Sitting of 18 January 1979

Preamble
The House met at half-past
Two o'clock

PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    European Monetary System
    2. Mr. Spearingasked the Chancellor of the Exchequer if he will make a statement concerning the operations to date of the European monetary system.
    The Chancellor of the Exchequer (Mr. Denis Healey): The EMS has not yet started to operate.
    Mr. Spearing: Do not the complicated delays over the system show how prudent it was for Her Majesty's Government to remain outside the system, and how foolish it was of the Opposition to advocate our entry? Does my right hon. Friend agree that if the system went ahead on the conditions that the French are now asking—namely, the phasing out of MCAs—it would mean an increase of farm gate prices in the United Kingdom of at least 30 per cent. to 40 per cent.? As the Opposition have already advocated the phasing out of the green currencies, they would be causing immense inflation that would be against the interests of housewives and consumers as a whole and the entire nation.
    Mr. Healey: Beyond saying "Yes, Sir", which I say with the greatest pleasure, I add that it is true that developments since the summit conference was held in December have shown that the views of the Shadow Foreign Secretary, as he expressed them on 19th December, were as fatuous as they were anti-British. It is true that if certain proposals for the phasing out of MCAs were accepted and the common price was
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    allowed to rise, that could have a damaging effect on the cost of living in Britain and on British food prices. I have no doubt that my hon. Friends will be referring to that in debate whenever they have the opportunity. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has already made it clear in Brussels that there can be no question of the British Government agreeing to a resolution of the current dispute over MCAs leading to an increase in food prices for Britain.
    Mr. Hordern: Has the right hon. Gentleman given any assurances to the EEC Finance Ministers that he will keep sterling within the present band of the basket of European currencies?
    Mr. HealeyNo. I made it clear when I spoke to the House on this matter before Christmas that the Prime Minister and I have given assurances to our Common Market colleagues that we intend to maintain the present stability of sterling, which has been stable within a narrower band than is permitted even inside the EMS, against not a basket of European currencies but a basket composed of the currencies of the countries with which we trade.
    Mr. Gould: To what extent are we now pursuing policies that are virtually indistinguishable from those that we should have to pursue if we were members of the EMS? Given the overwhelming case made against our joining the EMS, is not the case against those parallel policies equally damaging?
    Mr. Healey: To quote the poet Marvell on love:
    "But ours so truly parellel Though infinite can never meet."
    The fact that we are pursuing the stability of sterling does not mean that we are pursuing policies that could lead to Britain joining the exchange rate regime of the EMS. The important difference is that the parity grid system of the EMS would commit countries with currencies not divergent from the general trend to lose reserves to make the deutschemark more competitive. That does not seem to be in Britain's interests. That is a general view.
    Mr. Marten: Am I right in assuming that the British Government can block these proposals by the French?
    Mr. Healey: There are no specific proposals by the French. The French Government have certain objectives on MCAs which have been resisted by a number of other Community countries. We have made clear that there can be no question of our agreeing to the increase of the common price as a result of that, and we have the power to prevent it.

    Pay Settlements (Government Action)
    3. Mr. Tebbitasked the Chancellor of the Exchequer how many employers he has subjected to sanctions to date in the current pay round.
    13. Mr. Ashtonasked the Chancellor of the Exchequer whether he has decided to impose sanctions as a result of other wage settlements subsequent to his statement relating to the Ford Motor Company.
    The Chief Secretary to the Treasury (Mr. Joel Barnett): Only the Ford Motor Company was ever subject to discretionary action for a breach of the current pay guidelines, and the Government have announced that discretionary action in support of pay policy has now ceased.
    Mr. Tebbit: Why are the Government proposing new action against employers through the price code? Employers are being bludgeoned into paying excessive pay claims. Does the Minister think that the road hauliers are rushing around trying to force pound notes into the pockets of their reluctant employees? Would it not be better to try clipping the wings of over-powerful, over-arrogant and totally unworthy leaders of the trade union movement in this country today? [HON. MEMBERS: "No, no."]—Yes, that is unless the Minister thinks that these union leaders are worthy.
    Mr. Barnett: I think I heard most of that. It might be helpful if the hon. Member for Chingford (Mr. Tebbit) were to put a constructive point in the House occasionally. I have never yet heard one from him.
    Mr. Ashton: Is my right hon. Friend aware that the reason for the strike at Ford's, as with the newspapers and as with the road hauliers, was the massive profits that these firms have been making? How does he expect trade unions to stick to a 5 per cent. pay rise when the profits of their companies in
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    many cases have risen by over 50 per cent.? How can he guarantee that some of this surplus profit will be used to keep down prices in future, or at least will be transferred to the nurses, who are entitled to a decent pay rise?
    Mr. Barnett: Whatever my hon. Friend may feel about the pay guidelines and what happened at the Ford Motor Company, the fact must be that if we have an excessive pay outturn in the current round or any other round, this would be disastrous for the nurses and every other worker in this country. The sooner we recognise that the better.

    Inflation
    4. Mr. Skinnerasked the Chancellor of the Exchequer if he is satisfied with the current rate of inflation, and if he will make a statement.
    9. Mr. Temple-Morrisasked the Chancellor of the Exchequer what is the present rate of inflation.
    Mr. Healey: The retail price index rose at an annual rate of 8·4 per cent. in the 12 months to December. The rate should remain around this level for the next few months ; thereafter the rate will depend crucially on the level of pay settlements.
    Mr. Skinner: Will the Chancellor give lie to the oft-repeated claim by many people in this House and outside that a 15 per cent. increase in wages equals 15 per cent. inflation? Will he explain that last year wages went up about 15 per cent. in total while inflation was down to 8 per cent.? Were there not some other important factors involved, such as a strong pound, terms of trade in our favour, and currency reserves relatively high, which helped to ensure that inflation was kept down to 8 per cent.? Will not these factors together assist this year just as they did last year?
    Mr. Healey: It is certainly true that our rate of inflation last year was assisted by the strnegth of sterling, which in itself improved our terms of trade. I am glad that my hon. Friend supports this element in the Government's policy and presumably also the measures such as those that I took in June and November to ensure that the money supply was kept under control and that sterling remained strong.

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    It is the Government's policy in the current year, as I have already made clear, to conduct our affairs in such a way that we keep sterling strong. The strength of sterling is bound to be affected by the rate of inflation which will depend this year very largely on pay settlements. Some of the factors that helped us last year, such as a fall in world prices, are unlikely to be so favourable this year. Already, for example, there is likely to be a substantial increase in oil prices where there was no increase last year.
    Mr. Temple-Morris: Does the Chancellor agree that there is no hope whatsoever of continuing with the present rate of inflation while his Government are quite unable to reach any agreement with the trade unions of this country? Does he agree that that possible agreement represents the only claim that his party has to remain the Government of this country?
    Mr. Powell.
    Mr. HealeyI do not entirely agree with the hon. Member, and certainly his neighbour but one on his right, the right hon. Member for Down, South (Mr. Powell), disagrees very profoundly. I am glad to see that the right hon. Member dissociates himself totally from what has just been said by the hon. Member for Leominster (Mr. Temple-Morris).
    It is very important for the House to recognise that, as the Secretary of State for Employment confirmed yesterday, the great majority of settlements have been within the Government guidelines. Those that have been outside have been mainly settlements by groups which exceeded the guidelines last year, and in all cases except that of the Ford Motor Company the resulting settlement has been well below the level of last year.
    Mr. Rooker: Now that we have the retail price index for the calender year 1978, namely, 8·4 per cent., will the Chancellor of the Exchequer allow the provisions of section 22 of the Finance Act 1977 to carry through, thereby giving the low-paid a rise in personal tax allowances in line with the rate of inflation? He knows as I do that this benefits the low paid proportionately more than the well off.
    Mr. Healey: I hope that that will be possible, but I have made it clear, and
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    so has the Prime Minister, that if we had anything like the wage explosion that we had in 1975 the Government would be required to take fiscal or monetary measures in order to correct the situation.
    Mr. Wigley: The Chancellor mentioned the strength of sterling. Does he accept that there is a real possibility that sterling is over-valued, and whereas that may help with the inflation battle it does encourage imports from overseas, thereby losing jobs in this country?
    Mr. Healey: I do not accept that view, although I know it is widely held on both sides of the House. In fact one or two of my hon. Friends not a thousand miles from where I am standing now agree with the hon. Member. But, in spite of the fact that sterling remained strong throughout last year and that, as a result of increases in wage costs that were higher than those in other countries, we lost some of the competitiveness we had earlier in the year, our non-oil exports rose in volume by almost as much as they had the previous year. In fact, we maintained the increased share of world trade which many people thought we achieved in 1977 entirely from the depreciation of sterling in the previous year. The lesson of experience is that the advantages of depreciation as a cure for competitiveness have been grossly exaggerated.
    Mr. George Rodgers: Does my right hon. Friend accept that his incomes policy might be received with greater enthusiasm by working people if it were seen to apply equally to those in the upper income brackets? Is it not so that a company director in possession of a dozen or so company directorships can always accumulate another dozen directorships with a fat fee to go with them? What will he do to remedy this situation?
    Mr. Healey: It is true that some people in the higher income brackets have, by various devices, been able to increase their incomes by more than the Government would wish. This has also been true of many self-employed people at very much lower levels of income. Inevitably there is some leakage there, but a study of the general distribution of incomes in recent years shows that as a result of inflation and tax changes the better off have suffered a greater erosion

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    of their purchasing power than those lower down the scale.
    Sir Geoffrey Howe: Does the Chancellor remember telling the country—indeed, boasting to the country—at the time of the last election that he had succeeded in getting the rate of inflation down to 8·4 per cent.? Has he noted that the figures announced last week take the figure of inflation back up to 8·4 per cent. and that it is universally expected to rise above that? Does he also accept that the figures announced last week mean that since this Government came into office the value of the pound has been exactly halved? Is that not a fitting epitaph on the Chancellor's tenure of the Treasury?
    Mr. Healey: No, I do not think that that is a fitting epitaph. I well remember sitting where the right hon. and learned Gentleman now sits and hearing the then Conservative Chancellor trying to justify a 20 per cent. depreciation in one day in the value of the £ sterling. The fact is that we have succeeded, after many years, in stabilising the value of our currency—something which previous Governments did not succeed in doing. When the right hon. and learned Gentleman refers to the current rate of inflation, he should pay some tribute to the efforts of all those who contributed to that—not least those in the trade union movement. He should be ashamed to make the remarks he has made as he and his right hon. Friends are consistently pressing policies on us which would raise prices—a very good example being their approach to agricultural policy in the European Community.

    Bank of England
    5. Mr. Hoyleasked the Chancellor of the Exchequer when he intends next to meet the Governor of the Bank of England.
    Mr. Healey: I maintain close contact with the Governor of the Bank of England, meeting him on a regular basis and also as and when circumstances require.
    Mr. Hoyle: Will my right hon. Friend tell the Governor of the Bank of England, when he next meets him, that he is not prepared to act on all the advice offered by the governor, and particularly on the advice given by the Treasury man-
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    darins? Will the Chancellor instead act on the policies of the Labour Party conference and the TUC, and particularly on the advice given by myself and my hon. Friends? If he had done that, we would not be in the mess we are in today.
    Mr. Healey: I find myself subjected to advice from many quarters and from many personalities, including the governor of the Bank of England and my hon. Friend. I came to the conclusion, quite soon after taking up the office I hold that the sensible thing was to make up my own mind on the merits of the cases put to me. That is what I have done and I think that that is responsible for the enormous improvement in our performance over the last 12 months.
    Mr. Farr: Can the right hon. Gentleman say whether during his consultations with the governor of the Bank of England,, he was able to make an estimate of the amount of money involved in the decision recently announced by the Irish Government to register, and probably withdraw, all Irish nationals' funds in Britain as a result of Ireland's entry into the EMS while we stayed out?
    Mr. Healey: By saying "probably withdraw" the hon. Gentleman recognised the impossibility of making estimates of very uncertain quantities. What I can say is that the decision of the Irish Government to introduce exchange controls on certain transactions between Britain and Ireland is not likely to damage our interests. If we saw any risk of our interests being damaged as a result of the Irish Government's being a member of the EMS, when we were not, we would, as I have made clear to the House, complement their exchange controls with some of our own. At the moment the Irish Government are sticking to their declared policy of keeping their exchange rate parallel with ours. They have succeeded in doing so exactly since they took their decision and I see no reason for our taking the kind of action I have referred to.
    Mr. Atkinson: Does not the Chancellor agree that, like the Treasury, the governor has become obsessed with anti-Socialist policies which seek to minimise the public sector borrowing requirement? Does he not recollect that early this week he published figures showing that next

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    year's public expenditure will represent no more than 4½ per cent. of what he estimates to be our gross domestic product, and that, of that 4½ per cent., no less than 2½ per cent. must be deducted for capital expenditure? Is it not an absolute disgrace that a Socialist Government should want to minimise their public sector borrowing requirement to no more than 2 per cent. of the gross domestic product for expenditure purposes?
    Mr. Healey: I think, with respect, that my hon. Friend is making a great mistake if he thinks that the views which the Government hold on the appropriate size of the PSBR have anything to do with party politics. The only countries in the world which have a higher percentage of gross domestic product in their public sector borrowing requirement, or their CGBR, are Japan, which has a 25 per cent. savings ratio—about twice the size of ours—and Canada, which has much higher unemployment than ours, high inflation, and a currency which is weaker than the American dollar. I believe that our level of PSBR is appropriate to the level of capacity use and our ability to finance it without excessive increases in interest rates.
    Mr. Lawson: In the light of recent events, will the Chancellor give the House an assurance that he will take whatever steps are necessary to ensure that, at the very least, the public sector borrowing requirement does not exceed the figure given for 1979–80 in table 7 of the public expenditure White Paper published yesterday?
    Mr. Healey: Yes, Sir.

