasters.
How do we go ahead and produce broadcasting of quality in Scotland? I make three simple suggestions. I have said that broadcasting is not cheap, because of the terrain and population base. That is a prime reason for both the Scottish Council of the Labour Party and the Scottish National Party suggesting that there should be one ITV Scottish company. I make it plain that we are not suggesting the STV takeover of those excellent companies, Grampian and Border. We recognise the need for them to continue, to expand and to talk locally through sub-opt-outs to their own communities.
The reason for a single ITV company in Scotland is that then we would be getting precious close to the size necessary
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to qualify for membership of the "Big Five" network committee. If in ITV there were automatic Scottish membership of the network committee, we would have automatic network programmes. Given one company, the population base in Scotland would just about justify that membership. As a goal, I suggest that such a company might aim for network programmes as of right in proportion to population size: about 60 per cent. of the current network output of Yorkshire.
I turn now to the points that have been raised by the hon. Member for Glasgow, Maryhill (Mr. Craigen), who dealt with the post-independence situation in Scots broadcasting. It need not be a pale carbon copy of present British models. The present duopoly of public service—that is licence-financed—and commercial—advertising financed—alternatives may not be suited to Scotland's needs. For reasons of geography and population, once independence is gained there may well have to be a separate system of finance and development. That is the problem to which the hon. Member for Glasgow, Maryhill was referring.
Given our positive resources, how do we put money into the pockets of Scots broadcasters without putting them into the pockets of the politicians? Clearly, as politicians we have no desire to influence the editorial content of broadcasting in Scotland. Much will depend on the circumstances of individuals, but I hope that there will be interdependence on broadcasting. I hope that we shall continue to receive a large percentage of programmes that are generated in England. None of us wants a small provincial "kailyard" Scotland that is turning inwards. While we want to produce our distinctively Scottish investigative and overseas programmes, we should clearly want to pay for international news—from BBC, ITN and Visnews—generated south of the border.
The important point is that we are not a region of the United Kingdom; we are a nation with regions in our own right. How do we cope, media-wise, with that? I think that there is an interesting model advanced here by the Standing Conference on Broadcasting and the Scottish National Party to the Annan Commmittee—namely, that there should be one blanket body analagous to

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the Arts Council or University Grants Committee that stand between the Scots Treasury and the Scots broadcaster. That is a useful bridge. Underneath we should have the respective Scots programme services. STV1 and STV2 licence-financed, STV3 Commercial, an "open" channel, and so on. In Scotland this would be on a mixed economy basis. Such a body would allow co-ordination in Scotland and avoid much of the duplication of effort that takes place at present.
I am sure that the hon. Gentleman has no joy in switching from one channel to another on a Saturday evening and finding exactly the same football match, or whatever, when he might be inclined to watch a bad B movie, for example, or some information programme.
Secondly, the organisation should be responsible for the collection of all finance—licensing finance and advertising levy—and perhaps, in the Scottish situation, Treasury grant-in-aid. In a small country such as Scotland there is a case for saying that broadcasting is every bit as much a public service as is the provision of drainage and electricity in remote areas with populations of under 500, and it is perfectly reasonable to expect a Treasury subvention—[An HON. MEMBER: "What sort of Treasury?"]—a Scottish Treasury, of course—in such independent circumstances.
Mr. Craigen: The hon. Gentleman has been quite realistic about the difficulties of the terrain of Scotland, but I hope that he has not overlooked the fact that about 90 per cent. of IBA rentals in Scotland are devoted to capital developments. If he is anxious, as I am, that television should cover the whole of Scotland, a good deal of the financial resources of the authorities will be eaten up by the erection of transmitters, and so on.
Mr. Reid: I accept that, and I agree that the BBC and IBA have both done a good job in extending the provision of small transmitters. Perhaps part of the levy in Scotland could be devoted to that. In this House there cannot be hypothecation of levy to broadcasting needs, but I see no reason why part of the levy in Scotland should not be used to help finance the fourth channel to bring television pictures to small communities.
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Beneath that broad confederal structure we should have mixed programming, with the radio companies—both BBC and IRC—continuing much as they are now.
The Scottish National Party has no desire to create an inward-looking or excessively Scottish system of broadcasting. We want a wider range and variety of service at a high creative level and a distinctive Scottish contribution to the world of broadcasting. It is a pity that the Annan Committee did not investigate the Scottish situation more thoroughly, but simply "dipped in". It is a pity that Scotland was written off as a mere "national region". Perhaps Annan forgot that by the time his report is acted upon Britannia may no longer be ruling the Scots air waves.
7.33 p.m.
Mr. Hugh Jenkins: I hope that the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) will forgive men if I do not follow him into the Scottish Highlands. If I were tempted to do so I should be deterred by the fate which befell my hon. Friend the Member for Durham (Mr. Hughes) when he took pathways unknown to him.
Every speaker in the debate has prefaced his remarks with a tribute to the Annan Report. This strikes me as rather ominous. Almost the same happened a few years ago to the Pilkington Report. Everyone said what a jolly good report the Pilkington Report was, but nothing was done about it. In some respects, the Pilkington Report was a more revolutionary document than is the Annan Report. Perhaps that is why its main recommendation—that the Independent Television Authority, as it then was, should receive the advertising revenue and should redistribute it among programme contractors—was not implemented. That would at one stroke have got rid of the complete nonsense of franchising and the rubbish talked by all companies when they put forward a false prospectus in asking for a renewal of the franchise. There is not in television or in broadcasting a company which is closely following the prospectus given to the Independent Television Authority.
A very useful service was performed the other day on Capital Radio when Miss Anna Raeburn reassured the males

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of this country, who, perhaps, are suffering from a sense of personal inadequacy, that they need not worry too much. This was not a specifically London matter. There was nothing local about it. If there is a sense of inadequacy among the male population, it is widespread and is not confined to London. I give that illustration to show that local broadcasting is not local. It may conceivably be local in Carlisle, but it is not local in London.
Radio London does a very good and amusing round-up once a week of local newspapers. London Broadcasting broadcasts some of the proceedings of the Greater London Council, occasionally question time, but to say that these stations are really local is nonsense.
Therefore, I agree with the recommendation of the Annan Committee that an authority should be set up for the purpose of taking over local radio and ensuring that it is local. I hope that the Minister will consider that recommendation very carefully and will not reject it. There is a great deal to be said for it.
My hon. Friend the Member for Derby, North (Mr. Whitehead), who took us so clearly and comprehensively through the Annan Report, made it clear that the central proposition of Annan was what he called pluralism. I firmly believe in pluralism in broadcasting. I call it multiplicity. I believed in it when it was unpopular to believe in it. I was possibly the only member of my party who wanted to break down the BBC's monopoly. Hardly anybody on this side of the House was against it.
In communications and the arts multiplicity of source is essential. It struck me as utterly absurd and ridiculous that the same people who said that it would be disastrous if we were to lose daily newspapers and that we must maintain a dozen, or 20 as it was only a few years ago, organs of the Press were content that there should be one organ of broadcasting. That seemed to me untenable. Therefore, I supported the introduction of a second television channel. I agree with much of the Annan Report because it advocates multiplicity. It does not stick to the old idea that because we have a duopoly that is as far as we need go.
Annan says that local radio should have a separate degree of control. I even
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agree with the minority report, which suggests that BBC television and BBC sound should be separated. The greater avoidance of centralised control in the arts, communications and the media, the better. That is essential and basic. As I have said, the main Pilkington recommendation was not followed, and perhaps the same sad fate will befall some of the Annan recommendations.
I should like to deal with what should happen to the fourth television channel. Here again I turn to the idea of multiplicity. I like the Annan recommendation in this respect because it presents a new idea in television. It suggests that, instead of handing over the fourth channel to ITV, something quite different should be brought forward. What is proposed is a sort of house theatre. We already have a national theatre in the BBC. We have a commercial theatre in ITV comparable with the West End theatre. But we need a third—a house theatre which will take products from a variety of producers. It would provide something we badly lack in television. We have no fringe. Some endeavours have been made by open door programmes to create a fringe. Here we have an opportunity to create a fringe in television. We have an opportunity through the fourth channel to do all those things that are not being done, and will not be done while we have the duopoly. I regard the idea of a new approach to the fourth television channel as one which should gain widespread support. I commend the idea to my right hon. Friend.
Mr. Reid: Would not the hon. Gentleman agree that there should be access for independent producers and independent ideas who have no part in the present existing BBC or IBA set-up?
Mr. Jenkins: It is absolutely vital that that should be so. Indeed, under such an independent organisation anyone should be able to go along to the "house owners" as it were and say "I have got an idea for a programme. Will you find me a slot?" The organisation should be responsible for what goes into the channel and for a variety of things coming from a variety of different sources without a single brand name covering them. That is essential. A tremendous contribution could be made not only to that channel but to the whole newness of television itself.

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The danger at the moment is that television is beginning to settle down and is falling into a pattern. We are beginning to know what sort of thing we shall see on BBC1, BBC2 and commercial television. That is all very good, but it is time that something was done to prevent television from becoming gradually worse. That is the advantage of the fourth channel.
I do not intend to take up much more time, but I want to refer to the levy which at present goes into the Treasury. The hon. Member for Clackmannan and East Stirlingshire talked about hypothecation. That was a word invented by the Treasury for the purpose of centralising its control. Once the Treasury has its hands on some money, whether it is State money or not, it becomes hypothecation to take it away. If there is one piece of money which the Treasury ought not to have, and it would not be hypothecation to take it away, it is the television levy. The Treasury should never have had it.
What ought to have happened was that the IBA should have been given the authority to charge a differential rate to the independent companies according to their profitability. Because the IBA was not given that right, the companies became over-profitable and the Treasury had to take the extra money away because it was becoming a public scandal. That was not Treasury money, but money from entertainment, and it should have remained in the entertainment business. It would have been entirely right for that money to have been redistributed for the purpose of regenerating the unprofitable areas. This will be necessary if, indeed, we have a fourth channel.
One of the few things mentioned by my hon. Friend the Member for Derby, North with which I disagreed concerned the licence. My hon. Friend suggested that Annan is a matter for the next 10 years. There is an immediate problem. Do hon. Members really think that it is tenable for people to go on paying £18 or £20 a year for something that they do not look at? All over the country large numbers of people are reluctantly paying £18 a year, and are complaining about it, because by and large they look at the other programme. They regard the licence fee as something which they ought not be paying. They see it as a BBC fee, but they watch the other side.
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One of the reasons for the great objection to the licence fee is not its size, but it is that people feel that they are having to pay for something they are not using. That is the sort of feeling which exists. I, and I am sure many other hon. Members, have come across that point of view. People are asking "Why should I have to pay this? I do not watch BBC. I watch commercial television."
Mr. George Rodgers: That is an extraordinary suggestion. Does not my hon. Friend agree that the same objection is made about NHS contributions? People argue that they never utilise the service and ask why they should have to pay for it. My hon. Friend has not made a very valid argument.
Mr. Jenkins: I think it is a valid argument, because it is a question of choice. It is something that a person does not have to do. A person can choose not to use the BBC service. However, if one is childless one still pays towards the education service. The question of choice does not arise because once a person has a child that person is entitled to make use of the education service. It is a different argument.
I therefore suggest that the way of getting over this problem is to set up a broadcasting revenue authority. This authority, in accordance with the recommendations of the Pilkington Committee, woud have the right to collect all revenue arising from television. It would handle both advertising revenue and licensing revenue and redistribute it to the various companies. In that way we would overcome the problem while maintaining the independence of the BBC. We would maintain the independence of the commercial companies by maintaining their advertising basis of revenue. We could also develop local radio and the fourth channel because we would have an authority which had nothing whatever to do with programmes. It would solely be an authority which collected and redistributed money.
I have the greatest personal admiration for my right hon. Friend in spite of some occasional disagreements, but I believe it is wrong—I suspect that in his heart he may not entirely disagree—that the Home Office should have anything to do with television, broadcasting or anything else in this area. The Home Office

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is not in existence for the purpose of engaging in communications and the arts throughout the country. The Home Office is essentially a restrictive organisation. What we need is the establishment of a new ministry of arts, communications, entertainment and sport. We should bring together all these areas. There should be a minister with a seat in the Cabinet with responsibility for them. We should bring the arts and communications together, and thus give them the coherence and importance they deserve.
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): There are still 18 hon. Members who wish to catch my eye before the Front Bench speeches begin at 9.20 p.m.
7.48 p.m.
Mr. D. E. Thomas: The Minister will pardon me for being slightly cynical about his statement on the use of the fourth channel in Wales. In effect, it was the same kind of statement that we have had from the Home Office over the last two years. Indeed, when I met Lord Harris immediately after the publication of the Annan Report to discuss the implications for Wales and the recommendations of the report, it was very much an action replay of the meeting that I had with him when I first came to the House three years ago.
We have had a recommendation from the Crawford Committee and from the Siberry Working Party, yet there has been no real progress at all in implementing the decision to allocate the fourth channel to Wales and to give it some degree of priority. Indeed, Annan tells us that that this should be second in priority only to the extension of UHF television and VHF radio coverage. It also says that the provision of the fourth channel in Wales should certainly precede the use of the channel for the rest of the United Kingdom.
What seems to me to be emerging clearly from the Government's unwillingness to allocate any finance to the fourth network in Wales is that we shall not see any implementation of that recommendation, that there will not be any progress in Wales on the fourth network, until there is some progress on the fourth network throughout Britain. That is my main fear arising from the Government's
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failure to allocate resources to set up the channel. The longer this is delayed the more expensive the initial capital outlay will be on setting up the network.
The commitment, which was repeated by the Home Secretary this afternoon, was not good enough. There must be a clear statement about allocating resources to this new development. Only in that way will the commitment have any validity.
In the meantime, there is increasing frustration about the present situation in both linguistic communities in Wales. The present output of Welsh language programming by BBC Wales of 330 hours per year and the 280 hours by HTV is the maximum that can be contained within the present system. We know that throughout South-East and North-East Wales thousands of viewers have voted with their aerials and tuned in to transmitters based outside Wales to avoid having to look at programmes they cannot follow.
This means that the cultural deprivation of the English speaker in Wales is perhaps greater than that of the Welsh speaker, in that the English speaker in Wales is not being provided with programmes of his own area and interest. He is not receiving those. He has to look at programmes that are generated outside Wales. He has to look at the regional English output because he is not offered a linguistic choice on channels within Wales itself.
The proposal in the Annan Committee recommendations about which I have most misgivings is that, if the fourth channel is alive in Wales when the OBA is established, the fourth channel in Wales should become part of the OBA's responsibility. This is a basic failure on the part of the Committee to understand that Welsh language programming is not minority viewing, is not fringe—if I may use a word which has been already deployed by one hon. Member to describe how he hoped to see the OBA develop. It is an attempt to provide a broad general programme in Welsh. It is an attempt to provide a whole output of current affairs, light entertainment, sport, and so on, in the Welsh language. It is not in any sense minority viewing or a fringe development.
This was said categorically in the report of the Siberry Working Party—that Welsh

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language programming should be seen as a broad service and not as something exceptional, not as minority viewing.
The Broadcasting Council for Wales has expressed opposition to OBA control of the fourth channel. Siberry recommended that an authority be established to co-ordinate the setting up of the fourth channel within Wales. In my view, such a co-ordinating committee, if set up to run the channel, should be retained and become the nucleus of a broadcasting authority in Wales.
Another aspect of the Annan Committee's recommendations that needs to be criticised—here again I think that the Committee is guilty of trying to fit Wales into an all-British model as opposed to looking at the specific broadcasting problems of Wales—is the proposal that the BBC should no longer have anything to do with local radio.
The proposal to set up the LBA reflects again an attempt to pigeonhole Wales into an all-British structure when we all already have in BBC Wales exciting developments in local radio alongside the commercial radio station at Swansea which is so widely praised in the Committee's report.
We have seen the experiments which BBC Wales has done in community radio both in Welsh and in English. In those experiments BBC Wales has been not only providing a community radio service on a weekly basis in towns with a very small population—under 3,000—but has also been using programmes generated for the community radio as an input into the national network. In this way a link has been established between the community radio and the national network. Indeed, BBC Wales is planning further regional opt-outs within Wales on the basis of its existing pattern of send-outs throughout Wales. It would be a mistake to debar BBC Wales from continuing this activity in local radio and building up a relationship between community-based radio and the national network in Wales.
Mr. Michael Morris: Is the hon. Gentleman aware that the BBC, in its report "Serving Neighbourhood and the Nation", found its contribution in Wales and in Scotland to be not local radio but regional radio and derivations from that? That is relevant to some of the points made by the Home Secretary.
Mr. Thomas: When talking about the national network, I mean the national network in Wales. I am talking about the link established between the national programming done by BBC Wales since it made a split between VHF and medium wave, Welsh language programming on VHF and English language programming on medium wave. The concept of localised opt-outs from the main Welsh network of BBC radio should be encouraged rather than discouraged.
Mr. Whitehead: The hon. Gentleman is wrong. The Committee said that we wished to see extended the BBC's rôle of interpreting the different national regions of the United Kingdom. That meant a wider rôle for the BBC than the hon. Gentleman is talking about. It is not local community radio stations rooted on the ground as we have them in England. They do not have them in Wales.
Mr. Thomas: This is precisely what the BBC itself has been developing in Wales in its community radio experiments. If the BBC is prevented from continuing this kind of grass roots community radio within Wales it will be barred from having a fruitful relationship between community radio and the national network within Wales. That is my understanding of the recommendations. Perhaps the Home Secretary will enlighten us later.
As regards the fourth channel television, Annan refers to the question whether Welsh language programmes should be placed on one channel or whether there should still be a sprinkling of Welsh in programmes on the existing channels. This point was also made by the hon. Member for Conway (Mr. Roberts) when he argued that the ITV should take over the fourth channel and be able to provide through the Welsh language the service that we have been asking for.
I believe that it would be a mistake not to concentrate Welsh language programming in one channel. By not doing that we should still be faced with the very genuine argument of viewers who are voting with their aerials. I look forward with interest to the publication of the audience research figures giving details of the split between VHF and medium wave radio to see to what extent there is or has been built up a substantial audience for VHF Welsh language radio on a split frequency which the BBC has already brought to Wales.

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Finally, reference was made in the other place to the fact that television and the mass media constitute a grave threat to the Welsh language. This is not my personal view. My view is that the media in Wales have made a fantastic cultural contribution both to the consciousness and to the development of Welsh language culture. Through the medium of television national communication has been established in Wales. The history of BBC and ITV in Wales shows that they have been able to establish a national culture and a national Welsh language culture which prevented such a culture from becoming purely localised.
I think that television more than anything has made the Welsh language culture our national culture. Nothing indicates this more than the growth of the Welsh pop culture, which is due entirely to the medium of television. I want to see new technologies to strengthen Welsh culture, and this can be done only if we have the fourth network and the resources to set it up.
8.1 p.m.
Mr. Michael McNair-Wilson: I want to say a word about the proposals for an Open Broadcasting Authority. In reading the Annan Report I was continuously told that there could be a fourth or a fifth channel. The Open Broadcasting Authority, as set out by Annan, could not come into existence until the economy is strong enough to support the expenditure on it.
On the other hand, ITV tells me that it could set up a fourth channel by 1979 with no recourse to the taxpayer. Therefore, I would support ITV as the original organisers of the fourth channel, because if the fifth channel is there I am not damaging the concept of the Open Broadcasting Authority. However, I should prefer to see the fifth channel devoted entirely to education.
Any document purporting to be about the future of broadcasting must be portentous, and in this case it is voluminous. Obviously, it has been carefully researched and will become something of a bible for broadcasters. In my opinion, its contents rather than its recommendations are its value. I do not say this with any desire to be hypercritical of Lord Annan or any of those who worked with him, including the hon. Member for
1110
Derby, North (Mr. Whitehead). I do not find myself in agreement with many of its recommendations, and in reading the report I feel that it reaches recommendations that have little to do with the arguments that have led up to them.
I want to confine my remarks to Chapter 16 which deals with standards. It is fairly obvious that any broadcaster must ask himself one principal question about his medium. The question is basically whether he is an informer or an entertainer. The obvious answer is that he must achieve both rôles. But in the last 10 years, we have seen the broadcasting authorities placing more emphasis on being entertainers rather than on the more serious task of informing by news and views and by putting forward a balanced viewpoint between the various arguments in order better to inform the democracy.
I would go so far as to say that their attitude gives credence to the phrase that we heard some years ago—that they are inclined to trivialise great events and turn almost everything in life into an extension of show business. It is as if they have become master showmen in a world circus. As a result, they have not treated this tremendously powerful medium with the respect that it deserves. To quote Shakespeare, they seem to think that
"All the world's a stage,
And all the men and women merely players".
Because of that, the standards set have not enhanced our country, our society or our democracy.
These same points about trialisation, sensationalism and superficiality lie at the core of the American film "Network", which is currently showing in London, and must make us ask whether our television is going the same way as that of the Americans.
What is wrong is the cynical view of the world and its activities taken by the broadcasters about those who seek to be responsible for society. Not for nothing did the Prime Minister touch recently on the cynicism of the media, and I suspect that we are all aware of it. They think of television as being a mirror image of life when in fact it is nothing but a distorted looking-glass. Lord Hill once described it as a view that shows life, warts and all; in my view, it simply shows one aspect through the eyes of a particular broadcaster.

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Today too many broadcasters do not see society in positive terms with clear-cut moral standards or social values that are worth defending. They are simply knockers or questioners of authority. Certainly there is a place for that, and none of us can be complacent. But for too long this country has been suffering from too much of that sort of thing. Whether the televisers are affected by something that comes from other parts of the media or whether they are the purveyors themselves is a question that I leave to hon. Members to decide. The Annan Report touches on this aspect on pages 279 to 281 where it describes how certain important events in our lives—such as industrial relations, party politics and the Common Market—have been treated.
On standards, we must ask ourselves how we can raise them and enforce them. We know that the report goes into some detail about public concern over bad language, violence and explicit sex. But when anybody calls for some means of making these views known to broadcasters, Annan shies away. He will not hear of a broadcasting council but refers to a council for taste, which strikes me as being a million miles away from the wishes of most of us.
One viewer actually went to the trouble of counting and found that in the course of a year on one channel viewers were subjected to 3,500 murders. We must ask ourselves whether that sort of diet is all that we can get from this marvellous medium. The hon. Lady the Member for Northampton, North (Ms Colquhoun) may smile, but I wonder whether she has seen a survey which shows that one out of three children between the ages of 11 and 13 stays up to watch X and AA films from 9.30 p.m. onwards while broadcasters have the comfortable illusion that all those children have gone to bed and no harm can be done. Why are we so sure that this sort of diet has no effect at all on those who watch? Can we be really certain that the increase in juvenile crime bears no relation to programmes on television? I think that the broadcasters must say that they do not know whether there is a cause and effect, and add that "If there is any doubt, we shall not put out that material." They should take the view "If we are to put out X and AA films, we shall follow
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Annan and put a symbol on the screen such as that suggested by the IBA—and, better still, we shall censor out pieces of the film to bring them to the British Board of Film Censors "A" certificate standard.
Mr. Whitehead: The films have already been censored.
Mr. McNair-Wilson: Yes, but they are not censored to that extent.
Let me turn to the subject of the Broadcasting Council. I believe that members of the public who write to the offending authority or to its chairman or to their Member of Parliament are not given the consideration they deserve. Since the Annan Report makes that point, I am following its view. There is another factor. Although members of the public will be given a reply, it will be the kind of reply which I have received in the past from Lord Hill, Sir Charles Curran and Sir Michael Swann. Those answers have ranged from the arrogant to the anodyne, but never to the apologetic.
We are told earlier in the report that parliamentarians have a check on broadcasters. That is certainly news to me. If it means that, theoretically, we are able to table Questions, I accept the point, but if it is being said that we have a check in more material form, I should like to know how it is operated.
We are also told that the Governors and the Chairman impose a check, but we see on page 120 of the Annan Committee Report that
"Both Lord Hill and Sir Michael Swann have told us how hard it is to get BBC top management to accept proposals put to them by the Governors."
We then see from page 121:
"Sir Michael said that some producers are astonished when, having criticised some executive or business or group in a programme, their victims answer back and demand redress; and they are not only astonished but indignant if, after the hullabaloo, the Governors do not as a matter of course support the producer of the programme."
If that is the case, I should like to ask who does control the broadcasters. Why should we give them total editorial freedom that is enjoyed by no other organisation in the country? The BBC exists because licence holders pay their money—and, indeed, have no say in whether they pay it. They have to put up with what is said on television, whereas when

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a newspaper offends, the reader is able to cancel his subscription.
I believe that we should not dismiss the idea of having an outside authority—not a tribunal of taste, but a council agreed between broadcasters and Government representing a brake on the broadcasters, a body which can take up issues of taste, violence or bias, Sir Charles Curran recently said that we were being given the kind of drama we now see on television because only Left-wing dramatists were producing material. Apparently Right-wing or centrist dramatists are non-existent. That is a curious argument if the medium is supposed to be unbiased. The question of bias is central to democracy. If one or another is able to lend itself to a particular viewpoint, and that viewpoint alone, we are all in danger.
The Government should carefully consider whether the arguments against a complaints procedure have been made out. The individual with a complaint is in a different category, but I am referring to members of the general public who wish to complain because the authorities can put those complaints on one side if they do not suit their point of view.
If the Press Council works, and it does work, why cannot a Broadcasting Council work? If we are not to have a Broadcasting Council, will the Minister say whether the Government have given any thought to giving governors greater strength than the secretariat which was suggested by the Annan Committee? If we are talking about the future of broadcasting, it is the viewer and the listener who should be given pride of place above all the technical innovations. Unless we can guarantee that their voices are heard more effectively, the system will fall short of what is required, and our broadcasting may not remain the pride of the world, as many hon. Members have emphasised it is in this debate.
8.16 p.m.
Mr. Bryan Magee: I fear that this debate has not been forward-looking enough. I do not have in mind the trivial point that the report we are discussing is "On the Future of Broadcasting".
It has been argued by many speakers that we cannot keep tearing up broad-
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casting by its roots every few years to see how it is working. For that very reason the Annan Report presents us with what is likely to be the last chance we shall have in this century to revise the pattern of broadcasting in any radical way. Whatever decisions we in this House take on the report are likely to stick for another 15 years at the least and, much more likely, 20 or 25 years—which, as I say, takes us to the end of the century.
Therefore we should approach the subject with much more imagination and flexibility than we have done so far. There is much too much tendency to defend entrenched positions. That is a disappointing feature of the response with which the report has been greeted not only in this House but outside. On the night the report was published I appeared on a television programme on BBC to discuss its implications. The most striking feature of the programme was that every vested interest represented sought to defend itself. I began to think in that broadcast, as I have continued to think during this debate, that the general response to Annan is: "We approve of everything in the report except its proposals. Its argument is excellent but we do not like its conclusions." The representatives of the BBC said: "We think the report is good—but we do not like the bit about the BBC, particularly the part which says that the BBC should lose control of local radio stations".
People in ITV likewise give the report a great deal of praise, objecting only to the fact that it does not propose to give them the fourth channel. I regret to say that even the trade unions are guilty of the same kind of attitude. More than one of the trade unions with large numbers of members employed in broadcasting have shown themselves primarily concerned with defending the vested interests of their members rather than with broadcasting.
What matters most about broadcasting is the programmes, and the public who watch them. We should try to arrive at whatever organisation of broadcasting will best produce quality, diversity, integrity and entertainingness of programmes. That cannot be repeated too often. It is programmes that matter. The trouble with the policy document produced by the Labour Party three years ago was that it lost sight of that. It

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showed itself more concerned with the control of broadcasting than with programmes.
It is worth reminding ourselves that the four main principles enunciated in the Annan Report are: diversity, flexibility, editorial independence and public accountability. It is difficult to combine the last two, namely editorial independence and public accountability. Nevertheless we have shown ourselves to be successful in this country at devising institutions which spend public money but are not under the control of party politicians. The Arts Council and the University Grants Committee are examples. For that reason the BBC is mistaken in its fear that if the licence system is discontinued it is bound to lose its independence. This is one important respect in which I disagree with the Annan Report.
It would be perfectly feasible to devise a system whereby the financing of broadcasting came from Government money but was not under the control of party politicians. I should like to see the finance come from general taxation. That would be appropriate, because about 90 per cent of the people in this country—or at least of householders—have television, and that being so, the licensing fee functions as a regressive poll tax, which the poor part of the population is finding it increasingly difficult to pay.
But again I must stress that however broadcasting is financed it must remain absolutely free from the control of party politicians. The hon. Member for Newbury is nodding his head, but I took him to be implying the opposite during his earlier remarks. If I was mistaken, I am extremely glad I was mistaken.
Mr. John Mendelson: He wants to censor it.
Mr. Michael McNair-Wilson: Since censorship has been mentioned I should like to point out that we are all consumers of broadcasting. There is a Consumer Council, so why should there not be such a council for broadcasting?
Mr. Magee: The BBC has come out of this report very well. The point has been made that in one sense the report is a massive re-endorsement of the existing system. To some extent it is. However critical we may be about some particular
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points, we should remember that we have developed—although it sounds complacent to say so—the best broadcasting system in the world. Whatever changes we may make, we must preserve and extend that level of quality. That must be the first consideration.
However, there are some elements of hypocrisy in the BBC's attitude to the report. I remember the time, a couple of years ago, when in the early stages of the Annan Committee's considerations, word got round that a number of people on the Committee wanted to see the BBC broken up. The BBC was absolutely terrified. At that time the BBC would have handed over local radio almost with a laugh it it could thereby have ensured the continuing integrity of the existing television broadcasting structure. Time has passed. Now local radio—which the BBC had been prepared to hand over as though it were of little account in the total context of its whole operation—is the focal point of its criticism of the report. Indeed, the BBC is adopting a hostile attitude to the report because of that point.
It is desirable that we should have a special broadcasting authority for local radio, chiefly because of the way local radio functions within the BBC. It is a small tail on an extremely large dog. Local radio stations are, as it were, outposts of empire, a long way from the centre—under-budgeted even when they were set up, largely as an attempt to preempt commercial local radio. There has always been doubt about the motivation behind these stations, and they have never fitted happily, or totally successfully, into the broadcasting system.
I should like to see—as the Annan Report suggests—a body with local radio as its central concern. I do not want local radio to be the last concern of a body with much bigger concerns. It is always at the end of the line. Local radio can contribute marvellous things to the life of a community, especially very small communities. But it is essential that small stations should be considered as ends in themselves, and treated as such in administrative as well as other ways.
I endorse also the Annan proposal for a fourth channel. I am in favour of the fourth channel going to an Open Broadcasting Authority. Great lack of imagination has been shown so far in this debate.