    Development Land Tax Office
    6. Mr. Michael Lathamasked the Chancellor of the Exchequer whether he will make a statement on the progress of his departmental review of the staffing of the Development Land Tax office.
    The Minister of State, Treasury (Mr. Denzil Davies): The Inland Revenue's present review of development land tax, which covers administration and financial procedures, is still in its early stages and I cannot usefully add to what I said in reply to the hon. Member's Question on 11th December.
    Mr. Latham: Is there not a scandalous bureaucratic situation here in that, when
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    a secret Inland Revenue inquiry made a recommendation that the staff should be cut by 30, the Government's response was to increase it by 20 and set up another inquiry?
    Mr. Davies: No. That inquiry was conducted on the basis of the work of the office between May and June 1977. By October 1978, the number of working cases had doubled. It was therefore necessary to increase the staff in order that people who dealt with that office should, in turn, be dealt with in a proper and efficient manner.

    Inflation
    7. Mr. Bulmerasked the Chancellor of the Exchequer whether he will introduce further measures to control inflation.
    8. Mr. Knoxasked the Chancellor of the Exchequer, whether he is satisfied that his economic policies will result in a further reduction in the rate of inflation.
    Mr. Healey: I believe that the Government's current policies of encouraging pay settlements within the pay guidelines combined with monetary and fiscal restraint will stabilise and gradually reduce inflation. However, the Government will not hesitate to bring in further measures should they consider them necessary.
    Mr. Bulmer: As the majority of union leaders are reasonable people, and as few employers wish to pay more than is justified by commercial considerations, why are the Government in such difficulty over their pay policy?
    Mr. Healey: The Government are in difficulty for two reasons. First, a powerful argument has been deployed by the party opposite that free collective bargaining is consistent with holding the rate of inflation where it is. I do not believe that even the Conservative Party could maintain the truth of that proposition in the face of recent events and I gather that the hon. Gentleman does not do so. Secondly, the Government's ability to influence the level of settlements in the private sector was gravely damaged by the decision of parties opposite to remove pay sanctions. If the hon. Gentleman would like other explanations, I shall be glad to give them to him.
    Mr. Knox: Does the right hon. Gentleman consider that the current level of

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    wage and salary settlements will cause higher inflation, higher unemployment, or both?
    Mr. Healey: As I said a moment ago, the great majority of settlements have been within the guidelines. Those that have been outside so far have been mainly in groups, or companies, which broke the guidelines last year. In all those cases—except that of the Ford Motor Company —the resulting settlement has been a great deal lower than last year. There is still time to recover control of the situation if the Government are assisted by all those with influence in the community to achieve the necessary control. For that reason, I hope that the Conservative Party will stop encouraging people to make use of their market bargaining power to produce excessive settlements which are totally inconsistent with keeping inflation down.
    Mr. Watkinson: Will my right hon. Friend be wary of claims from the Conservative Party opposite that inflation can be kept under control by slashing further public expenditure? Does he not agree that his own White Paper shows that one of the principal problems relating to public expenditure is not excessive spending, but underspending, and are Departments taking measures to ensure that the sums are actually spent?
    Mr. Healey: One of the problems that we face all the time is to persuade Departments—and this is not a problem unique to the present Government—to announce spending plans which they are satisfied they can carry out. There have been cases—some are displayed in the current White Paper—where individual Departments have failed to make use of the spending powers which were given to them. The House will have seen that there has been much less underspending in the past 12 months than there was in the previous 12 months. On the other hand, my hon. Friend will recognise that, if the White Paper does nothing else, it demonstrates the effects on growth, output and the possible level of public expenditure of the level of inflation and, therefore, the immense importance of keeping pay settlements to a level that is consistent with keeping down the rate of inflation.
    Mr. Budgen: Does not the Chancellor of the Exchequer agree that, because of
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    the difficult political situation in which he finds himself, it will be impossible for him to carry out his threats of stern fiscal measures in the near future and that therefore the only way that he can curb inflation will be to impose even higher interest rates?
    Mr. Healey: No, I do not accept anything of the sort. I hope that if it became necessary, for the sake of keeping control of inflation, to ask the House to approve difficult and unpopular measures, there would be at least one or two Conservative Members who would be prepared to respond to a call for responsibility.
    Mr. Heffer: Will my right hon. Friend and his right hon. Friends come off the cloud on which they have been sitting for some time and recognise the fact that the trade union movement was prepared to accept voluntary incomes policies for two and a half or three years but gave adequate notice to the Government that it was not prepared to accept a phase 4? Is it not clear that if we are to get out of the present situation we must recognise that reality, allow settlements to be reached on a free collective basis and face the fact that we shall have to deal with the resulting situation on the basis of those of us who pay rates having to pay more to meet the costs of wage settlements for people in the public services and elsewhere? We must not dodge the realities of the situation.
    Mr. Healey: In this area, as so often in politics and government, Governments have to take account of a number of realities, and so do peoples. As the Conservative Party has occasionally had the courage to admit, if the average level of settlements this year is significantly above 5 per cent., it will not be possible to keep down the rate of inflation. That is a fact and there is no political argument that can get rid of it.
    I have already explained that although we have had some excessive settlements they have so far been in areas where we had excessive settlements last year and their size has been significantly lower than last year's increases, except in the one case of the Ford Motor Company. It is the duty of myself and my right hon. Friends and, indeed, all my hon. Friends, as well as hon. Members opposite, to

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    put these facts in front of the people continually until they finally recognise them.
    The only alternative—and my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) was beginning to recognise it in the latter part of his supplementary question—is to allow wages to rip and to be compelled to take the sort of action that the Government had to take in 1975–76 in rigid control of further wage increases, cuts in public expenditure and rises in taxation. I do not think that that is a prospect which my hon. Friend would relish in practice, however much he may contemplate it in theory.
    Sir Geoffrey Howe: Will the Chancellor recognise that it is high time that he stopped lecturing the Opposition on pay responsibility? Is he not aware that he should count himself profoundly lucky—and I mean this seriously—that in virtually every statement that I and my right hon. and hon. Friends make on this issue we impress upon those concerned with pay bargaining the need to achieve moderate settlements in line with moderate targets of monetary growth if we are to achieve a sensible solution without rising unemployment?
    Will the right hon. Gentleman recognise that the threat to achieving sensible outcomes from responsible collective bargaining arises from the intolerable sanctions that are being imposed on employers who are trying to achieve sensible results by the increasingly disorganised bands of labour which represent the unacceptable face of what used to be called the trade union movement?
    Mr. Healey: I never complain about having the right hon. and learned Gentleman as the Shadow Chancellor of the Exchequer. That is something which I welcome and I hope that it will continue for many years. On the substance of what the right hon. and learned Gentleman said, the speeches of Conservative Members would be more convincing if they had supported the Government's attempt to achieve settlements in line with what the Opposition say is necessary, had not tied our hands behind our back by robbing us of the sanctions weapon in the private sector, had not pressed consistently for policies that would increase prices, particularly in agriculture, and had not gone out of their way on every occa-
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    sion—and this applies particularly to the right hon. and learned Gentleman—to insult the trade unionists whose support and responsibility they are canvassing.

    Contingency Reserve Fund
    10. Mr. Ashleyasked the Chancellor of the Exchequer what is the current size of the Contingency Reserve Fund; and what proposals he has in relation to it for the rest of the financial year.
    Mr. Joel Barnett: I take it that my hon. Friend is referring to the contingency reserve for the current financial year included in the public expenditure planning total. The amount now remaining in the reserve is just over £40 million. I cannot say what contingencies will arise in the next three months.
    Mr. Ashley: Is the Chief Secretary aware that some severely disabled housewives have been denied the new allowance, partly because of the semantics of the regulations which are now being considered by an advisory committee, but partly because there is no public expenditure provision? I do not wish to tie anyone's hands behind his back, but can my right hon. Friend undertake to ensure that public expenditure provision is made available for this small, but hard-pressed, group of severely disabled women?
    Mr. Barnett: That is a matter for my right hon. Friend the Secretary of State for Social Services, but I know that my hon. Friend recognises, and I hope that all my hon. Friends recognise, how much the Government have done for the long-term sick and disabled. In 1973–74, we were spending, at 1978 survey prices, £1,190 million. In 1979–80, that figure will have risen to £1,840 million and we are planning to increase it, in real terms, to £2,070 million at the end of the current public expenditure round. I hope that my hon. Friends are aware of just how much we have been able to do for the long-term sick and disabled, despite all the difficulties.
    Mr. Madden: Can my right hon. Friend confirm that the increase in earnings in the 12 months up to November justifies an increase in retirement pensions and can he tell us when pensioners are to be paid what they are owed?
    Mr. Barnett: I am not sure how that supplementary question relates to the original Question, but my hon. Friend will be aware that there was a substantial increase in pensions this year which was entirely in line with the legislation under which we were working. I hope that he will recognise, in fairness, that we have given substantial real increases to pensioners since we came to office in 1974.

    Vehicle Excise Duty
    12. Mr. Newtonasked the Chancellor of the Exchequer when he expects to give further details of his proposals for phasing out vehicle excise duty.
    Mr. Denzil Davies: We must await the outcome of consultations with the motor industry and other interested bodies. These are to begin shortly.
    Mr. Newton: If the Minister of State decides to go ahead with this policy, can he at least give us a definite undertaking that funds will be made available to compensate the disabled who receive the mobility allowance and who are exempt from vehicle excise duty from the loss that they will sustain?
    Mr. Davies: It is not for me to give that sort of undertaking, but I assure the hon. Gentleman that the points that he and others have made will be taken into account when we consider this very difficult problem.
    Mr. Gwilym Roberts: Will my right hon. Friend accept that the phasing out of the duty and the corresponding increase in petrol prices will be an enormous problem not only to people in rural areas but to urban groupings, such as Cannock Chase, which are on the borders of major conurbations and where large proportions of the population travel considerable distances to work?
    Mr. Davies: I accept that some groups will be worse off as a result of the change. But other groups will be better off. We are conscious of the problems of the disabled and we are examining them.
    Mr. Burden: Does the Minister agree that we are worried not only about the abolition of the vehicle tax but about the alternative measures to ensure that cars are properly licensed and insured? Will the Minister undertake that before
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    such measures are introduced full particulars will be published of the proposals to replace the present vehicle licence?
    Mr. Davies: It will still be necessary to have a proper system for vehicle registration, for the purposes of enforcing the law and road safety. There is no question about that. We are concerned here about the taxation aspect of the matter.

    National Association of Widows
    14. Mr. Durantasked the Chancellor of the Exchequer if he will meet a delegation from the National Association of Widows to discuss the taxation of widows.
    Mr. Denzil Davies: My right hon. Friend the Financial Secretary would be glad to meet a delegation from the National Association of Widows, as he has in previous years.
    Mr. Durant: When the Minister meets representatives of the National Association of Widows will he bear in mind their feelings of grave injustice about being taxed on their widows' pensions? Will he consider bringing them into line in the next Budget with the war widows who have been given a 50 per cent. discount?
    Mr. Davies: I do not accept that there is a grave injustice. However, I accept that widows, like other groups of people, are anxious about the amount of tax that they pay. The House decided to give the 50 per cent. exemption to war widows. I do not accept that that is the right way to deal with the problem. Income from whatever source should be taxed in the same way, subject to the rules.
    Mr. Ovenden: When my right hon. Friend meets the widows, will he tell them how he justifies singling out widows' allowance as the only short-term social security benefit which is taxed?
    Mr. Davies: Both sides of the House recognise that in theory there is no reason why other short-term allowances should not be taxed. But there is an administrative problem caused by the fluctuating nature of most of the short-term allowances. The widows' allowance does not fluctuate. It is a flat-rate allowance paid for a short period and there are no administrative problems.

    Young Workers (Industrial Clothing Tax Allowance)
    15. Mr. Frank Allaunasked the Chancellor of the Exchequer if he will now take steps to extend to other young workers the income tax allowance of £20 a year for tools and industrial clothing just granted to engineering apprentices after agreement with union representatives.
    Mr. Denzil Davies: If any trade union makes an application for apprentices to be given a flat-rate allowance, the Inland Revenue is prepared to negotiate one, provided that the allowance broadly reflects the amounts individually deductible in respect of the cost of upkeep of tools and special clothing. In the absence of any such flat-rate allowance, individual apprentices are entitled to claim the amounts actually expended for the purpose.
    Mr. Allaun: I welcome that Answer, but there are young workers in certain other industries who do not receive these allowances. Does my hon. Friend accept that, even when the allowances are available, they are often unclaimed because people do not know about them? Will the Minister publish the list?
    Mr. Davies: I shall consider publishing the list, but I make no commitment. The object of the flat-rate allowance is to ensure that people know to what allowances they are entitled. The Inland Revenue has no objection to negotiating such arrangements with the trade unions.

    £ Sterling
    16. Mr. Tim Rentonasked the Chancellor of the Exchequer in what range of fluctuation against the basket of Europeon currencies he now wishes to maintain the £ sterling.
    Mr. Healey: There has been no change in our exchange rate policy. Our aim is to maintain a stable exchange rate as measured against the currencies of all our main trading partners.
    Mr. Renton: In view of the fact that the current public sector borrowing requirement is regarded widely as excessive and is forecast in yesterday's White Paper as remaining excessive, does the Chancellor agree that his exchange rate target will be achieved in the end only by either
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    higher domestic interest rates or higher taxes?
    Mr. Healey: If the hon. Member's view were shared by those who help to determine the value of sterling on the foreign exchange markets, sterling would not have been as stable as it has been in the last 12 months. But it is not shared by those who watch our affairs from outside. The hon. Member and his hon. Friends would be wise to look at the value which foreign countries put upon our currency before seeking to denigrate our achievements.
    Mr. Jay: Has my right hon. Friend read his own expenditure paper? Has he noticed that our net budget contribution to the EEC in 1980 is to rise to £795 million? Is this not an intolerable burden on our Budget and balance of payments?
    Mr. Healey: The Government have made it clear on many occasions that they regard the budgetary burden which falls on the United Kingdom as a result of the current monetary arrangements inside the Community as seriously excessive. They are seeking to renegotiate them both in terms of the budget itself and the common agricultural policy, which is the main culprit.
    Mr. Tapsell: if the Chancellor's reply to my hon. Friend the Member for Mid-Sussex (Mr. Renton) has any validity, how does he account for the fact that other countries have reduced the proportion of their reserves which they maintain in sterling to under 2 per cent.?
    Mr. Healey: We have asked them to do so because we regard the reserve role of sterling as damaging to the interests of the country. I am glad to say that we were successful.

    PRIME MINISTER (ENGAGEMENTS)
    Q1. Mr. Terry Walkerasked the Prime Minister if he will list his official engagements for 18th January.
    The Prime Minister(Mr. James Callaghan): This morning I presided at a meeting of the Cabinet. In addition to my duties in this House I shall be holding further meetings with ministerial colleagues and others.
    Mr. Walker: Is my right hon. Friend aware that neither in her television broadcast last evening nor in her speech to the House of Commons on Tuesday did the Leader of the Opposition make any reference to how the Tories would tackle the problems of inflation? [HON. MEMBERS: "Reading."] Short-term, ill-considered proposals on trade union legislation would not help the country in the present situation. [HON. MEMBERS: "Reading."] Will my right hon. Friend continue to impress upon the trade union movement that inflationary wage increases have no relevance to social justice and are not in the best interests of working people—[HON. MEMBERS: "Reading."]
    Mr. Speaker: Order. The hon. Member made copious use of notes, that is all.
    The Prime Minister: That might be so, but I did not hear all the question. If I caught my hon. Friend's first few words correctly, as I think I did, he stressed the need in all our current problems to emphasise the importance of overcoming inflation. That, of course, is right. Inflationary wage settlements, so far as they enter into the final costs of production, give rise to rising prices and rising unemployment. Nothing that I know can destory that basic fact. It should be hammered home on all occasions.
    Sir Paul Bryan: Does the Prime Minister appreciate that in the East Riding of Yorkshire we have the biggest concentration of pigs in the country? [HON. MEMBERS: "That is right."] Labour Members will laugh less when I tell them that, owing to the concentration of the Transport and General Workers' Union on the feed mills of Hull, a large number of those animals are definitely and genuinely in danger of going short of food. Hon. Members may laugh if they wish.
    Will the Prime Minister today phone up the strike committee in Hull and use his influence to persuade its members to withdraw the pickets and to show in practice the sympathy which they profess for animal welfare?
    The Prime Minister: The hon. Member will now understand how I sometimes feel when I have to give a quick reply at the Dispatch Box and I say not quite what I mean to say. The hon. Gentleman made a serious point, however I understand that there have been particular problems,
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    especially in the port of Hull and in East Yorkshire, with picketing and secondary picketing. I know that contacts have been made through the emergency unit. I believe that some changes have been made. Clearly I cannot give a definite answer to the hon. Member. I shall have something more to say about the general position in my statement later.
    Mr. Mike Thomas: Will my right hon. Friend, in the course of his engagements today, seek to ascertain from the right hon. Lady the Leader of the Opposition whether she sees any relationship between wage settlements and inflation and, if so, why she fails signally to refer to that relationship in any of her public statements?
    The Prime Minister: I am sure that the right hon. Lady is as aware as anyone else of the consequences of inflation. This is a problem to which more attention might be paid by the Opposition on occasions, instead of referring to what are in certain circumstances peripheral matters affecting powers. I do not believe that taking statutory powers is necessarily, as experience has shown, the right way to conquer inflation.
    Q2. Mr. Blakerasked the Prime Minister if he will list his official engagements for Thursday 18th January.
    The Prime Minister: I refer the hon. Member to the reply which I have just given to my hon. Friend the Member for Kingswood (Mr. Walker).
    Mr. Blaker: I understand that it is the intention of the Prime Minister to seek a voluntaryagreement with the trade unions, not simply with a view to settling the present dispute but on wider and longer-term issues. How will such an agreement differ from the solemn and binding agreement made between the trade unions and the Labour Government in the 1960s which, as the Chancellor of the Exchequer reminded us not long ago, melted away like butter in the sun?
    The Prime Minister: That is not on the list of my engagements for today, I am bound to say, and we had better wait to see what emerges from discussions with the TUC, which I shall certainly hope to have as soon as possible. I imagine that present circumstances have shown clearly how important it is for any Government

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    to secure the full co-operation of the organised workers in this country if we are to succeed.
    Mr. Stoddart: As my right hon. Friend reflects today—if he reflects at all—on the right hon. Lady's broadcast last night, will he recognise that it was an exercise in sheer damned hypocrisy, for two reasons? First, on the one hand, she is citicising the lorry drivers for following the policies advocated by herself and her right hon. Friend the Member for Leeds, North-East (Sir K. Joseph)—
    Mr. Burden: On a point of order, Mr. Speaker. In the light of circumstances today—
    Several Hon. Members rose—
    Mr. Speaker: Order. Usually we take points of order at the end of Question Time.
    Mr. Stoddart: Secondly, will not my right hon. Friend agree that the right hon. Lady was hypocritical in promising—
    Hon. Members: Withdraw.
    Mr. Speaker: Order. It is out of order, as the House knows, and quite wrong, for an hon. Member to call any other hon. Member a hypocrite.
    Mr. Stoddart: Thank you for your guidance, Mr. Speaker, but I did not call the right hon. Lady a hypocrite. I merely said that the political broadcast was an exercise in hypocrisy, and I think it was. [HON. MEMBERS: "Withdraw."] Will my right hon. Friend say whether he does not think that promising public service workers substantial increases in pay, and at the same time threatening huge cuts in public expenditure, is a hypocritical exercise?
    The Prime Minister: I am afraid that I am unable to join in this, as I did not have the privilege of seeing the television broadcast. I am not, therefore, able to pass any comments on it. What is quite clear is that if we have free collective bargaining, as a result of which public sector workers are to have large increases in pay, it is certainly not consistent with that to promise large cuts in taxation. I am sure that must be known to the Conservative Front Bench.
    Mr. Baker: If Mr. Moss Evans can produce within a matter of hours a draft
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    code on picketing, why is it not possible for the Government within a matter of days to produce their own proposals on picketing and to publish them this weekend, so that we can debate them in the House next week?
    The Prime Minister: The Transport and General Workers' Union, as I shall report a little later, is issuing a code of practice about the current dispute and the current dispute alone. That is somewhat easier than drawing up a general code that would apply to all disputes at all times. I should have thought that the Opposition, having seen some of the results of their own ill-considered legislation, would not wish to rush back into this too soon.
    Mr. Swain: Is my right hon. Friend aware that he has often said in this House that prevention is better than cure? Does he not consider that the crisis facing this country today would have been prevented had his Cabinet given a flat-rate increase right across the board during the early stages of negotiations? I am sure, having done my sums on this—[Interruption.] Listen to that lot, Mr. Speaker. If they were in India they would be sacred. Will my right hon. Friend agree that, had such a flat-rate increase been allowed, so that the man on £40 a week would have had the same increase as the man on £20,000 a year, three-quarters of the trouble which faces the Prime Minister and the Government today would have been prevented?
    The Prime Minister: One of the problems that we face at present is that while there is one view in favour of increasing the pay at the bottom end of the scale by a substantial flat rate or percentage rate, at the other end of the scale—and, indeed, in the middle of the scale—the cry by those who are organised is for an improvement and an increase in the differentials. This is one of the dilemmas facing anyone who tries to devise policy in this field.
    Mr. Montgomery: Will the Prime Minister some time today give some thought to the fact that today, in the Trafford district of Greater Manchester, four hospitals have closed down, partly due to the transport workers' strike and to picketing and partly due to the proposed threat of action on Monday by the National Union of Public Employees? Does he not think it is quite serious that

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    sick people are being penalised in this way by industrial action? What view do his Government take about, and what do they propose to do to remedy, this serious position?
    The Prime Minister: The hon. Gentleman knows full well that we clearly take a serious view of a matter of that sort, if it is as the hon. Gentleman has described. But, as he will also know, it is easier to say how serious a position is than to put it right. It would be possible to put it right by giving substantial increases in pay to all those who are coming to lobby us on Monday. If that is the Opposition's policy, they should say so clearly. If not, they should not just bellow "What are you going to do about it?".
    Later—
    Mr. Burden: On a point of order, Mr. Speaker. I am sorry to press this matter. However, over the years, there have grown up in the House certain rules of procedure and rules concerning the manner in which hon. Members are addressed. Not only do those rules preserve the dignity of this House here; they are consistent with the dignity of this House in the eyes of the country. I think that you will agree, Mr. Speaker, with the view that the terms in which the hon. Member for Swindon (Mr. Stoddart) referred to statements made by my right hon. Friend the Leader of the Opposition were against the best traditions of this House. I hope, Mr. Speaker, that you will make that perfectly clear.
    Mr. Stoddart: Further to that point of order, Mr. Speaker. I explained to you and to the House that I referred to the broadcast and the direction of that broadcast, and not to a person. I think that it does no good to this House of Commons if Members of Parliament are mealy-mouthed and do not state what they mean. I stated exactly what I meant, and I believe that it was the truth.
    —[Interruption.]
    Mr. Speaker: Order. There is not one right hon. or hon. Member who would like to be called hypocritical—not one of us.
    Mr. William Hamilton: I do not know about that.
    Mr. Speaker: Order. Every man according to his taste apparently—but it is not mine.
    I agree with the hon. Member for Gillingham (Mr. Burden) that it behoves us all to try to maintain the proper standards in the Mother of Parliaments. Hansard is read widely throughout the Commonwealth—and not always to advantage, I may add.
    Sir David Renton: Further to that point of order, Mr. Speaker. The hon. Member for Swindon (Mr. Stoddart) used the word "hypocrisy" as an accusation against my right hon. Friend the Leader of the Opposition. It is well known that to use that word as an allegation against an hon. Member is an unparliamentary proceeding. Should not the hon. Member, therefore, be called upon by you to withdraw that allegation?
    Mr. Speaker: When the hon. Member for Swindon (Mr. Stoddart) rose later, I understood him to indicate that he was not making a personal charge. Therefore, although I have the same impression as the right hon. and learned Member for Huntingdonshire (Sir D. Renton), as the hon. Member for Swindon has told us that he made no personal charge, I think that the House would be better served by accepting that.
    Later—
    Mr. Stoddart: On a point of order, Mr. Speaker. Having checked carefully with the Official Report, I now realise that I did make a personal allusion to the right hon. Lady the Leader of the Opposition which implied that she was a hypocrite. I am very happy to withdraw that remark.