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We are being asked to conceive something entirely new in broadcasting, and we have shown ourselves rather inadequate in forming this new conception.
Mr. John Mendelson: My hon. Friend the Member for Leyton (Mr. Magee) should not be too pessimistic. After all, this is a limited debate and many hon. Members may support what my hon. Friend is saying but they have not yet had an opportunity to speak.
Mr. Magee: I hope that my hon. Friend the Member for Penistone (Mr. Mendelson) will turn out to be right.
Within the existing set up new ideas can be developed only within one of two rather rigid frameworks—commercial broadcasting or the BBC. Anything that cannot grow up under one of those two umbrellas cannot grow up. The fourth channel, in the form advocated by Annan, would create open access for all comers. It would be an independent producers' channel—not necessarily a channel only for those people who are normally television producers, but one open to programmes from all sources. It would be much more like the traditional publishing function than the traditional editorial one. We should open our minds to that exciting new concept.
Those hon. Members opposite who are advocating that the fourth channel should go to ITV should be reminded that ITV would not only be as free as any other source to contribute to such a channel, in practice it would be—because it is the biggest independent source of manpower, finance, talent and so on—the biggest such supplier. But it should not be the only supplier of programmes to the fourth channel. And it should not control it. But, if the only concern of hon. Members opposite is to find a wider outlet for under-used talent, expertise and finance, it can be found abundantly in a fourth channel of that kind. Therefore their objections to the proposal fail. So in its two main proposals the Annan Report thoroughly deserves the support of the Government. I hope that the Home Secretary will reconsider his apparently half-hearted attitude to these proposals.
It is difficult when discussing broadcasting to ensure that matters are considered on their merits. Before he left the Chamber the hon. Member for the Isle of Ely
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(Mr. Freud) said that since he became a Member of Parliament he has received more letters on this issue than on any other. He added that not one of those letters was from a private constituent. They were all from interested parties or pressure groups. All of us who are concerned with broadcasting know that that is so. Alas, the general public shows remarkably little interest in the structure and organisation of broadcasting. For those who pour their life blood into broadcasting this can be hurtful. Nevertheless, it is a fact. Precisely because of this fact, hon. Members face an unusually sharp responsibility. The general public does not care, and the only people who do care are interested parties. We therefore have a double responsibility to make up our minds free from undue pressures.
There is another danger that the House may make up its mind on the basis of false values. I have heard far too many Conservatives, inside and outside approach broadcasting with an ideological prejudice in favour of the commercial principle. Equally, there are hon. Members on this side of the House who are ideologically against commercial broadcasting. These ideological stances, on both sides, are mistaken. We should try to put them aside. There is a place, as the present situation proves, for both public service broadcasting and the commercial principle in broadcasting. We should not allow ourselves to be blind to the virtues of one or the other on ideological grounds.
There are parts of the report that do not make specific proposals but should nevertheless be taken seriously. The part under this heading that deserves special consideration is the criticism of the bureaucracy of the BBC. There is quite a lot of criticism of the BBC for being overstaffed, top heavily bureaucratic, excessively rigid, and so on. I have done work for the BBC over many years, and I am involved in making a series of programmes for them now. Although I am not expressing any personal complaint—and some of my colleagues at the BBC will be angry at me for saying it—almost everyone who works with or for the BBC is forced to the conclusion that such criticisms as the report's are true. It is an excessively bureaucratic organisation. It is top heavily staffed. It does react either badly or complacently to criticism.

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I appeal to the BBC to take these criticisms to heart, and to try seriously to do something about them. I also appeal to the Home Secretary to think of ways of doing something about them. The great weakness of the Annan Report is that, having made these excellent critcisms, it proposes no solution to the problem. I see that my hon. Friend the Member for Derby, North, who was a member of the Committee, is nodding in agreement. Solutions must be found. The difficulty is that the BBC management cannot be expected to wield the axe against itself. No one wields an axe against himself. The BBC management would rather cut anything, orchestras or anything else, than itself.
A way must be found from outside—if it does not come from inside—of making the BBC cut the bureaucracy and overmanning, without posing any threat to programmes. I am sure it can be done. It is one of the most important responsibilities of the Home Secretary, who has the ultimate responsibility for the arrangements arrived at through the drafting of legislation. But I should still like to see the BBC do as much as it can to forestall action from outside because, as I said earlier, I do not welcome interference with broadcasting by politicians.
8.34 p.m.
Mr. Geoffrey Johnson Smith: I should like to confine myself to two aspects of the report—the financing of the fourth channel and the question of allowing sponsored programmes on television, especially those relating to sport. Following the custom and procedure of the House, I must declare a number of interests. I am on the IBA General Advisory Council, I am a member of the Institute of Practitioners of Advertising, a director of an advertising agency, consultant to two companies concerned with sporting activities, chairman of a consortium that hopes to obtain a commercial radio licence and, for good measure, I have a number of good friends in the BBC.
I hope that with those credentials behind me—from both sides, one might say—the hon. Member for Leyton (Mr. Magee) will acquit me of adopting an ideological and emotive stance. I am not ideologically motivated in favour of commercial television to the detriment of the broadcasting developed by the BBC. I
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admit that I have an ideological motivation in favour of freedom. I believe that we should have a greater variety of sources, because in that way we can contribute to a greater variety of programmes on existing channels and on the fourth channel, which I hope will materialise much quicker than will be the case if we accept the recommendation of the Annan Committee.
I suspect that this is where we differ. I agree with him and with the hon. Member for Derby, North (Mr. Whitehead). We go around congratulating ourselves that we have the best broadcasting services in the world, and perhaps that is true, but we also have some bad broadcasting. I agree with the hon. Member for Putney (Mr. Jenkins). There is a great danger of our sitting back and thinking that nothing should be done. We ought to have a look at the future.
I agree with much of the thinking in the report, and I am not being cynical when I say that I disagree profundly with some of the methods which it suggests should be adopted to achieve its objectives. In paragraph 15.18 it says that
"The greatest temptation in British television in the next 15 years will be to continue the present duopoly of BBC and IBA."
I notice that the hon. Member for Derby, North agrees with that.
The report quotes with obvious approval the views of someone whom we know. He is much respected as a pundit on television, a Fellow of Nuffield College, and a former distinguished television producer. I am referring to Anthony Smith. The report quotes this statement:
"If the fourth channel is placed in the hands of the IBA and the companies it will complete the symmetrical straitjacket of broadcasting and continue it for ever: two public institutions would each supervise two channels and they would compete, two by two, for parallel audiences in perpetuity. In other words, awarding a new channel or even a substantial part of it to the IBA and the companies would damage broadcasting irreparably. Better not to award it at all than to place it in these particular wrong hands."
With respect to Anthony Smith, that is pretentious, over-awesome stuff, and it is a pity that the Committee ever got hooked on it and served us up with a new organisation so inadequately and unrealistically financed.
I find it difficult to understand why the Committee, which praised the IBA for

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its governance, should paradoxically find it so difficult to concede that it could do just as competent a job overseeing a second ITV channel, approved by Parliament, to provide fresh opportunities for a greater variety of programmes from a variety of new sources and independent producers, in addition to those of the established programme companies.
Mr. Whitehead Mr. Whitehead rose—
Mr. Deputy Speaker: I know that hon. Members can intervene, but I remind the House that a number of hon. Members have been waiting all afternoon and evening to take part in the debate.
Mr. Whitehead: This will not be a long intervention. May I ask the hon. Gentleman why, if the Anthony Smith proposals are as bad as all that, IBA has come out with substantially the same ideas?
Mr. Johnson Smith: I shall come to that. Some of the thinking should be incorporated in the second ITV channel, but I do not think that we need the OBA. It is bureaucratic. It would be floated financially on extremely unsound lines. It is proposed for some time in the future, when the economy grows, when already we have an organisation that will put into operation in a very short time many of the things that the hon. Gentleman desperately wants. The Committee would have been much better advised to have stuck to the logic of its thinking rather than allow the emotional dislike of some of its members of commercial television to lead it into an impractical and wasteful compromise.
I am indebted to one advertising agency for this comment on the proposed financial arrangements. I shall not go into the details of its thinking, but I hope that the Home Secretary will take some practical financial advice from the companies that have to give advice on these matters.
According to Annan, the financing of the fourth channel would be provided by block advertising, sponsored programmes and educational grants. The analysis that I have seen is that on that basis the programming would have to cater for minority groups and not be allowed to be in competition with the BBC and ITV. On that basis, assuming that there would
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be 20 minutes of advertising during the day, it would yield £18 million annually. We know from the Annan Report that at 1975 prices the estimate is that it will cost about £30 million to run.
I believe that a careful study of the cost of the opportunities to bring in advertising revenue would reveal that that proposal is impractical and when one adds to it the suggestion that there should be no advertisements in children's programmes or between them, and that advertisements promoting products and services of particular interest to children should not be shown before 9 p.m.—not to mention the interpretation of what should be in an advertisement designed to be of particular interest to children—one sees that from the outset we would be saddling an enormous burden on those responsible for the OBA in embarking on a project that was inadequately financed.
One proposal by the Annan Committee that struck me as interesting and practical is that for injecting fresh cash into televised events by sponsorship. In the context of its proposals for the fourth channel, the Committee suggested that for certain types of programmes—for example, sporting and artistic events—the suggested new authority should be able to transmit sponsored programmes. When we set up commercial television we rightly rejected the system of sponsorship prevailing in the United States, whereby time is sold to a sponsor, who is then free to choose a programme and dictate its contents. As I interpret it, the Committee's recommendation is not for that type of sponsorship.
The Committee suggests a system that would permit a sponsor to buy time in order to bring to the screen a public event—for example, a sporting event-that he himself had helped to finance. In other words, the event would be something that was going to happen anyway and whose content was not being dictated by the sponsor. I presume that the extra amount of publicity and the shape it was to take would be subject to ground rules laid down by the IBA in accordance with the wishes of Parliament, just as we could impose our wishes on the IBA when it came to enriching the content of the second ITV channel.
There would be need for further safeguards. The Kerry Packer cricket deal and its unfortunate effects gave rise to

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considerable concern about the problems of bad commercial arrangements for televising of sport, and there is need for an arrangement to ensure that sport is not traduced and its rules subverted. It should be possible for the sponsor to make the arrangements necessary with the governing body of the sport concerned. Thereby, the sport itself would benefit and its ideals would be preserved.
Many sponsored events are already televised, with the names of the sponsors clearly to be seen. In no sport is that more the case than in cricket. The Annan Report says that this form of indirect advertising is a challenge to the principles of both the IBA and the BBC. Rightly, it says that the problem will get worse for broadcasting unless we do something about it. Improved facilities for spectators and more lucrative rewards for sportsmen are inevitably leading to higher costs. The Director-General of the BBC has complained more than once of attempts to bribe his cameramen. The problem of how to deal with this form of advertising is a complicated one, and it has led to the banning of cameras from Formula I racing. On more than one occasion a blind eye has been turned to obvious transgressions.
It is time that common sense and financial reality came together again. All of us, I hope, resent the worst forms of commercialism, be they in sport or elsewhere, but in our kind of society, which rightly rejects the Eastern European methods of State dominance, I believe that we can and should recognise sponsorship along the lines that I have mentioned and clean out a lot of the cant and hypocrisy at present enveloping the whole question of the relationship of advertising and televised sport. I believe that broadcasting can benefit from less covert means of publicity. Certainly, sport itself can benefit from the extra funds and much support from this additional investment. Meanwhile, the sponsors would be entitled a fair return in publicity for the amount of money that they had invested.
I am glad that my right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw)—with most of whose speech I agreed—touched on the question of pay-TV. There are other ways of providing for a wider range of programming. Pay-TV and cable-TV are just
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two. The report did less than justice to these forms of financing programmes. Perhaps the reason lies in the belief that TV belongs to and is an extension of the broadcasters and therefore that anything not transmitted by the broadcasters is an intrusion into their domain. "Parasite" was the word used in the report to describe pay-TV.
But TV is not wholly something that belongs to broadcasters. We are no longer wholly dependent upon them, technically. The advent of video-cassette machines has changed all that. With video discs and the Post Office's own view data system, all these additional facilities are on the threshold of mass consumer demand. Those who want to own or use the facilities have to pay for them. Pay-TV is such a facility, which people should be able to buy or not to buy, as they choose. They should be given that freedom, be it in their home or if they are staying at an hotel. To put it out of court, along with—for the time being—cable-TV, because it is merely distributing film material and not originating it, is like banning booksellers because they do not write books.
To conclude, whatever my strictures and reservations about the report, I should like to express my own appreciation and thanks for all the hard work put in by the members of the Committee. It has led to their producing quite the most lucid and informative report that we are ever likely to read. It is a pity, as I have said, that the Committeee's conclusions do not follow much of the logic of its thinking.
8.47 p.m.
Mr. Jim Craigen: Following, as I do, the speech of the hon. Member for East Grinstead (Mr. Johnson Smith), I must say that I found the speeches of my hon. Friends the Members for Derby, North (Mr. Whitehead) and Leyton (Mr. Magee) among the more stimulating. However, I had to keep reminding myself that they are professionals in broadcasting. Indeed, a number of hon. Members who have spoken in the debate intimated that they have either advertising interests or professional interests in broadcasting.
One cannot help but feel that the Annan Report may share something of the fate of the Layfield Report on Local Government Finance, because while everyone has been calling for reform for years,

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there is no clear agreement about the means by which we shall actually fund the necessary reforms. Just as the two consultative documents of last week on local government finance said, more or less, that the existing system is not so bad after all, I have a feeling that the Green Paper or White Paper on Broadcasting, when it comes, may be in similar tone.
It struck me as significant this afternoon the Secretary of State had to be drawn on the question of the BBC licence fee. It was not in the content of his opening speech—although I accept that there are limits to what can be covered in the opening speech. None the less, the fact is that finance will be the Achilles heel for both the BBC and the IBA. The question is whether the public will be prepared to pay for more and better broadcasting in the future, and it is not one that has been readily answered today. The right hon. Member for Penrith and The Border (Mr. Whitelaw) said that he was not very happy about the idea of index-linked licence fees, so we shall not be placing the BBC licence fee in the same category as old-age pensions concerning index linking.
In one sense, it is important to answer the question posed by my hon. Friend the Member for Leyton when he spoke about how we should cut the size of the bureaucracy, because if one just closes the tap sufficiently on the matter of the licence fee, the authorities will have to sort it out themselves.
There are, of course, some postive ways in which British television has been trying to earn money. One of these is the contribution it makes towards our balance of payments by selling programmes abroad. I know that there are certain quotas on the number of foreign programmes shown in this country, but I hope that in the foreseeable future there might be a higher content of programmes from Western Europe—and indeed Eastern Europe—with perhaps a proportionate reduction in the number of rubbishy American films that feature so often on our television screens.
I wish to make one point concerning the Open Broadcasting Authority. I note
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that my hon. Friend the Member for Derby, North, after the diligence of three years' work on the Annan Committee, was still freshly enthusiastic about some of the Committee's proposals. There is no doubt that the OBA, or "off-beat authority", will be something of a challenge to the existing order, but we have to accept that this proposition is a long way off. Where will the money come from to finance this hybrid broadcasting authority? I agree with the hon. Member for East Grinstead (Mr. Johnson Smith) that, like Noah's Ark, we seem to do everything in twos. I am not saying that there would be no scope for a third broadcasting authority in the future, but I think that it is more in the future than the present.
I do not think that any hon. Member has yet referred to the interface between broadcasting and the Press, and perhaps this is something about which we ought to be thinking much more seriously. We are still awaiting the final report of the Royal Commission on the Press. Hon. Members will realise that the Press and broadcasting are the main means by which we get our information, apart from our entertainment and adult education. The Annan Report referred, albeit briefly, to the interlocking between commercial television and Press interests, although it added that we must not over-play this.
In the present context of the difficulties facing some of our national newspapers, quite apart from the difficulties that they get into by publishing forged letters, there is the real problem of a growing monopoly or oligopoly of news distribution in this country in the future. I think that my right hon. Friend the Home Secretary and his Cabinet colleagues will have to look more closely at the interrelationship between broadcasting and the Press. The newspaper industry is going through some of the same problems as broadcasting is coming up against in terms of technology and inflation.
There is a need for some kind of strong independent audience research, which could perhaps be coupled with an effective complaints procedure against the broadcasters, which must exist in any free society, just as we have a procedure against the Press.
I have one more point to make on a matter referred to by the hon. Member for Clackmannan and East Stirlingshire

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(Mr. Reid). Many of us would like to see the television companies in Scotland making a bigger contribution to the national network. The problem is one of trying to balance cultural aspirations with the technological financing of the industry.
A significant point was made by the hon. Member for Merioneth (Mr. Thomas) who said that television had generated a great interest in cultural matters. That is fair, but it cannot be divorced from the sheer cost of financing an effective television set-up. I cannot help feeling that, in spite of the enthusiasm shown today by my hon. Friends about the future of broadcasting and the need to set up an Open Broadcasting Authority, when the BBC charter and the IBA contracts come up for renewal, in 1979, the watershed year, it will be a matter of "stay as you were". I do not think we shall be ready to grasp the opportunities that now face us in broadcasting.
Several Hon. Members Several Hon. Members rose—
Mr. Deputy Speaker (Sir Myer Galpern): Order. Five speeches at five minutes each will enable all hon. Members who wish to participate to be accommodated.
8.57 p.m.
Mr. Tim Rathbone: I am in the world of advertising, though not, as the hon. Member for Leyton (Mr. Magee) suggested, ideologically committed only to commercial television. If I have any ideological commitment it is to the difference between broadcasting and narrow-casting. That point has not been brought out in the debate.
I am frustrated at having only five minutes in which to speak, and I hope that the Home Secretary will give an assurance that once the White Paper is published we shall have a full debate. If that happens, Mr. Deputy Speaker, I hope that I shall be able to catch your eye at an earlier point in the evening.
I believe that it is most important for the Government to make absolutely clear to the BBC that its licence fee is not dependent on maintaining a 50 per cent. share of the audience. This point crops up in almost every conversation that I have with BBC people. It is an unfair yardstick to apply to their performance.
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Secondly, I believe that licence fee increases should be contained. The BBC must look for economies, and in looking it might come to the conclusion that it should divest itself of local radio—not to eliminate those stations that are so well established but purely as an economy measure. I believe that reductions in the bureaucracy are possible. An hon. Member who worked for the BBC confirmed that earlier. I wonder what other economies there might be.
In addition, could not the BBC be charged with the investigation of more cost-efficient yet politically independent ways of raising its own finances? Programming by a new and entirely independent authority would be more rather than less likely aggressively to seek audiences in order to establish its own existence among viewers.
Therefore the fourth channel should evolve as a complementary service, not as a totally separate and competing one. We must remember that there will eventually be much competition locally from cable television, video cassettes, video discs and teletext systems and the like.
Programming could be kept to the sort of quality and balance envisaged by the Annan Committee only if it could be planned as part of a balanced two-station system, because otherwise it must abandon its principle and seek out its audiences or, inevitably, there must be a drop in standards as interest wanes.
Local radio needs extending, and that should be left to the commercial companies, because that would put the least burden, if any burden at all, on the taxpayer. It would, in addition, include the establishment of satellite stations to those stations already created. The present local BBC stations should be continued.
I also believe that one day there may be room for a Local Broadcasting Authority. I do not believe that it is necessary at the moment, from a cost standpoint and because there is not sufficient responsibility for it to take under its wing.
I deal now with two technical points, the first relating to the comments on advertising during the so-called "Children's Hour". This overlooks the safeguards already existing in the ITA code. It genuinely underestimates the power of choice and decision among children

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today. I speak from perception of my own children. It is a somewhat peculiar logic that children should be stopped from watching commercials aimed at them whereas there should be no limitation on their watching commercials aimed at their parents. The loss of revenue from that time segment might lead to a diminished quality of children's programmes.
My other point has to do with research. Co-ordinated research could be valuable. We have to be careful that it is more cost-efficient than present research and that quality does not suffer. I welcome the suggestion for a complaints tribunal. I question the idea of an institute of broadcasting affairs. I am reassured by the assurance that broadcasting is to remain responsible to Parliament. I ask the Home Secretary to make it possible for us to have annual debates on the reports of the BBC and the IBA, since that is essential if we are to have this responsibility.
9.2 p.m.
Mr. George Rodgers: Few would dispute that the Annan Report contains much that is of great merit. A great deal of it will be accepted and approved by the majority of hon. Members, certainly by those employed within the service and by the broad community outside who receive the programmes. My criticism of the report relates almost exclusively to the observations and recommendations concerning regional television and local radio.
In this area I find the report to be not only ill-researched but contradictory in places and certainly offensive in some of its remarks about those who work in the regions. To suggest that the situation there was bizarre and rustic and that there was introspection in the regions was unnecessary and has been resented by those employed in the regions by the BBC.
The Annan Committee describes broadcasting in Britain as an "inhibiting duopoly" and it proposes that the BBC should cut back on its regional services and that the commercial companies should become responsible for a single service regional television system. To seek to remedy a problem created by duopoly by establishing a monopoly is a curious thing. By definition, a monopoly forbids competition, and in my view the
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proposition, if carried into effect, would result in a stifling monopoly based on commercial considerations. Annan claims that there is only small evidence of attempts to interfere in programme content by those who provide the revenue. If the commercial stations had the field to themselves, the circumstances would be completely changed. Then there would be enormous pressure by those who pay the piper to dictate the tune.
There is a greater danger. If a monopoly by a commercial outlet is tolerated at regional level there will inevitably be a demand for a similar arrangement at national level. At present the independent television service is bound to respond to the yardstick of quality provided by the BBC. Should this criterion cease to be available the standard of television broadcasting would surely diminish to what Annan describes as pop and prattle. There would be an attempt to maximise audiences for the benefit of commercial interest.
There is the illusion that commercial television is "for free." In reality, the cost of the advertisement is added to the price paid by the consumer purchasing the goods advertised. I see no evidence to suggest that any article has become cheaper as a result of its virtues being proclaimed on radio or TV.
In current economic circumstances the rôle of the advertiser is somewhat odd. Government policy is designed to persuade the public to restrict their spending and accept a lower level of incomes. At the same time, we have advertisers seeking to persuade or stimulate people to indulge in an orgy of spending, usually on trivialities.
Mr. Rathbone: Nonsense.
Mr. Rogers: I am concerned substantially about local radio, especially in the area with which I am most concerned, namely, the North-West. Fewer than half the Annan Committee spent less than half a day with the BBC in Manchester. None of the Committee visited the regional television operation or showed any interest in it. I believe that in 1966 and 1967 the North-West regional television operation cost £840,000. It went out to a potential audience of 7 million. That works out at 1p per person per month. Surely that is a small price to pay to

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prevent an insidious commercial monopoly.
There has been little correspondence on this subject, but I have been advised by some of my constituents that I should defend BBC local radio to the death. I am prepared to go a little way along that road. BBC local radio provides a unique and intimate service. It recognises that hon. Members are prepared to broadcast at the drop of a hat. It has recognised that hon. Members do not warrant a substantial fee, as is paid by the major stations. It provides a service to the in-living communities and minority groups. I believe that that would be siphoned off if left in the hands of commercial operators.
I cannot anticipate that commercial interests would be prepared to support a consumer programme that was critical of consumer provision and to interlock that programme by occasionally advertising the very goods in dispute. I know of a consumer programme in Manchester that has 1,500 calls a year. That programme would be put at risk if the proposals in this sphere were implemented.
I hope that we look upon the Annan Report and act upon it with common sense and decency. I hope that we reject those parts that are in defiance of those objects.
9.7 p.m.
Mr. David Crouch: I very much agree with the Home Secretary that independence is precious. The right hon. Gentleman has said so, as has my right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw). Every hon. Member has recognised the preciousness of independence of the authorities. That applies to the IBA, the BBC or any new authority.
The Annan Report properly said that during the war it was the BBC that was trusted world-wide for its independence of views and news. It was never a propaganda unit. That should be remembered.
The report concentrates on the duopoly and the need to drop it. I do not follow it in that respect. I do not think that the matter is so serious as it is claimed to be in the report. I want to see the BBC preserved. I am a great admirer of it, with all its faults, warts and all. I want to keep both the BBC and the IBA.
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Competition has greatly helped the BBC. It has become sharper. It has lost much of its old-fashioned image and has achieved greater ratings than the IBA in many instances and on many occasions.
Competition has helped to produce a well-balanced independent television service. It is well balanced in as much as it has not gone down the drain like heavily commercialised television in the United States. I was on the Select Committee on Nationalised Industries that examined the old ITA some years ago. Mr. Stanton, the President of CBS, told us that he had to take live theatre out of the programme of the CBS network in the United States because he could not achieve a 25-million audience. He had to give way to re-run films and old Westerns that would capture a greater audience. He told the Committee that the power of commerce and the power of advertising—I used to serve in advertising to a greater extent than many of my colleagues—had driven the good out of television as provided by a commercial service. This was said by one of the most influential commercial television people in the world, the President of the Columbia Broadcasting System. In this country, however, we have managed to keep the two in contradiction to each other but balancing, competing and helping each other.
It is not so much a question that the BBC and the IBA have a responsibility for what they produce but that they should be responsive to the public. That is brought out clearly in the Annan Report. I have read the Report. A great deal of work is involved in reading it, as the Home Secretary and my right hon. Friend the Member for Penrith and The Border admitted. It contains 500 pages, but it is worth reading. The report said that both authorities must not only continue to be responsive but must be more responsive and must get closer to the public.
I agree. I do not wish a Public Enquiry Board to be set up. I merely wish the present authorities to be more accessible to the public. The Governors of the BBC and the members of the IBA should go out to meet people in the regions and to listen to their views, as hon. Members listen to their constituents. They must be more visible. They must not sit in Broadcasting House or in the IBA premises thinking that they are visible. They must

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meet the people and explain their reasons for their actions.
I have a letter, which I do not have time to read, from Sir Michael Swann as a result of a complaint which I transferred to him' from a constituent about a play on television early this year which depicted an explicit rape scene. I had a good explanation from Sir Michael, who is Chairman of the BBC's Board of Governors, setting out why he felt that the scene should be shown. It has helped me, and I think that it has helped my constituents who complained, to understand that there is another side to the coin.
Unless the authorities make themselves accessible to the public, that understanding will not be possible. They must remember that they are not like the producers of a play during the first night at a great London theatre. There are no first nighters or critics of the performance in the gallery. There is no worry about whether the show will have to come off after the first night. The BBC and IBA must remember that there are not catcalls or boos. The public are very disturbed occasionally by what they see on television. Television is different from the theatre and the cinema and from what one can read in a book. It is seen collectively in the home by our children and friends. We have not reached the stage of having a television set in each room.
The authorities have a big responsibility to be responsive to the public. They have a responsibility to censure but not to censor. They must catch the producer by the arm in the studio and say "People do not like what you are doing. They do not like all this bad language. There is perhaps another way of doing this". The producer may say "This is real. This is what happens in Britain." The Annan Report rightly says that the producers should be caught by the elbow rather than twisted by the arm. This is typical of the Annan Committee's understanding of the English language and of current feeling in the country.
As Lord Clark has said, the authorities have an opportunity to enlarge their knowledge and to stimulate interest, and even to change their views and attitudes. They have the opportunity to hold up a mirror to nature. We should not underestimate their influence. We may say that
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they have no influence on our behaviour, but the advertisers who book IBA lime recognise that they have an influence: they book time for that reason.
The broadcasting authorities have a great responsibility. They must be more responsive to the public. The only accountability I want them to have is to be directly accountable to the public by going out to meet them. They must remember their accountability to Parliament and to the Government and bear in mind the criticism that they received from hon. Members in voicing the opinions of their constituents about what they hear and see. That is the only accountability that I want to see. I want to see the authorities maintaining their independence.
9.15 p.m.
Ms Maureen Colquhoun: In the short time available to me I want to say that I am against the increase of commercial enterprise in local radio stations. I believe the end results of such an increase will be a number of things, like a brief news flash, pop music, phone-ins and the sale of products. One has only to look at what has happened to radio in the United States to see the progressive horrors of such a policy. A great deal of local air time there is spent on the phone-in, when people are engaged in selling things to each other. All that more commercial radio in the United Kingdom will result in is a kind of "Exchange and Mart" of the air, briefly interposed with the time of the day or night, the latest world disasters—laughingly called news—and the trendiest pop group, which will be called music, also heavily influenced by the debilitating pressures of commercial considerations.
The whole concept would be a travesty of broadcasting. The BBC has no doubt been and still is of inestimable value to Britain and the outside world, but it is—and this has been its overwhelming failure—a very insular group. It is also an overstructured one. Decisions are made from the top, and entry to the organisation is from the bottom, working one's way up. This has resulted in the "Beeb type" insular mind, where original ideas are nearly always sapped by the bureaucratic structure. People are sent out to the provinces hopefully in order to progress to Portland Place. They naturally tend to toe the "Beeb" line.