    NATIONAL ECONOMIC DEVELOPMENT COUNCIL
    Q3. Mr. Gwilym Robertsasked the Prime Minister when he plans next to take the chair of the National Economic Development Council.
    The Prime Minister: I next plan to take the chair at a meeting of the National Economic Development Council on 7th February.
    Mr. Roberts: Will my right hon. Friend agree that, in spite of our present

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    problems, the usual relationship between trade unionists and management is that reflected in the useful co-operation seen in the NEDC sector working parties? Will he accept that, if we are to get the long-term benefits of the industrial strategy, even more Government involvement will be necessary to ensure the rapid implementation of the working party recommendations?
    The Prime Minister: Yes, it is the case, as is commonly vouched for, that relations in the overwhelming part of British industry are satisfactory, if not good. Indeed, they are improving. I believe that the increased communication that is taking place as a result of the sector working parties has contributed to that. Certainly they will have the full backing of the Government.
    Mr. David Steel: Is not the National Economic Development Council one of the appropriate places in which to consider some of the suggestions put forward by the Leader of the Opposition. since the scale of repeated industrial anarchy is gravely damaging to the economy?
    Will the Prime Minister not reject the suggestions of the Leader of the Opposition simply because she has come rather late in the day to the principle of inter-party co-operation? Will he recognise that there really is growing public concern about the impotence of Parliament in these situations? Will he therefore give the right hon. Lady a positive response in trying to seek a united approach on these issues?
    The Prime Minister: The right hon. Gentleman may be certain that all proposals—from wherever they may come—for dealing with the present situation or, indeed, any other discomforts in our industrial situation, will be objectively considered by the Government.
    I must say that I was impressed this morning by the article that appeared—if I may give an advertisement to such an organ—on the editorial page of The Daily Telegraph. It is well worth reading, because it shows how misconceived are some of the proposals that are put forward in—again I repeat the word "peripheral"—circles regarding the capacity of the law to deal with this situation. I do not say that in any polemical spirit,
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    but it seems to me that we must get the analysis right if we are ever to find a solution. The writer was someone who did not sign his article, but he described what he was doing from his practical experience. I hope that every member of the Conservative Party will read that article very seriously.
    Mr. Ridley: On a point of order, Mr. Speaker. It may not have escaped your attention that the hon. Members for Newcastle upon Tyne, East (Mr. Thomas) and Swindon (Mr. Stoddart) both asked questions of my right hon. Friend the Leader of the Opposition. I can quite see that it is more interesting to ask questions of the next Prime Minister than of the past Prime Minister. Would not it be more sensible if we asked my right hon. Friend to take, say one of the sessions, on the Tuesday or the Thursday, to answer her questions?

AMBULANCE SERVICE (INDUSTRIAL DISPUTE)
Mr. Michael Morris(by Private Notice)Mr. Michael Morris(by Private Notice) asked the Secretary of State for Social Services if he will make a statement on what advice he has given to area health authorities about emergency ambulance cover from Monday 22nd January.
The Secretary of State for Social Services (Mr. David Ennals): No general guidance is necessary at present. NHS authorities know that it is their responsibility to take whatever measures are needed.
I have spoken personally to the general secretaries of the unions concerned and have been assured that the unions have advised their members to maintain emergency services. I have, however, to tell the House that there is an unofficial threat to remove emergency services in London next Monday. I understand that the men are to consider the matter tomorrow. Such unofficial action could have tragic consequences, and I appeal to all those concerned to act responsibly and to maintain emergency services.
The South West Thames regional health authority, which is the authority responsible for the London ambulance service, has made contingency plans to ensure an emergency service.
Mr. Morris: As, by definition, we are dealing with matters of life and death, is the right hon. Gentleman aware that certainly the Northamptonshire area health authority has been expecting advice? Secondly, will he explain why it is to be the unions which decide what is to be an emergency, and not the medical staff concerned? Finally, will the right hon. Gentleman explain why it is that union members are apparently to be paid for next Monday although they are going on strike?
Mr. Ennals: It is certainly not wholly unions which decide whether a matter is an emergency. But there can be no question at all, whether it be a matter for unions, for administrators or for the professions, that to maintain an emergency service such as the London ambulance service clearly cannot be other than essential. Therefore, I am glad that the unions are bringing every possible pressure to bear upon their men. I hope that there will be a response.
The hon. Gentleman's second question related to pay sanctions. There should be no misunderstanding about this. Those who go on strike get no pay. The question relates to action other than withdrawing labour, where some flexibility may be necessary, depending on the nature of the action and the circumstances at the time.
Mr. Molloy: Is my right hon. Friend aware that in this dispute it is the policy of the four major trade unions involved, with particular reference to the possible situation in London—their policy and not merely their advice—that there should he complete emergency cover? Is he aware that what he can do to help them in trying to keep some form of order and a continuing exchange of views to see that this is accomplished would be appreciated by the trade unions and, I hope, everyone in the House, as an aid to the achievement of their desire that during this dispute there should be full and complete cover for emergencies?
Mr. Ennals: Quite right. It is the policy of the unions. I am in touch with them. The London ambulance service has a very fine reputation. It is a well-trained and very efficient force. I do not believe that when the men consider these
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issues properly and fairly they will leave London without an emergency service. I cannot believe it.
Mr. Geoffrey Finsberg: In regard to the possible withdrawal of emergency services in London on Monday, why is it not possible to advise the public now of what the contingency plans are? With newspapers reduced in size, and a lot of news, if this is to occur, people want to know what will happen on Monday.
I have another question, which follows a point made by the hon. Member for Ealing, North (Mr. Molloy), who asked the right hon. Gentleman whether there was anything that he could advise the unions to do to strengthen their authority over those of their members who are not following the rules. Will the right hon. Gentleman discuss with the appropriate general secretaries the "branching" of members who are disobeying union instructions?
Mr. Ennals: As to giving advice, emergency service will be provided as a contingency. There have been very productive discussions with the police force and with the voluntary organisations. I am satisfied—my Department has been totally in touch—that the authority will provide an emergency service. In any case, as I have made clear to the House, the meeting is being held tomorrow morning and I do not want to do or say anything today other than to encourage the men to act responsibly in accordance with their union policy.
Several Hon. Members rose—
Mr. Speaker: Order. This is an extension of Question Time. We are dealing with a Private Notice Question. I remind the House that there are three important statements to follow, as well as business questions. I shall allow one question from each side of the House.
Mr. William Hamilton: Does my right hon. Friend recognise that every Labour Member would deplore any action by anybody outside who threatened emergency services of any kind? Does he understand that most of those who are coming on Monday have a serious grievance, namely, low pay in the public sector, and that many of them were attacked in the first instance by the Tory Government

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as long ago as the early 1960s? The nurses were the first victims of a Tory incomes policy and have the same grievances today. Will my right hon. Friend give an undertaking to the unions that the problem of low pay in the public sector will be tackled imaginatively by the Government?
Mr. Ennals: I am sure that hon. Members in all parts of the House will not support the withdrawal of emergency services.
My hon. Friend mentioned a grievance. He will know that two days ago my right hon. Friend the Prime Minister outlined two important initiatives on pay. In line with those initiatives, there have been informal meetings with representatives of employers and unions in the hope that it may be possible to find the basis of a fair and reasonable settlement. I am sure that both sides of the House hope that such a settlement will be achieved.
Mr. Patrick Jenkin: The House welcomes the right hon. Gentleman's statement. I hope that he will prove right in his confidence that an emergency service will operate in London. Is he aware that if the Red Cross and St. John Ambulance and the police are prepared to play their part, they will be supported
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by hon. Members in all parts of the House?
Has the right hon. Gentlemen taken the advice of the management of the London ambulance service and warned the Ministry of Defence that it may be necessary to call on Service personnel to reinforce emergency services? Is he aware that his circular issued last Monday, which appeared to advise authorities not to withhold pay from those who take industrial action, gave great offence to many health authorities? It cut the ground from under their feet in deciding whether to exercise any discipline.
Mr. Ennals: On the right hon. Gentleman's last comment, I believe that there has been some misrepresentation. On the subject of strike action, the position as recognised by health authorities is clear. Unfortunately, a press report gave a totally contrary impression.
In answer to the right hon. Gentleman's earlier comments, I inform him that there has been great co-operation from the Red Cross and St. John Ambulance, and especially from the police. The question of the involvement of the Ministry of Defence is a matter with which my right hon. Friend the Home Secretary will deal in a later statement.

ROAD HAULAGE (INDUSTRIAL DISPUTE)
The Prime Minister(Mr. James Callaghan): With permission, Mr. Speaker, I shall make a statement about the road haulage strike. My right hon. Friend the Home Secretary, if he catches your eye, hopes later to make a statement on the effects of the present current industrial disputes and the Government's contingency arrangements. It will be a rather broader statement.
I regret to inform the House that there appears to be no prospect of an immediate end to the strike, and the movement of supplies of all kinds is being held up. Hardship and considerable dislocation are being caused to the general public and to trade and industry, particularly because of the severe effects of secondary picketing. I therefore asked the general secretary of the TGWU, Mr. Moss Evans, and the general secretary of the TUC, Mr. Lionel Murray, to come to see me for discussions last night.
Mr. Evans made it clear that his union stands by its agreement to maintain the priority supplies of essential goods. He also repeated that it stands by its instructions to its own members that the strike and the picketing should be confined to those companies which are in dispute with the Road Haulage Association. Mr. Evans undertook to take further action to ensure that these priority supplies are maintained and that action by pickets is not extended to companies and employees who are not involved in the dispute.
Nevertheless, it is clear that some picketing practices, and, in particular, secondary picketing, have given rise to the present serious situation. I told Mr. Evans that there had been little amelioration in the position and that it was essential that pickets, and, in particular, secondary picketing, should be properly controlled. I have already made clear to the House that in the Government's view this control is likely to be more effective by a voluntary code of practice than by attempts at unenforceable legislation.
As a result of our discussion, the TGWU has agreed to a voluntary code of practice in relation to picketing during this dispute and this has been issued by it today. The code explicitly provides that
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"Picketing should be confined to the drivers and vehicles in the hire and reward section of the industry who are employed by firms in dispute with the union"
—that is to say, it rules out secondary picketing. The union is making clear to all its members that no member of the union will be penalised or suffer in any way as regards his rights as a member of the union if he follows this code of practice.
My right hon. Friend will deal in his statement with the general question of contingency arrangements. But, in relation to the road haulage dispute, I should say that in the current grave situation the Government have given careful consideration to the question whether they should seek the powers that would become available by proclaiming a state of emergency today. The critical question is whether the proclamation of a state of emergency would increase the supply of essential goods and services. At the moment the Government's view is that essential supplies would be better maintained by the members of the TGWU observing the code of practice issued by their union and so putting an end to secondary picketing. But the Government will keep the matter under review day by day, and will keep the House informed of developments.
Mrs. Thatcher: Is the Prime Minister aware that the Opposition are astonished at the weakness and hollowness of his statement? There is nothing in the statement to re-establish the authority of government under the law. The right hon. Gentleman must daily be receiving reports of violence, intimidation and money passing.
Mr. Cryer: Where?
Mrs. Thatcher: I refer to intimidation as a result of which people are afraid to go to work. They can obtain no aid or comfort from the weak and complacent statement made by the Prime Minister a few moments ago.
Mr. Cryer: Give us the names.
Mrs. Thatcher: May I put a question to the right hon. Gentleman about the code of practice? Is he aware that one of the reasons for making the strike official was to give the union more power over secondary picketing? If a code of practice is to be effective from today, why has it not been effective until now?