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I want to talk about that part of Annan which has concentrated on the question of trust radio. I have an interest in this. I am a trustee of a non-profit making group, which is hoping to set up a women's radio service that is in no way meant to be confused with BBC Radio Four's "Woman's Hour", which, typically with the BBC structure, broadcasts in the early afternoon. Any item of faint interest to working women, now well over one-third of all adult women in this country and the highest percentage in Europe, is never heard, nor can be heard. "The Voice of Women" plans to broadcast international news concerning women—particularly in the Third World—not covered by any existing news service, as well as conditions of employment, housing, education essential to Britain's growth, and progress reports on the Equal Opportunities Commission, its achievements, and how women can best use its facilities. The Arts, women painters, musicians and poets get hardy any coverage at all, in the traditional broadcasting sense. That was a feature of the Annan Committee—a diversity of broadcasting interests.
We shall also broadcast women's sports, because the media has always assumed this to be a male prerogative. It is assumed that women make the tea or sandwiches and that the men play the cricket. One has the impression that only tennis is considered by men to be a nice female game, because that is basically the only sport ever covered.
Women play as well as work. With all the pressures in today's society I do not know how women get the time to play after they have looked after their homes, their husbands, done the shopping and taken an outside job. As for health information, there is hardly any coverage at the moment. Almost non-existent is information about cervical smear tests, breast examinations, contraception, abortion, and the menopause. There is a lack of basic information on all these issues, which could well be covered by a women's radio service. That is why a group of women have got together to set up a non-profit making trust to communicate women's news at a time when women, and particularly working women, can listen.
Annan has shown that wavebands are available and that more air time can be
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used. Although the Committee does not speak of discrimination against women other than in the career structures of the IBA and BBC, and having taken note of the information supplied to it by "Women in Media" and other organisations, one would have wished that it could take a look at the indirect discrimination in programming. Nevertheless, there is no doubt that there is a real need for a radio frequency that will provide a service for over half the population of the country.
I end with a protest. I have sat in this Chamber for the whole of this debate and I have been told at the end that I can squeeze my speech into five minutes. When I think that I have been the only woman speaker and that I have listened to the waffling of right hon. and hon. Gentlemen, who have sometimes gone on for over 35 minutes at a time, I am disgusted. I hope that the Speaker's Office, if it is going to censor speeches or impose a time limit for speeches, will think very carefully about this at the beginning of debates and not constantly put some hon. Members who are not as favoured as others in situations in which they have to carve their speech and garble it.
I was not sent here by the electors of Northampton, North to be constantly placed in that situation, but that is what has happened to me in at least four debates and I am disgusted by it—and I hope, with respect, Mr. Speaker, that you will take note of it.
Mr. Speaker: Order. The hon. Lady knows that whoever is in the Chair does his best. Other hon. Members feel just as strongly because they have not been called.
9.17 p.m.
Mr. Michael Morris: I have just three minutes. May I first declare an interest as a director of an advertising agency?
I welcome the extension of local radio suggested by Annan. I ask the Home Secretary to reflect again about the need for a new body. The BBC controls both radio and television successfully. I think that there is a misunderstanding of the rôle of the IBA. Radio Orwell, Radio Swansea and Radio Clyde are all good, successful, commercial stations which

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need relatively little interference or supervision from the IBA. They are models for the future. They indicate also something that a number of us questioned in the early days, when we doubted whether commercial radio could successfully deal with both the urban environment and the small rural community. These stations are a good example of stations that have successfully dealt with the problem.
We need to recognise also the evidence of Annan, that where the BBC and commercial radio are in competition it is the commercial sector to which the public respond.
As to public resources, if it costs £250,000 to set up a local radio station, as the BBC says, in my community in Northampton if there is £250,000 of public money going we should prefer it to be spent in the hospital service rather than on a public local radio.
It would be a great pity if the BBC were to opt out of regional television. There is a need for the BBC to maintain competition with the regional ITV networks. There is a danger—one reads between the lines—of the BBC's opting out of regional television.
The report contains just a few lines about charity advertising. The Home Secretary and his Department need to have a close look at this question and provide revised guidance for the many charities that wish to use the commercial network in future, whether it be radio or television.
My final point is that I do not think that commercial radio or local radio through commercialism can wait for two, three, or four years. This is an area of decision for local radio in which we need action in the relatively near future.
9.26 p.m.
Mr. Julian Critchley: I shall be mercifully brief. This has been a good debate and a good-natured one as well. If we do not have the experience of some on the subject of the Annan Report, such as those who spoke last week in another place—Lord Hill, Lord Annan, Lord Aylestone and Lord Windlesham—we have at least in the hon. Member for Derby, North (Mr. Whitehead) one member of the Annan Committee who is more of a minority
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report in himself. I hope to come later to some of the points that he made.
All speeches should begin with a resounding statement of the obvious, and most do. My statement is no less important for being obvious. It is that Britain enjoys the best radio and television in the world, and that we should all be concerned to try to improve it.
Having said that, I stress that the Conservative Party speaks not for the BBC or even for ITV, but for the many millions of viewers. The Conservative Party is not responsible for Annan. In 1970 we stood down that small army of workers and intellectuals because we thought it was wrong to subject the industry to yet another investigation. We thought that this would postpone decisions such as that on the fourth channel. Annan was given the kiss of life by the right hon. Member for Huyton (Sir H. Wilson) and the Annan Report—all 500 pages of it—is the result.
Love it or loathe it, it is a highly literate report, and for the time being at any rate we are obliged to live with it. When the recommendations of the Committee were first published I described them as a dog's breakfast. Perhaps that was rather hasty.
Does the Home Secretary have any news on the investigation that I believe he is conducting into how a copy of the final revise of the Annan Report fell into the hands of the Observer newspaper for, I am informed, the sum of £1,000? Has the culprit been apprehended? How like the Observer to know the price of everything.
If the Annan recommendations are not a dog's breakfast they are perhaps a frito misto in which one finds a large amount of squid. They are a curious melange. They succeed in being both conservative and radical at the same time. They are conservative in that they acknowledge the merits of the British system and the standards of programmes that have been the result. The BBC is not to be carved up, and there is not to be a central super body imposed on the BBC and the IBA. The sources of finance will remain the same—the licence fee for the BBC, and commercial advertising for IBA. Most important of all the freedom of broadcasters from political

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control is upheld. So far, an alpha at least.
The radical element is seen most plainly in the hostility that Annan shows towards ITV and especially to advertising. The IBA is to be rusticated. It is to become the Regional Television Authority and it is not to be given the fourth channel. On page 241 of the report Annan asks:
"what could have been easier in the short term and cheaper in terms of public expenditure than to have recommended that the fourth channel be allocated to the IBA for a second ITV service?"
What indeed? Annan goes even further. The report states that it is not lack of confidence in ITV to hand over the goods that led to the conclusion to award the fourth channel to the Open Broadcasting Authority. Should we then not ask what was the overwhelming reason for this conclusion, if it be neither business nor ability? I quote from page 241 of the report:
"It is simply that in our belief an ITV2 will result in worse television services than we have now because the BBC and ITV will engage in a self-destructive battle for the ratings."
Where has Annan been all its life? Why should a so-called "battle" be self-destructive? Somewhere in the report Lord Annan claims that the advent of ITV has served to improve programmes. Would not the OBA have to compete for viewers with ITV 1, BBC 1 and BBC 2?
Am I being unfair in detecting in the report a high-minded disapproval of commerce and of advertising? There is the flavour of Whiggery about the report. I sometimes hold Whiggish views, but unfortunately I am landed with a Conservative income. The report has a whiff of exquisite patronage. It is written by those who rarely watch the box for the rest of us who do.
The Committee gives the game away in one small recommendation, namely, that commercials should not be shown during programmes specifically designed for children. Are our children to be protected from advertisements as well as from hard drugs, wood alcohol and strong tobacco? Does Annan believe advertisements to be corrupting? Evidently he does. That such an attitude shows a mistaken "rectitude" is not surprising. What is perhaps more surprising is the fatuity of the suggestion.
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For three years I wrote nightly about television for The Times. My notices were racy and inaccurate, but it at least gave me a marginal advantage over the overwhelming majority of hon. Members who rarely watched television but only appeared on it. Perhaps I should absolve the hon. Member for Derby, North. While I was watching bad television, he was producing it. To be fair to the hon. Gentleman, the only bad programme he produced was the one in which I starred.
My duties as a television critic allowed me to begin to understand the extent of the anxiety of the public about certain aspects of television. We, as politicians, are in the anxiety-relieving business, and so is Lord Annan. I think that we can distinguish at least three different kinds of anxiety—sex, which is intimately linked with the name of Mrs. Whitehouse; violence, for which there is no one parent; and distortion or bias, which has many fathers drawn equally from every political party.
I do not share Mrs. Whitehouse's obsession with sex—or, to put the matter another way, I do, but in a different way. I have never thought that television is a medium that has been more guilty of sexual misbehaviour than any other. In fact, the controls on sex on television are far more strictly observed by the broadcasting authorities than are similar controls upon films or theatre.
The broadcasting authorities are inclined to put on any programme with a sexual content late at night—which is a reasonable thing to do, except that they hold the curious view that all children are safely in bed by 9 o'clock.
Sex is often to be found in television drama, especially in the Wednesday Play. I think that I can claim to be—I shall be happy to give way to the hon. Member for Derby, North if he wishes to contradict me—the only Member of Parliament ever to have written a Wednesday Play. It was a bad Wednesday Play, but then most them were bad. It was never screened. I was asked to go away and rewrite the third act. I refused to do so, because my theme was a row between a Conservative Member of Parliament and his executive committee, and slap in the middle of my rewriting I was adopted as Conservative candidate for Aldershot.
I refuse to march on London with Mrs. Whitehouse under her flags or banners,

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most of which are made from lace curtaining material. None the less, Mrs. White-house speaks for many people. She would make an admirable Member of Parliament, for she reflects the anxieties of many people—anxieties that would be more properly directed not at the box but at society itself. But we should not offend these people. They are as entitled as anyone else to their point of view.
If broadcasting has a peculiar sin it is that its values are very much those of the London-based middle class—NW1 rather than SW3—as opposed to those of the rural, semi-rural and urban, working and middle classes. The purpose of broadcasting should not be to give offence to the majority of its viewers. There is a tendency for television to be blamed for the sins of society, particularly sex and violence. Lord Annan was right in saying that violence on the box is a matter of moral judgment—indeed, of moral aesthetics. It is true to say that the British enjoy violence, but at second-hand. Yet, for all our anxieties, we live in a remarkably non-violent society. I cannot remember the last occasion upon which I saw a fist fight in public, but perhaps, unlike the majority of my hon. Friends, I live an especially sheltered life.
There are two kinds of screen violence—real life and fictional. Fictional violence has become so stylised that, with certain exceptions, one accepts the ritual violence of Westerns, gangster films and crime series. They really do not impinge on the sense of reality of the overwhelming majority of those who watch. The degree of violence in a crime series is a matter for the broadcasting authorities, who must draw the line—an exercise that is far from easy.
However, I sometimes feel that we are far too squeamish in terms of showing the effects of real violence on the screen. However admirable our motives, we ought not to disguise the horror that results from an assassination or the explosion of a bomb. We might learn to hate violence the more if we were made fully aware of what it really means. We do not really know the effect of television violence upon the watcher. For every sociologist who says one thing we can find another who takes the opposite view. We can at least agree that some violence on the screen may cause some people,
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who are already predisposed towards violence, to act savagely. Of course, films and football matches can do the same thing.
Perhaps the most useful point that I can make is that what matters is not so much how much violence one sees as the attitudes implicit in the violence in the programme. Violence never ought to be presented as the solution to anything.
Another public anxiety concerns distortion or bias. Television suffers from a natural inherent defect in that it holds up a distorting mirror to the world and the image often bears little resemblance to reality. It also gives scope to some producers to use the uniquely powerful medium of television not for informing but for persuading. However, television is organised on the basis of editorial control and the obligation to strive for some sort of balance.
As a newspaper journalist—though how much longer I shall remain one depends on the NUJ—at least I enjoy the luxury of expressing my own opinions in print, reading my own opinions and re-reading them. Were I a producer I could understand the frustrations if under instructions from above not to persuade but only to inform. In the past, broadcasting has recruited clever young men, mainly from Oxford and Cambridge, who were more likely to be dissatisfied than satisfied with society. A bright and ambitious young man dissatisfied with society will, if he takes a very long view, join the Army, and if he prefers the middle-term view he will join the BBC. A person basically satisfied with society will become either an advertising executive or a merchant banker.
There is one Committee recommendation that should be scrutinised with special care, because it goes to the heart of the relationship between broadcasters and this House, namely, the recommendation in paragraph 17.58 to modify the requirements placed upon broadcasters to ensure impartiality. The rule that broadcasting authorities should not broadcast their own opinions and should ensure a fair spread of the opinions of others is fundamental to broadcasting in Great Britain. It is written into the broadcasting Acts and is an obligation accepted by the BBC each time the charter is renewed.

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In the relevant paragraph, the Committee proposes a drastic modification of the way in which this principle should be applied. Indeed, it is so radical a modification as to put the principle in grave danger. In an earlier paragraph the Committee endorsed and praised the whole principle of impartiality, but it went on to recommend that
"the requirement for impartiality should not preclude committed public affairs programmes from having a recognised place in broadcasting outlets".
The word "committed" is one of those sly words that sociologists and propagandists use when they want to get into our minds an idea that, if expressed forthrightly, we should find unacceptable. In this context it means slanted and biased. If those words are too strong for the hon. Member for Derby, North I shall use the word "opinionated", which the Committee itself uses later in the report.
If the recommendation that broadcasters should establish a regular series of reports on film using commentators who are clearly identified as Conservative, Labour, Liberal, Marxist or National Front—and National Front should be verbally underlined, because that is what the opening of such choices implies—no doubt a case could be made for it on the ground of freedom, just as some years ago, in one summer when "Panorama" was off the air, the BBC handed over that spot on Monday evenings to the Spectator, the New Statesman, Tribune and The Economist to give their versions of the week's events. The result was unwatchable, but it was fair.
If the recommendation means that some people should be invited, as in the excellent BBC series "One Pair of Eyes", to give opinionated accounts of their opinions, it would be valuable, but the recommendation goes far wider than that. It is not just a matter of using an opinionated film script and commentary to argue issues that are mostly debated in the studio; it is a proposal that reporters and producers should go to the trouble spots of the world, such as Ulster and Rhodesia, and report from there in a way that intermingles fact and opinion and gives not only information but information with a slant on it.
The people of this country have not yet developed the immunity to assertions on
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television that they have fortunately developed to assertions in respect of the written word.
9.45 p.m.
Mr. Merlyn Rees: With the permission of the House, I should like to speak again briefly.
I thought that the elegance of the hon. Member for Aldershot (Mr. Critchley) matched, to some degree, the elegance of the Annan Report, and I hope that the House will forgive a more fustian reply. I was glad to hear that the hon. Gentleman believes that violence is rare in this country, if only because when I conclude this speech I shall begin preparing one for the Police Federation Conference at Scarborough on Wednesday.
It is commonplace to say "this has been an interesting debate", but I have listened for most of the day, and from my listening post I have learned a great deal. I have found this a questioning debate, and one can ask for no more than that.
I felt that the only one who spoke with certainty was the hon. Member for Howden (Sir P. Bryan). His certainty on everything about broadcasting matched that of the hon. Member for Antrim, North (Rev. Ian Paisley) in another respect. I am not wishing to be rude in drawing that analogy. I made the point about certainty, and I meant what I said.
There are many questions to be settled about broadcasting. Because time is short, I take up one point made by the hon. Member for Aldershot—programme content, about which not a lot has been said. The hon. Gentleman's views are very interesting. There are problems about content. There is the influence of advertising. I have noticed it over the years with my children, but I do not worry too much about it. I think that if one brings one's children up in what one regards as the proper way they can resist that influence. I am not always satisfied with what is done in advertisements.
I am concerned about violence. I think that to brush it off too easily ignores the influence that it has in society as a whole.
There are two matters on which I think I can help the House. The hon. Member for Bristol, West (Mr. Cooke) said that

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it would fall to the next Government to implement Annan. We shall see. Perhaps I should remind the House that we do not have an unlimited amount of time at our disposal. The BBC's Charter and the IBA Act expire in 1979—in two years' time. There must be legislation, at any rate for IBA. I note the hon. Gentleman's suggestion that the BBC should be transferred into a statutory body. Clearly this legislation must be passed in good time for July 1979 because, whether it is renewal or new legislation, all the programme companies come up for their contracts to be renewed.
I hope that both sides of the House will take note of the fact that there is not a lot of time available in which to take decisions. I suppose that we shall have to renew for a short time if we cannot make up our minds on the most important issues, but I hope that we can do so and that we can provide the framework for broadcasting for the next decade and possibly longer. It will be a substantial Bill, and, to judge from today, there will be substantial argument. However, we shall see.
With regard to the debate as a whole, I have noticed that there is agreement on the concepts of a public service and a public authority. Those seem to be generally agreed. There is clearly wide support for the Committee's proposals for a Broadcasting Complaints Commission to deal with complaints about misrepresentation and unfair treatment in programmes. There seems to be a substantial measure of agreement that pubic hearings by the authorities themselves might be used more extensively, and that the Committee's proposals for a Public Enquiry Board for Broadcasting should be rejected.
On the major issue of the OBA, ITV 2, and so on, I detect signs on both sides of the House that, whatever decision might be taken, there is a wide measure of agreement that the fourth channel should, as far as possible, provide something different rather than more of the same.
I now propose to say something about licences.
Mr. Gwynfor Evans: Will the right hon. Gentleman confirm that a decision on the use of the fourth channel in Wales
1146
was reached by the Government years ago but that we are still waiting for that decision to be implemented? The reason given for its not being implemented is a shortage of money. In the meantime, £12 million has been spent in Germany to establish an English channel that is seen, apparently, by 38,000 people.
Mr. Rees: I do not want to get involved in the question of BAOR and what the Ministry of Defence does. However, I remind the hon. Gentleman that there has been a step forward. Home Office officials and officials of the Welsh Office are studying how the preparatory work should be done. I may say that I was impressed by the forward-looking remarks of the hon. Member for Merioneth (Mr. Thomas) about television in Wales. But a fourth channel in general will require money, and in the current economic situation the money is not available.
There is also the interesting question whether the BBC should continue to be financed by means of the licence fee. My hon. Friend the Member for York (Mr. Lyon) mentioned advertising; other suggestions have been for the use of the levy on Independent Television or a direct Government subvention. My concern would be that any change made should do nothing to remove the independence of the BBC. If it was dependent on taxation or money from another source, there would be a problem in ensuring that its independence was not threatened in any way. That aspect is of great importance.
With regard to the financing of the OBA, the right hon. Member for Penrith and The Border (Mr. Whitelaw) said that he had understood me to say that I found the problem of the financial viability of the proposed authority to be a fatal flaw. I did not say that, but there is no doubt that it would present a real problem that we must sort out in considering it.
There have been suggestions that if the fourth channel were to be given to ITV, it would be possible, by use of spare resources, to provide a new service quickly and cheaply. It may be—and this is for the broadcasters themselves—that some use could be made of existing facilities for making programmes. But the House will appreciate that, whatever arrangements are made, there will be a real cost in resource terms.

1147
Since this is so, there will, as Lord Annan has pointed out, have to be a judgment how to use available money and resource. Should we concentrate on the completion of the UHF programme, so that as many people as possible can receive television services? We have mentioned the Welsh fourth channel. How much should be spent on local radio? There may be a balance of argument between all these proposals, but all of them require resources.
I turn now to the question of cable television. The present services of the Cable Television Association are licensed by me. The right hon. Member for Penrith and The Border, who mentioned cable television, may have had in mind pay-TV. The problem here is whether pay-TV would syphon off programmes from national television and so impoverish it. Certainly, a decision by the individual viewer would be more easily taken with pay-TV. There are also other local cable services—both television and sound broadcasting experiments, such as those at Milton Keynes and Swindon. The problem here is how to supervise such developments.
The future of cable services raises much wider and long-term problems. The Annan Committee envisaged in the future the provision of a national and wide-band cable network to carry communications services of all kinds. There are conflicting claims as to how much a cable network might be provided. As the Committee records, a number of organisations, including the Post Office Engineering Union, have urged that the Post Office should be given the sole responsibility for providing this network, which raises wider questions in the long term than the simple provision of entertainment. The right hon. Gentleman referred to the Post Office and its research and development work at Dollis Hill and Martlesham and other places. The public sector is often allowed to be better at research and development than at implementation.
There are wide implications for the future in considering the question of cable television. The Cable Television Association is anxious that it should play some part. It would be premature for me to make any decision on the matter now. I will simply say that it is important.
Mr. Freud: On the subject of cable television, does the right hon. Gentleman
1148
not agree that there are areas and pockets of reception in this country where the only way in which a decent picture can be obtained is by existing cable services? Promising to look carefully into the matter of giving it all to the Post Office is an enormous disincentive for those firms that are now providing a valuable service from continuing with it.
Mr. Rees: I understand that, too. However, either way, my job tonight is to cast the net widely. No decision has been taken. I am simply saying that the sort of cable provided for entertainment would not of itself be suitable for the scientific developments that would take place on a wider scale in the future. That illustrates the sort of decision to be taken.
With regard to Scottish television, mentioned by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid), the Annan Committee commented upon the problem of providing an identifiable Scottish television and radio service. I think that the hon. Gentleman was fair about the problems that arise. I asked for some figures. I find that in 1975–76 the BBC provided 538 hours of television in Scotland and 2,400 hours of radio. The three independent television companies provided 1,076 hours of television. However, the House will appreciate that the provision of television in Scotland is expensive.
Mr. Tarn Dalyell: Hear, hear.
Mr. Rees: Again, the hon. Gentleman made that point. But very broadly, Scotland provides less than one-tenth of the total licence revenue. The licence revenue would, therefore, have to be multiplied many times if Scotland were to bear the full cost. That is a point that the hon. Gentleman fairly made about the revenue that comes in from broadcasting. I am not making a point other than to say, amplifying what the hon. Gentleman said, that it is easier said than done, certainly in the short run, to develop Scottish television and radio.
The last point that I want to make concerns the Press. It was my hon. Friend the Member for Carlisle (Mr. Lewis) who raised the matter of the implications of local broadcasting for local newspapers. I note the figures quoted by the hon. Member for Isle of Ely (Mr. Freud), but I cannot shut my mind to the question

1149
raised by my hon. Friend. There is the report of the Royal Commission on the Press, which I understand is due quite soon. There is no doubt that the provision of more and more news from local radio, or on the hour from national radio, must have an effect at least on the content of local newspapers.
That is something that we must take into account. I think that it was my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) who talked about the question of duopoly and the fact that news nationally comes from two sources—which is better than one. However, when one reaches the pitch that the local newspaper is being affected in its traditional rôle, then that is something we must take into account. The media, and the news provision of the media, are changing and will change with the developments that are mentioned in the Annan Report.
The purpose of today's debate is to take note of the Report. I think that the appropriate thing will be to provide, at an appropriate moment, a Green Paper or a White Paper—I take the point that has been made about that—and then we can have a more concentrated debate in advance of legislation.
The Annan Report is of the greatest importance. I think that we were right to set up the Committee. It is right that from time to time we should look at the developments taking place in broadcasting.
I finish where I started. Whatever else happened in Annan, the Committee praised the existing—the word is now being used all the time—duopoly. Praise there must be; but it is not perfection. On the basis of the Report, in some way or other, after discussion, we shall have to legislate in this House. I say to the hon. Member for Howden that I suspect that the divisions will not be on strict party lines, which is perhaps appropriate for such an important matter as broadcasting.
Question put and agreed to.
Resolved,
That this House takes note of the Report of the Annan Committee on the Future of Broadcasting (Command Paper No. 6753).

EMPLOYMENT PROTECTION
Resolved,
That the Code of Practice on disclosure of information to trade unions for collective bargaining purposes, a draft of which was laid before this House on 3rd May, be approved.—[Mr. Harold Walker.]

HOUSING (HOMELESS PERSONS) [MONEY]
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session to make further provision as to the functions of local authorities with respect to persons who are homeless or threatened with homelessness, to provide for the giving of assistance to voluntary organisations concerned with homelessness by the Secretary of State and local authorities, and to repeal section 25 of the National Assistance Act 1948, it is expedient to authorise—

(i) the payment out of money provided by Parliament of any sums required to enable the Secretary of State to give financial assistance to a voluntary organisation concerned with homelessness or matters relating to homelessness; and

(ii) the payment into the Consolidated Fund of any sums falling to be so paid by virtue of the said Act;

and for the purpose of this Resolution "voluntary organisation" means a body the activities of which are carried on otherwise than for profit, but does not include any public or local authority.—[Mr. Frank R. While.]

HOSPITAL SERVICES (WESTON-SUPER-MARE)
Motion made and Question proposed, That this House do now adjourn.—[Mr. Frank R. White.]
10.0 p.m.
Mr. Jerry Wiggin: I think that this is the third occasion on which I have had the privilege of raising the subject of Weston-super-Mare Hospital in an Adjournment debate.
I begin my saying how grateful I am that the Secretary of State was able to see a delegation of my constituents that I led this afternoon to discuss with him the problems of the Weston health district. The Secretary of State opened his remarks to the delegation by saying that his Department thought that we should

1151
be entered in the "Guinness Book of Records" for having raised this matter more consistently than any other area.
I make no apology for having broken any records by raising this subject for a third Adjournment debate. Normally these debates take place after midnight, and until about 90 seconds ago I thought that the same thing would happen tonight. I am extremely glad that we can have the debate at a more civilised hour.
I appreciate that no decision has been taken on the health district, and it is not my job to press those arguments, which have been well rehearsed. My concern is not to interfere, as a Member of Parliament, in the day-to-day operation of the area health authority, but I think it right that I should exercise my democratic function to reflect the views of local people where they do not have any statutory right or obligation. The health and district councils have that right and obligation and have stated their purpose, as have other bodies in my constituency.
Here I should state that the area of influence of Weston-super-Mare, in medical terms, extends far beyond the boundary of the old borough. It goes deep into my constituency and in some places over its boundary. It is not just about one small town, it is one great area—the catchment area of doctors who send patients into Weston for treatment. Our difficulty about the district is that we foresee, in a vast geographical area spreading from Bristol to the south of Weston-super-Mare, one or more hospitals, and the Department saying that they are adequate for the health district. Unhappily, that takes account only of lines on maps. It does not take account of what people want, how people can and do travel and, indeed, where patients come from for medical attention. I have consistently pursued and intend to pursue this evening that aspect of the district argument.
The case for the Weston-super-Mare Hospital started as early as 1945, although there are those who will say that it was earlier still. That is the date used by the old regional hospital board just before disbandment, when, at its own expense, it produced a most powerful argument for a new district general hospital at Weston.
In researching my comments for tonight I came across a letter that I had written
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to a constituent four or five years ago, in which I said:
"Do not worry, Madam. The Weston-super-Mare hospital will be complete in 1978. That I have been told."
At that time the then regional hospital board determined to press ahead and delayed the start for 12 months in order to complete it a year earlier—so went the theory. In practice, with the tendering documents going out to builders in June or July 1973, the then contraction in the Conservative Government's spending programme led to cancellation of the project. But no other circumstances has altered. The requirements are precisely as they then were. The number of people who will be ill is the same as it then was. Those who would like to serve medicine in Weston-super-Mare are still there, but they are disillusioned by cancellations, alterations and prevarication.
I am the first to say that no one Government should carry the can for this situation. It is a particularly bad example of endless bureaucratic delay, and perhaps, in all fairness, I should say that the delays were not all bureaucratic. Ministers have some considerable part to play in this.
I will not retail the episode in which the right hon. Member for Blackburn (Mrs. Castle), as Secretary of State, came to Weston-super-Mare and in a moment of generosity allocated about £200,000 to ameliorate the deteriorating medical conditions. That money was grabbed by the area health authority and allocated to Ham Green Hospital, just south of Bristol, which is a long and expensive journey from Weston-super-Mare.
Much as we appreciate the allocation of one ward to patients from Weston-super-Mare, it is not the same as having facilities provided in the town, and it never will be. And with the threat of the change in the district status we can see, not for the first time, and not only in health matters, that we shall be run from Bristol. Weston-super-Mare is not a part of Bristol.
I could go over the battles about the county boundaries. I was one of the few Conservatives who opposed them. But this all comes back to the simple fact that Weston-super-Mare is an entity. If it were not on the coast, which fact causes it to lose half its catchment area, its

1153
numerical position would look considerably better than it does. On the question of numbers, Weston-super-Mare has a holiday population of staggering proportions, but numbers are probably not our strongest point.
I have always made it clear that the people of Weston-super-Mare want a new hospital. I have deliberately not used the word "new district general hospital". I could go all around my constituency, because the feeling is the same, whether it be in Burnham-on-Sea, Cheddar, Axbridge, Congresbury Churchill, or anywhere else in or near the constituency. The people want a new modern hospital at Weston-super-Mare because that is their centre.
I am concerned at our relationship with Taunton. I have always made it clear that Taunton has an excellent case for a new hospital, and nothing I say tonight should be construed as seeking to reduce that case one iota. But it has been accepted until now that Weston-super-Mare has an even better case and that its priority is greater.
I turn now to the booklet that was produced by the old regional hospital board. I hope that if the Minister has not seen it he will arrange to have a copy on his desk in the morning, so that he may consider it and see the case that the old hospital board thought it fit to produce. This propaganda was distributed to civil servants, Ministers, Members of Parliament and any others who might be able to influence the decision. It set out the priority that should be afforded to Weston-super-Mare in the whole of the western region. I hope that tonight the Minister will confirm that that priority remains, and if it does not I want him to say why not. If the arguments were good then, they are good today.
There are those who will say—there is no evidence for it and I should expect the Minister to deny it—" The chairman of the regional health authority comes from Taunton, so the priorities have been altered for internal political reasons." I hope that I shall never have to say that. But I must warn the Minister that if the people of Weston-super-Mare see a greater priority in terms of urgency or total allocation being given to any other hospital in the area they
1154
will deeply question the reasons for this alteration in priorities. It was not just our voice that gave this hospital priority; it was that responsible body which preceded the present one which used all its resources to give Weston-super-Mare priority and argued for that priority.
Now it is being argued that the Uphill site, 36 acres of ground purchased for a new district general hospital, should be sold—soon. It will never be needed, it is said. I do not particularly mind the precise location. This is something that we must leave to the planners. It may well be that a site nearer the motorway would be more convenient and would serve the district better. But it will not be understood if the Uphill site is sold and no alternative site is found. I would go further, and say that the alternative should be found first. I have not heard one person who knows the centre of Weston-super-Mare and knows the present hospital site who truly believes that it is a sensible or practical alternative to build a new hospital on the site of the old. The area is constrained by two roads. It is almost completely built on.
I know that the technicians argue "Oh well, an old hospital is cheaper to run than a new one." The Minister ought to have a look at that argument, used by those technicians, and exercise his political muscle to find out why it is that we cannot reflect modern technical achievements. Or could it be that the standards are so high that the cost has become unreasonable? These are questions to which the hon. Gentleman must know the answer better than I. I cannot conceive of people erecting a new factory or new plant if the costs of production were to be higher than in the old one. This is a fairly simple business principle. The Minister, as a business man, will bear me out on that.
It can be argued that capital is short and that there are no funds for investment in hospital building. We have even thought of that. We have obtained a consortium, which says that it will build a hospital and lease it to the regional health authority. I cannot say whether the proposition is a good one financially. The consortium is prepared to build a 500-bed hospital for £10,712,000 and let it to the Department on a 20-year basis at an annual rental of £1,700,000. The consortium is prepared to provide alternative

1155
arrangements—a 250-bed hospital at £900,000 a year, or other alternative permutations.
No doubt the Minister will say that we have not got the revenue, let alone the capital. That is the root cause of the problem. I must tell him that the Government will have to decide about the revenue. People will have to go to hospital somewhere. If the Government do not have the revenue for Weston-super-Mare how is the same sick person to be treated somewhere else? The same amount of money is needed. This is a question not only of efficiency but of service, locality, all sorts of things. I could argue, too, that if the distance from Weston-super-Mare to anywhere else is considered to be insignificant—and it is said that with the motorway Westonians can get to Bristol relatively easily—Bristol people can come to Weston just as easily. What a good idea for having a major new investment on this lovely site. It would attract staff and would be set in an ideal atmosphere, in a resort which was originally founded for the health-giving properties of its climate.
I have no wish to take up any more valuable time tonight. I end by reminding the hon. Gentleman of the unanimity of view that exists in my constituency on this matter. The passion that has been aroused and the demonstrations that have taken place occur because so many people believe that Weston-super-Mare is inadequately served by its existing buildings. That cannot be said about the staff. No one has anything but the highest praise for the way in which the medical staff carry out their tasks. However, they do so under grievous difficulties.
Morale has been destroyed. I fear that careers have been destroyed. A number of specialists came to Weston-super-Mare knowing that there was to be a new hospital. Their hopes and aspirations have now been removed. The nursing school has been steadily downgraded. In the past, recruitment of nurses in Weston-super-Mare was good. The nurses now have to go to Bristol, which they do not like. These are the problems that are attached to a decline in the medical services.
I hope that tonight I have reflected, yet again, the unanimity of view that somehow and somewhere, in spite of our national situation, which we all well
1156
understand, something must be done to improve hospital facilities in Weston-super-Mare.
10.17 p.m.
The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): The hon. Member for Weston-super-Mare (Mr. Wiggin) is to be congratulated—I mean that sincerely—on securing this Adjournment debate and on the clear and concise way in which he has presented his argument. As he said, it is not the first time. I have in my background file a copy of his Consolidated Fund debate of July 1974 on a similar subject.
The subject of new hospital provision in Weston-super-Mare has been a bone of contention in the hon. Gentleman's constituency for many years, as he rightly pointed out. And it has in recent months again come into the limelight chiefly because of the proposals developed by the Avon Area Health Authority (Teaching) for merging the present Weston District with the Bristol Teaching District.
These two issues are, of course, to a certain extent inter-related, but it is perhaps necessary to look at them separately to understand fully the present situation. I will take the hospital issue first, and should perhaps refer to the National Health Service planning system which is just approaching the end of its first full year of operation. The system ensures that the identification of needs and priorities for health services is done successively and jointly by the three tiers in the NHS—district, area and region—within guidelines laid down by my Department and augmented to suit local conditions and situations by further guidelines issued by regional and area health authorities. This system thus ensures that the bulk of planning is done in the local situation where the people concerned have immediate knowledge and personal experience of the problems and needs existing. My Department through its guidelines can and does select only national priorities.
Coming back to the local situation, I think that I can fairly say that no one doubts the inadequacy of the present hospital facilities in Weston-super-Mare. This has been recognised as a major problem over many years. It is the solution that is proving difficult.

1157
As the hon. Gentleman will recall, the former South-Western Regional Hospital Board had intended to start building a new district general hospital at Weston-super-Mare in 1973–74 after letting contracts for schemes at Barnstaple and Plymouth. In the event the Board was thwarted in its intentions because of a cutback in public expenditure imposed by the then Conservative Chancellor of the Exchequer, which considerably reduced the NHS capital building programme.
Since then, mainly because of the continuing commitments of the Barnstaple and Plymouth schemes, the South-Western Regional Hospital Authority has not been able to finance any major development in Weston-super-Mare or, indeed, elsewhere in the region. And in April 1976 the Authority announced that, in the light of anticipated capital and revenue resources, it would be impracticable to proceed with the plans for a new district general hospital in Weston-super-Mare in the foreseeable future. It has since expended this to the extent of not envisaging such development before the end of the century.
Faced with this change in expectations, the Avon Area Health Authority decided to re-examine the concept of the Weston Health District as a management entity and consider how a comprehensive health service for the population of the district could be provided by forging stronger clinical links with other hospitals and how best these should be managed. The area team of officers prepared a consultative paper which explained that,
"the essential problem of the Weston Health District is that it cannot provide within its own boundaries the essential support of a District General Hospital for its population and that, without a considerable strengthening of the medical staff at the Weston General Hospital, it cannot even provide a reliable and satisfactory satellite hospital service in the basic DGH specialties for the immediate population of Weson-super-Mare".
This passage clearly spells out the seriousness of the situation and shows that the authority is fully seized of the difficulties.
I agree with the hon. Gentleman that urgent action is unquestionably called for. In its deliberations the authority accepted that the Weston General Hospital needed to be provided with support of both consultant and junior medical staff in the
1158
basic specialties, namely, general medicine; general and accident surgery; obstetrics; gynaecology; and the medical care of the elderly; with supporting anaesthetic, pathology and X-ray departments. The authority also recognised the need to improve and extend out-patient facilities to enable more of the population to be referred for consultation and examination locally even though they may have to go elsewhere for treatment. For these reasons, the merger proposal evolved as it was realised that improvements relying on substantially strengthened clinical links with other hospitals could not be achieved in any other way.
My understanding is that the need for improved clinical links is generally accepted locally at least as a short or medium term solution. However, the proposal to merge the two districts has resulted in considerable opposition and a number of deputations have been received by Ministers. Indeed, one led by the hon. Member for Weston-super-Mare was seen by my right hon. Friend the Secretary of State earlier today, and my right hon. Friend will be meeting another on Thursday. My right hon. Friend also called in at Weston-super-Mare as recently as 22nd April further to acquaint himself with local opinion. The bodies leading the opposition are to be congratulated on the way they have prepared their cases against the merger, and I can repeat the assurance given to all deputations that their views will be taken fully into account by my right hon. Friend before he makes a final decision on the merger proposal.
More generally, the Government's attitude to proposals for changes in district or area boundaries has been made clear on a number of occasions. We were critical, when in opposition, of the form of reorganisation imposed by the previous Government. We considered that it would be unwieldy and bureaucratic, and experience has shown that—despite the best endeavours of staff to operate the new structure—our fears were well founded. We took office three weeks before the reorganisation came into effect—far too late to change it—and we decided very early on that a further general reorganisation would not be in the interests of the service. The Royal Commission on the National Health Service will, I hope, in due course put forward proposals which

1159
will enable the service to be better and more effectively managed. In the meantime, we are not prepared to countenance a general or fundamental change in the structure of the service.
This does not mean, however, that we believe that there should not be any change at all. We recognise that there will be cases where the boundaries of health districts could now be changed in ways which might achieve greater economy, coupled with improved management efficiency in the delivery of services. My right hon. Friend has therefore made it clear that he is prepared to consider proposals for the merger of existing districts. Any such proposals would, however, require his specific approval, and he would need to be satisfied on three counts: first, that the proposal would lead to more effective delivery of services and improved management efficiency; secondly, that there had been full and adequate consultation with staff interests, with district management, with local authorities and with community health councils; and thirdly, that both regional and area health authorities approved the proposal.
The specific proposal from the South Western RHA is being examined stringently against these criteria. It would be premature for me to comment in detail until this examination has been completed. It is important, however, that a final decision on the proposal should not be long delayed and my right hon. Friend is well aware of this. He will make an announcement as soon as possible.
Mr. Wiggin: One of the great problems at Weston-super-Mare is that the county boundary allows the Avon Area Health Authority to operate only up to the boundary of the town. If in medical terms the region could take in a larger area, it would go some way towards meeting my point.
Mr. Deakins: I shall consider that matter and draw it to the attention of my right hon. Friend in case the delegations have not done so already. It involves local government reorganisation which happened at about the same time or just before the Health Service reorganisation, and we are trying to cope with the consequences of both.
1160
Earlier this year, the South-Western Regional Health Authority published its strategic plan indicating long-term objectives and priorities for the development of a full range of health services within the resources likely to be available within the next 10 years. The sum of £10 million has been set aside in the plan for improvement of existing facilities in Weston-super-Mare and Taunton on existing sites. I hasten to assure the hon. Gentleman that such improvements are recognised in the plan as top priorities. More recently, at its meeting on 14th March, the authority reaffirmed that it was not possible to build a new district general hospital at Weston-super-Mare this century and therefore decided to declare the previously earmarked site at Uphill as surplus to requirements. The authority is now to undertake a feasibility study. This will examine how the service can be improved by development on the existing site of the Weston General Hospital—extended as necessary by purchase of adjoining properties—or on the Royal Hospital site, because there are two, or on both.
I can well understand the disappointment that must be felt locally as the long-promised and long-awaited new district general hospital slips further away from reality. In the current economic climate, however, many projects throughout the country are having to be postponed. My right hon. Friend has not been able to avoid a further cut in the NHS capital programme this year as part of the package of economies that have had to be made in the construction field. In the Public Expenditure White Paper published in February 1976, Cmnd. 6393, the Hospital and Community Health Services capital programme for England was set at about £280 million—1976 Survey prices—for both 1977–78 and 1978–79. The combined effects of the cuts announced by my right hon. Friend the Chancellor of the Exchequer in July and December last has been to reduce the programme to about £260 million in the current year and £265 million in 1978–79. But in spite of the economic difficulties facing the country, the Government have honoured their pledges to protect the elderly, the sick and the poor. There have been no cuts in NHS services to patients, or in social security benefits and pensions.

1161
The efforts made by the hon. Member to secure a new hospital for his constituents over many years are laudable. He has always been rational and responsible in these efforts. This is the third occasion on which he has raised the subject in this House. He has also seen Ministers several times and pursued the case by correspondence. He has championed the cause well. There must be some considerable disappointment for him personally, but he should not be too despondent. The proposal to redevelop existing facilities seems to me to be a realistic one in the present climate. As I understand the regional health authority's intention, it is to build a hospital of about the same size as the existing Weston General Hospital which has 135 beds. In this way there should be no additional revenue costs for the area health authority to meet.
This kind of development in the relatively near future will undoubtedly provide a better service in Weston and, with new facilities at Ham Green Hospital becoming available for Weston patients shortly, it is apparent that a great deal is being done to improve the admitted inadequacies. I know that many people locally have feared that these proposals will lead to the closure of hospitals in the town, and that patients would have to travel to Bristol for all hospital facilities. I can categorically assure them that this is not so. The intention of the
1162
authorities is to improve facilities in the town.
I very much hope that the proposal for redevelopment will now be accepted by the people of Weston as realistic and, bearing in mind the full seriousness of our economic situation, the only practicable solution to a very difficult problem. It is unfortunate that more resources cannot be made available to the NHS. That is a Government decision and we accept the responsibility. It means that Weston-super-Mare and a number of other places throughout the country, where improved hospital facilities are urgently required, have to be disappointed and accept something less than ideal. I must emphasise that in the "reorganised National Health Service" there is a policy of maximum delegation from the centre which places on authorities the extremely difficult task of determining priorities within the limited funds available. Ministers do not intervene in such decisions, but my Department ensures that authorities' actions are broadly consistent with national policies.
I am very glad that the hon. Member has again raised this subject in the House—I congratulate him on his timing—and I very much hope that what I have said has helped to clarify the issues involved.
Question put and agreed to
Adjourned accordingly at twenty-nine minutes past Ten o'clock

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ENERGY
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INDUSTRY
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EMPLOYMENT
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  Incomes Policy
  Incomes Policy
  Staffordshire
  Staffordshire

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

WATER SUPPLY CHARGES
Lord BOYD-CARPENTER: 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 they are aware that the Southern Water Authority, in reliance on the provisions of the Drought Act 1976, are imposing a surcharge on those consumers of water charged for on meter who responded to the appeals made by Her Majesty's Government to cut water consumption last year; and whether, in view both of the injustice of such a charge and the damaging effect which its imposition must have on any future appeal for economy in the use of water, they will take the necessary action to have such surcharges annulled.
The PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (Baroness Birk): My Lords, there is no surcharge. It is standard practice for all consumers to pay a minimum charge for water supply, irrespective of the quantity they use. Water authorities have a statutory obligation to cover their costs through charges, so suspending minimum charges to metered consumers means higher charges for everyone else. We did not think it right to penalise other consumers in this way, particularly as they also made substantial savings in their use of water with no question of any reduction in their water rates.
Lord BOYD-CARPENTER: My Lords, as one who has the misfortune of living within the area served—if that be the word—by the Southern Water Authority, perhaps I should declare an interest.
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Whereas the consumers who are charged on rateable value have a fair deal in the sense that if they use more or less water they pay the same, does not the noble Baroness appreciate that the consumers on meter who are charged at the option of the water authority, pay for water that they do not have and who, in response to the appeals of Her Majesty's Government, have restricted consumption, are, none the less, charged for that water which they abstained from obtaining? Can the noble Baroness say what will be the effect of oppressive conduct of this kind the next time an appeal is made for economy in the use of water?
Baroness BIRK: My Lords, people responded very well to the appeal for economy in the use of water. Even when there is no consumption of water, the water authorities still incur the cost of making the supply available. As the noble Lord is aware, if the amount of water he uses is below a certain amount, he will pay no more than those who pay the standard rate. I do not know whether he was asking me why he should be metered in this way, but I imagine that it is because he uses a rather large amount of water. I agree that there is a certain amount of rough justice, but if everyone were metered the cost would be completely prohibitive, and if they were not, the charge to domestic consumers, who are not metered, would have to be increased.
Lord BOYD-CARPENTER: My Lords, can the noble Baroness point to any company in the private sector which charges for a commodity that it does not supply and which has also managed to avoid appearing at the Old Bailey?
Baroness BIRK: My Lords, I do not think that the use of water can be compared to the supply of any other commodity. It must not be judged in that way. Neither the House nor my voice will take it if I repeat all that I have said, but I do not think that there is any more that I can add. However, I was interested that when the noble Lord wrote his letter to The Times he did not seem to receive a torrent of support for his views.
Lord NUGENT of GUILDFORD: My Lords, is the noble Baroness aware of a precept—which my noble friend

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often invoked when he was First Secretary to the Treasury—that sometimes in the public interest it is necessary for virtue to be its own reward? Is the noble Baroness aware that my noble friend's virtue will not be diminished by this experience?
Baroness BIRK: Yes, my Lords.
Viscount ST. DAVIDS: My Lords, is there not a way in which this matter could be sorted out? Would it not be possible to assess the amount of water which these people have not used and to give them a kind of water credit on their next bills? That would sort the matter out entirely, and then everybody would have paid for the exact amount of water which they used.
Baroness BIRK: My Lords, in one sense that is done because, if a person uses less water on the metered rate than would normally be used on the standard rate, then that person would pay only the equivalent of the standard rate. There is no way of operating any of these alternatives which would not be extraordinarily expensive both in terms of money and personnel.

GRASS VERGES: HERBICIDAL CONTROL
2.41 p.m.
Lord DE CLIFFORD: 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 proposal by some county councils to use herbicides for the control of grass on road verges and banks in place of cutting them; whether they are aware of the grave damage which will ensue to plant, insect and animal life, particularly in rural areas, as a result of this action; and whether they will take steps to discourage the proposed action.
Baroness BIRK: My Lords, the Government's attention has not been drawn to any such proposals by county councils. To avoid environmental damage, the use
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of herbicides on motorways and trunk roads is strictly controlled and limited to selective application. On other roads, local highway authorities decide for themselves how they maintain roadside verges. They are under no obligation to adopt the Department's strict policy on the use of herbicides strongly recommended to them.
Lord DE CLIFFORD: My Lords, I thank the noble Baroness for that reply. Is she aware that that proposal was widely published both in national and local newspapers and has caused a great deal of concern? Is she aware that the use of these herbicides particularly in rural areas and in remote districts, is very liable to cause considerable damage to the very rare plant life, animal life and insect life, and also considerably spoils the enjoyment of the areas for visitors?
Baroness BIRK: Yes, my Lords. It is for this reason that the Department sent out a circular to local highway authorities pointing out that the use of herbicides should be based on whether the noxious weeds affect the agriculture which is aligned to them, or on the grounds of road safety where it is necessary to use herbicides. Otherwise I would only suggest to the noble Lord that if he has any particular council in mind, he should himself get in touch with them.
Viscount MOUNTGARRET: My Lords, could the noble Baroness answer whether or not the county councils could be asked to refrain from cutting grass verges until after the end of June? Is the noble Baroness aware that a good deal of damage is done to birds that do not hatch out until that date?
Baroness BIRK: My Lords, we really have to leave it to the local authorities to decide for themselves. As I said before, it depends on the need for it. At the moment, with the cut in expenditure and manpower, I should not think that there is in any event a great rush to get round to cutting the grass.

THE LOBBY SYSTEM
2.44 p.m.
Lord BOOTHBY: 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, in view of recent events, they will now bring what has become known as "the lobby system" to an end; and whether Ministers, while retaining public relations secretaries as assistants, will in future accept personal responsibility for all Government briefings and statements made to the Press.
The LORD PRIVY SEAL (Lord Peart): My Lords, methods of communication between the Government and Parliamentary journalists are currently under review. Ministers are, of course, at all times responsible for the conduct of their Departments.
Lord BOOTHBY: My Lords, arising out of that very interesting reply, may I, as one who was a Member of another place for many years and at the same time a journalist, ask the noble Lord whether or not he would agree that this present half-secret system does not in practice work out, and that the recent handling of the appointment of the new Ambassador in Washington, which did considerable and, as I think, quite unjustified harm both to the Prime Minister and to the Foreign Secretary, proved that it was not working well? When Her Majesty's Government are making their inquiries, will the noble Lord seek to ensure that in future public relations should be handled publicly; and that only on rare occasions such as, for example, when security is involved, should meetings between the Government and the Press be held off the record?
Lord PEART: My Lords, my noble friend Lord Boothby is quite right in saying that he has had a lot of experience of this. But I still say from my experience, which also has been considerable both as Leader of the House and a Departmental Minister, that I would be cautious about destroying something which has worked well. If individuals break this system it is not necessarily always the fault of the system. Inevitably we have some incidents. A review is now going on. I would be cautious and would only say that one must not destroy something which has worked well over the years.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, is the noble Lord
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aware that the view expressed by the noble Lord, Lord Boothby, from the Cross-Benches, is not universally held in the House, and that many of us have every reason to be grateful to the lobby system?
Lord PEART: My Lords, I am grateful to the noble and learned Lord, Lord Hailsham, for saying that because he too had long experience of this practice, as I have, and I should hate to see it cease. It is something which has been part of our system, and if it is good let us keep it. But if there has to be a review, let the review be made.
Lord BOOTHBY: My Lords, in view of Lord Hailsham's question I should like to remind the Leader of the House that in 50 years I have seldom expressed the views of either Front Bench.
Lord PEART: My Lords, that may be so, but that is a tragedy. The noble Lord, Lord Boothby, probably should have been on the Front Bench.
Lord DUNCAN-SANDYS: My Lords, is the noble Lord aware that many people will share the view expressed by my noble friend? While there are weaknesses in all systems, the lobby system has, over the years, provided a most valuable channel for informal contact for not only the Government but also Members of Parliament generally. It would be the greatest possible mistake, just because of criticism in one case, to abolish a long established and valued system.
Lord PEART: My Lords, I agree with the noble Lord, Lord Duncan-Sandys, who had long experience in a very important Department.
Lord LEATHERLAND: My Lords, may I ask my noble friend—and I do so as one who was a Lobby correspondent in the other place 55 years ago—whether he will carefully bear in mind the matters which have been mentioned by the noble and learned Lord, Lord Hailsham, and the noble Lord, Lord Duncan-Sandys? This scheme has run for a long time and it does work.
Lord PEART: My Lords, my noble friend has confirmed precisely what has been said by some very experienced politicians.

DIPLOMATIC STAFFING: CPRS REPORT
2.48 p.m.
Baroness EMMET of AMBERLEY: 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 when the CPRS report on diplomatic staffing is to be published.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, Sir Kenneth Berill will send his report to the Printers shortly. It covers all aspects of Britain's overseas representation. My right honourable friend the Foreign and Commonwealth Secretary intends to publish as much of the report as possible as soon as he can. He cannot decide this until he has studied the report.
Baroness EMMET of AMBERLEY: My Lords, I thank the Minister for that reply, which is encouraging. Is he aware that there have been quite a number of leaks from this report? Would he agree, therefore, that the sooner it is published the better, and that, due perhaps to the now frequent meetings of the Heads of State, the leaks have given one an uneasy feeling that the Foreign Service and the Ambassador, who abroad is an immensely important person from our point of view, are now being pushed into the background?
Lord GORONWY-ROBERTS: My Lords, I entirely agree on the sooner the better. I repeat that it is the intention of my right honourable friend the Foreign and Commonwealth Secretary to do this. Certainly anything that arouses speculation in this field is to be deplored. I agree with the noble Baroness that the sooner we publish the better.
Lord MERRIVALE: My Lords, whether they be leaks to the Press at the end of last month or speculation on the part of the Press, would the Minister not agree that the fact is that this Sword of Damocles is hanging over the Diplomatic Service and is causing concern and worry? I know from a number of
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diplomats abroad that they are concerned. Do Her Majesty's Government not feel that a date should be given for publication and that the disquiet of the Foreign Service should be alleviated because it provides a fantastic service abroad and it is unreasonable that they should be put to this worry?
Lord GORONWY-ROBERTS: My Lords, I am glad of the opportunity of agreeing with the noble Lord, and indeed, with, I believe, practically all the Members of the House, about the excellence of our Diplomatic Service. I hope that note has been taken of what I have said; namely, that my right honourable friend will publish his report as soon as possible.
Lord ORR-EWING: My Lords, can the noble Lord say when this report was completed? Is he aware that the general view is that, since several months have elapsed since the work was virtually completed, some of the report was not entirely commendable to those who were reporting? When the noble Lord says that the "bulk" of the report will be published, one is forced to wonder what parts will be left out. Would it not be better to say when the report reached the Government and when it is likely to be published?
Lord GORONWY-ROBERTS: My Lords, I cannot be more helpful than I have already been. I feel I have already been sufficiently helpful on this point. I agree that the shorter the delay the better. This has been an inquiry into a very complex and very important matter. I believe that it was the noble Lord, Lord Gore-Booth, who reminded us the other day that it is better to have this matter right than to have it ahead of time. As to the speculations in which the noble Lord, Lord Orr-Ewing, has tendentiously engaged, I refuse to be drawn on the content of a report which I have not yet seen.
Lord AVEBURY: My Lords, though the Diplomatic Service cannot remain immune to cuts in posts by all other Government Departments, may I ask whether the Minister agrees that while new initiatives are being taken in the field of human rights by President Carter, it is important that we should back

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them up and that our Diplomatic Service should contain officers to report hack to the Government on the human rights situation in every country overseas where we are represented?
Lord GORONWY-ROBERTS: My Lords, I entirely agree with the second part of the question of the noble Lord, Lord Avebury. As to cuts, I believe that the Foreign and Commonwealth Office and the Diplomatic Service has given a very good example to all other Departments in Whitehall in being ready, over the past 10 years, to make very effective cuts.
Lord O'HAGAN: My Lords, will the publication of all or part of this report include an explanation as to why the Government chose the Central Policy Review Staff to carry out this investigation in the first place?
Lord GORONWY-ROBERTS: I could not say, my Lords. It is an interesting point and I shall pass it on to the right quarter.
Baroness EMMET of AMBERLEY: My Lords, may I, in conclusion, ask the noble Lord when the report was received? How long ago was it?
Lord GORONWY-ROBERTS: My Lords, the report, as is the case with major reports by the Central Policy Review Staff, is formally submitted in printed form to the Minister concerned. I could not say whether my right honourable friend has received drafts before now. I should imagine that he and one or two others, who are concerned with the necessary deletions arising from, for instance, security and clearance of certain records with other friendly Governments which we have consulted, may have. I think that the House must take it that when my right honourable friend receives the printed report, that is when that report is formally submitted to him.

MINIBUS BILL
Brought from the Commons, read 1a; and to be printed.

PRESUMPTION OF DEATH (SCOTLAND) BILL
3.55 p.m.
Lord RITCHIE-CALDER: My Lords, I beg to move that this Bill be now read a second dine. This Bill reforms the Scottish law relating to the presumed death of missing persons. The Bill originated in a report by the Scottish Law Commission (Scottish Law Commission No. 34) which was laid before the House in 1974. That is three years ago and I think that it is proper that it should now be considered as a matter of urgency. I would recommend your Lordships to read the report for your own edification and it should be compulsory reading for all writers of "whodunits". It seems to me to take into account every contingency from Robinson Crusoe to Tennyson's Enoch Arden, from the lone oarsman rowing out into the sunset to the clothes left on a beach, or the criminal who contrives to be presumed dead but comes back and finds that he is still responsible for his crimes. The scope of the report and, indeed, of the Bill, seems to have covered every possibility of abuse and, above all, it takes into account the essential compassion which this subject involves.
The essential of this Bill is the same as a Bill drafted by the very thorough Commission in an annexe to its report. The existing position rests partly on the common law of Scotland and partly on Statute which the Bill amends and, in part, re-enacts. As things stand at present, a missing person may be declared dead under the common law when it is clear that he is unlikely still to be alive. We can all think of the self-evident cases of railway disasters, mining disasters, disasters at sea and so on. That kind of case is fairly self-evident, but the general rule is that a person is presumed to continue in life until he has reached the allotted or natural age span.
One of the remarkable things that I have discovered in considering this matter is the extraordinary durability of the Scots. The Scottish authorities on this subject define the life span either as 80 or as 100 years. That is considerably more than the psalmist allows them. Within

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that there has meantime been a great deal of common sense exercised.
A missing person may also be presumed dead under Act of Parliament—the Presumption of Life Limitation (Scotland) Act 1891. I am glad that we are correcting what seems to me to be an anomaly in that we are not presuming life but are now presuming death which is not quite so acceptable. The present Act allows a person to be presumed dead under the Act of Parliament simply because he has not been heard of for seven years or more. I ask myself what is this seven which has a mystical significance in so many other ways? Nevertheless, it is for seven years. One of the great drawbacks of the finding of death of a missing person under the 1891 Act is its limited effect. It entitles the successors of the missing person to claim his property, but it does no more than that. For example, it does not apply to a claim for the proceeds of any policy of assurance on the life of the missing person and if the missing person is married it does not make his wife a widow. If she wishes to have the marriage dissolved she must do it by separate action under another Statute. Nor does the finding of death bind the social security authorities as regards her claim for a widow's pension.
Such defects in the law may at best lead to expense and inconvenience and at worst to considerable misery and, indeed, to real hardship. Moreover, the layman must find it very puzzling to see a person being treated as dead for some purposes and alive for others. Clause 1 of the Bill provides that an action to have a missing person declared to be dead should be dealt with in the Scottish courts where the missing person was domiciled in Scotland, or had lived there for at least a year before his disappearance, or in a case where the action is raised by the husband or wife of the missing person, where the spouse is domiciled in Scotland or has lived there for at least a year. Jurisdiction, which has hitherto largely been confined in practice to the Court of Session in deciding the common law and Statute position, would under this Bill be conferred concurrently on the sheriff court. Clause 2 provides that the court may grant decree in an action of declarator (a declaration of presumption of death) where it is satisfied that a missing person is dead, or has not been known to be alive for a period of at least seven years.
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Clause 3 of the Bill provides that a declaration of death, whether founded upon a person's disappearance in circumstances pointing to his death, or simply upon his absence without trace for seven years or more, should be effective for all purposes, including the dissolution of marriage. This proposed reform of the law would go far to eliminate the anomalies and defects of the present law, and would represent a very important step forward in the modernisation and simplification of the law.
Other provisions of the Bill allow for reconsideration; that is to say, for recall or variation of a decree of declarator of death of a missing person—for example, where it later appears that the missing person is in fact still alive, or that he died at a different date from that shown in the decree. But there could be problems if the return of a person declared to be dead were to revive with marriage. The marriage would have to be dissolved by the decree of declarator of his death and his wife might, in the interval, have married, and so Clause 3(3) provides that the dissolved marriage should not be revived by recall or variation of the decree.
There are also difficult problems as regards the property of the missing person declared to be dead who subsequently returns. The difficulty lies in protecting, so far as possible, both the interests of the missing person and the interests of the persons who had succeeded, in good faith, to the property. The solution ultimately reached is to provide in Clause 5(1) that a recall or variation of a decree of declarator of death should have no direct effect upon property rights acquired as a result of the decrease. The court is, however, given power to make any further order which it considers "fair and reasonable" in the altered circumstances for the redistribution of property rights. But a further order cannot be made when the period between the date of the decree and the date of the application for its recall or variation is longer than five years. Incidentally, there is a wonderful "Catch 22" in the Bill, which is that if an insurance company pays out the money, it ensures that the people to whom it is paying out the money take out an insurance policy to make sure that the money paid out would be available in a case of different circumstances. I like that.