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Why has it taken so long even to get one considered and issued?
Why does the Prime Minister think that neither the TGWU's undertaking to see that food is moved nor its promise to see that own-account lorries are not affected has been followed? We all know that food has been affected and that own-account lorries have been stopped. What makes the right hon. Gentleman think that a code of practice will be effective?
Furthermore, as the right hon. Gentleman well knows, it is reported that some pickets are not union pickets at all but that various other people have joined the pickets. The fact is that the strike is out of control of the union and appears to have passed from one group of militants to another. In that case, this code of practice will not be, and cannot be, effective.
I asked the Home Secretary the other day whether he had yet sent guidance, in a circular, to chief constables. If he has not done so, it is high time that he did. Perhaps he will tell the House whether he has now issued such guidance to chief constables. I have reason to think that until last night no such guidance had been sent out.
The Prime Minister always uses the argument that the law cannot deal with these matters, but he never hesitates to use the law to increase the power of trade unions. He uses that argument only when it is suggested that such power be reduced.
Finally, does the Prime Minister now think that it would be far better to reestablish the authority of Parliament by proclaiming a state of emergency in the light of this situation, with existing strikes and those threatened for next week?
The Prime Minister: I rather welcome this new non-party approach to our problems. I have no doubt that if it is maintained we shall get even more agreement between us.
As to whether there is authority under the law, the advice that I have been given—the right hon. Lady will have had similar advice—is that secondary picketing does not break the law. If the law is being broken by intimidation or in any other way, it is for the police to take action and to bring the offenders before the courts. I have no doubt that they will not hesitate to do so.
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I am not able to say whether this new approach will be effective. However, in my view we must give it an opportunity to prove effective or, indeed—I hope that this would not be the case—to prove that it cannot be effective. It has not taken a long time to establish it. The union has had difficulty in securing control because of the widespread nature of the dispute. I think that it would be better for the whole House to encourage the union to try to ensure and secure control than to abuse it before it has even begun.
As to the food and the own-account lorries that are being interrupted, the right hon. Lady will presumably have noticed from my statement—she will certainly see in the code of practice, which is being issued—that the union indicates—I shall quote exactly what is said—that
"Members of the union who are working for employers not party to the dispute or who are engaged in moving priority supplies should indicate where they stop at the request of pickets that they are proceeding to move such supplies in accordance with the Union's instructions as embodied in this code and that pickets should therefore make no attempt to prevent such a vehicle from proceeding."
This is a continuing matter. I hope that the union will be effective this time. I want to encourage all national and regional officers and the strike committees to obey this code of practice. Otherwise, it is possible that a code of law will be introduced with all the results that we have seen before.
On the question of a state of emergency, as I have said, we must keep this matter under review. There is a case for saying that if a state of emergency is declared the result will be positive, in the sense that, although we shall not be using many troops or lorries, many other people will then go back to work. That is a matter of judgment. I do not at the moment believe that that judgment would be true. We should find that we had accentuated, not lessened, the dispute. The time may come when that judgment will be accurate or, at least, when we shall have to make the judgment that it is accurate and will have the required beneficial, not adverse, effect. When that time comes, there will be no hesitation about declaring a state of emergency, but I do not propose to do so far pure cosmetic reasons. I say to the right hon. Lady that strong words and weak actions do not go well together.
Mr. David Steel: Does the Prime Minister accept that the House is at least entitled to expect an assurance from him that, unless there is a marked improvement in the situation in the next 24 hours, he will consider declaring a state of emergency tomorrow without waiting any further?
Secondly, on reflection, does the right hon. Gentleman consider that his statement that the union is making it clear that no member will be penalised or will suffer in any way if he follows the code of practice is a Gilbertian way of putting things? We want to know how they will be penalised if they do not follow the code.
The Prime Minister: This code is issued by the union. Therefore, it is not my responsibility to answer for it. It is for the TGWU, which at national level has, I think, shown its bona fides on this matter. If the document, as it is prepared, is carried out by union members throughout the country, it will undoubtedly substantially alter the situation. We shall have to see to what extent the union's members carry out the code of conduct.
The right hon. Gentleman asked whether we would consider declaring a state of emergency tomorrow. I have already made clear in my statement that we shall review the matter from day to day. That is the best way of proceeding. Whether it is tomorrow or next week will depend upon whether we judge that the declaration of a state of emergency will either get men back to work or improve the movement of goods. At the moment, our judgment is that that would not be so, and no evidence has been forthcoming from the Leader of the Opposition to show that it would improve the situation.
Mr. Loyden: Will my right hon. Friend make clear to the Leader of the Opposition, who evidently understands very little about the events that have been taking place recently, that it was the influence of the national officers of the Transport and General Workers' Union that brought the tankers drivers' strike quickly to an end and that this week those officers have been involved daily in dealing with the matters to which she referred? It is absolutely untrue that the union so far, in its instructions to its members, has not been able to penetrate the membership in that way. The membership is
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responding. The code of practice being issued today has the full backing of the union's executive. [Interruption.]
The Prime Minister: My hon. Friend is a member of the union and therefore has a more complete knowledge of its attitude than some Opposition Members who are now shouting. It is true that the union's national officers are endeavouring to ensure that this code is carried through. If it is carried through, there will be relief at the ports and in other ways. But it is now for the members of the union to accept the code that has been issued by their union. We shall certainly ensure that it gets the maximum publicity. We trust that they will then carry it out. If they do not carry it out for their own union, the Opposition still have to answer the question: for whom would they carry it out?
Mr. Peter Walker: Further to the point made by the Leader of the Liberal Party, is the Prime Minister aware that the most staggering thing about his statement is that, having called Mr. Moss Evans to Downing Street yesterday and agreed not to declare a state of emergency because of the assurances given by Mr. Evans, it was on the basis that those who complied with the voluntary code on picketing would not be punished for complying and that those who did not comply would not be punished for not complying? Did he not obtain from Mr. Moss Evans an assurance that any member of the Transport and General Workers' Union who now indulges in secondary picketing will lose his membership of that union?
The Prime Minister: I do not know whether the right hon. Gentleman's object—
Mr. Skinner: Ask him about secondary banking.
The Prime Minister: I do not know whether the right hon. Gentleman believes that that would solve this problem or bring the strike to an end. If so, his knowledge of industrial relations must be very scant.
Mr. Ward: Is my right hon. Friend aware that a number of the messy situations that have arisen in the last few days are due to appalling communications in a very difficult situation? Did Mr. Moss Evans indicate whether he intended to do

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anything to improve communications between his district officers and the local press and employers and the Government's own regional staff?
The Prime Minister: That is a matter for Mr. Evans, but certainly the staff of the various Ministries are working well together and are in touch in order to ensure, as far as possible, that essential goods go through. That communication is complete, and we get up-to-date reports regularly.
Mr. Paul Dean: Does the Prime Minister recognise that he has totally failed to give any leadership to the moderate majority in this nation? Does he accept that it is his first duty, at this grim moment, to demonstrate his resolve that this country shall be governed by the elected Government and Parliament and not by small groups of bullies and blockaders?
The Prime Minister: I think that it has always been my responsibility. I have tried to carry it out to give leadership to moderate opinion of all sorts. That is what I am continuing to do. I do not intend to fall victim to any cheap gestures that might look strong but would not produce a result. That is the test. If a state of emergency were declared in present circumstances, newspapers might tomorrow say "How strong!" and by Tuesday they would be saying "What a ghastly mistake!" This is a matter of judgment. If we believe that the moment has arisen when the situation will be improved by a state of emergency, the hon. Member for Somerset, North (Mr. Dean) need have no doubt that we shall declare one, but I have still to hear any evidence why people believe that a state of emergency would improve the flow of goods from the ports, through the warehouses and into the shops, or, indeed, would get the men back to work. There has been no evidence of that at all.
Mr. Norman Atkinson: Does my right hon. Friend agree that if this whole series of disputes proves anything it proves clearly that the Conservative Party is the party of the employers? It will not have escaped his notice that all the proposals made by the Conservative Party, in the last four days, for legislative changes would have strengthened the employers' bargaining power. Is it not a disgrace
1964
that the Conservative Party should seek to exploit the class struggle—[Interruption]—when uppermost in the minds of all of us should be a solution to the problems of inflation?
The Prime Minister: The real question, if hon. Members jeer about the class struggle, is that we are all engaged in a national struggle at the moment.
Mr. Lawson: The right hon. Gentleman is not.
The Prime Minister: If the hon. Gentleman suggests that I am not, he mistakes very much my approach to this question. That it is not a strident approach does not mean that I do not care as much as he does about the welfare of our nation—about getting men back to work and ensuring that there is justice and fair play for all our citizens. The hon. Gentleman must give me the credit for believing that what I am doing is the right way to conduct this nation through a most difficult situation.
Several Hon. Members rose—
Mr. Speaker: Order. A wider statement on the current situation is to follow. I propose to call three more hon. Members from either side.
Mr. Edward Gardner: Is the Prime Minister aware that the effects of the present strike on the North-West of England have produced a state of crisis that is now beginning to show symptoms of anarchy? In addition to being threatened by poisoning from contaminated water, people in that area are now threatened by malnutrition, due to the interruption of food supplies. Does he know that supplies of the necessities of life are being controlled not by the agencies of government but by the bully-boys of the unions? What steps is he prepared to take immediately, as a matter of urgency, to deal with that situation?
The Prime Minister: I would be astonished if the hon. and learned Gentleman's rather extravagant language about people suffering malnutrition were found to be true. We are all threatened with malnutrition in the long run, but it is absurd to use language of that sort in present circumstances, as the hon. and learned Member knows.
It is true, according to the reports that we have received, that the North-West

1965
has suffered particularly. We have to try to ensure that the normal food and water supplies are restored as quickly as possible. People are having to walk 200 or 300 yards to get water, which is a disgrace in a civilised community.
But I would point out to the hon. and learned Gentleman and to Opposition Members in their present, if I may call it, union-bashing mood—[HON. MEMBERS: "Withdraw."] All right, I withdraw and apologise. I have not heard a word said against unions this afternoon. But when Opposition Members criticize—if they will accept the word—if not attack, the unions, they should recognise that the action being taken in many cases is not under the authority of the union. It is outside its authority. It is unofficial, and therefore the problem is all the greater—unless we intend to put a few thousand citizens into gaol—to try to get a sense of responsibility back into society, which is what I intend to do.
Mr. Heffer: Does my right hon. Friend agree that the simplistic demand for a state of emergency made by the Opposition could actually lead—they must think about this for two or three minutes—to a withdrawal of labour from the docks and from the airports, and could freeze the situation entirely? Will they stop making these simplistic demands? Is it not time that the Department of Employment, despite ACAS, got the people involved in the dispute round the table in order to reach a settlement? No matter how long this strike goes on, a settlement has to be reached. The most positive thing that we can do at this moment is to concentrate on reaching a settlement and not make the sort of demands that are coming from the Opposition Benches.
The Prime Minister: I shall certainly discuss this prospect with the Secretary of State for Employment. The Road Haulage Association made a proposal yesterday which, I understand, was unacceptable because of the negotiating practices that exist in that industry. In some ways, they are rather strange practices, perhaps because of the history of the industry. The association made a proposal that was not acceptable, but if it were possible to get the parties round a table and get a settlement, the Govern-
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ment would certainly lend their best offices towards achieving that.
Mr. Hugh Fraser: Is the Prime Minister aware that since he saw Mr. Moss Evans yesterday the strike of lorry drivers has been made official in the West Midlands? Secondly, the secondary picketing of the salt works in Cheshire has increased, with serious consequences for the people.
The Prime Minister: My understanding was that the salt works position had eased, but I shall look into what the right hon. Gentleman says. We were given assurances about the movement of salt. As for secondary picketing, if the members carry out the code of practice laid down by the union that should cease.
Mr. Alexander W. Lyon: Are not the questions of the Leader of the Liberal Party and the right hon. Member for Worcester (Mr. Walker) based on a mishearing of the words in the statement from Moss Evans? Does not that passage relate not to the pickets but to the people who go through the picket lines, as long as they go through the picket lines in accordance with the instructions of the unions? In that sense. is not that passage absolutely vital? Does it not rob the picket line of its authority to stop people who are not involved?
The Prime Minister: My hon. Friend, with his legal mind, has stated the position exactly as I understand it. [HON.MEMBERS: "No."] At least I have the advantage of having read the statement, and those who are shouting have not. I shall gladly read my statement again, because I do not want any misunderstanding about it. Having said that secondary picketing is ruled out, the statement goes on:
"The union is making clear to all its members that no member of the union will be penalised or suffer in any way as regards his rights as a member of the union if he follows this code of practice."
My understanding is that it is alleged that some people have been threatened that if they go through a picket line they will suffer afterwards by the withdrawal of their union card. Therefore, when I read that sentence it seemed to me that that was a protection and advice to those who go through the picket lines that in no circumstances will they be penalised or suffer in any way.
Sir Geoffrey Howe: I should like the Prime Minister to clarify one point beyond doubt. His hon. Friend the Member for York (Mr. Lyon) said that the picket line had authority to stop—[HON. MEMBERS: "No."] Those were the words he used. The Prime Minister, inadvertently perhaps, endorsed or accepted those words. Will he make it absolutely clear to the House and the country that a picket line has no authority whatsoever to stop anybody?
The Prime Minister: With respect. I do not think that I—
Mr. Alexander W. Lyon: Before my right hon. Friend replies, may I say that I did not say that? [HON. MEMBERS: "The hon. Gentleman did."] I did not. What I said was that the picket line had authority. The authority comes out of the loyalty of the trade unionists or out of the power of the union to withdraw the card of any member who violates the picket line. That is all.
The Prime Minister: I think that if the right hon. and learned Member for Surrey, East (Sir G. Howe) studies what I said—we must not get this wrong, nor must we try to make points that are not relevant—he will agree that I certainly did not endorse any suggestion of the kind alleged. As my hon. Friend the Member for York (Mr. Lyon) says, he did not intend to make such a suggestion, nor do I believe that he did make it. The right hon. and learned Gentleman knows the law as well as I do.
There is no need for any dispute about this, and I am happy to repeat that there is no right of a picket to stop anyone. It is at the decision of the person who is approaching the picket line, as the statement says in two places. It refers on the first page to those drivers who are approaching a picket line and on the second page it says:
"Members of the union … should indicate where they stop at the request of pickets".
They themselves decide to stop, at the request of pickets. As I understand it, that is what the law of picketing is about, and always has been. There is no need for false differences over this issue.
Mr. Cryer: Will my right hon. Friend confirm and make clear whether he has received any evidence of a tacit or explicit conspiracy between the Tory Party
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and the Road Haulage Association deliberately to prolong the strike so that the Tories can make the maximum political advantage, as they think, as they did in their party political broadcast last night?
The Prime Minister: No, Sir. I have received no evidence of that sort.
Mr. Gordon Wilson: On a point of order, Mr. Speaker. I raise this point of order with some deference to you. One of my hon. Friends was trying to put a Question to the Prime Minister and failed to do so. I recognise that it is your right to choose hon. Members to ask questions, but this failure puts those who represent Scottish constituencies in some difficulty, for the following reason. The next statement will be made by the Home Secretary, who has no responsibility whatever for Scottish affairs, and I doubt whether he will be able to add any comment about the emergency in Scotland. In those circumstances, what can Scottish hon. Members do if the Prime Minister cannot answer their questions?
Mr. Speaker: I think that the whole House is aware that I lean over backwards to make sure that minority party interests are heard. The Scottish National Party can have no complaint against me.
Secondly, when so many right hon. and hon. Members are seeking to ask a question, it is impossible to watch, on a regional basis, who is called.
Mr. Wilson: Further to that point of order, Mr. Speaker. I rise again with humility and deference. As you will know, the SNP has not been very audible in relation to selection or otherwise in recent weeks. We on the SNP Bench do not have the opportunity of putting any questions to the Secretary of State for Scotland, because the right hon. Gentleman, who represents a national area of the United Kingdom, has not come forward with a statement of the position in Scotland and the way in which people are affected by the strike.
Mr. Speaker: I understand that the Secretary of State for Wales also will not make a statement. It is the Home Secretary who will be making the statement.
Mr. Tebbit: Further to that point of order, Mr. Speaker. You do yourself an