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The Bill also provides for procedural and other consequential matters, and makes some miscellaneous alterations in the law. For example, it is provided in Clause 13 that it should be a defence to a charge of bigamy for the accused person to show that at no time during the period of seven years immediately before the bigamous marriage had he, or she, reason to think that the original wife, or husband, was alive. It seems to me, looking first at the Report of the Law Commission and at the nature of the Bill, that it takes care of many anomalies and contingencies which have been involved so far.
That, my Lords, is the essence of the Bill. It is technical in its details, but I have no reason to think that you will find it in any way controversial, and to me it is simply straightforward common sense. In filling a gap in the present law and providing a single comprehensive Statute constituting the one source of law, I believe that the Bill will be a valuable social measure. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(Lord Ritchie-Calder.)
3.5 p.m.
Lord CAMPBELL of CROY: My Lords, this Bill has already passed through another place as a Private Members' Bill and I, for one, applaud warmly the action of the noble Lord, Lord Ritchie-Calder, in taking it up and being prepared to pilot it through your Lordships' House. I shall not cause him any navigational problems. The Bill is based on the recommendations of the Scottish Law Commission, as the noble Lord has reminded us, and personally I am very glad that time has been found for the law in Scotland on this subject to be reformed.
There may be points, which might be technical ones that lawyers may perhaps raise during later stages of the Bill, but certainly I can confirm that the Bill is not controversial. However, it did not have a Second Reading debate in another place. That arose because it is a non-controversial Bill. It passed through the Commons; it was not sponsored by a Member who had been successful in the ballot and was in the first eight or so places, and therefore there was no time
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for a Second Reading debate. The Bill received the affirmative nod and no objection after debating on an appropriate day had already been exhausted.
I, for one, welcome the fact that it got a Second Reading, but it has not had any general debate. It went to the Standing Committee in another place for Scottish Private Member's Bills; and so it is in the interesting situation of having had a Committee stage in another place and having had particular points discussed, but not having been subject to general debate so far. Your Lordships' Chamber can provide a forum for a few general remarks to be made following the introduction which the noble Lord gave and which it was impossible for anyone to give in another place.
I presume that the intention is—and the noble Lord, Lord Ritchie-Calder, appeared to confirm this—to avoid awkward, difficult and anomalous situations which can arise when a person disappears without trace. The noble and learned Lord the Solicitor-General for Scotland, may be able to tell us later of examples of what has happened under existing laws. The noble Lord, Lord Ritchie-Calder, pointed out that under some legislation a person can be regarded as being dead while, at the same time, under other legislation, he is regarded as still alive. That is the kind of anomaly that certainly needs to be corrected in Scotland.
There is no doubt that serious problems can arise if a person disappears and there is no proof that he, or she, is dead. I understand that most of those who go missing nowadays are traced within a few weeks or months; for example, young people who are deliberately running away from home and who wish to get away from their families and make a start elsewhere. There are also cases of elderly persons who may collapse on a walk in the countryside and be missing for a period until they are found, either alive or dead. There are statistically always a rather larger number of persons missing at any given time, both South of the Border and North of the Border, than I think many of us would imagine. But that is a changing list of names for the reason that I have just given. People are reported as missing, but in most cases they reappear or are found in a comparatively short space of

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time. This is only to be expected in the age of computers and with all the technical equipment which is available to the police and other authorities.
But the fact remains that there still are some unsolved mysteries, and I must of course refer to a Member of this House, the noble Earl, Lord Lucan. So far as I know, his disappearance remains completely unaccounted for. This kind of thing can still happen.
In Scotland, where this Bill is to apply, there has recently been the mystifying disappearance of a Mrs. Macrae and her child from near Inverness. All that was found was her car by the roadside only a few miles from Inverness, and there is no clue whatever, so far as the public have been informed, to provide information as to whether she and the child are dead or alive. I am reminded of this because there are still placards in the area in the North of Scotland where I live showing her photograph and saying:
"Missing—If you have seen this woman, please report immediately to the police".
Now, months afterwards, there is still no information to indicate whether she and her child are alive or dead. It is necessary to have placards of that kind—I quite understand that—even though it may cause distress to relatives, particularly in the early days, because of cases of loss of memory. It is possible for a person to go missing and be quite unable to remember who or where he is, and he can usually be found fairly quickly by such methods.
Then, personal matters, some of which the noble Lord, Lord Ritchie-Calder, has mentioned, come up; for example, marriage, and for how long after someone has completely disappeared the spouse is to be regarded as married to that person. There is in Clause 13 a provision to deal with a situation where someone has unintentionally committed bigamy if a person who has disappeared comes to life again. There are questions of insurance and social security, and there are matters of contracts and disposal of property. In all these matters the period of seven years has been selected. The noble Lord informed us that there has not been a period of this kind in Scotland previously, but the period of seven years has now been selected and I understand that this is the same period as that which is applied South of the Border. I am sure that in matters of this kind it is right that, so far as
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possible, we should have uniformity throughout the United Kingdom, because cases can be vexatiously complicated where they affect both sides of the Border. It may not be marriage or family matters that cause difficulty; it could be insurance, property and other matters of that kind.
Finally, lawyers with experience of cases or possessing views on what they think to be the best reform and the best improvements that can possibly be made in this field may well have points to raise at later stages of this Bill. For my part, I am happy that the Scottish Law Commission's work and its proposals are now to be applied in order to promote fairness, clarity and common sense in dealing with what in certain situations can be a difficult matter and also, for relations, a distressing one.
3.14 p.m.
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): My Lords, I should like to join the noble Lord in thanking my noble friend Lord Ritchie-Calder for bringing this Bill before your Lordships' House. As my noble friend said, the Scottish Law Commission produced its report in 1974. The Scottish Law Commission, if I may respectfully say so—and in this I endorse what my noble friend said—was then, and still is, a body of quite outstanding quality, with lawyers of the highest calibre; and in its lucidity and its comprehensiveness this particular report is typical of its work. This report contains a most valuable review of the law which was in force then, and which still is in force, and came to the conclusion that there was need for a general presumption of death to be effective for all legal purposes; and that, as has been explained, is the main purpose of the Bill now before the House. I believe that it will greatly simplify the law and will be of considerable assistance to all who are administering the estate of a missing person, and indeed to all persons who are affected personally or patrimonially by the prolonged disappearance of a person with whom they are connected in some way.
The noble Lord, Lord Campbell of Croy, asked me for some examples of how the present law is unsatisfactory. I really cannot do better than go to the report of the Scottish Law Commission,

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from which I might just briefly cull three instances which will perhaps illustrate the point. First of all, under the 1891 Act one could not petition unless one was entitled to succeed to estate. Accordingly, if the person who was missing had no estate then the petition was not competent. Indeed, in one case in recent years the petition was dismissed simply because the petitioner's husband, who had disappeared in 1937, had no estate. Secondly, where, for example, the petition is brought by a spouse, it will be effective under the 1891 Act for purposes in connection with property but not effective for the purpose of terminating the marriage; and, accordingly, there will have to be two separate applications to the court.
Then, of course, the 1891 Act does not apply, and no other legislation applies, to claims against insurers under a policy of assurance upon the life of a person who has disappeared. Accordingly, a person who wishes to claim the proceeds of such a policy has to present a petition under the common law, and the standards of the common law in this regard are very high indeed. Indeed, it is in the common law that a person is presumed to continue in life unless there is strong and positive proof that he has died. These are some of the difficulties which I think the noble Lord, Lord Campbell of Croy, was seeking as illustrations.
The present Bill will remove all of these; and, on behalf of the Government, I must say that it is heartening that we in this House are being given the opportunity to implement yet another important recommendation of the Scottish Law Commission. I congratulate my noble friend on bringing this Bill forward, on his courage in venturing into the field of lawyers' law, and on the ease and skill with which he has seemed to move in it.
Lord RITCHIE-CALDER: My Lords, I can do no more than thank the noble Lord, Lord Campbell of Croy, and my noble friend Lord McCluskey for the good will they have shown towards this Bill. I repeat what I said: I think it is a masterpiece of common sense, and I may say to my noble friend that it does not need a lawyer to recognise the virtues of this Bill.
On Question. Bill read 2a, and committed to a Committee of the Whole House.

SALE OF MANORS BILL [H.L.]
3.18 p.m.
The Earl of KINNOULL: 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.—(The Earl of Kinnoull.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Lord Aberdare in the Chair.]
Clause 1 agreed to.
Clause 2 [Categories of Lordships to which this Act applies]:
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 1:
Page 1, line 9, after ("land") insert ("or other rights").
The noble Earl said: It may be for the convenience of the Committee that we discuss Amendments Nos. 1 and 2 together. Your Lordships will recall that Clause 2 of the Bill deals specifically with the categories in which lordships of the manor will operate under this Bill. They are fairly narrow categories, and I hope that they are accepted in principle. On the Second Reading of the Bill my noble friend Lord Clitheroe raised what I thought was a very valid point about the question of other rights going with lordships, notably empty lordships, such as shooting rights: and, indeed, he raised the question of mineral rights.
The first two Amendments on the Marshalled List are designed to eliminate the question of shooting rights where a lordship is being transferred or sold without any land. The definition of "other rights" we shall come to a little later, in Amendment No. 4. It specifically means the
"rights of free warren, fishing or other rights (however originating) to hunt or kill game exercisable over the land".
It may be to the interest of the Committee to know that the right of free warren is a right to kill four-footed game. It arose, I understand, mostly from grants in the purlieus outside the perambulations of ancient Royal forests which, at one time,

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covered one-third of Britain. I hope, with that short explanation, I have sufficiently convinced the Committee to approve these Amendments. I beg to move Amendment No. 1.
On Question, Amendment agreed to.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 2:
Page 1, line 11, after ("land") insert ("or other rights").
On Question, Amendment agreed to.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 3:
Page 1, line 17, after ("land") insert ("other than useful land").
The noble Earl said: This Amendment could perhaps be taken, in part anyway, again with Amendment No. 4 because it covers a phase "useful land", which the Promoters have imported into the Bill. This again is a point made by my noble friend Lord Clitheroe, particularly in regard to the ancient right of minerals which might go with lordships of the manor. As I understand it, this could specifically occur where copyholds have been compulsorily enfranchised under the 1925 Law of Property Act. It is this specific point that it is trying to cover.
What the Amendment seeks to do is to exclude other than useful land. As will be seen a little later, under Amendment No. 4, "useful land" means land upon which there is a building, for instance, a manor house and garden, or which is a garden appurtenant to any building or which is a quarry, a claypit or other place where minerals are extracted or which is, perhaps, just an ordinary agricultural field within the meaning of the Agriculture Act 1947. I hope, again with this brief explanation to meet my noble friend's point, that this Amendment will be acceptable to the Committee. I beg to move.
On Question, Amendment agreed to.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 4:
Page 1, line 19, at end insert—
("(2) This section shall apply to an undivided share in a lordship as it applies to a lordship but only if the said undivided share is proposed to be transferred to a person who is not the owner of an undivided share.
(3) In this section "useful land" means land upon which there is a building, or which
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is a garden appurtenant to any building or which is a quarry, claypit or other place where minerals are extracted, or which is agricultural land within the meaning of the section 109 of the Agriculture Act 1947 and "other rights" means rights of free warren, fishing or other rights (however originating) to hunt or kill game exercisable over the land.")
The noble Earl said: I beg to move this Amendment, which really covers three points, two of which I have explained. The first deals with useful land and the second with other rights. The one I have not explained covers the question of undivided shares. My noble friends Lord Sandford and Lord Inglewood, both raised the question of what happens where there is a lordship of a manor which is technically owned by perhaps six shareholders—and I am putting this in nonlegal words—and what would happen where one undivided sharer wishes to dispose of his interest. This, again, has been taken up, and the Committee will realise that undivided shares were the survival of old tenancies in common and often arose under feudal law where the lord had only daughters and no son. It is, indeed, somewhat similar to a Peerage in abeyance. The shares could be further divided where the next generation also produces no son but only daughters.
The effect of the Amendment would be that anyone who has an undivided share (a share of the lordship which would come within the scope of this Bill) would have two options under the Bill: either to sell to a fellow shareholder—and there would be no interference with that—or to offer it as a first option to the parish councils. I beg to move.
Lord BARNBY: My intervention might equally have been made on one of the previous Amendments. I did not raise these points on Second Reading because it was obviously preferable to await what the Government spokesman was going to say about my noble friend's Bill. I want to say that I entirely support his intentions in the Bill as a whole, but the Bill raises some points which, I am advised, will affect it as a whole. I select by chance this Amendment on which to express those points because this, I believe, is the first occasion of legislation being put forward since the Select Committee on Common Lands, some 15 to 20 years ago, when our late colleague, Lord Winterton, after very long experience in the House of Commons, took a great

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deal of trouble in trying to get the Government at the time to bring in legislation, in some degree, on that matter. That would have covered a great many of the points at which my noble friend has aimed in his Amendments today.
It is a matter of great regret to all of us whom these Amendments influence, that although the Government at the time promised early legislation, nothing has been done. The situation with regard to manors (and, therefore, lordships which we are discussing today) has got into more and more of a tangle and the need for legislation is greater than ever. This is particularly so when, with the evolution of time, we find that manors and common lands once virtually entirely in rural areas now practically fall within urban areas.
What I particularly refer to is the provision of this Bill where acquisition is considered with regard to small areas of under three acres. I would address myself to even smaller acreages than that. It seems a pity that legislation should be undertaken and considered by the House without a wider scope of consideration on a matter on which legislation has been promised.
I address myself particularly to the omission of, say, a small area of land—smaller than that my noble friend has mentioned—which, by statutory action prompted by the needs of the community, has entirely severed portions of a manor from the rest of the area; this cutting off, so to speak, being caused by statutory action directed to, say, the construction of highways. The Bill, quite properly I suppose, only calls upon councils possibly to agree to do something. It would seem that there should be ventilated at this stage the serious position of the owners of the soil of manors where such separation from the main body as I have just described through no desire of the owner of the soil, should not in some way (when such action has occurred through statutory requirement) permit a method of relieving the owner of the soil of that particular cut off area—and particularly if it involves the owner of the soil in some action which the public authority may feel themselves obligated to call upon him, for the safety of the public, to carry out, thereby causing possible substantial expense.
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While I suppose this cannot be written into the Bill with only the aims which my noble friend has, it seems that it is a matter which should receive the consideration of the appropriate authorities. For that reason, I take this opportunity of drawing attention to something which is certainly a misfortune at present and could and should attract some correcting action.
The Earl of KINNOULL: My noble friend Lord Barnby was kind enough to warn me he was going to raise this matter. I tried to obtain the best advice I could. I am advised—as the noble Lord suspected I would have to say—that this is outside the scope of the Bill. It would come more profitably under the Land Compensation Acts rather than this little Bill. Nevertheless, I am most grateful to the noble Lord, who I know has an interest in a lordship and has great experience in this subject. I am grateful for his intervention and his support of the Bill.
On Question, Amendment agreed to.
On Question, Whether Clause 2, as amended, shall stand part of the Bill?
3.32 p.m.
Lord SANDFORD: My Lords, I agree with my noble friend Lord Kinnoull—and my noble friend Lord Clitheroe would, too, if he were here—that the first four Amendments meet a large number of the points that we made on Second Reading about mineral rights, shooting rights, and such like. But there are two further points on which I should be glad to have my noble friend's reassurance, preferably now; but, if not now, perhaps between now and the next stage. First, would he confirm that the sole object of the definition contained in Clause 2(a) is to prevent unseemly transactions in titles which are empty, as it were, by such means as raffles, and so on? That seems to me to be the residual reason for including this point, but I should like my noble friend to confirm that.
The next point which would be useful to have stressed, if my noble friend feels that he can do so, is the reason why parish councils and community councils feel that it is only by acquiring the ownership of the lordships that they can satisfactorily exercise their powers of management over the surface of the lands referred to in Clause 2(b). He explained that this

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Amendment was necessary in order that they should acquire the ownership of them. But, looking back over our debate, I am not sure that he really convinced me—and I am sure he did not convince others outside this House—that without this ownership they would not be able satisfactorily to manage the village green and the other things mentioned. Perhaps he could try to give us examples of what frustration has occurred as a result of not owning these greens.
The Earl of KINNOULL: I am grateful to my noble friend. He emphasises the bulwark of the Bill, the key purposes of the Bill. The first point he raised about why this expression "no land" is included is something which the noble Baroness, Lady Birk, raised with me. It is entirely as my noble friend suspected. To use his own words on Second Reading, it is an affront to the dignity and pride of local communities. It is that spirit in which this part of the clause is written. There is a feeling that these historic relics—certainly records—are of value. They are valued by historians but particularly by the local people in the parish. It is for that reason that it is put in. I hope that my noble friend supports that.
The second point is again very important. It is the precise reason and indeed evidence of the parish councils for wishing to have a physical control of the centre parts of the parish, the village green, and so on. One has to remember the village green of all parts of a village is the centre core of the village. Often it can range from half an acre up to 20 acres and is a very important part for any local community to keep tidy and to control. As the noble Baroness, Lady Birk, accepted on Second Reading, there is at present not sufficient control exercisable by parish councils or district councils. What they should like to do in many cases where there is damage caused by heavy vehicles, the dumping of bedsteads or mattresses, or builders who dump materials waiting to build, is dig a trench separating the hard road from the village green which will not be unsightly but very effective against the hazards and problems which occur. I hope that sufficiently convinces my noble friend.
Clause 2, as amended, agreed to.
Clause 3 agreed to.
Clause 4 [Duty to consult]:
3.37 p.m.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 5:
Page 2, line 7, at end insert ("and to inform the owner that they intend so to do").
The noble Earl said: The Committee will recall that Clause 4 lays down a duty on the council which is originally notified by the owner of the lordship that he intends to transfer or sell his lordship, to inform other councils which might be within the parish, lordship or the manor boundary. As the Bill is at present drafted, there is no notification by the council that they are informing other councils. As the Committee will know, at the latter part of the Bill other councils who have an interest in this parish or this manor can take up the right of the option. This Amendment is simply to inform the owner that the original council has notified another council. I beg to move.
On Question, Amendment agreed to.
Clause 4, as amended, agreed to.
Clause 5 [Power of councils to acquire Lordships and conditions as to valuation]:
On Question, Whether Clause 5 shall be agreed to?
3.39 p.m.
Lord SANDFORD: I have a number of points about Clause 5 which I should like my noble friend to consider between now and the next stage. They are points which he needs to consider and on which he will possibly need to introduce Amendments, if he agrees that the points have some weight. First, there is no reference at the moment to what shall be the basis on which consideration of the purchase price shall be measured. For example, open market value. We need to have some reference of that kind.
Secondly, there is no reference as to whom shall bear the cost of the arbitration which is provided for under Clause 5(2). There is no right of appeal. This was raised at Second Reading and there is some force in it. There is no right of appeal on a point of law arising out of the arbitration. There is no indication that the council shall bear the reasonable costs of the surveyor of the vendor in

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negotiating the terms nor the reasonable legal fees that a vendor must incur in making the transfer to the council.
The fifth point is that I do not think the valuer should determine the proportion of costs for a valuation. It would be more satisfactory, and I think more equitable, if it were to be provided that the proportion should be three-quarters as to the council—since it is the council which is pressing to acquire the lordship and some of the incidental interests—and only 25 per cent. as to the vendor. Perhaps my noble friend will be kind enough to bear those points in mind and incorporate such of them as he considers have weight at the next stage.
The Earl of KINNOULL: I am most grateful for those comments by my noble friend. I think that all those points I took down have considerable merit. I would add that when the Promoters drafted this particular part of the Bill they did so mindful of the fact that all these valuations will be of a very small and simple nature. Nevertheless, I accept what my noble friend has said, which I think covers three points: the open market value, the question of costs and the right of appeal. I will certainly take advice on these matters before the next stage.
Lord SANDFORD: If might make just this point to my noble friend, the general assumption made by the National Association is certainly valid when it comes to small parcels of land in the countryside; but those small parcels, in relation to urban and development land, have considerable value.
Clause 5 agreed to.
3.42 p.m.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 6:
After Clause 5, insert the following new clause:
Application of certain Acts to manorial records.
1922 c. 16, 1936 c. 43, 1972 c. 70.
. The provisions of section 144A(4) of the Law of Property Act 1922, section 36(2) of the Tithes Act 1936 and section 225 to 229 of the Local Government Act 1972 shall apply to manorial records acquired by a council under this Act or otherwise, and such records are specified papers for the purposes of the said Act of 1972.
The noble Earl said: This is a new clause to be put into the Bill which deals
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specifically with manorial records. It is a subject of which many of my noble friends know a great deal more than I do but I understand that, certainly for a century now, the question of parish records and their preservation has been of considerable interest and concern. I understand there are really two types of records. There were the parish records which were originally books, papers and writings of the parish and, as early as 1874 under the Local Government Act, the parish council became the custodian of these records.
It is interesting to note, in connection with the Local Government Act 1972, that custodianship was not considered satisfactory because a lot of the old records were being eaten by mice. Under the 1972 Act, it became the duty for the district councils to provide, I believe, armoured chests or something of that kind which would combat mice, dampness or any other evil substance which might damage the old records. The most important thing, under that 1972 Act, was that the county councils themselves should have the power to inspect those records and, indeed, I understand that a lot of these ancient and valuable records are now with the county museums and archives.
Manorial records did not have quite such a strong protection, naturally perhaps, since most of them were independently and privately owned; but under the Law of Property Act 1922 the Master of the Rolls was given power to direct that the ancient records be held by museums, and so on, for safe custody. The Amendment put down, which would insert a new clause, basically tries to bring the manorial records into line with the parish records. I accept it is an Amendment which has not been drafted by Parliamentary draftsmen and, if the Government accept the principle of it, I shall do my best to satisfy the Government at the next stage with a new Amendment. I beg to move.
Lord DOUGLAS of BARLOCH: I think we should be a little hesitant about this. I am not al all certain that the proposal will be of benefit. I know of one case in which the owner of manorial rights deposited the relative historical documents with the local authority for safe custody and, some time afterwards, when the owner went to look at them she found that two pages had been torn out.

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If that is the way in which they are going to be safeguarded by public authorities, I think we want to be a little careful.
Lord CLITHEROE: I should like just to raise one very small point, if I may. I would first thank the noble Earl for the various Amendments he has made to some of the points in which I was interested at the time of Second Reading. In the first line of this Amendment the provisions of Section 144A(4) are referred to. When I looked up the Law of Property Act this afternoon, I found that it was only Section 144. So I think this point needs correction.
The Earl of KINNOULL: I am grateful to both noble Lords. My noble friend is quite right: correction is needed. A major correction of which I have just been advised is also needed. As to the single case mentioned and as to local authorities not being the proper custodians and having allowed damage to those ancient titles, I am as sad about that as I am sure the noble Lord is. I am sure this is a very, very rare case indeed.
On Question, Amendment agreed to.
Clause 6 [Power of councils consulted pursuant to s.4]:
3.47 p.m.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 7:
Page 2, line 25, leave out ("the expiration of one month after").
The noble Earl said: Clause 6 deals with the question of the time-scale in which a council which has been consulted by the main council may serve notice of its intention to exercise its option to purchase. The original draft gave the second council, so to speak, an additional month. It was felt that was really unnecessary when the principle is fairly simple and parish council meetings can be called at fairly short notice. Indeed, in order not to damage any individual rights of sale, I feel that the time-scale should be kept as short as possible and therefore this clause deletes the extra month which was originally granted. So the second council, so to speak, will have the same time as the original council—three months—in which to serve their notice. I beg to move.
On Question, Amendment agreed to.
Clause 6, as amended, agreed to.
Clause 7 [Interpretation]:
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 8:
Page 2, line 34, at end insert—
(""Independent valuer" means a person who is a corporate member of the Royal Institution of Chartered Surveyors or a corporate member of the Incorporated Society of Valuers and Auctioneers, and has knowledge and experience in the valuation of land.")
The noble Earl said: I feel I should declare an interest over this. Clause 7 deals with interpretations under the Bill. There is no specific interpretation for "independent valuer" and it has been brought to the notice of the sponsoring body that in the past there has been other legislation, notably regulation 6 of the Insurance Companies (Valuation of Assets) Regulations 1974, which imported the very words we are now suggesting should be imported. Basically, the point is that where you call in an independent valuer, I think it is accepted that he should be professionally qualified rather than merely a valuer without any experience—which could happen, of course. I beg to move.
On Question, Amendment agreed to.
3.50 p.m.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 9:
Page 2, line 39, after ("conveyance") insert ("or").
The noble Earl said: This is just a "grammatical" Amendment. I beg to move.
On Question, Amendment agreed to.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 10:
Page 2, line 39, leave out ("probate or letters of administration").
The noble Earl said: This is an Amendment to meet a point made by my noble friend Lord Clithcroe, who pointed out on Second Reading that as the Bill was drafted it could he that, on the death of an owner of a lordship, the operation of the Bill would then apply without his son having the right to succeed. As I then indicated, that was not the purpose of

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the Bill and we have tried to correct it by Amendments Nos. 10 and 11 to delete the words "probate or letters of administration", and to insert after "marriage" the words, "death or otherwise by operation of law". I beg to move.
Lord CLITHEROE: I am grateful to my noble friend Lord Kinnoull for this Amendment. If I may just point out one other matter in connection with Amendment No. 11, to which my noble friend has referred, I suggest that after the words, "death or otherwise by operation of law", there should be added, "or gift or settlement on the heir or relative", because it is just as important that it should be done when it is a question of a gift by a father to a son, as when the father dies.
The Earl of KINNOULL: I am most grateful for those words from my noble friend. I will certainly look into that point, which I think is a good and valid one.
On Question, Amendment agreed to.
The Earl of KINNOULL The Earl of KINNOULL moved Amendment No. 11:
Page 3, line 2, after ("marriage") insert ("death or otherwise by operation of law").
On Question, Amendment agreed to.
Clause 7, as amended, agreed to.
Remaining clause agreed to.
Schedule agreed to.
On Question, Whether the Short Title shall stand part of the Bill?
Lord SANDFORD: I wonder whether my noble friend will reconsider the Short Title. The Long Title is perfectly sound and correct, but the Short Title is misleading, because the very thing that we are not talking about in this Bill is the sale of manors. This is quite clear if one looks, at the definition. It is misleading as a Short Title, and I should have thought that it would be better if it were something like Sale of Lordships of Manors. All I would ask my noble friend to make quite sure about when making any change, is that he does not amend it to Sale of Lordships, which would be even worse!
Lord CLITHEROE: May I add my support to the proposal which has just been made by the noble Lord, Lord Sandford?
The Earl of KINNOULL: I am grateful to both of my noble friends. I will certainly look into that point before the next stage.
Short Title agreed to.
House resumed: Bill reported with the Amendments.