1969
injustice. It will be within the recollection of the House, even if it has slipped your mind, that you called the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel), who is the best of our belief is a Scottish Member.
Mr. Speaker: I am much obliged to the hon. Gentleman.

ESSENTIAL SUPPLIES AND SERVICES
The Secretary of State for the Home Department (Mr. Merlyn Rees): With permission, Mr. Speaker, I will report to to the House on developments in the arrangements for ensuring that essential supplies and services are maintained.
As the House knows, the broad picture has been one of some deterioration in the last day or so in the supply situation, though the extent of this varies from region to region.
Food shortages are becoming more marked all over the country, more so in some regions than others. There has been some improvement in supplies of salt, but in some areas there are difficulties in the supply of some basic manufactured foodstuffs, such as sugar and margarine.
As to animal feedingstuffs, there has been or is expected to be some improvement in Humberside and in Wales, though the situation at Hull remains critical. The general situation is still, however, one of growing shortage.
On the health side, there are reports of difficulties in supply to hospitals as a result of production disruptions at suppliers.
Looking at industry as a whole, layoffs have increased in some degree. Many industries and firms face problems in the supply of raw materials and in the storage of stocks of products, which are not being moved out to customers.
Many of these problems are the result of secondary picketing. Picketing is not being confined to drivers and vehicles in the hire and reward section of the industry, and it is interfering with the movement of essential supplies and services covered by the list of priorities that we have agreed with the unions concerned. I have had reports from chief officers of police about the conduct of the picketing. On the whole it remains peaceful, but there are beginning to be some exceptions to that, and there have in some instances been signs of intimidation.
The police, as always, will carry out their responsibilities under the law. But the need is to confine the picketing in accordance with the code of practice described by my right hon. Friend the

1971
Prime Minister. Arrangements have been made, under my direction, for Government officials and senior officials of the Transport and General Workers' Union to meet, so that any problems relating to priority supplies or extension of the dispute to unauthorised areas that are reported to the Government from the regions can be taken up forthwith with union officials. Monitoring meetings will be held daily, and the Government and the union officials will maintain continuing contacts.
The implementation of the code of practice on picketing to be issued by the Transport and General Workers' Union and the monitoring arrangements that I have described to the House would lead to an early and marked improvement in the movement of essential supplies and services all over the country. As my right hon. Friend has said, the Government believe that the balance of advantage lies in those voluntary measures to control the dispute and maintain priority supplies rather than in the Government's introducing direct emergency action. But we continue to be ready to call on the assistance of the Services or to proclaim a state of emergency if need be, and the necessary contingency plans for this are at a very high state of readiness.
As for the unofficial dispute in the London ambulance service, my right hon. Friend the Secretary of State for Defence and I have already made contingency plans for emergency arrangements to be provided by the Services, if this should prove necessary.
On the question of water, in the Pennine division the North-West water authority is maintaining piped water supplies to the vast majority of the population with industry. Of 350,000 households in the division, about 2,200 are without piped water owing to burst mains that have not been repaired. Most of these are scattered across the division in small groups. No one is without access to water. Standpipes have been erected for all except a few properties. Elsewhere, people are able to go to neighbours down the street. Sewage is a difficult matter. Nearly all sewage treatment plants are fully working, but it has been necessary to divert into the river parts of the flow at Bolton. Water flow in the river is reducing the effects of pollution.
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Negotiations on pay in the water industry are taking place today and we must await the outcome. However, I can assure the House that there are contingency arrangements to help the North-West water authority at short notice.
Mr. Whitelaw: Does the right hon. Gentleman recollect that on Monday he said:
"We are not near a crisis"?—[Official Report, 15th January 1979; Vol. 960, c. 1328.]
Surely his statement today and that of his right hon. Friend, and everything that is happening in this country, must convince even him that we now are. He will also remember that on Monday, on behalf of the Opposition, I promised full cooperation to the Government in any measures that they undertook to maintain essential supplies. Does the right hon. Gentleman not equally have to admit today the harsh reality that his own statement shows that the Government have not succeeded in carrying out their duty of maintaining essential supplies? Feedingstuffs are still not getting through as they should, there are mounting lay-offs, and the result is that in failing to maintain essential supplies the Government have actually failed the nation.
Will the Home Secretary now make clear his position in respect of chief constables of police? Has he issued any advice to them? If not, why not? In view of the arrangements that have been made about picketing with the Transport and General Workers' Union, should not the chief officers of police be advised by the Home Secretary exactly what those arrangements are?
Next, if he believes that the best way of proceeding—which is a very dubious way—is by these monitoring meetings, will he at least be prepared to make sure that the police are associated with those monitoring meetings and know what is going on and what is being arranged?
Next, in reference to the water situation, is it not pretty poor comfort to people in the areas concerned to be told that they are able to go to their neighbours down the street, in some of the weather we are having at the present time, in order to obtain water?
Lastly, is it not very eloquent testimony to the mounting chaos that we have today that a statement on maintaining essential services in industrial disputes

1973
makes no reference at all to the national rail strike today?
In these circumstances, will the Home Secretary undertake in all these matters to make a further statement to the House tomorrow?
Mr. Rees: I shall deal first with the matter of the police. I am glad that the right hon. Gentleman has raised it, because I can refer to what the right hon. Member for Finchley (Mrs. Thatcher) said earlier, since I have checked on the point that she made.
Mr. Michael Morris: Get on with it.
Mr. Rees: That is just what I am going to do. It is rather complicated, so perhaps hon. Gentlemen will listen.
Mr. Morris: It is a quite simple matter; there is no need to draw a diagram.
Mr. Rees: The point at issue is that I do not have powers to instruct the police. The right hon. Lady did not know that. The right hon. Lady then, and the right hon. Gentleman now, said that I could advise the police, so I checked on the occasion referred to. The right hon. Lady talked about a circular. There was no circular. All that happened was that the Secretary of State of the day met some Labour Members of Parliament during the miners' strike. They said "Why do not the police locally get together with the officials?" A telex went down the line saying that the Labour Members of Parliament advised that there should be co-operation locally. There was no circular; there was no advice. I am quite prepared to spell that out. The right hon. Lady and the right hon. Gentleman have got it wrong.
All I propose to do is to advise down the line of the existence of the debate in the House today and what the right hon. Gentleman said. I cannot tell them what to do; in no way can that be done. There was no circular in the way the right hon. Lady suggested in the House the other day, and I have a letter here spelling it out.
With regard to the reality of the situation, I have no contingency arrangements that I want to deal with with regard to a railway strike. If right hon. and hon. Gentlemen will think about it, the judgment I have to make when I advise
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my colleagues, as I did a week or two ago when I was responsible for the oil position, concerns putting in soldiers with the vehicles that they have—and it would not necessarily mean a state of emergency because in the first instance they would use their own vehicles and a state of emergency would not be necessary for that. The judgment I have come to quite clearly is that the amount that could be supplied by the Army in the current situation would be less than is being supplied at the moment, and it would be the height of folly to have a state of emergency if as a result one supplied less than is being supplied now. I stick by that fact: the facts of the matter are quite clear.
With regard to the comments about a crisis situation, we are in a very grave situation. It is not universal in the country. The situation in the South-West, for example, has improved, I am advised. Therefore, what I am arguing against is the idea that the country is on its knees. It is not. There is a very serious and grave situation, but the argument that we have been brought to our knees is extremely silly.
Mr. Frank R. White: I am grateful to my right hon. Friend the Home Secretary for his comments relating to the North-West water situation. I should also like to acknowledge the efforts of the chairman of the North-West water authority and the union officials to try to bring about a speedy settlement and to ensure the maintenance of services. But would not the Home Secretary agree with me that it is not sufficient to say to my constituency that the action is unofficial and expect that to be accepted as some kind of panacea for all our problems?
Does my right hon. Friend agree that good, clean water is a condition of efficient public health, and that great concern exists when those in the community, especially the young, the elderly and people in hospital, have to consume or use water that people would think twice about before putting down for pigs? If the dispute continues after today's negotiations, does he agree that urgent action will have to be taken by the Government to ensure public health standards? Is he aware that no one, least of all those in the House of Commons, would be excused from criticism if typhoid were to break out?
Mr. Rees: I agree with everything that my hon. Friend says. My responsibility is in aid of the civil power. The arrangements are ready to be set in train. It is for the water authority to make the request, and when it does the Services will move in to provide what is necessary for essential supplies.
Mr. Cyril Smith: Is the Home Secretary aware that my constituents will welcome the part of his statement that deals with the Pennine water authority, if only for the reason that it is the first statement that the Goverment have made about the water industry in my area? Some of us find it disgusting that the first Government statement is made nearly eight days after consumers have been advised that before they touch one drop of water they should boil it. Is the right hon. Gentleman aware that thousands of homes have no water?
For how long does he propose to wait before setting in motion the contingency arrangements to which he has referred? Secondly, is he as concerned about the quality of water, to which his statement does not refer, as he is about the supply of water, to which his statement does refer? What action does he propose to take to ensure that the water that is being supplied is pure water which people may drink with confidence?
Mr. Rees: The method is important. I with my right hon. Friend the Prime Minister have been ready for a number of days. The contingency plans are ready. I have no power to order in the soldiers. I have no powers to tell them to go into the hon. Gentleman's area. They have to be asked in, and the judgment of those concerned was that they did not want the soldiers in yet. There would be problems. If the soldiers go in, we shall need the co-operation of some of the water authority's personnel who know their way round. When soldiers go into that area, they will need to be guided. Some of the supervisory staff will be needed to help in those circumstances. Opposition Members are laughing at the advice that the Army has given.
Mr. Corbett: May I ask my right hon. Friend to add calor gas supplies to the list of priority supplies, bearing in mind that many people in rural areas of my constituency and in other parts of the
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country rely solely on calor gas for cooking and part of their heating?
Mr. Rees: That is a matter that has been discussed since the original code. If my hon. Friend has in mind his area, perhaps he will let me know the facts.
Mr. Peyton: As the right hon. Gentleman's statement refers to difficulties concerned with food supplies both for human beings and for animals, will he consider making arrangements for his right hon. Friend the Minister of Agriculture, Fisheries and Food to put in an appearance on Monday to give some details of the situation?
Mr. Rees: I shall pass on the right hon. Gentleman's remarks to my right hon. Friend, who has been concerned every day and night with these matters.
Mr. Peyton: Nobody is doubting the concern of the Minister of Agriculture, Fisheries and Food. We should like him to give some details.
Mr. Skinner: Does my right hon. Friend agree that there are two common threads running through the whole of these industrial disputes? One thread is the fact that these workers, whom many people did not care tuppence about for ages, have now seemingly turned out to be extremely important and necessary to the nation's lifeblood. Secondly, they are, in the main, low-paid workers. Is my right hon. Friend aware that the so-called imbalance of power, with a shift towards the unions, has meant that lorry drivers are still on £52 a week—they are striving to get a bit more—and that 1 million public sector workers will be on strike on Monday, some of whom are receiving less than £40 a week take-home pay? However, the Tory press and the Tories are commiserating this morning because Michael Edwardes, the British Leyland chairman, cannot manage on £100,000 a year.
Mr. Rees: Who is essential to the community? There has been discussion about that recently. Those who are essential are not only people who are on strike. I think that the right hon. Lady the Leader of the Opposition said that those who are essential could go on strike and bring the country to its knees. There are small groups in that position throughout the country. At the end of the day the right