UNFAIR CONTRACT TERMS BILL
3.54 p.m.
Lord JACQUES: My Lords, I beg to move that this Bill be now read a second time. It is concerned with those exemption clauses in contracts and notices which seek to exclude liability for negligence and breach of contract. It is based upon studies made by the Law Commission and the Scottish Law Commission, which were extended over a period of 10 years. The Commissions submitted a First Report, and that was implemented by the Supply of Goods (Implied Terms) Act 1973. This Bill seeks to implement the Second Report of the Commissions. The Bill comes to us with all-Party support from the other place, and I hope that it might leave us in the same way.
I would pay tribute—and I am sure that noble Lords will join me—to the thoroughness of the work of the Law Commissions. I would also congratulate my honourable friend Mr. Michael Ward, the Member for Peterborough, who sponsored and piloted the Bill through the other place. I would also personally thank my noble and learned friend the Lord Chancellor and my right honourable friend the Secretary of State for Prices and Consumer Protection and their staffs, for the help that they have given me in connection with this Bill.
The Commissions were in agreement as to the controls that were needed, but they differed as to the scope of their operation and, in some respects, as to the methods of their application. There have, however been widespread consultations since the Second Report of the Commissions, by the Department of Prices and Consumer Protection. They have consulted with

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more than 300 organisations in the legal profession, in commerce and industry and in consumer affairs, as well as the Office of Fair Trading and Government Departments. In consequence, to some extent this Bill is based upon the results of those consultations.
The Bill is in three Parts. The first Part amends the law in England and Wales and Northern Ireland; the second Part amends the law in Scotland to the same effect, and the third Part provides miscellaneous clauses which apply to the United Kingdom as a whole. Clause I deals with the scope of Part I. It covers matters in which the Commissions were in agreement, and matters in which they were not in agreement. They were agreed that negligence includes not only breach of Common Law duty of care, but also breach of any contractual duty of care, whether express or implied, and any breach of duty of care imposed by the Occupiers' Liability Act. Secondly, they were agreed that the controls should apply to business transactions only, except in the case of the sale of goods where they already apply to business and private transactions. Thirdly, they were agreed that the controls should apply whether or not the breach is intentional, and whether it arises out of the party's own act or the act of someone for whom he is responsible, such as an employee. In consequence of the agreement between the Commissions on these points, the clause follows that line.
However, the main divergence of view of the Commissions was on the overall scope of the Bill. The Law Commission took the view that the controls should not be restricted to particular classes of contract. The Scottish Law Commission took the view that it should be restricted to four classes of contract: first, contracts for the supply of goods; secondly, contracts of service and apprenticeship; thirdly, contracts for services and insurance and, fourthly, licences to enter or use land. In particular, the Scottish Law Commission suggested that the controls should not apply to the transfer of ownership or possession of land, and to other aspects of commercial and company law, without further consultations.
The majority of those bodies that had been consulted favoured the Scottish line—that is, restricted scope for the controls.
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It was suggested that by this restriction the consumer would not be disadvantaged. For example, when there is a transfer of the ownership of land, that is an occasion when the consumer usually has legal advice at his elbow.
Clause 1 and Schedule 1 therefore follow the Scottish line. Indeed, their restriction goes a little further than the Scottish line. They exclude insurance. Also they exclude commercial maritime transactions in respect of negligence which results in property damage and also in respect of breach of contract. The principal reason for these two exclusions is that they would handicap our traders in international competition. However, there was another reason in the case of insurance. Investigations showed that to apply the Bill to insurance would result in an excessive cost being paid by the consumer without any commensurate advantages. Consequently, the Bill excludes insurance, but in its place a code of practice has been negotiated between the Department of Trade and the insurance industry. Therefore by this voluntary effort some restrictions will be placed upon insurance companies.
Clause 2 deals with the controls on exclusion or restriction of liability for negligence. This is the heart of the Bill. The Commissions said that these exemption clauses were in many cases a social evil and that the case for greater control was unanswerable. They recommended a complete ban in four areas where negligence results in death or personal injury; first, contracts of employment; second, contracts concerning travel by air, sea, road and rail; third, lifts and escalators and fairground equipment; and fourthly, the use of car parks. However, they recognised that there would inevitably be other areas where the control should apply and they recommended that the Bill should have order-making powers so that its scope could be extended.
Representations received by the Department have shown a general feeling that there are many other areas where there is reliance on the care and skill of the other party. There is also a good deal of scepticism on the cumbersomeness of order-making powers. It is pointed out that these powers have not been very effective in the application of the Fair Trading Act 1973. The Office of Fair Trading,

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the National Consumer Council and the Consumers' Association all favoured a complete ban, except where international Convention, to which the United Kingdom was a party, provided otherwise. The Bill therefore provides accordingly; that is to say, where the negligence results in death or personal injury the exclusion clause will be void. Where the damage is other than death or personal injury, an exemption clause will be subject to the reasonableness test.
Clause 3 is in accordance with the Commissions' recommendations. Clauses evading liability for breach or lack of performance are subject to a reasonableness test, but only where the other party is a consumer or the contract is in written, standard terms. The latter provision is intended to protect the small businessman who is often just as vulnerable as the consumer himself.
Clause 4 deals with indemnity clauses. A particularly iniquitous example of indemnity clauses is the one which is often found on the back of cross-Channel car ferry tickets. Here, the customer is required to indemnify the shipowner against damage to third parties resulting from the negligent handling of the car by the ship's crew. Clause 4 provides that where the other party is a consumer, the clause, whether in relation to negligence or breach, will be subject to a test of reasonableness.
Clause 5 implements the recommendations of the Commissions that a guarantee by manufacturers or importers of consumer goods shall not exclude liability for negligence. For convenience, Clause 6 restates the controls which already apply to contracts for the sale of goods and hire purchase. However, the Commissions took the view that there should be similar controls in the case of hire of goods, contracts for work and materials and the exchange of goods. These similar controls are provided in Clause 7.
I come now to the reasonableness test. Clause 8 replaces the test in the Misrepresentation Act 1967 with the test which is in the Bill. Clause 9 modifies the doctrine of fundamental breach to take account of the operation of the reasonableness test where there is a serious breach of contract and the innocent
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party either repudiates or reaffirms. An exclusion clause which, by the Bill, is not subject to the reasonableness test will nevertheless be subject to that test.
Clause 10 sets out the test itself. Here there was a fundamental disagreement as to whether all the circumstances should he taken into account or only those matters within the contemplation of the parties when the contract was made. The latter view has been taken in framing the clause, on the grounds that this will lead to less uncertainty. Guidelines for the application of the reasonableness test to contracts for the supply of goods are in Schedule 2. By an Amendment in Committee in the other place, the burden of proof of reasonableness is on the party which relies upon it.
Clause 11 defines "dealing as a consumer". Clause 12 seeks to prevent the evasion of the controls in the Bill. Clause 13 gives interpretations of the terms which are used in Part I of the Bill. Clauses 14 to 23 make the necessary amendments to the law of Scotland so that it will apply there with equal effect as it does in England, Wales and Northern Ireland. Clause 24 excludes from the controls contracts for the international supply of goods. Clause 25 prevents evasion by choice of a foreign law but it allows foreigners to use the United Kingdom law without the controls, if they so wish. Clause 27 disapplies the controls to terms which are authorised or required by present legislation and disallows the controls in relation to terms Which comply with international conventions to which the United Kingdom is a party.
Clause 26 provides interim arrangements for dealing with the Athens Convention. This is a convention concerning the carriage of passengers and their luggage by sea. The United Kingdom has signed the convention but has not yet implemented it. Clause 28 amends the Consumer Protection Act of 1961 so as to make it clear that an exclusion clause cannot be used to evade the safety requirements of that Act. Clause 29 states that the Bill will come into force three months after it has been passed.
In conclusion, may I say that my background gives me a dual interest in this Bill. First, having been associated all my life with a consumer organisation I am well aware of the need for the protection of

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the consumer in the area covered by the Bill, but having spent the greater part of my working life in management I know the frustrations of uncertainty. I believe that this Bill seeks fairness while at the same time minimising uncertainty. I have pleasure in commending it to the House and I beg to move that the Bill he now read a second time.
Moved, That the Bill be now read 2a— (Lord Jacques.)
4.12 p.m.
Lord LYELL: My Lords, all of us on these Benches and I believe all round the House would seek to congratulate the noble Lord, Lord Jacques, for introducing this fairly long but certainly immensely technical Bill to your Lordships this afternoon. We are all very glad to see that the main recommendations of the Law Commissions, both in England and Wales and in Scotland, are to be implemented in this Bill so far as the exclusion of liability in contracts or negligence is concerned. It is indeed pleasant to find that the individual is to be given further protection, especially where our society and our economy depends for the most part upon the demand for goods and services. It is even more pleasant to find that the Sale of Goods Act has stood the test of 84 years' use and refinement and revision. This Bill goes a little further in the process of up-dating commercial law, but I believe the Bill is still closely concerned and connected to the Act of 1893. However, as we have heard from the noble Lord, Lord Jacques, the main purpose is to prevent exclusion or the restriction of liability from hearing too harshly on the consumer or indeed on commercial businesses.
We take note of the clauses dealing with liability for death and personal injury which arise from negligence or breach of duty, and indeed we support those provisions most warmly. The two clauses which deal with the test for reasonableness where a consumer finds a business has disclaimed its responsibility so far as performance of the contract or agreement is concerned, are equally to he most warmly welcomed.
However, I wonder whether the noble Lord, Lord Jacques, and the Government would notice that all those professions
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and traders and industries which deal mainly with the public rather than with other businesses are happy to see that, where individuals are dissatisfied with the performance of some aspect of the agreement or contract, the Bill will put into law what is already laid down in various voluntary codes of protection and codes of conduct and practice. I am thinking especially of travel or tour operators. Certainly customers of that particular trade or industry receive excellent treatment, often going far beyond what is set out in this Bill. This is admirable, but noble Lords will notice in the Bill that there is no improvement in service to individuals which is utterly painless or indeed without cost.
Each year when I, and certainly other noble Lords, set off to represent your Lordships' House in foreign parts for all sorts of reasons we find at the foot of our travel invoice a little item "Two per cent. Government levy". This goes to ensure that travellers who take out navel tickets, or indeed book inclusive tours, from a recognised source and who are then possibly stranded or left in some difficulty suffer no financial penalty. The provision for protecting them against this is indeed an added expense which the travel operators cannot possibly absorb, given the degree of risk and competition in their business, so the cost of safeguarding the, happily very few, aggrieved consumers is borne by the great majority of travellers who have not, and will not have, any complaint.
There is another point I should like to raise and possibly the noble and learned Lord who is to reply for the Government will be able to enlighten me and, I hope, the House. It seems that when anyone buys a travel ticket he (or she) admits tacitly that he is aware of what are called the "company's terms of service", which I understand include terms of liability in cases of death or injury or mere inconvenience. Cases where travellers were inconvenienced or suffered damage were known, certainly in Scotland when I was studying—and I should be interested to receive confirmation from the noble and learned Lord, Lord McCluskey—as "ticket cases". I can certainly remember a number of esoteric cases which were not unconnected with contracts for the sale of goods. Most of those of course were decided in the early 20th century.

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But I wonder whether the new Bill will not cause massive inconvenience in that travellers will have to be asked whether they are aware of their rights when they purchase tickets, be they rail tickets, road tickets or sea tickets.
Indeed, we have had one interesting example this afternoon quoted by the noble Lord, Lord Jacques, in regard to cross-Channel car tickets. Apparently, unwittingly, all of us who take a car across the Channel are indemnifying the company against claims by third parties. Certainly I have not read what is described as the light grey print on the darker grey paper—or is it the other way round?—in these convoluted legal terms. When I buy my rail ticket I notice the small print on the back of the ticket which says that I may inspect the conditions of travel at the company's offices. Yet I understood that these reminders on tickets were to obviate inconvenience. I have information that the commercial world is to a major extent unware of the provisions contained in this Bill. This is no criticism of the Government or indeed of any Department. Indeed, I believe that your Lordships' House exists to check and to revise legislation which has such far-reaching consequences as this Bill.
These consequences could, and I believe will, include a massive increase in litigation, not necessarily between businesses and consumers, but more often—dare one say, almost exclusively?—between one section of a business and another. For the purposes of the Bill the noble Lord, Lord Jacques, and I are mere consumers amid the more businesslike approach of the many noble and learned Lords who sit all around us in the House and who will speak later this afternoon. Thus, I tread warily when I mention that there are fears that the provisions of the Bill as between business and business could open up new facets of law with new cases and judgments. This will increase costs and in some cases it could mean a sensational rise in prospective damages. One can see this every day in the United States of America.
There is, of course, one major safeguard at present contained in the Bill and it is the concept of, and indeed the clauses containing the word, "reasonableness". The noble Lord, Lord Jacques,
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explained it to us very fully, but to me it is a new concept and it is to be written into the Bill as well as into other Acts. One example is the Misrepresentation Act. Certainly the clauses dealing with reasonableness are well drafted and appear to put into Statute form many judgments in cases from both England and Scotland. I hope and believe that the clauses dealing with reasonableness will make the Bill's provisions not unduly onerous, but I must warn noble Lords that voices are being raised in concern that these clauses may bring about all that we do not want in commercial law; for instance, disputes, disagreements, litigation and added costs.
My Lords, there is one aspect of the title which interests me; it is the change from "avoidance of liability" to "unfair contracts". Apart from the purely emotive aspect, I think there is some mild inaccuracy. The old title is perfectly clear to me, and, I believe, to others in your Lordships' House. Many of us are not lawyers; certainly, for my part, I rush for the nearest legal practitioner when the law threatens me or any action of mine. Would not the noble Lord, Lord Jacques, agree that this new title may give the impression that contracts which are freely struck and concluded are oppressive on one side or another? I do not think that he or the Government, or the Bill, intends this; yet the lingering impression is that some, and indeed many, contracts are oppressive.
There is another question concerning the burden of proof. The Bill contains references which represent a very major shift in the balance of the law, not necessarily in connection with consumers. If we look at Clause 10(4), and Clause 22(3) for the Scottish equivalent, we find that the defendant—I think in Scotland he is called the defender; if the noble and learned Lord, Lord McCluskey, would confirm that point I would be grateful—has to counter-attack and prove the burden of his case. This may well be what the Law Commissions had in mind, but I would be grateful to receive confirmation; I think it is indeed possible. But, as it is seen throughout the Bill, the consumer is well protected but the commercial world has cause for concern, in that what have until now been acceptable terms in a contract and have at no time been troublesome, nor oppressive nor contentious are

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now to be so. I think that Clauses 10(4) and 22(3) could give rise to a flood of litigation, not all of it entirely valid, and I believe some of it merely malicious.
My Lords, the Bill is technical. I find it very interesting. It is relevant, and for the major part it is desirable. It seems to push heavily towards the consumer, and yet it does no more than enact what is contained in codes of practice which have effect when a trade or an industry is dealing with individual members of the public. There are some legitimate reservations in the minds of some businesses and industries so far as they engage in business with others similarly engaged.
I hope we can discuss these points before, or possibly at, Committee stage. In connection with any possible discussions and our further deliberations, I am glad that our printers, at least, seem to be back in full flow, because there have been complaints that the Bill, with all its consequences, has not received the publicity and attention which it merits. This could be due to the printing difficulties in another place. I would conclude by congratulating the noble Lord, Lord Jacques, on bringing forward this Bill, and indeed on his mastery of the many technical details. We look forward to hearing from him in reply, and indeed to hearing the many noble and learned Lords who are going to speak on the Bill this afternoon.
4.25 p.m.
Lord MORRIS of BORTH-Y-GEST: My Lords, I should like to express a general welcome for this Bill, and in doing so I would voice my warm appreciation of the way in which the noble Lord, Lord Jacques, introduced it to us. I do not think this was a Bill that was very easy to expound, but I thought, if I may respectfully say so, Lord Jacques helped us by the clarity of his introduction and exposition. I would join with the noble Lord, Lord Jacques, in taking this opportunity to express once again admiration of the work undertaken by the Law Commissions, in this case by the two Law Commissions. I would endorse all that the noble Lord said as to the care that has been devoted to the problems that arise in considering this Bill.
My Lords, as long ago as 1969 there was the First Report. That report made recommendations in regard to the law of
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the sale of goods. One very important consequence of that report was that there was passed the Supply of Goods (Implied Terms) Act 1973, which I regard as a very important Act. Then the second stage of the inquiry related to exemption clauses in a much wider field. The method of work was very thorough. There was a Joint Working Party—the names are all recorded in the report of the Law Commission—and that Working Party had members with particular qualifications of knowledge and experience. They considered the evidence submitted by various bodies and individuals who had special interests. Then the Law Commissions considered their conclusions and published a document for consultation; after full opportunity for consultation, there came the final reports, which we have, that the Law Commission and the Scottish Law Commission published in August 1975.
I think we can feel, and with gratitude acknowledge, that very careful and elaborate consideration has been given to the various recommendations in the reports. It is true that the two Law Commissions differed on some matters. That circumstance in itself perhaps illustrates the care with which the problems were examined. One report was that of the Law Commission for England and Wales; the other was the report of the Law Commission for Scotland. The noble Lord, Lord Jacques, has told us of the way in which various differences were resolved. The Scottish views were given preference in a number of cases over the views of the Law Commission for England and Wales. Despite that fact, I found myself very much in agreement with the preference given to the views of the Scottish Law Commission where they have been preferred in the Bill now before your Lordships.
My Lords, I regard this Bill as being a very important one. It deals with a variety of human and day-to-day activities, and I for one am wholly in sympathy with the general philosophy which is the basis of the Bill. As the noble Lord has told us, it deals with various potential liabilities for breach of contract, for negligence, and for other breaches of duty. I think we all start with a general predisposition in favour of freedom of contract. Yet I think we must pose to ourselves the question: To what extent ought such liabilities to be avoided by

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contract terms or otherwise? If I put that question to myself, I would make answer: "Well, at all events, not by any unfair terms or by any unreasonable terms". That really is the answer which this Bill gives in so many places. It makes assault upon unfairness and it expects and requires reasonableness. Any legislation calculated to achieve fairness and reasonableness must, I think, win the heart of any lawyer, for surely fairness and reasonableness are the twin pillars upon which the working of any legal system should be based.
Yet the questions may be asked: Is there a case for legislation? Are we unduly interfering with freedom of contract? Are we indulging in too zealous a paternalistic approach? I think not. The relevant considerations supporting the necessity for the main provisions in the Bill are well set out in the report of the Law Commission. In particular I refer to paragraph 11, which begins:
"It is clear that exemption clauses are much used both in dealings with private individuals and in purely commercial transactions. We are in no doubt that in many cases they operate against the public interest and that the prevailing judicial attitude of suspicion, or indeed of hostility, to such clauses is well founded".
I think that we all share that "prevailing judicial attitude of suspicion". I think that we are all alarmed—or if we are not alarmed we may be disarmed—by some of the small-print clauses. I remember that Lord Evershed, in one case where a contract was under consideration, made the remark:
"I think that this contract is so one-sided that I am surprised to find that it extends over both sides of the paper".
It is right that the courts should give protection in many cases. I commend the rest of paragraph 11 to your Lordships as based upon sound experience and good reasoning. The report points out:
"All too often, they [the clauses] are introduced in ways which result in the party affected by them remaining ignorant of their presence or import until it is too late. That party, even if he knows of the exemption clause, will often be unable to appreciate that he may lose by accepting it. In any case, he may not have sufficient bargaining strength to refuse to accept it".
The Law Commission then point out that the result may be a failure to achieve satisfactory standards. They continue:
"There is no doubt that the misuse of these clauses is objectionable. Some are unjustified".
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However, the Law Commission put the other side of the considerations and they conclude:
"Others, however, may operate fairly or unfairly, efficiently or inefficiently, depending on the circumstances; for example, the cost and practicability of insurance may be factors in determining how liability should be apportioned between two contracting parties. The problem of devising satisfactory methods of controlling the use of these clauses, and indeed of identifying some of them, has proved both difficult and complicated".
I agree entirely with the point taken by the noble Lord, Lord Lyell, in his very interesting speech, that as a result of the Bill, if your Lordships accept it, there may be additional litigation. There may be. But I do not fear the test of reasonableness. Save in the cases where the Bill makes an exemption clause entirely void, I think that where it is left to the test of reasonableness we can safely leave the matter in the hands of the judges, who can balance the considerations one way and the other. It is not only the consumer who has to be considered; the rights and interests of the other party must manifestly be kept fully in mind. On that point I am not sure that I quite agree with the noble Lord, Lord Lyell, about the burden of proof. I do not think that I am alarmed by the provision in the Bill casting the onus of proof.
In our days of legal reading we recall that Maine had expressed the view that the development was from status to contract. I cannot help thinking that in recent times there has been a change of direction and that in so many spheres it is now status and not contract that prevails. Perhaps I may give two illustrations. I see that the noble Lord, Lord Hailsham of Saint Marylebone, agrees with me; I hope that he will also agree with me that, on the whole, it is not a bad thing to pay full regard to status, sometimes to the exclusion of contract. As one illustration I give the status of the tenant. From 1915 onwards, in days of housing shortage and difficulties in time of war, everyone realised that one cannot allow contract to rule without any limitation. One cannot eject a tenant in times of great difficulty when he would have nowhere to go. One cannot let the landlord charge any amount because of the shortage. One must control. The status of being a tenant must be considered. I could give many more examples. Per-

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haps I could just add one other—the status of being an employee. As I understand it, we have now recognised that, although contractual terms are followed, a case may be brought, and it may succeed, that dismissal, according to the terms of a contract, has been unfair. We have not hesitated in recent years to restrict exemptions from liability.
We all recall some time ago, in days of transport difficulties, perhaps a railway strike, that people gave lifts and put a notice on their cars saying:
"Lift given—entirely at passenger's risk".
Not only have we made compulsory insurance to cover passengers, but we have enacted that any arrangement restricting liability in the case of the death or injury of a passenger will be void. I do not think that we were wrong so to restrict absolute freedom of contract. There is a provision in the Companies Act 1948 making void any exclusion of liability for negligence on the part of an auditor. There is a provision in the Solicitors Act 1974 avoiding any agreement absolving a solicitor from liability for negligence in contentious business. Then there are all the changes made so recently in the Sale of Goods Act. The original provision in the Sale of Goods Act—I think that it was Section 55—provided that any right, duty or liability arising by implication of law might be negatived or varied by express agreement. All that was changed in 1973 in the Act to which the noble Lord, Lord Jacques, referred and to which I have referred.
The noble Lord also referred to the Misrepresentation Act 1967. There Parliament enshrined the test of reasonableness. Your Lordships will recall that by that Act in 1967 damages could be awarded for innocent misrepresentation where a contract had been made after misrepresentation, unless the person concerned proved that he had reasonable ground to believe, and did believe, that the facts represented were true. But could that provision be excluded by contract? "No", said Section 3 of that Act. Such a,
"… provision shall be of no effect except to the extent (if any) that, in any proceedings arising out of the contract, the court or arbitrator may allow reliance on it as being fair and reasonable in the circumstances of the case".
That is very much in accord with the new Clause 10 of this Bill. There was a
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difference between the two Law Commissions as to the time to be taken. I think the view taken by Clause 10 is that the time of the making of the contract is the important time:
"… the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made".
I think that we can fairly leave to the judges a decision in regard to such matters, having regard to all the circumstances whether something,
"… ought reasonably to have been, known to or in the contemplation of the parties when the contract was made".
As I understand it, this Bill will cover a wide range of ordinary transactions. The noble Lord, Lord Jacques, has pointed to the fact, as set out in Schedule 1, that a great many matters are excluded. The noble Lord enumerated them. I think that is right, for the time being at any rate.
"Sections 2 to 4…do not extend to—

(a) any contract of insurance…

(b) any contract so far as it creates or transfers a right or interest in land",

and so on.
"(c) any contract so far as it relates to the formation or dissolution of a company",
and so on.
"(d) any contract so far as it creates or transfers any right or interest in the shares, stock or other securities of a company".
But there are many transactions affecting the ordinary citizen which will come within the purview of this Bill. First, there are hiring transactions. Sale and hire purchase were covered by the previous legislation. What about hiring? There is hiring by somebody in business to somebody in business, and then there is hiring by somebody in business to somebody who, in the language of the Bill, "deals as a consumer". I think it is right to have a difference as between those two.
Let us take an ordinary transaction; the hire of a television set. I think that that would be covered by the words of being hired by somebody in business to somebody who deals as a consumer. It seems an odd idea that you regard the "box" as something to be consumed, but I think the situation is covered there. Take the case of sending goods to a laundry. Suppose the laundry have a

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clause to the effect that they are not to be liable for any loss or damage of the goods. Take the case of a garage. You leave your car at a garage where there is a notice saying, "Cars are left entirely at the owner's risk". Then, suppose the car is damaged by the negligence of the garage proprietor. Of course, in those cases there is always the preliminary point as to the construction of the clause, and I think the courts have been averse from holding that an exclusion clause covers negligence unless the words are very clear.
Take the ordinary case of something left in the cloakroom, or in the left luggage place, where there is some notice, "Left entirely at the owner's risk". Take the case of a museum, or gallery, or stately home where people pay to enter and there is a notice, "No liability for any defect in the premises". Take the case of an architect. He draws plans and when they are used they are found to be faulty and expense is involved. Suppose he had put up a notice, "No liability for negligence". Take the case of an accountant or a valuer. An accountant gives advice which involves a company in a considerable loss. A valuer gives a wrong valuation, and considerable loss is effected. I would ask the general question: am I right in thinking that, in all these cases, the transaction will, in the future, have to be examined in the light of the provisions of this Bill?
A second question I would ask—although I do not expect an answer to these questions now; it may be that they will have to be resolved in due course by the courts—is whether I am right in thinking that there is any overlap between some of these clauses. Take, for example, the case I put forward of the hire of a television set. I think hiring comes within Clause 7, and I suppose if you hire a television set there will be an implied contract that it will be in reasonable condition to enable you to view the programme. Clause 7(2) says:
"As against a person dealing as consumer, liability in respect of the goods' correspondence with description or sample, or their quality or fitness for any particular purpose, cannot be excluded or restricted by reference to any such term".
I should have thought that that was right and reasonable, but I was not quite sure, in reading the Bill, whether Clauses 2
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or 3 would also apply to such a transaction, because there might be a different test (namely, that of reasonableness) in the case I posed. I would think that it came within Clause 7 and that you could not exclude an implied term that the set should be in condition that you may use it for receiving programmes.
Finally, may I ask under the Bill what is the position of a banker's reference. Again, I do not ask for an answer to this question now. It may well be that the matter will have to be resolved in the courts. Suppose a banker gives a reference and he puts on the reference, "Without recourse", or "Without any responsibility". I suppose a banker's reference is generally given by a bank to a bank, but it is given with knowledge that it is likely to be passed on to someone who will rely upon it.
There is also the question of what does a banker undertake to do when he gives a reference. Does he undertake to make inquiries, or undertake only to be honest? These are questions that we cannot in any way resolve this afternoon in a debate of this kind. They may be matters for decision in the courts. But suppose the bank inserts a clause saying, "No liability for any negligence in giving this reference"? I think that that would be covered by Clause 2 and that the court, if an occasion arose, would have to decide whether that exclusion was entirely reasonable. I repeat that those are matters about which I would not expect any answers this afternoon; they may or may not arise in litigation. I end as I began; that is, by giving a welcome to the Bill and by expressing my gratitude to Lord Jacques. This is a worthwhile Bill and I am in full support of the philosophy that underlies it.
4.51 p.m.
Baroness PHILLIPS: My Lords, I too wish to congratulate my noble friend Lord Jacques on the very clear exposition he gave of a highly legal Bill. I was able to understand every word of his explanation and I congratulate him. I also wish to give the Bill a warm welcome and, following the very thoughtful speeches we have had, I would only say that for many years I have conducted a consumer programme in which we have endeavoured to help those unfortunate people who were not truly getting value for money.

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It is very noticeable that over the years more and more people spend money not merely on the goods they buy through retail outlets but for services which perhaps 50 years ago would not have been contemplated as purchases by the ordinary consumer. The law of contract between buyer and seller has always seemed to me rather like a marriage; everything is splendid if all goes well but if things go badly people begin to read the small print, and it is generally against one party rather than against another.
Lord Jacques and the noble and learned Lord, Lord Morris of Borth-y-Gest, spoke of some of the areas in which exclusion clauses occur and I wish to remind noble Lords of some others. Lord Jacques said that the order-making powers were slow and he hoped it would not be so necessary to use them; in other words, that there might be other ways of dealing with the issue. I would say to the noble Lord, Lord Lyell, that in my experience the codes of practice have not been found to be entirely useful, as they are invariably voluntary and refer only to those people who are willing to undertake them. Consider the case of the dry cleaner. All too frequently have I heard of customers whose dresses have disintegrated because of being put in certain liquids. When those customers have tried to obtain redress, their attention has been drawn to an exclusion clause on the back of the tickets which they have not read, which is very poor comfort if, by that time, they do not have the article for which they paid money.
I must confess that the only time I have read the exclusion clauses in relation to travel, it has seemed to me that British Rail are under no obligation even to get me from point A to point B—I hope I am wrong about that—although when I was travelling to Brighton last week and we were all tipped out in the pouring rain two stations before, I wondered what clause in any contract I could invoke, apart from heavily complaining about the people who had caused it.
We now have some very sophisticated terms of service. For example, we have those applying to central heating installations, but I will not worry your Lordships with the horrible stories of people who have spent in many cases a couple of thousand pounds but have been left
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with apparatus which neither works nor gives them any heat. We all know about the car parking situation; the fact that National Car Parks write into their exclusion clauses an obligation which provides that they shall do nothing except allow one to put one's car there. It seems to me that if it is damaged by anybody else, that is bad luck and they appear to be indemnified by their exclusion clauses against any sort of obligation.
I remember the excitement when we got the Supply of Goods (Implied Terms) Act 1973, and I still invoke this excellent little Act. I will quote from the leaflet which was issued at that time by the Office of Fair Trading. At the very beginning—I have a copy of the leaflet with me—it said:
"For many years the law has given the buyer of goods certain implied rights. The rights are ' implied' in that they do not have to be specifically claimed by the buyer, either orally or in writing, whenever goods are bought. Unfortunately for the modern consumer the Act concerned, the Sale of Goods Act 1893, allowed the parties to such a sale to agree in the contract that these rights should not operate."
I think we all remember how customers had to sign away their rights in order to buy certain goods. What a delight it was when we got the Supply of Goods (Implied Terms) Act, which put the matter right. However, at the end of that excellent leaflet it said:
"Are services covered by goods? No. At present the law applies only to goods. Exclusion of liability in the supply of services is being studied now and possible extension of the law to cover services will be considered when the studies have been completed."
Today, in 1977, apparently the studies have been completed and this afternoon your Lordships are asked to approve a law which will put this matter right. I give it a warm welcome and wish it a speedy passage through the House.
4.57 p.m.
Viscount HANWORTH: My Lords, coming relatively late in the list of speakers and as everybody else has welcomed the Bill, I do not think it is necessary for me to do much more than say how much I welcome it from the consumers' angle. It is not a bonanza for consumers but a piece of reasoned legislation which brings the exemption and restriction clauses for service contracts roughly into line with

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those for the sale of goods. We might remember that in many cases it simply is not reasonable to expect even a highly intelligent person to read the small print of a contract. I am thinking of such instances as going to a garage in an emergency or parking one's car. In some such cases a person really has no choice, even if he is able to read the small print. The Bill is therefore an important step forward and I am glad that it has virtually no opposition.
4.58 p.m.
Lord DENNING: My Lords, I am sorry that I was not in my place when the noble Lord, Lord Jacques, moved the Second Reading. It seems to me to introduce one of the most important reforms in our time in our civil law, both of contract and of tort. Let me describe the position as it has been up to the presentation of this measure, and I wish particularly to draw attention to the printed conditions which appear on the backs of order forms, warehousemen's notes, laundry cleaning documents and the like; whatever it may be, we sign them without reading them and, if we do not read them or there is no place for signing, we are bound by them.
They are said to be contracts, but we have never agreed to them. It is a fiction of the law to say they are contracts, and it has been a great mistake of the law hitherto to say that the courts cannot inquire as to whether or not they are reasonable. I was engaged in a case many years ago which exemplified the old law as it existed. It was a case in which a salesman went to a little shop in North Wales and induced the shopkeeper, a lady, to buy an automatic machine from him, the price to be paid by instalments. He produced a long brown printed form and asked her to "sign here", which she did without reading it. The automatic machine was delivered. It did not work. Mechanics were sent down three times. Still it did not work, and finally she said, "I cannot pay the instalments". So the company took her to the county court. There she said that the machine did not work. The company said, "Look at the clause." There it was in small print on the back of the form,
"Any condition or warranty, express or implied by Statute or by common law is hereby excluded"
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The county court judge managed to get round this and found for the lady and I was instructed for the company in the Court of Appeal.
At the Bar, I was concerned to win the case. I was not concerned with what was right or wrong. I said to Lord Justice Scrutton, producing some old cases, "Look at this, she signed it. It doesn't matter that she didn't read it; it doesn't matter if she couldn't read it because the print was too small; it doesn't matter if it was most unreasonable. She is still bound." Lord Justice Scrutton said, "Yes, in the absence of fraud or misrepresentation she is bound to pay these instalments." There she was, bound to pay the instalments for the machine that would not work.
To tell you the sequel, my Lords, that reporter in the courts did not report the case at once. He did not think so much of it, but my company had it privately printed and I went round the county courts of England winning case after case, most unrighteously. That was the law as laid down in 1934 and it has remained so ever since. However, I shall tell your Lordships how we got round it. I had a personal experience a little while after that. I went over to Northern Ireland and took the car. Of course, in coastal traffic, one can put in any conditions one likes so, when I went to the boat, I was told, "Go and get the sailing ticket. Sign here". I signed there and I pushed the form into my pocket. I looked at it as we went across the Irish Channel, and it said that the company would not be liable for any act or default, wilful misconduct or otherwise howsoever. They could have thrown the car into the sea for aught I could have done!
I went to the Court of Appeal, and there we tried to find a way round this. A case arose in which a hire-purchase company had hired a motor car to a man and told him to sign as usual and pay the usual fee. They said that they would deliver the car the next morning and, when he got up in the morning, there it was at his front gate. However, the company had had to tow it there because it would not go. When they sued him for payment, he said, "It won't go." "Look at the clause," said the company. They did not guarantee the car's roadworthy condition or anything at all.