1977
hon. Lady would find that she would be giving higher wages to not a small group but an extremely large group. Over the past 20 years and beyond, and certainly in recent years, one of the problems about payment for the lower paid that has applied within the trade union movement is that some in that movement say "Yes, pay extra to the lower paid, but we want the extra as well." That is a great difficulty in operating a pay policy.
Mr. Buchanan-Smith: Will the right hon. Gentleman acknowledge that one area of supply vital to the British economy that he has not mentioned is that of supplies to the North Sea oil industry? Is he aware that there have been repeated warnings to the Department of Energy both last week and this week that supplies of vital fluids, such as those for the servicing of blow-out prevention equipment, are not getting through? In these circumstances, there is a risk not only to human life but of pollution in the North Sea on a scale that has never been seen before. The Department of Energy is doing nothing. Will the right hon. Gentleman do something about it?
Mr. Rees: The hon. Gentleman has referred to one problem in the North Sea. There are other problems. My right hon. Friend the Secretary of State for Scotland is involved—
Mr. Buchanan-Smith: Where is he?
Mr. Rees: We are aware of the problem. We have been discussing the problem and obviously steps will be taken to deal with it. It is a matter not only of doing something about it but of discussing it in the Aberdeen area.
Mr. Noble: Is my right hon. Friend aware that the dispute in the Pennine area of the North-West water authority is only partially caused by pay, and arises especially from the deep-seated grievance of employees that has grown over the five years since the gang on the Opposition Benches reorganised the water industry? Is he further aware that inflammatory actions and words at this stage, and the movement of the Army, would only exacerbate the feelings of the men, who feel isolated from their union and from the management.
Mr. Cyril Smith: What about the consumer for a change?
Mr. Noble: I shall come to that. The men are affected as well. Will my right hon. Friend join with the Minister of State, Department of the Environment in ensuring that a full inquiry takes place into the conditions of those who are engaged in the dispute so that we may get the men back to work, provide better employment for them and, as a result, provide a better service for the consumer?
Mr. Rees: I shall pass that on to the Minister concerned. My hon. Friend is absolutely right. I have one view on the need to bring in the soldiers, but there are others with different views who believe that the dispute would spread. We ought to be careful about what we say.
Mr. Mayhew: Does not the Home Secretary agree that his freedom to act in the interests of the nation is gravely restrained because in the House there are 21 right hon. and hon. Gentlemen who are members of the Transport and General Workers' Union and who are all members of his party? Seven are members of the Government and two are members of the Cabinet.
Mr. Rees: The hon. and learned Gentleman should be on the "Dick Barton" show.
Mr. Ioan Evans: Does my right hon. Friend realise that there are 2 million members of the Transport and General Workers' Union in this country, so there certainly should be some members in this House? There is great resentment at the orchestrated attack on 11 million trade unionists and their families, particularly the TGWU workers.
Does my right hon. Friend recall that in the recent petrol tanker drivers' dispute he was receiving demands from the Opposition to declare a state of emergency? The Government were right and the Opposition wrong in that case. Whilst we on this side of the House recognise that there might need to be a state of emergency, we hope that we can settle the matter without that. We continue to seek co-operation with the trade union movement and not the confrontation that the Tory leader and her party want at present.
Mr. Rees: With regard to oil, I repeat that we had co-operation from the Transport and General Workers' Union and, indeed, very importantly, from the oil companies. Although we were asked

1979
to bring in the Army and declare a state of emergency in that dispute, it would have been a waste of time. We were right then. In the present situation, it is too early to make a judgment because the dispute is nowhere near finished.
Several Hon. Members rose—
Mr. Speaker: I appeal to hon. Members to ask as brief questions as they can rather than to advance arguments.
Mr. Maxwell-Hyslop: In view of the Prime Minister's categoric statement that no picket has any right to stop any vehicle, will the Home Secretary embody that in a circular to all chief constables tonight so that they enforce the law? This has not been happening outside Avon docks.
Mr. Rees: I shall ensure that the hon. Gentleman's view as to the role of the police at Avon docks is passed on. As to advising the police, when an Act is passed in this House it is brought to the notice of the police in the form of a circular.
The day before yesterday, I discussed the situation in the London area with the Metropolitan Police Commissioner. He gave me an example which illustrates the problem. He knows the law and does not need to be advised on it. He told me of an industrial estate on the east side of London where a policeman reported that a vehicle came along and was flagged down by the pickets, who were official pickets. They had a word and the vehicle turned round and went back. There was nothing wrong in that. There was no violence or intimidation used. It is not the job of the policeman to make a judgment on that when it is done peacefully. That is the law of picketing.
Mr. Molloy: My right hon. Friend referred to the possibility of contingency plans which might be required in the Greater London area because of the ambulance drivers' dispute. May I remind him, as I did his right hon. Friend the Secretary of State for Social Services, that the official policy of the four major trade unions involved is for them to provide, with their colleagues, proper cover or the Greater London area, although that might not be possible in some parts of London?
1980
My right hon. Friend mentioned that he has contingency plans. Will he be prepared to discuss the possibility of using these plans with the executives and officers of the trade unions involved, who, I feel sure, will be glad to co-operate in them?
Mr. Rees: We will be happy to do that and this is a matter for my right hon. Friend the Secretary of State for Social Services. It will have to be done, and I think that that is the best way of doing it.
Mr. Crouch: Does the Home Secretary realise that when he described the situation that has developed in this country many of us felt that he was describing the need for an immediate declaration of a state of emergency? I, too, have been making investigations this morning, from a large feedingstuffs manufacturer in my constituency. I learned that the machinery for making an arbitrary judgment on the picket line on whether to issue a dispensation certificate is not working efficiently. A certificate issued in Canterbury is not accepted at Tilbury docks or across the estuary in Essex. Surely the Secretary of State and the Prime Minister should again go back to Moss Evans and ask him whether he can control the situation effectively. The system does not seem to be working efficiently.
Mr. Rees: I have checked on all occasions when a state of emergency has taken place over the past 16 years, and states of emergency were used far more by the Conservatives. In the column "Action Taken", it says "nil". When I inquired why it was done, I was told that it was for cosmetic effect and that the Tory Party believed in cosmetics. We are not prepared to deal with this in a cosmetic way. I shall bring the hon. Gentleman's point to the notice of the emergency committee.
Mr. Litterick: Does the Home Secretary agree that for over 100 years the law has given working men and women the right to picket in furtherance of an industrial dispute, but that the physical assaults on pickets widely reported in the press are a violation of that right? Secondly, will he look at an article in the Daily Express on Tuesday, which can only be construed as an incitement to violence?

1981
Will he bring it to the attention of the Attorney-General? There is a danger that the press, in its anxiety to make a party cause, will create civil disorder and cause bloodshed.
Mr. Rees: I shall certainly bring it to the notice of my right hon. Friend, Physical assaults and intimidation are against the law. That is absolutely clear. The chief constables have reported to me that to a large degree, unlike the position in the strikes four years ago, there is very little physical violence. Where it does take place, it is illegal.
Mr. Onslow: Having listened to the Prime Minister and the Home Secretary, I think that most people must have grave doubts as to the effect of the voluntary code. Has the Home Secretary nothing to say about what will happen if unofficial secondary picketing continues, when drivers are obliged to turn back either because of intimidation or fear of the consequences if they do not obey the pickets? Will there be any follow-up by the police to question the drivers and find out why they turned back, or is the Home Secretary content to see the matter dealt with in the way that the pickets outside Cadbury-Schweppes were swept away by the girls inside?
Mr. Rees: I read about that occurrence; it may happen in a number of places. The pickets must take that into account. The other problem is that, with the police being scattered around, intimidation may take place on pickets when there is no policeman present. The police cannot cover every eventuality. Where there is intimidation, it is illegal, wrong and against the best traditions of the trade union movement.
Mr. Ashton: Is my right hon. Friend aware that much of the problem is still being caused by panic buying in shops? [Hon. Members: "Rubbish."] Is he aware that night after night on television the leaders of the supermarket chains tell housewives that certain commodities will be in short supply within a few days? Many of them are making great profits out of creating shortages and encouraging housewives to buy everything. Will my right hon. Friend ask for a little more responsibility on television to stop this sort of panic being created by people with a vested interest?
Mr. Rees: There is no doubt that this is one aspect of the problem, but it is by no means the major aspect. It has been reported to me that panic buying—people buying more than they normally would—undoubtedly plays a part in our troubles. When people hear on television lists of things that may be in short supply, they are influenced. But it is not a major aspect of the situation.
Mr. Haselhurst: Does not the Home Secretary realise that the country is disinclined to believe that assurances extracted from Mr. Moss Evans represent the most that might be done in the present situation in order to bring it under effective control? With people thinking like that, there is a danger that they may decide, as increasing numbers of them are laid off, to take the law into their own hands.
Mr. Rees: The figures that were given for lay-offs in the press last weekend were wrong. That is not to say that there are no lay-offs. I am prepared to give the estimates that I have from the regions. We must face up to one essential fact. There are large numbers of vehicles in the complicated distributive trade in this country which do not just go down the motorway and turn round and come back again. If we bring in the Army, we shall not be able to do more than deal with the essentials of life. It is wrong for people who might quite properly believe that not enough is being done to think otherwise. The same thing happened in Northern Ireland when my right hon. Friend asked for a state of emergency to be declared there. Northern Ireland had no petrol. The following day people were complaining that the petrol was not available to them because, in the same terms there as here, it was reserved for essentials only. I do not want to see a state of emergency declared or the Army used. There is no need for it yet.
Mr. Andrew MacKay: Is the Home Secretary aware that the TGWU pickets outside the Cadbury-Schweppes factory in Birmingham, only three hours ago on local radio, said quite bluntly that they would play no part in the voluntary code of practice? Against the advice of their regional trade union organiser, they said that they would continue secondary picketing. Does not this mean that the

1983
trade union leaders have lost control of their militants, and does not this put the ball right back in the Government's court?
Mr. Rees: I understand that the new arrangements were issued at 3 p.m., so that the pickets in Birmingham obviously knew about things that had not then left London. It is up to the Transport and General Workers' Union to see to it.
Sir David Renton: Will the Home Secretary confirm that it is perfectly lawful for people whose jobs are threatened by lorries not being able to get through to their factories with raw materials to picket the pickets? Would not a lot of this trouble be stopped if the pickets were picketed peacefully in this way?
Mr. Rees: It would certainly not be against the law. It is not for me to give a judgment of what should be done, but certainly if it is done peacefully it will not be unlawful.
Mr. Shepherd: Does the Home Secretary appreciate that the statement he has just made, together with that of the Prime Minister, is less than satisfactory in that it makes no reference to a time scale for the introduction of this discretionary code of conduct? Will he enlarge upon this and ask the Prime Minister to ask Mr. Moss Evans, as a demonstration of his good intent, to have every secondary picket in the land off the streets by 8 a.m. tomorrow so that feedingstuffs and raw materials can start to move, and exports can catch deadlines?
Mr. Rees: If a trade union could be run in that way, it would not be a voluntary organisation and it would also remove one of the important elements in local organisation. That cannot possibly be done.
Mr. Ian Lloyd: The Prime Minister and the Home Secretary have described to the House in modest and restrained terms, which we respect, the definition of the public interest and aspects of their policy to uphold it, which many of us find totally unconvincing. Many people in the country will also find it unconvincing. Has the Prime Minister addressed himself to the possibility that, when the people of this country find that the definition of their interests in unconvincing and that the Government are unwilling or unable to uphold it, they will seek to uphold their
1984
Interests themselves? In that contingency, will these people enjoy the same immunities as those enjoyed by trade unionists and secondary pickets?
Mr. Rees: The hon. Member is a great supporter of illegality in Rhodesia, and now he is doing the same thing here.
Mr. Burden: Will the Home Secretary agree that the Government were greatly influenced over the declaration of a state of emergency by the meeting last night with Mr. Moss Evans and the hope that the code of practice which he agreed to produce would bring about an improvement in the situation? Is it not a fact that we have been bedevilled by unofficial strikes recently over which the trade union leaders have been unable to exercise control? Therefore, is it not a pious hope that they will be able to stop this secondary picketing? Will the Home Secretary ensure that one of his staff goes to London Broadcasting this afternoon and gets a report of a statement by a man picketing London docks who claimed that the picketing would be intensified and all movement would be stopped?
Mr. Rees: If that is what has been said, it shows the great difficulties in getting this voluntary policy through. On the question of the state of emergency, of course what was said was important, but the judgment that we had to take in the oil tanker dispute and again now involved the practical result of bringing in the Army at this stage.
Mr. Johnson Smith: Is the Home Secretary aware that, despite assurances given in the past few days, feedingstuffs are not getting through? What value are we supposed to place on the reassurances given in the past? And what value does the Home Secretary put on reassurances that he must have been given in the past few hours?
Mr. Rees: I know of the problem of feedingstuffs and I know that in a number of cases reported to me feedingstuffs have been allowed through as a result of discussions between our regional committee and the regional secretary of the TGWU. In the discussions that took place nationally with the TGWU today, the problem of Hull was raised, as was the problem of edible fats and the serious difficulties about animal feedingstuffs, particularly in the North-West. The latter