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In the Court of Appeal, we managed to say that if a company was guilty of a fundamental breach that went to the very root of a contract it could not rely on these exception clauses. Your Lordships may think that we did very well and that we did a great deal to stop the exception clauses but, oh no. About 17 years later, the House of Lords in its judicial capacity found that we were wrong and that the clauses must be construed according to their proper intent and given effect to if they were clear enough. So it looked as though we had lost.
However, we in the Court of Appeal have ways of getting round things and, if your Lordships look at recent cases, and in particular one this year about a lady who sent her carpet to be cleaned and the cleaners lost it, you will see what I mean. The cleaners, having lost the carpet, said, "Look at the clause. It says, entirely at owner's risk, liability not more than £2'." We held that the company was guilty of a fundamental breach and that it could not rely on the clause.
So your Lordships may think that we have done something but, really, it was unsatisfactory. The House of Lords was right. We had tackled the problem as best we could, but it is right, on the law as laid down by the House of Lords, that these clauses, if they are expressed clearly enough, can exempt a person from any liability for anything whatsoever. We have tried before to bring in reasonableness but never before succeeded. How good it is that the Law Commission has looked into the matter most thoroughly and that there will be no need for our old doctrine about the fundamental breach because, in future, the courts will be able to inquire into the reasonableness of these clauses and the equality or inequality of bargaining power both in these standard form clauses and in consumer clauses and the like and, if they are not reasonable, the courts will be able to say that they will not allow the exemption to apply. That will do away with our subterfuges and will bring the law to say quite clearly that companies cannot rely on these clauses if they are not reasonable. That is a whole modern innovation in our law of contract.
I should like to add one word, however. This applies not only to our law of contract but also to the notices which people
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put up, for instance, in car parks saying that the car is parked at the owner's risk. The banker giving a reference who says that it is without responsibility, the solicitor the engineer or the accountant who seek by a notice to escape liability for their own negligence, will not be allowed to do so. Such a notice will not be valid unless it is found to be reasonable.
However good this is, the vista that lies before us is that all the companies, and other great organisations which hitherto had conditions on the back of their forms, will, almost at the moment the Bill passes, go to their lawyers and say, "Please revise these so as to see that they are reasonable." I can foresee case after case coming before the courts, whether or not on friendly arrangement, in which we are asked to say whether a clause is reasonable. So there is a lot of work ahead for the lawyers. Still, as a matter of principle, this Bill is right. People ought not to be able to exempt themselves from liability for their own negligence unless it is reasonable, and reasonable as between the parties concerned. That is why I wholeheartedly support the Bill.
I should like to throw out, as did my noble and learned friend, a few words about the fact that the ultimate object behind this move is to transfer the responsibility for insurance. In the old days, the companies would seek not to insure, or not to insure so much, by inserting exemption clauses placing the risk on the individual. Let the man who sends his laundry or his carpets to the cleaners take out the insurance. Let the man who sends his furniture to the warehouse take out insurance. The companies would insert their exemption clauses. The result of this legislation will be that the burden of insurance should, as I think is right, be turned over to the companies who carry out all these activities. If they injure the consumer, the consumer can sue the companies which, if they are wise, will have covered themselves by insurance against liability. So it will affect greatly the commercial practice of our companies in relation to insurance.
When I speak of insurance it leads me to think of the professions. I have in mind, for instance, the engineer who is said to be negligent (let us say when that great bridge fell down in Australia); or the

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accountants who in giving advice may be negligent, and one or two million pounds may be claimed against them for their negligence. The solicitor might have his insurance, and so might the barrister, too. But the insurance companies are ready to insure only up to a certain amount. Depending upon your profession you cannot get cover beyond £100,000, or if you are a lawyer perhaps £1 million. I do not know whether there is any limit for the engineer or the accountant. I wonder whether it would not be reasonable for people to be able to limit their liability to the amount of the insurance cover which is open to them. Otherwise it might be found that professional men—doctors or others—are ruined by enormous claims which they could not meet and against which they could not insure.
That is just a thought, my Lords. I hope that reasonable clauses can be put in to protect such people. That is one of the consequences which can be envisaged as a result of the Bill. There are consequences. It will run throughout the professions and throughout the commercial community, but on the whole it is a very great reform. Difficulties must be faced, but it is a very great reform, and, if I may say so, the Law Commission and my noble friend hake done a great service to the country in bringing the Bill forward and I hope that it will be welcomed and passed by your Lordships' House.
Lord AIREDALE: My Lords, one small point came to my notice only this morning which I think worth mentioning. I believe that shortly we are to have regulations under the Consumer Credit Act which will lay down what must be contained in the documents issued by the finance companies, and no doubt this Bill, too, if it is passed, will affect what may be contained in such documents. So let us have some co-ordination so that the finance companies will be able to re-design their documents once, and not twice, within a short space of time.
5.13 p.m.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, after the chorus of praise I think there is relatively little for me to say. I deliberately asked my noble friend Lord Lye11 to speak on
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behalf of the Party first. He had won such a glorious pair of spurs over the law of patents that I was only waiting for the noble and learned Lord on the Woolsack to give him an honorary QC. Of course he would have to he called to the Bar first, but no doubt that could easily be arranged at Gray's Inn. I deliberately wanted to wait to see what the noble and learned Lords on the Cross-Benches said, and I am sure that the House is very grateful to them both for their very different appreciations of the effect of the Bill. I should also like to congratulate the noble Lord, Lord Jacques, for the extraordinarily lucid exposition of the Bill with which he began. It cannot have been easy for him in a technical matter to know exactly what to say—or what to leave out—or exactly how to say it, and I think the House is generally agreed that he put his case with perfection.
First of all, it is quite clearly my political judgment that the Bill must go through, and substantially without amendment. As I have pointed out in this House previously—and this was first said by Lord Campbell, a Lord Chancellor in the 19th century—one either does law reform by consent or one does not do it at all. In practice one cannot carry law reform measures through Parliament by controversial legislation which takes up an inordinate amount of Government time. Thanks to the noble and learned Lord, Lord Gardiner, we now have two instruments for doing it, and those two instruments have developed a technique of doing it which, though no doubt it can be improved, indicates the way in which it must happen. We have the two on-going bodies—the two Law Commissions—and the technique of working paper and consultation.
In this case I wish that all law reform measures went through that particular fence, or something similar to it, because at the end of the day one can get a workmanlike reform which, at any rate, has a body of opinion behind it. This Bill has gone through all those hoops and is now before Parliament. Moreover, not only is it supported by the Government (as I hope we shall shortly be hearing from the noble and learned Lord on the Woolsack) but my own Party almost went overboard in its excitement for it in the House of Commons. Reading, as I did late one night of the enthralling picture of

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the Committee stage in that place, it seemed to me that my Party was defeating the Government every few minutes in a desire to make the Bill more exacting in its provisions, and it is rather in that form in which it has come up here. I am bound to say that I, like Voltaire, even when my own Party is guilty of it, am a little sales resistant to an excess of zeal, and after all this praise I am going to put in one or two caveats.
First, I think that the change of Title is a change for the worse. The Bill started by being called, in effect, the Avoidance of Liability Bill, and it is now being called the Unfair Contract Terms Bill. That is wholly misleading because there are plenty of unfair terms in contracts which do not consist of exemption clauses. All of us who read the Law Reports—as some of us have to do—are familiar with those awful clauses in estate agents' contracts which attract sums of money when no relevant service has in fact been performed. We all know that there are terms in leases which are sometimes abominably unfair, and if one cared to do so one could continue the catalogue almost indefinitely. I hope that the Government, or perhaps the noble Lord, Lord Jacques, will at least seriously consider the rather ridiculous rhetoric brought at a late stage into the Short Title of the Bill, because it is itself a form of misleading device which ought to be prosecuted under the Trades Descriptions Act. Unfortunately, those responsible for it, being in another place, are protected from any kind of liability for their misleading trade description.
The second point that I want to emphasise is that I endorse what the noble and learned Lord, Lord Denning, said a few minutes ago. I think that it will be very difficult to give adequate insurance to professional men who may make themselves liable for damage quite beyond their means and beyond the point at which they can find insurance to protect themselves. The noble and learned Lord, Lord Denning, referred to the engineer who builds a bridge. In such a case, if a train carrying 100 or 200 passengers falls off the bridge after it collapses with a vast amount of traffic on it, the engineer could find himself liable for hundreds of millions of pounds, especially if the plaintiffs lived in America and, if in America, particularly in California.
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I was, at the end of my career at the Bar, familiar with a case called Hedley Byrne v Heller, which caused quite a flutter in the legal dovecotes because it suggested that barristers might be responsible for negligent advice. I hope they are not; but, at any rate, this was the suggestion. I therefore thought it prudent to run round to Lloyd's and insure my chambers, and they made it clear (at least, so far as I remember) that they were not prepared to pay more than £250,000 for any incident. Now when, as a barrister, you are advising, in a responsible kind of way, these big international companies, you cannot hide behind limited liability because you cannot turn yourself into a limited company with £100 capital: and, of course, if you give the wrong advice you can render yourself liable for literally millions of pounds which you have not the hope of an icicle in June of paying, and when you go round to the insurers you find you cannot insure against it, either.
I think one must give serious consideration to the position of professional and other people in this line, as to whether it is reasonable to ask them to incur a liability for providing their ordinary professional service when, as a matter of fact, no single human being can hope to recompense those who may be damaged as a result of a fault. I think also that one ought to consider at the same time the range of clauses which deal with remoteness of damage. It is the classes of damage, not merely the quantitative amount of damage. I think we must think in terms of whether it is not reasonable for the providers of goods and services to guard themselves against the remoteness of certain types of damage.
In this respect, I could not help noticing that the other day my son was practising in front of, I think, the Master of the Rolls, in a case about pigs, which was perhaps rather suitable in some ways. At any rate there must be, I should have thought, some careful consideration given to the question of the class of damages to which a professional firm can be made liable.
Having said that, I do have some reservations about "reasonableness", in spite of the very warm commendations which it has had. "Leave it to the judges", say the judges; but, of course, to cobblers there is nothing like leather. "The judges

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can be trusted", say the judges. Not so Mr. Michael Foot, who, with great respect to the noble and learned Lord on the Woolsack, takes exactly the opposite point of view. I take an intermediate point of view. Judges are absolutely reliable subject to the ordinary defects of human nature, from which even they suffer to a very small degree. Most of them are endowed with half the usual ration of original sin; but, at any rate, they are absolutely reliable when they are dealing with something which is strictly speaking justiciable. That is to say, they are reliable when the question is one of disputed fact, because one of their specialities is deciding who is telling lies and who can be believed, and sorting out a complicated skein of facts so that they get as near as human beings can to the truth; and, equally, in applying known principles of law. But reasonableness is not a known principle of law, and I am bound to tell the House that that is my conclusion about it.
Reasonableness, even with guidelines, whatever they may be, contained in the Schedule, is as long as the judge's foot—and in this case the Master of the Rolls' foot. Although, of course, in the past juries were supposed to know what a reasonable man would do, there were at least twelve of them, so their idiosyncrasies were apt to cancel out. But when there is one, or at the most three, one cannot be quite so sure. I know it is said that at common law there is a class of contract case—namely, the restrictions on employers' contracts with their employees as to future activities—where reasonableness was a test and where the burden of proof was, again, on the employer; and there are the more recent cases of the Misrepresentation Act 1967 and the 1973 Act dealing with the supply of goods, to which reference has been made. I do not believe that those Acts have really worked through the profession yet, and I do not regard the fact that Parliament has enacted new legislation recently as an absolute guide to the reasonableness of the legislation which Parliament has enacted for the purpose of extending it still further.
I am bound to say that I think that up to a point this Bill is a leap in the dark. It is, as the noble and learned Lord, the Master of the Rolls, said, a revolution in
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the law of contract. I am bound to say he greatly underestimated his own capacity for making new law. Towards the end of my life at the Bar I began to say, "Give me an exclusion clause and show me the Master of the Rolls, and I will break it". I think he did underestimate his own power to act without Parliament, or in advance of Parliament; but, at the same time, I doubt whether reasonableness is fully justiciable, at any rate on the established principles of law. However, at the end of the time, like any other practising barrister—at least, any other barrister practising in the common law courts—I broadly agree that exclusion clauses had gone beyond the limits of what was tolerable.
The noble and learned Lord, the Master of the Rolls, referred to the small print, but sometimes it was the big print which was even more misleading. With a sale of goods—a new television set or a new motor-car—you got something with gold edges round it, and it was called "Guarantee". It had a seal, or a mock seal, upon it, and you thought you were getting the whole Bank of England; but in point of fact, if you read it at all, even the largest print, it said you were getting it instead of what the law would otherwise have given you, and what you were getting instead of what the law would otherwise have given you was simply an undertaking to replace defective parts, without any consequential damage being allowed for at all. So this Bill has got to go through. I am not quite so enthusiastic about it as some of my noble friends, but good luck to it; and good luck, too, to the noble and learned Lord, the Lord Chancellor, in replying to the debate, and to the noble Lord, Lord Jacques.
5.28 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, upon that encouraging note it gives me very great satisfaction to say that the Government of course enthusiastically support this Bill. I should like to add therefore my chorus of acclamation to that which has already been given by so many splendid voices, speaking with such splendid and complete authority. Indeed, it is a happy thought that all the Parties in the other place, and now apparently here, are like-minded in welcoming the principle of the Bill,

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and I am glad to say that the Government have been pleased to be of assistance to the Bill's sponsors—and of course I can assure them of our continuing commitment.
I should like first of all to thank my noble friend Lord Jacques for undertaking the task of steering this Bill through the House and to congratulate him upon the masterly way in which he introduced the Bill today and for explaining it so clearly to us. As the noble and learned Lord, Lord Denning, has pointed out, it is obviously a Bill of very great importance, and I agree with the noble Lord, Lord Lyell, who again I compliment upon his courageous embarkation upon the technical field of the law so well, that it is very important that its provisions should become known and steps will obviously have to be taken to see that that is done.
As has been said, I believe that the Bill goes far to remove one of the worst blots in our law of contract and provides valuable protection for consumers. It would not have been possible were it not for the years of work that the two Law Commissions have put into the Bill. We are most grateful indeed for the splendid and continuing work of the Law Commissions and I would venture, encouraged by the observations of the noble and learned Lord, Lord Hailsham, to say a few words about the work of the Law Commissions, particularly in the light of certain week-end commentaries which I read upon this matter.
This Bill is one of no less than six now before Parliament which deal, in whole or in part, with implementation of reports prepared by the Law Commission. If one were to add reports prepared by the Scottish Law Commission who participated in the work on exemption clauses, the total would be higher. Reform of the law of exemption clauses is one, I believe, of the major reforms to have emerged from the Law Commissions; but there are other achievements which I think it is right that I should mention. This House has recently sent to another place a major Bill dealing with the criminal law, one of the main purposes of which was to implement the bulk of the Law Commission's Report on Conspiracy. Other current Bills—and these do not include a Private Member's Bill in another place which unfortunately did not make progress—concern rentcharges, a
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Bill which your Lordships may expect to see shortly; jurisdiction of ancient courts (which is contained in the Administration of Justice Bill already before your Lordships' House); the Statute Law Repeals Bill, the biggest Bill of its kind since the Law Commissions began work in 1965; and a report on the consolidation of the Rents Acts.
My Lords, I think the position could fairly be summarised thus: no single law reform agency and, indeed, no single Government Department is currently active in so many different fields of law reform as the Law Commission, and none has so many measures (some of them of considerable social importance) now before Parliament. There are, of course, a number of reports before me which do not appear in current Bills. I had been hoping to be able to implement one of these, on Remedies in Administrative Law, by Rules of Court, and this proposal was well advanced at the time when the Court of Appeal gave its judgment in the case of Gouriet v The Union of Post Office Workers. I have, however, decided that it would not be sensible to make further progress with this until the outcome of the appeal to your Lordships' House in that case is known. This is because an important issue in that case concerns locus standi which is very closely related to the proposals of the Law Commission.
My Lords, since we are dealing today with a matter of close concern to consumers, it may be of interest if I say that the Lord Advocate and I have recently received from the two Law Commissions an important report on Liability for Defective Products. This report will be published as soon as possible as a Command Paper. One of the subjects with which it deals is a draft directive prepared by the Commission of the EEC. The Law Commissions are now taking a major part in advising the Government and, through them, the country as a whole, on the legal issues that spring from our membership of the European Communities. Much work has been done, for instance, on the European Draft Convention on Contractual and Non-Contractual Obligations: this is concerned with choice of law in contract and in tort. Another matter being examined with a view to early advice is a draft directive on commercial agents.

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The Law Commission has also let me know that it is expecting soon to be able to present final reports on a number of very important topics, including joint ownership of the matrimonial home, and use the enjoyment of the household goods, on the mental element in crime and, again in criminal law, duress and general defences. In the more workaday fields of Statute law revision and consolidation, the work in the Law Commission and under its guidance continues unabated.
In the light of what I have ventured to say, I think it right to pay tribute to the Law Commission in this direct way. Your Lordships may not he disposed to agree with a week-end newspaper article which spoke of the Law Commission retreating to obscurity under the Lord Chancellor's guidance. I hope that what I have said may successfully dispel that remarkable comment now that we are facing this new product of the Law Commission; and we are grateful to the admirable initiative of the Back Benches in taking it over.
If I may briefly indicate at this stage why the Government support the Bill wholeheartedly, the reasons is this. As we have been told so attractively today, the courts have for some years shown by their judgments that they dislike the use of certain exemption clauses. Indeed, as we have been told—and attractive illustrations have been given of the fact—a number of learned judges and noble and learned Lords have (in the best traditions, I believe, of the common law) done what they could to mitigate the worst effects of the social problem of the inequality of bargaining power between the supplier and the consumer and the big business and the small; and have sought, to use the words of the noble and learned Lord, the Master of the Rolls, to get round it—a technique at which he became, indeed, the master.
The weaker party often has to choose between giving up his common law rights to expect a contract to be carried out effectively or not to contract at all. The judges have tried to remedy mischiefs in that area but, as I think he willingly conceded, Parliament alone can strike at the roots of the problem we are facing. I think it really is intolerable that in an
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exercise in avoidance and ingenuity, it should be left to the judges to correct the mischief. The judges, and now Parliament, with the Law Commissions, have acted together to improve the law to meet changing social needs. Here is a sphere where co-operation between the Judiciary and Parliament (which I regard to be at the root of our continuing system) has proved of value.
My Lords, the Bill, as I see it, has two main purposes. First, it advances the work on the supply of goods, as we have been told, begun by the Law Commission in 1965 and by Parliament in 1973 with the Supply of Goods (Implied Terms) Act. That Act dealt with goods sold or supplied on hire purchase or given in exchange for trading stamps. It introduced widely-welcomed controls on avoidance of liability for breach of the obligations implied by law in such contracts. This Bill introduces, in Clauses 7 and 20, similar much-needed controls on other ways in which goods are supplied, such as hire, exchange and contracts for work and materials such as work done in garages or even the supply of false teeth. Thus most, if not all, contracts for the supply of goods will be much safer for the consumer to undertake when this Bill becomes law while many business buyers will also enjoy certain additional valuable rights in this field. But there is still a great deal of work to be done in this area: the buyer's rights in contracts for hire, exchange and so on are implied at common law. A study which could lead to legislation has already been begun by the Law Commission for England and Wales and I look forward to receiving their recommendations.
The other, and major part, of the Bill is concerned with more than the supply of goods. Aspects of the supply of goods are involved, but primarily this part of the Bill breaks new ground. as my noble friend Lady Phillips has pointed out, by protecting buyers of services as has never been attempted before. The Bill does so in two ways. First, there are the controls on the exclusion or restriction of liability for negligence; and the Government fully endorse the way in which that has been dealt with in the Bill. We think it quite wrong that someone in the course of business should be able unfairly to avoid his legal liability for negligence, especially

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where this is done by means of some small print tucked away at the end of the contract or on the back of a ticket or in a notice on the wall. Businessmen may think in future, as no doubt most do already, that it is far better to apply forethought to avoiding being negligent than to avoiding their liability for negligence.
In the Government's view, it is right to distinguish, as the Bill does, between personal injury or death and other loss or damage. Where negligence which arises in the course of a business results in injury to life or limb, liability ought not to be avoidable at all. For property damage, on the other hand, a restriction of liability could, in many cases, be reasonable. That is the test which is applied. In the case of services like dry cleaning, for example, it would make little economic sense to ask all customers to pay appreciably more to cover the occasional fur coat handled by the firm. It may therefore be reasonable for the cleaner to restrict his liability in cases of expensive goods where their value is not declared. In such cases, the customer's own insurance could then cover the risk.
It also seems sensible that there should not be any discrimination between consumer and businessman in this context. For death or personal injury, I can see no reason why the private customer and the business customer should be treated differently. For example, a defectively repaired electric drill could injure a householder or a self-employed building contractor, and the result should not be different. In cases of property damage it can be difficult at the purely practical level for the supplier of the service to know whether he is dealing with the person as a consumer or as a businessman. In addition, it is hard to see why, even in business dealings a firm should be able to avoid liability for its own negligence in an unreasonable way.
The second way in which the Bill materially improves the position of the users of services is that it tackles the other type of small print clause—the type that, for instance, allows the contract to be broken or drastically-reinterpreted by the supplier to his advantage. I believe that such clauses are every bit as unfair and undesirable as those which allow avoidance of liability for negligence. Few consumers
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reading the typical, "We reserve the right to…" clause in fact ever stop to consider how large a hole in the contract that might represent. Obviously, some of these clauses in some contexts are fair and reasonable: one must concede that situations do arise which are outside the control of the provider of the service. On the other hand, we believe it to be unjust if firms use such clauses to suit their convenience and profit, irrespective of what the consumer believes—and reasonably believes—he has contracted to enjoy.
The Government hope that the House will take the view that consumers should be protected from the unreasonable use of such clauses. We have had discussion of the reasonable test. I have noted that the noble and learned Lord, Lord Hailsham of Saint Marylebone, has not displayed trop de zele in respect of that test. I doubt whether it would really cause very great difficulties. It is not a new idea, after all. It has been part of the Statute law since the Railway and Canal Traffic Act 1854. However, I have not been able to discover any cases which arose under the provisions of that Act which have indicated one way or another whether the interpretation of reasonableness is going to provide the judges with any very great difficulty.
Something we can note is that contracts between businessmen covered by the 1973 Act at any rate do not appear to have been made less certain because they could be subject to a test of reasonableness. Nor am I convinced that the test will create more uncertainty than has the doctrine of fundamental breach, which was called in aid by the noble and learned Lord, Lord Denning, in all its various forms. Both Law Commissions recommended the reasonableness test as an appropriate form of control even though they differed as to the time at which it should be applied. The Bill contains the Scottish version of the test. It will no doubt have given great satisfaction to my noble and learned friend Lord McCluskey that the acceptance of the Scottish version has been deemed to be preferable by those who have spoken in the debate. I believe that the Scottish approach, by limiting the importance of considerations attaching to a particular case, should facilitate the creation of case law and so help to reduce future uncertainty.

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We have had a discussion on the burden of proof. All I can say about it at this moment is that the minds of those concerned with the matter are not closed to argument that the Bill has the burden wrong. It is a matter which will in any event need to be looked at again, in view of the difference within the Bill itself between the provisions in the England and Wales section and the Scottish section. If the Bill is given a Second Reading, we shall clearly have to examine this again in Committee, and perhaps after seeking further advice from the Law Commissions.
The Bill seems to me to hit the right note. It represents a great advance in consumer protection but it recognises economic realities. Benefits and costs have been finely balanced; and where the latter appear to outweigh the former—as on insurance, for instance—an exception from the control has, very sensibly, been made.
Finally, I want to say a word about the form of the Bill. It is different from either Bill in the Law Commissions' report. This is in part because it contains certain new measures and goes beyond the Law Commissions' recommendations in some respects, and also because the provisions have been re-ordered. The main change is that we now have a single Bill for the whole of the United Kingdom. I expect that will be welcomed by the House as a whole. I am sure the House will favour provision of a separate part for Scotland, which makes the Bill as a whole easier to follow and has enabled its basic proposals to be framed in terms of the different systems of contract both North and South of the Border. I do not know that I need elaborate in any detail on the major differences between the Scottish and English parts. Perhaps we could examine those in greater detail when we come to the Committee stage.
I was asked by the noble and learned Lord, Lord Morris of Borth-y-Gest, about views on a number of potential cases which he raised. It is with some trepidation that I venture a shot at answering one or two of them. He asked whether all transactions such as the valuation of shares, or giving of advice, have to be reconsidered in the light of the
1136
Bill. In England and Wales, businessmen's contracts are controlled, and if there is reliance on the advice or valuation by a person who is not in a contractual relationship with a businessman, the question whether there is a valid exclusion of liability may have to be tested under the provision, for notices, of Clause 2(1) and (2).
Then a question was asked whether a contract for hire of a television set fell within Clause 7, and whether there was overlap with Clauses 2 and 3. The answer, I am so advised, is that if the television set does not work, this is almost certainly a breach of the common law obligation of fitness for purpose, so that Clause 7(2) would apply. If negligence were in issue, Clause 2 would also apply. There could be an overlap, but I do not think it matters.
Then there was a question about bankers' references, with the cover "without any responsibility", and whether those were controlled. A purported exclusion of liability by notice in a voluntary transaction such as a banker's reference would, I think, be controlled by the provisions of Clause 2 but, as the noble and learned Lord, Lord Denning, pointed out, these are matters on which the courts themselves will have to adjudicate in due course and I hope I have not been foolish in attempting to answer them in anticipation of the examination that may be required in a given case.
May I venture to doubt the anxieties that have been expressed, that the Bill will result in a massive increase in litigation. I am inclined to agree with the noble and learned Lord, Lord Morris of Borth-y-Gest, on this point. I do not think that need be a consequence of the terms of the Bill.
I feel I should not end without thanking and complimenting the Parliamentary draftsmen, both for England and Wales and for Scotland, who have assisted the sponsors at the Government's request. It is very interesting that there has been very little criticism of the drafting on this occasion—an unusual experience in technical Bills of this kind—and I am sure it will give comfort to those who have done the work. Again, my Lords, I am most grateful for the support which the Bill has received and I shall myself continue to assist the noble sponsor in any way I can.
5.52 p.m.
Lord JACQUES: My Lords, I am grateful to all noble Lords who have taken part in the debate and thank them for the very strong support they have given to the Bill. Particularly do I thank the noble and learned Lord the Lord Chancellor, who has replied to the more tricky points and relieved me of that obligation.
There were a number of points with which I should like to deal very briefly. First of all, the question of the Title was raised both by the noble Lord, Lord Lyell, and the noble and learned Lord, Lord Hailsham. We have an open mind on the Title and would be very pleased to receive suggestions. The question of cost was raised. Yes, it is going to cost money to consumers, but I believe there is a general opinion among the public that there are some costs which should not be borne by the individual, but by consumers in general instead of the individual. It is in response to that public opinion that we have this Bill.
The noble and learned Lord, Lord Denning, raised a very interesting point; namely, whether there should be a limit to the liability to the insurance cover which would be available. That is a very interesting point, but I should not like to commit anybody at this stage because I can see some difficulty in deciding what was the insurance cover available. I think the matter would need a great deal of thought before anyone could venture up that road.
Some relief or protection for the tour operator was pleaded for by the noble Lord, Lord Lye11. I will not take up the time of the House at the moment about this, but I would point out to him that this matter was very fully ventilated on the Report stage in another place and is fully reported in Hansard. The noble Lord will be able to see there the Government view on the question which he raised.
The co-ordination of documents, which was raised by the noble Lord, Lord Airedale, is quite a difficult matter because the Bills come into operation at a different time. But the point has been noted by the Department and, in so far as anything can he done to prevent or mitigate inconvenience, I can assure the noble Lord that it will be done. I think I have
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covered the principal questions not covered by my noble and learned friend the Lord Chancellor. Once again, may I hope that I shall have an equally pleasant time at the Committee and Report stages.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

POOL COMPETITIONS ACT 1971 (CONTINUANCE) ORDER 1977
5.55 p.m.
Lord WELLS-PESTELL Lord WELLS-PESTELL rose to move, That the draft Pool Competitions Act 1971 (Continuance) Order 1977, laid before the House on 10th May, be approved. The noble Lord said: My Lords, I beg to move that this draft order be approved.
The House may find it helpful if, in moving this draft order, I describe briefly its background. The Pool Competitions Act 1971 came into force on 27th July 1971 and was to run for an initial period of five years. However, Section 8 of the Act provides that the Act may, by order, be extended for periods of not more than a year at a time. No order may be made under Section 8 of the Act, however, unless it has first been approved in draft by Resolution of each House of Parliament. Noble Lords may recall that an order extending the 1971 Act was made last year, and the purpose of the draft order now before your Lordships is to extend the Act for a further period of one year.
The 1971 Act set up a system of licensing and controls for what were called charitable and sporting pools. These were competitions for prizes which benefited organisations supporting charities and sports. The distribution of prizes depended on the outcome of sporting events, especially football matches. The licensing and control system introduced by the Act is administered by the Gaming Board for Great Britain. The 1971 Act was introduced following a judgment by your Lordships' House that a particular competition of this kind did not constitute lawful pool betting, as the promoters had supposed, but was in fact an unlawful lottery. This was because, as a matter of substance, the prizes were not for making forecasts but were for holding numbers which happened to be lucky in a particular week.
My Lords, a number of charitable and sporting organisations had been supported by competitions of the kind I have mentioned. The Spastics Society and some cricket and football clubs derived substantial income from this particular source. The Government of the day therefore introduced the Pool Competitions Act 1971 in order to safeguard, for the time being, the interests of the charities and sporting clubs concerned. Although the number of bodies now relying on the 1971 Act to protect their fund-raising acts has decreased slightly in the last year or so, several continue to place substantial reliance on the "pools" for their income. The Act cannot, however, be regarded as a lasting arrangement, and noble Lords will be aware that the subject covered by the 1971 Act falls within the terms of reference of the Royal Commission on Gambling, which is carrying out, as your Lordships will know, a wide-ranging review of the law and practice relating to gambling. The Royal Commission was asked to give particular attention to the contribution made from the proceeds of gambling towards the support of other activities (including sports), the means by which this might be enhanced, and the conditions to be imposed. In considering what the future arrangements might well be, we shall need to take account of the report of the Royal Commission.
The Commission started its work in the early part of last year and I understand that it has made good progress. There is, however, still a good deal to be done and it would be premature to say when its report will be received. In all the circumstances, it seems to the Government necessary that the Pool Competitions Act 1971 be extended for a further period of one year, and I seek your Lordships' permission accordingly. My Lords, I beg to move.
Moved, That the draft Pool Competitions Act 1971 (Continuance) Order 1977, laid before the House on 10th May, be approved.—(Lord Wells-Pestell.)
6 p.m.
Viscount LONG: My Lords, I am sure that the whole House is most grateful to the noble Lord, Lord Wells-Pestell, for the information which he has given us and for the manner of his doing so.
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I feel that I should tread very carefully, because many of your Lordships probably do the pools, in one way or the other—like myself, the noble Lord does not do them—and outside Parliament a great many of the public are very keen on this type of betting. I notice that since 1971 two Governments have skated very carefully over this part of the Act, and have used this continuance order. Therefore, it could be a rather explosive situation if the public realised that we were going to try to whittle away some of the big dividends that are paid and which, without going too deeply into the subject, appear to be far too large.
The noble Lord was kind enough to tell us about the Royal Commission, which is still proceeding. But I should like to ask him how soon he expects this report to come out. I know that he feels a little vague about it, but I feel that the sooner the report comes out the quicker we can correct this part of the Act. I have one other question, which is rather a long-shot, because I know that these Commissions take time and one never knows exactly when they will complete their work. I should like to know what is the amount of money involved in this order; it must be enormous.
We on this side have no wish to delay this order and we will accept it for another year. We hope that the Royal Commission will soon be able to give an answer, in order that we can proceed. I am most grateful to the noble Lord and have no further points to raise.
6.4 p.m.
Lord WELLS-PESTELL: My Lords, I am grateful to the noble Viscount for his support of this measure. In answer to his first question, my recollection—I cannot give the exact wording—is that the Chairman of the Royal Commission on Gambling said that he hoped to be able to report in months, rather than years. If I am wrong, I will write to the noble Viscount about that, but I am sure that that is what he said. With regard to the amount, I think that the word "pool" here is rather misleading, in the sense that it does not include the football pools as we understand them, which show these fantastic wins in the newspapers every week. This has a very limited effect in a very restricted field.

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But the aggregate annual turnover has shown a tendency to decrease since the Act was introduced in 1971. The most recent figure is in the region of £25 million, of which just under £4 million, or 15 per cent., is paid to the benefiting societies which fall into two main groups. One group is concerned with providing financial assistance to sport—that is, principally football clubs—and the other is concerned with charitable aims including, as I said, aid to the Spastics Society and to polio and cancer research. One pool competition, which originally supported cricket, now provides substantial aid to medical aims. The pool competitions attract a pool betting duty at the reduced rate of 33⅓ per cent. on turnover, less the contributions to the benefiting societies. That is about as much information as I have on this matter.
Viscount LONG: My Lords, I thank the noble Lord for that information, and I am most enlightened to learn that a certain amount of money is going to medical aid. I am most grateful to the noble Lord.
On Question, Motion agreed to.

FARRIERS (REGISTRATION) (AMENDMENT) BILL [H.L.]
6.6 p.m.
Report received.
Lord NEWALL Lord NEWALL moved Amendments Nos. 1 to 7 en bloc:
Page 2, line 25, leave out ("until such date as the Council may prescribe")
Page 2, line 27, after ("registration") insert ("before such date as may be prescribed")
Page 2, line 36, leave out ("until such date as the Council may prescribe")
Page 2, line 38, after ("registration") insert ("before such date as may be prescribed")
Page 3, line 1, leave out ("until such date as the Council may prescribe")
Page 3, line 5, after ("registration") insert ("before such date as may be prescribed")
Page 3, line 13, after ("registration") insert ("before the said prescribed date")
The noble Lord said: My Lords, the Amendments to this Bill result from its examination by the Government draftsman, and they correct some minor drafting defects to which he has drawn attention.
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As it has been printed since 15th March, I am sorry that this was not done before Report stage. Nevertheless, it is better to get it right and we hope that we have now done so.
If I may take Amendments Nos. 1 to 7 together, Amendments Nos. 1, 3 and 5 remove the ambiguity in the new Section 7, to ensure that the words used mean what they say. Previously, it could possibly have been inferred that on the prescribed date registration might cease and this was not the intention. So that the section should be corrected, and the words in Amendments Nos. 2, 4, 6 and 7 should be inserted. In addition, the word "Council" has not been used in the Amendments, because the word "prescribed" attracts the definition in Section 18, where the word is defined as meaning,
'prescribed by rules drawn up by the Council".
My Lords, I beg to move.
Lord WELLS-PESTELL: My Lords, I do not think it is necessary for me to take up your Lordships' time, other than to say—and perhaps I may say this in relation to Amendments Nos. 8 and 9—that the Government are very grateful to the noble Lord for his co-operation in this matter. He will not mind my saying that these are Government Amendments, which are vital if the Bill is to be foolproof. We are grateful to him for both his help and his co-operation.
On Question, Amendments agreed to.
6.9 p.m.
Lord NEWALL Lord NEWALL moved Amendment No. 8:
Page 3, line 38, leave out from ("description") to ("cause") in line 39 and insert ("which is likely to").
The noble Lord said: My Lords, this Amendment is slightly different, and is concerned with a matter of drafting. The Bill includes words making it unlawful,
"…to use or adopt the style, title or description… which may be calculated to deceive or mislead".
The intention was that the deceiving and misleading should relate to the registration status of the person using the title in question. But as drafted it was not so limited, and could well apply to a variety of circumstances which were never intended to be covered. The Amendment

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accordingly substitutes the words "which is likely to" for the defective part of the provision. My Lords, I beg to move.
On Question Amendment agreed to.
Lord NEWALL Lord NEWALL moved Amendment No. 9:
Page 4, line 11, leave out from ("paragraph 1(2)") to end of line 12 and insert ("for the words "the quorum and of" there shall be substituted the words "and as to".")
The noble Lord said: My Lords, again this Amendment is very small. It is simply a matter of grammatical precision. The words "and as to" which are being substituted correct the words that are being deleted. I do not think there is any more that I need say. Perhaps, however, I may thank the noble Lord, Lord WellsPestell, for his co-operation and hope that the Bill will soon become law.
On Question, Amendment agreed to.

PUBLIC SECTOR BOARDS: MEMBERS' REMUNERATION
6.10 p.m.
Lord BOYD-CARPENTER Lord BOYD-CARPENTER rose to ask Her Majesty's Government when they propose to take action to deal with the damage and anomalies created by their decision in December 1974 to make none of the improvements in the remuneration of whole-time members of public sector boards recommended by the Boyle Committee while allowing substantial improvements to all other categories covered by the same recommendations. The noble Lord said: My Lords, I beg leave to ask the Unstarred Question standing in my name on the Order Paper. In doing so, I must say two things. First, I must declare a possible interest. As I think a number of Members of the House know, I was Chairman of the Civil Aviation Authority from April 1972 until March of the current year. This is one of the bodies which is very much involved in the Unstarred Question that I am raising. Secondly, I must make it clear that the issue I am raising has nothing whatever to do with the current problems which the Government are facing in respect of pay policy, wage restraint and the like.
This Unstarred Question arises from a report made as long ago as December 1974
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and intended for operation on 1st January 1975. In fact, three of the four categories involved were put into operation with effect from 1st January 1975. If that is not sufficiently conclusive, I have in my possession a letter dated 21st July 1975 from which I can quote, although I think the noble Lord the Lord Privy Seal knows of it, from the then Prime Minister and which makes this perfectly clear. The issue relates to the decision of the Government taken in respect of the chairmen and members of public sector boards, including nationalised industry boards—a body of rather fewer than 150 people.
The facts are starkly simple. During the summer and autumn of 1974, the Top Salaries Review Body, presided over, as the House knows, by my noble friend Lord Boyle of Handsworth, took a mass of evidence about the proper levels of remuneration for four categories of people: senior civil servants, senior members of the Armed Forces, the senior Judiciary and the chairmen and board members of public sector bodies. As the House will expect of any body presided over by my noble friend, it took a mass of evidence and produced in December 1974 a well balanced and moderate report. Report No. 6 of the Top Salaries Review Body (Cmnd. 5846) was presented to Parliament by the then Prime Minister in December 1974.
The Government accepted broadly the recommendations in respect of three of the four categories—that is, the senior civil servants, the senior Armed Forces officers and the higher Judiciary—and in considerable measure put them into operation with effect from 1st January 1975. To be precise, they granted them in full where they involved salaries up to £13,000 a year. Where they involved salaries above that level, they put them into effect for an amount half way between £13,000 a year and the amounts recommended, and they undertook to put the rest into effect from 1st January 1976.
It is fair—I am not sure what way—to point out that that undertaking was not, in fact, honoured. What they did—and I think it is of very great importance—was to provide that as from 1st January 1975 the three favoured categories would receive their pensions on the basis of the full Boyle recommendations. As regards

1145
the fourth category, the members of the nationalised boards whose case I am raising in this Unstarred Question, there is a very sharp contrast. Apart from one or two minor adjustments, which those concerned as chairmen of these boards fought very hard with Whitehall to obtain, in general they did not receive any of the Boyle increases.
At the time, the Government used the pretext that any decision on them, although not on the other three, must await the report of the Royal Commission on Incomes and Prices, the Diamond Commission. That august body has now reported several times. None of its reports seems to have any particular bearing on the salaries of the members of nationalised industry boards, certainly to no greater extent than they have a hearing on the pay of senior civil servants or Armed Forces officers. The result is that the Boyle recommendations, for just this one category, have been frozen. The result is that, having had no increase since 1972, most members of these boards have, as a result of the combined effect of the freeze, inflation and taxation changes, suffered something of the order of a 50 per cent. cut in their remuneration in real terms.
The consequences are undoubtedly grave. They come under two headings which, for the sake of brevity, I will take very quickly. They are, first, harshness and unfairness to a limited number of individuals and, secondly, loss of efficiency and damage to the public interest. Taking the first point, the question of individuals, there would have been a certain rough logic, although I think that it would have been wrong, if in December 1974 the Government had said that in the then state of the country nobody should have an increase. But they did not say that. They gave the greater part of the increase to the other three categories covered by the Boyle recommendations but discriminated against this limited number of hardworking and responsible men. This discrimination was particularly obvious—I am going to quote it as an example, although I am raising the point generally—in the case of the Civil Aviation Authority with which, as I have told the House, I was until quite recently associated.
Most of the full-time board members of the Civil Aviation Authority were formerly
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civil servants who transferred to the Civil Aviation Authority when it was set up. There they have been doing, sometimes after promotion, the same kind of work as they did when civil aviation work was carried out inside Government Departments. Now, however, they have an additional responsibility, which they did not have as civil servants: the collective responsibility of a board member who takes decisions, rather than their earlier, lesser responsibility, serious though it was, of advising Ministers. They have seen their former colleagues in the Civil Service—their contemporaries in that Service and their friends, as it were—receiving the increases to which I have referred, while any appreciable increase has been denied to them. The House can understand the feelings of men who, public-spiritedly, transferred from the Civil Service to do this job and who now find themselves treated in this way.
Moreover, the freeze is confined only to those people in the Civil Aviation Authority—and, so far as I know, to those people in the other public sector bodies—who are members of the Board. The staff and officers of the Civil Aviation Authority have, quite rightly, received broadly the same kind of increases as civil servants have had, and the result has been quite astonishing. It has not been a case of the erosion of differentials, of which we hear so much in industry today. It has been a case of the reversal of differentials.
To justify that statement I will quote just one example, although if the Lord Privy Seal were to challenge me I could quote a number more. My example is that of a very able man who performs the duties of controller of safety in the Authority. This is an immensely important job which covers both the operation and the airworthiness of aircraft from the safety angle. That officer was promoted as an officer to membership of the Board a couple of years ago and therefore now falls under the freeze on Board salaries. His successor in the appointment from which he was promoted in the Authority now receives £1,800 a year more than he does, with his extra responsibilities and his Board membership.
The story does not stop there because that successor's successor two grades down now receives £1,200 a year more than the

1147
controller of safety himself. That is an impossible situation which must give rise to great feelings of grievance, as it does to another full-time member of the Authority who was recruited on the basis that he would receive a salary equivalent to an Under-Secretary but who has seen Under-Secretaries' salaries raised but his own frozen. It cannot be right to treat men doing very responsible and difficult jobs in this way, and of course the practical consequences the House will appreciate only too well. It is now impossible of course to promote—if I may use the word, and if Hansard will print it in inverted commas—anyone from being an "officer" of the Authority on to the Board because that promotion would cost him anything between £2,000 and £3,000 a year. Indeed I am told that since I left the Authority the man who fills the vitally important job of controller of the national air traffic services, and handles the whole air control of the United Kingdom, has declined to join the Authority Board because to do so would involve the sacrifice of his well-earned salary of several thousand pounds a year.
The result is—and I am told this is true all through the nationalised industries—that there is now a large number of vacancies. They are carrying on, as the Civil Aviation Authority is carrying on, simply by not promoting and putting on their Boards the heads of divisions and departments and thereby not getting the advantage of their combined wisdom and judgment in the decisions that the Board has to make. This is plainly damaging to efficiency. I suggest it is plainly a nonsense. It is difficult to defend in logic, and I do not suppose the Lord Privy Seal will attempt to do it, because he is a most sensible man and an extremely good Parliamentarian, as I know from spending so many years in another place. To say that when a man is performing a very important full-time job the mere fact that he is also a Board member with those additional responsibilities should penalise him to the extent of some thousands of pounds, is quite indefensible.
Before I left the Civil Aviation Authority I warned the Secretary of State for Trade that it would be impossible to fill vacancies. I understand that the chairmen of many nationalised industries have done the same. Hence the vacancies. One cannot
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offer promotion with a financial penalty; one cannot recruit outside at thousands of pounds a year below the market rate. Therefore, not only because individuals have been treated with really quite peculiar and intense injustice, but also because the efficient working of the public sector Boards responsible for a large and important part of the British economy is being jeopardised, I thought it my duty to seize the opportunity tonight to raise this matter in your Lordships' House, and to beg the Lord Privy Seal and the Government of which he is a member to take remedial action as speedily as possible.
It is perhaps a little ironic that it should he a Labour Government, who created most of the Boards in the public sector, who indeed largely created the public sector, and have taken great and often legitimate pride in their creations, who are jeopardising the efficient working of those responsible for these industries, for a sum of money, payable of course by the Boards themselves, not from public funds, which is utterly trivial in relation to their turnover. I have a feeling that we have only to deploy anomalies so gross to contemplate damage being done for reasons so trivial, that a remedy will be found. It is for that reason that I have sought this opportunity to raise this matter tonight.
6.25 p.m.
Lord TREFGARNE: My Lords, the matter highlighted by this Unstarred Question tonight by my noble friend Lord Boyd-Carpenter is becoming something of a national scandal. As the noble Lord has said, the problem is simply that the salaries paid to full-time public Board members have now fallen so far behind their counterparts in private industry, and indeed, as the noble Lord has explained, the officials who work under them, that the numbers coming forward to serve on these Boards are diminishing to the extent that upwards of 50 vacancies now exist, including part-time appointments, many of which are directly caused by the low or inadequate salaries offered. I foresee a time not too far off when the quality as well as the quantity of the candidates will decline. I would in fact suggest that some recent appointments have been somewhat surprising, so already we are taking a chance about whether the appointments will prove successful.

1149
What is the scale of the problem highlighted by the noble Lord? I think there are just over 100 full-time public Board members at present being paid anything between £10,000 and £32,000 a year. Incidentally the latter figure of £32,000 a year is paid, as far as I can ascertain, to only one chairman, he being quite recently appointed. I omit, of course, the number of part-time members who fall outside the scope of this Question. With a few exceptions the full-time members occupy the most senior positions, so it is not unreasonable to say that upon their efforts depends the success or failure of the enterprises they manage.
As the noble Lord, Lord Boyd-Carpenter, has explained, these people have been singled out for peculiarly unfair treatment by the Government. One cannot but wonder whether the narrow exclusion of these public Board members was because they lacked some industrial muscle and because their salaries (uniquely, I believe) are controlled by ministerial decree. As the noble Lord, Lord Boyd-Carpenter, has said, categories covered by the Boyle Report, except for the ones we are discussing tonight, have all been awarded increases either wholly or partially in line with the Boyle Report. Furthermore, as the noble Lord mentioned, one group at least was granted pension rights relating to the full increase as recommended by the noble Lord, Lord Boyle, although the increase itself was for a while delayed.
It seems to me incredible that this Government, the champion of public enterprise, should have chosen to take steps peculiarly calculated to cause the maximum damage to what the right honourable gentleman the Secretary of State for Energy once hoped would become the commanding heights of British industry. I said earlier that the salaries paid at present range from £10,000 to £32,000 a year. It is difficult, if not impossible, to say by what average percentage these salaries have fallen behind the Boyle recommendations, because the range is so wide, but even to bring the salaries up to Boyle without regard to the inflation which has occurred since 1974 would need increases perhaps as high as 50 per cent. I have said, and I re-emphasise the point, that the present salaries are now so low that many
1150
vacancies exist because so many suitable people are disinclined to serve, and indeed some recent appointments have left much to be desired.
What then is to be done? First, I believe that a substantial increase must be agreed forthwith, particularly in those organisations where the Board members have served continuously through a long period of wage restraint, both voluntary and statutory. I should have thought that as a first step a phased increase up to the level suggested by the noble Lord, Lord Boyle, would be appropriate. As I have said, the percentage increases to achieve even these modest targets in some cases would have to be very substantial. It is for that reason that I suggest that the increases up to the level of Boyle should he phased over, say, 12 or 18 months.
Secondly, as and when the 1974 Boyle level is reached, a formula should be devised to bring the salaries up to a proper level for the circumstances then prevailing, bearing in mind that the Boyle recommendations related to December 1974. I recognise that the scale of these increases would appear very substantial, but I would emphasise that the number involved, as the noble Lord has said, is very small, that the cost falls largely upon the revenue of the bodies themselves and not on the public purse, and that in any event a grave injustice is clearly being done.
Having brought the salaries up to a level competitive with the industrial world at large, a method should be found of keeping the salaries in line by a system of regular reviews. It may be that an automatic increase to keep up with inflation would be politically unacceptable, but strenuous efforts must be made to avoid huge discrepancies in future. There are ways by which the political difficulties to which I have referred, and which no doubt stand in the way of the Government, can be ameliorated. They could, for example, extend the period of phased increases while allowing pension entitlements to be immediately calculated on the basis of the Boyle salary levels. I also believe that taxation rules could be altered with advantage in this special area. I think the Government ought to be persuaded to agree to the introduction of a cut-off arrangement by which salaries

1151
—that is to say, earned income—were taxed at a rate not exceeding, say, 60 per cent. A great deal of the bitterness caused by these anomalies would thus be avoided. Such an arrangement would be consistent with the rules applying throughout most, if not all, of the EEC.
I want, finally, to counter the argument that the correction of these serious problems would result in an unacceptable increase in public expenditure. I believe that if the board members are properly and fairly remunerated the efficiency, and hence the profits, of the bodies concerned will be greatly enhanced. The gross cost, before allowing for any increase in profits, would, in any event, as the noble Lord, Lord Boyd-Carpenter, has said, be infinitesimal by today's standards. My Lords, the Government must act before our public bodies become the laughing stock of Europe.
6.33 p.m.
Lord PEART: My Lords, the noble Lord used strong language and I regret that he did, because I do not believe, despite whatever arguments are presented to me tonight, they merit it. I would say this to the noble Lord, Lord Boyd-Carpenter: I think the noble Lord put his case fairly, and, as always, clearly, and pleaded for remedial action; so it does give me an opportunity to explain the Government's position on salaries at present paid to the chairmen and members of nationalised industry boards, not only the boards mentioned by the noble Lord, Lord Boyd-Carpenter, connected with the civil aviation industry.
The position in which they find themselves now is, I agree, unfortunately, the product of unforeseeable circumstances. Nor have the Government taken a decision not to implement the recommendations of the Review Body on Top Salaries, as the Question suggests. No decision has in fact been taken, for a variety of reasons. I hope noble Lords will bear with me if I explain those reasons in some detail, since the Government are acutely aware of the difficulties that have been created for individuals as a result of what has happened, and indeed have a good deal of sympathy for them.
I would begin by referring the noble Lord to the Statement, to which the noble
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Lord referred, made in another place by the then Prime Minister on 20th December 1974. The Prime Minister drew attention to the fact that the increases—which the Review Body recommended for chairmen and members—raised wider questions about incomes at boardroom level in private industry, with which these nationalised industry salary levels are compared. He went on to say that decisions on these recommendations would be postponed until the Royal Commission on the Distribution of Income and Wealth had reported. Mention was made of Lord Diamond, who is chairman of that Commission.
But circumstances have compelled us to delay a decision on the recommendations far longer than we would have wished, or was envisaged at the time of the Prime Minister's announcement. At that time it was thought that the deferment of a decision would not last much beyond July 1975, when it was hoped to have available the report on higher incomes prepared by the Royal Commission chaired by my noble friend Lord Diamond. This did not prove possible, and the report was not submitted to the Prime Minister until December 1975. By this time the Government were no longer able to act freely on the increases recommended by the Review Body. In the previous summer we had had to introduce the voluntary measures proposed by the TUC to restrict salary increases in order to counter inflation. The pay policy introduced in July 1975, as we all know, consisted of a set of simple but tough measures, equally applicable to everyone. A lot of people have objected to this, just as some people object to the Government not cutting down public expenditure, and then say, "We want more expenditure for various reasons", because it is popular to say that.
In theory, the increases recommended by the Review Body could have been paid without technically infringing the policy, as indeed the then Prime Minister indicated to the chairmen of the nationalised boards. The reason for this was that the increases were to have effect from 1st January 1975, before the policy began. However, at the time when the Royal Commission reported in December 1975, the existence of a strict pay policy meant that the Government could not consider the

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recommendation in isolation, whatever the theoretical merits of the case. They had to consider whether during the first round of a tough pay policy it would have been right to allow very substantial increases—up to almost £17,000 a year—at a time when all those whose earnings were below £8,500 were restricted to increases of £6 a week. These are the hard facts.
Against that background the Government could hardly have contemplated increases of up to £325 a week to chairmen and members of nationalised industry boards. To do so would undoubtedly have jeopardised the continuing acceptance of what was, after all, a voluntary pay policy. We were at that time in the middle of a national economic crisis, and the wider interests of the country had to come first. The measures to counter inflation had to take priority, even though this meant inflicting undoubted injustice on individuals.
The reasons that influenced us during the first round of pay policy are still relevant. The current round, with its maximum increase of £4 a week, is even tougher than the first. Once we had successfully achieved restraint during the £6 pay policy, it would have been folly to risk a reaction against the present round by allowing substantial increases while it is still in operation.
The noble Lord's Question refers also to the fact that part of the Review Body's recommendations were implemented. Higher civil servants, senior Armed Forces officers and the higher Judiciary received an increase. Only the nationalised industry board chairmen and members did not. This was put quite clearly to me this evening, quite rightly, from the point of view of the noble Lord, Lord Boyd-Carpenter. The reason for this was that the size of the increases and the new salary levels in the case of the other three groups covered by the Review Body's report were on a smaller scale than those for the nationalised industries. They did not give rise to the same considerations of the social justification for very high salaries.
Lord BOYD-CARPENTER: My Lords, is it not a fact that the recommendations of the Boyle Committee for most of the bodies, such as the Civil Aviation
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Authority, were for very comparable figures to those which were recommended for the Civil Service which the Government accepted? Is it not a fact that the noble Lord's remarks apply to only a few of the more spectacular chairmanships, such as the Post Office and the Iron and Steel Commission? Why could not the Government give Civil Service treatment to people who, in many cases, were ex-civil servants?
Lord PEART: My Lords, I have stated the position. It is quite true that there were only a small number of people in the nationalised industries to which that applied and one of the arguments advanced today is about why they were not given the increases. I have conceded that the higher civil servants, the higher Judiciary and Armed Forces officers received an increase. I accept that only nationalised industry Board chairmen and members did not. One can argue about this. I am simply saying that the reason—and it is the reason by which the Government stand—was that the size of the increases and the new salary levels in the case of the other three groups covered by the Review Body's Report, were on a smaller scale than those for the nationalised industries. There is no question about that.
Lord BOYD-CARPENTER: My Lords, will the noble Lord allow me to interrupt again?
Lord PEART: My Lords, perhaps I may complete my remarks. I shall naturally allow the noble Lord to interrupt me. I know and respect him. He said something kind about me when I was in another place and I could say the same about him. He is a very good Parliamentarian. I am not trying to score debating points. This is the information that I have been given. Even so, the increases recommended for these other groups were not paid in full. Where the recommended salaries exceeded £13,000, increases above that figure were halved. The second instalment was due to be paid in 1976. Like the increases for nationalised industry members, it still remains unpaid.
Lord BOYD-CARPENTER: My Lords, I am grateful to the noble Lord for his habitual courtesy in giving way. I should like to put this question to him. If the obstacle in the way of doing anything

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for these people was that the impartial Boyle Committee had recommended that they should have a bigger increase on the merits than the others, would it not have made some sense to have given them, at the same time, at least what the others received?
Lord PEART: My Lords, as I have said, we could argue about that but the Government decided—rightly or wrongly—to pay as they did. As I have said, like the increases for nationalised industry members, it still remains unpaid.
Nevertheless, these others groups received the first stage of their increases before the counter-inflation policies were introduced. They have, therefore, fared less badly than the nationalised industry Board members. As I have explained to your Lordships, it is the deferment of a decision followed by the introduction of pay policy in 1975 that has so far thwarted any action to bring the groups together again.
The noble Lord, quite rightly, mentioned the many difficulties that have arisen because of the deferment. In particular he mentioned the strain that has been placed on the loyalties of the Board members concerned. The non-payment of the increases was undoubtedly a severe blow to them—I accept that. Nevertheless, they have accepted the position with fortitude and have shown their loyalty to the industries which they manage in a most worthy manner. That is why I do not accept the extravagant language of the noble Lord, Lord Trefgarne.
Lord TREFGARNE: My Lords, may I ask the noble Lord to which aspect of my "extravagant language" he takes exception?
Lord PEART: My Lords, it was the part about being the laughing-stock in Europe.
Lord TREFGARNE: My Lords, I said, "will be".
Lord PEART: I stand by what I said. I hope that extravagant language like that will not be used. In particular I should like to pay tribute to those chairmen who, while championing the cause of the Board members' salaries with vigour and determination, have continued
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to shoulder the sacrifices they have been asked to make in the cause of the attack on inflation.
Inevitably, the salary situation has caused some difficulties in the recruitment and retention of chairmen and members for the boards of our nationalised industries. Nevertheless, the picture is not all black. Despite the fact that salaries are still at their 1974 levels, the Government have continued to recruit able people of the highest standing to fill the vacancies at chairmen level.
There have, however, certainly been some problems with board member vacancies. The deferment of the 1975 increases, as the noble Lord has mentioned, has meant that the salaries of board members have been overtaken by those of senior officials who have received any increases due in 1975. Quite rightly, the noble Lord mentioned that. Obviously such an inversion of salary relativities is embarrassing to the individuals concerned. It is hard to defend except on the basis of rough justice imposed by the introduction of pay policy. But any pay policy that is both simple and tough is bound to create anomalies through the cancellation or postponement of increases that were in the pipeline. This has happened in several spheres and it is, in effect, what has happened here.
The problems described by the noble Lord, Lord Boyd-Carpenter, are therefore only too well known to my colleagues and to me. We are alive to the need to solve them; they must be solved. The noble Lord pressed me to do it as quickly as possible. My hope is that we shall be able to do so before long. However, for this we shall inevitably have to choose an appropriate time to make the adjustment, and I am afraid that that moment has not yet arrived. I cannot make any specific commitments, any date, for the future, as your Lordships' House will understand, but I can assure all who are concerned with this problem that it really is our desire to resolve it as soon as possible, and I want to do so.

FIDELITY TRUST BILL
Report from Her Majesty's Attorney-General received, and ordered to lie on the Table.
RENT (AGRICULTURE) (AMENDMENT) BILL [H.L.]
Returned from the Commons agreed to.
  ENERGY: RESEARCH AND DEVELOPMENT
  ENERGY: RESEARCH AND DEVELOPMENT
  NUCLEAR WEAPONS: STORAGE
  NUCLEAR WEAPONS: STORAGE
  RADIO-ACTIVE WASTE
  RADIO-ACTIVE WASTE
  RABBIT OR DEER-PROOF FENCING
  RABBIT OR DEER-PROOF FENCING
  TYPE 42 DESTROYERS
  TYPE 42 DESTROYERS
  INLAND REVENUE: DISTRAINT OF GOODS
  INLAND REVENUE: DISTRAINT OF GOODS