1985
could result in the slaughter of pigs and poultry. I know that in the last week, as a result of the discussions, there has been some improvement when matters have been brought to the union's notice.
Mr. Sainsbury: Does the Home Secretary recognise that the buying of excessive quantities by shoppers has made only a very minor contribution to the shortages of foodstuffs in the shops? It is the generally agreed view of those responsible for food manufacture and distribution that shortages are almost entirely attributable to secondary picketing, and in some cases to the illegal actions of secondary pickets which have been carried out in clear breach of previous agreements. Will the Home Secretary assure the House that, in view of the deteriorating situation, either he or one of his right hon. Friends will report to the House tomorrow on the food supply position and, if it has not improved, tell us what action he intends to take?
Mr. Rees: The hon. Gentleman repeated what I said to my hon. Friend the Member for Bassetlaw (Mr. Ashton), that panic buying is only a small part of the problem. He spoke about secondary picketing being illegal [HON. MEMBERS: "He did not"] Very well. If he did not, I will not pursue that point. But there is no doubt that secondary picketing —which is a very general description of what goes on—is the major cause of our problems.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call two more hon. Members before I call the right hon. Member for Penrith and The Border (Mr. Whitelaw).
Mr. Gow: Since the Home Secretary has told us that the major cause of our difficulties is secondary picketing, will he also give an undertaking to the House, in the clearest terms, that if, as we all fear, the new voluntary code of conduct does not turn out to be effective, he will come back to the House to propose legislation of the sort suggested by my right hon. Friend.
Mr. Rees: When one is defining secondary picketing, we should remember that it is not just a simple happening. This sort of picketing happens in a variety
1986
of ways. If, at the end of the day, the House were to turn to legislation—I can only give my view of it—unless that legislation were to be generally accepted it would be an inferior way of dealing with the situation compared with the voluntary agreement which we are endeavouring to put into effect. Legislation was tried in the 1970s—in different aspects maybe—but I think that the House would be very foolish to turn to legislation in this respect.
Mr. Hastings: Is the Home Secretary aware that there are several thousand people in this country who suffer from severe kidney diseases—there are at least six in my constituency—all of whom depend for life upon dialysis? This, in turn, depends on a constant supply of clean water, and if this water is denied them for about a week they face imminent death. What specific proposal have the Government to deal with this problem? If the threat to such innocent sufferers is not a national emergency, in Heaven's name what is?
Mr. Rees: I take it that the hon. Gentleman refers not to certain pharmaceutical products, which have been looked at, but to fresh water. I have discussed the problem with the Secretary of State for Social Services and I do not have the slightest doubt that where any union is concerned something will be done about that. If the hon. Member has particular people in mind, perhaps he will let me know.
Mr. Whitelaw: Quite understandably, the right hon. Gentleman has missed one of the questions that I asked. I therefore repeat it as I believe that it has some importance. In view of the very widespread anxiety on both sides of the House, will he undertake to make another statement to the House tomorrow on the developing situation?
Mr. Rees: Certainly a ministerial statement on one aspect of the situation will be made. Perhaps I should explain to the House that my responsibility on a co-ordinating basis is for contingency arrangements. I understand—and we have given some thought to this—that on the agricultural, transport and industrial sides there are details which do not come within my remit. We have that in mind and, of course, we will take the appropriate steps. but I hope that the House

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will understand my precise responsibilities.
Mr. Ian Lloyd: On a point of order. Mr. Speaker. A moment ago when I was putting a question to the Home Secretary arising from the situation in which large numbers of people in this country might be persuaded, ill advisedly, to break the law, the right hon. Gentleman replied that I had advocated or supported illegality in Rhodesia. I have never done so, and I challenge him to produce one shred of evidence, written, spoken or otherwise, or to withdraw his totally unworthy statement.
Mr. Rees: In my time in this House I have thought that the hon. Gentleman was on the side of those in Rhodesia who are not looking to the future. If he tells me that he is against illegality—and that is my only point—I willingly withdraw my statement.
Mr. Maxwell-Hyslop: On a point of Order, Mr. Speaker. Earlier, a Scottish Member asked why the Secretary of State for Scotland was not here and you, Mr. Speaker, replied that the Secretary of State for Wales was not here either. The point I want to raise with you is whether the Secretary of State for the Home Department has certain responsibilities to this House which cover not only England but Wales, but which do not cover Scotland, and that the Secretary of State for Scotland has responsibilities in the area of law and order which are not covered by the Home Secretary. May I ask therefore that, when crucial statements are being made in a very serious situation, the Home Secretary should make clear whether he is speaking only of England and Wales, and whether the Secretary of State for Scotland will come to the House as well? This is a matter of more than technical importance.
Mr. Speaker: I am much obliged to the hon. Gentleman. May I say that I am glad to see a member of the Scottish National Party here because I can say to him that I realise that what I said earlier, in a very crowded and excited House, about the Secretary of State for Wales not being here was incorrect. Of course, the position is, as the hon. Member for Tiverton (Mr. Maxwell-Hyslop) has said, that the Secretary of State for Scotland has functions not covered by the Home Secretary.
The Prime Minister (Mr. James Calaghan): On a point of order, Mr. Speaker. I am sure that you do not mean to cast any imputation upon the absence of my right hon. Friends the Secretaries of State for Scotland and Wales. Let me make clear to the hon. Member for Tiverton (Mr. Maxwell-Hyslop) that under my direction the Home Secretary is coordinating, as makes sense, contingency plans for the whole of the United Kingdom.
Mr. Speaker: I must make clear to the Prime Minister that I was not casting any reflection on the Ministers. I was trying to explain that I had made a mistake. Everyone seems to he hypersensitive this afternoon.
Mr. John Page: On a point of order, Mr. Speaker. The Secretary of State for Social Services informed us that there is a possibility that on Monday the whole of London may not be covered by the London ambulance service, and that discussions will be taking place tomorrow morning at his Department between the ambulance service and himself. If those talks break down, would it be possible for a statement to be made at the end of tomorrow afternoon, say, at 4 p.m. or 4.30 p.m., by the Secretary of State so that we know what contingency arrangements can be made to cover this potentially dangerous situation in London?
Mr. Speaker: It depends what requests come in. We should have to look at a change in our normal rule. On Fridays, the time belongs to other people.

BOMB INCIDENTS
The Secretary of State for the Home Department (Mr. Merlyn Rees): With permission, I wish to make a statement. At 10.40 p.m. last night a bomb exploded at a Texaco oil terminal on Canvey Island, producing an 18-in diameter hole in a tank containing aviation fuel. The fuel escaped from the tank into a safety moat and did not catch fire. The Essex police had received no advance warning that a bomb had been planted.
At midnight a caller told the Press Association that the Provisional IRA had planted a bomb on Canvey Island and another bomb in the Blackwall tunnel,

1989
both of which were to explode at midnight. This message was passed immediately to the Essex police and the Metropolitan Police, but the explosion at Canvey Island had already taken place. The Metropolitan Police searched the Black-wall tunnel, and while they were doing so, at 12.40 a.m., a bomb exploded at a gasholder near the south exit of the tunnel, causing an explosion and fire. At 1.30 a.m. a second gasholder caught fire. By 3.15 a.m. both fires had been extinguished, and a secondary fire at 4.15 a.m. was quickly dealt with.
There were no injuries as a result of these explosions. In addition to the two bombs that exploded, a further explosive device was discovered yesterday lying partly covered at the side of the M6 in Leicestershire. Army bomb disposal experts were called and safely defused the device. The police are carrying out detailed investigations into all these incidents. The debris from the bomb that exploded and the unexploded device will be carefully examined for any evidence that may help the police to trace those responsible for these and the earlier incidents. It was fortunate that no one was killed or injured by these explosions, but their potential danger cannot be overstated. No estimate has yet been made of the damage caused to property.
I am sure that the House will join me in condemning these attacks and will support the Government in their determination not to be swayed by such methods. The vigilance of the public and co-operation with the police are of the utmost importance as the threat of further attacks remains high.
Mr. Whitelaw: Is the right hon. Gentleman aware that, whatever criticisms we may have made of his last statement, we well recognise the extra strains placed on him at this time when such a problem arises? On this statement we entirely support what he said. What has happened is clearly a new development and, like all new developments in this area, it requires careful security on all sides, careful action by the police and the fullest possible co-operation between the police and the public. Of course, I join the right hon. Gentleman in condemning such attacks. He and I have both had experi-
1990
ence of condemning such attacks over, alas, far too long a period.
Mr. Rees: I am grateful to the right hon. Gentleman. He and I know that the police can operate only on information. Their success is not due to luck. They gain successes from little bits of information that may seem unimportant when they first come in. Fortunately, we have not been in the same position as the people of Northern Ireland, who know the importance of vigilance, but I hope that the people of this country will appreciate that it is important for them to cooperate with the police.
Dr. McDonald: Is my right hon. Friend aware that I share his concern about these incidents and that Thurrock, which is a neighbour of Canvey Island and which experienced great fear last night, suffers equally from the dangers of such an explosion, since there are two oil refineries, power stations and oil depots intermingled with housing in one part of the Thurrock constituency? Will my right hon. Friend ensure that all possible support is given to the Essex police in their attempts to deal with further threats, and direct their attention to the dangers that exist in Thurrock as well as on Canvey Island?
Mr. Rees: It is quite proper for my hon. Friend to raise these matters, but the Essex police are fully aware of them and were involved in IRA matters earlier this week. It will be of interest to my hon. Friend and the hon. Member for Essex, South-East (Sir B. Braine) to know that I have checked with the Department of Energy and am told that it has warned all the oil and gas industries in the country to take special precautions against further attacks. Warnings have also gone out to other fuel industries to be especially on the alert. I emphasise that that is most important.
Sir Bernard Braine: Is the right hon. Gentleman aware that while, mercifully, the Canvey bomb did not kill anyone, this terrifying incident followed closely on the tanker explosion in Bantry Bay and that the tanker was similar to those that dock at Canvey and Thurrock almost every day? Is he further aware that at Flixborough, Aberfan and Bantry Bay disaster and death stemmed from a single neglected source, and that at Canvey

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Island there is a multiplicity of risks, each compounding the others and all close to a large residential population?
In view of the repeated warnings that I have given the Government on this issue, and on which we are still awaiting action, will the Home Secretary now heed my words and give three undertakings here and now? First, will he ensure that the appalling lack of security at all these installations, not just in Canvey but in Thurrock, is remedied forthwith?
Secondly, the Health and Safety Executive investigation into the safety of Canvey Island was incomplete, as the Executive has admitted, and gave no thought to sabotage. Will the right hon. Gentleman ensure that the HSE is instructed to look at the problem again and to come up with realistic recommendations this time? Thirdly, will the Government give urgent consideration to removing as quickly as possible the gas methane terminal, which is the major hazard to my constituents?
Mr. Rees: The last two points are not my responsibility, and it would be better if I put them to my right hon. Friend who has a direct responsibility for those matters. It will reassure the House if I tell the hon. Gentleman that the HSE has sought information about the explosion at Bantry Bay in order to judge its relevance in the wider scene. On the security aspect of all the oil and gas installations in various parts of the country, it would be better not to talk about the problem in the full public gaze because, as the right hon. Member for Penrith and The Border (Mr. Whitelaw) knows, the more one talks publicly about these matters the more one gives ideas to certain people. However, I shall be happy to discuss the matter with the hon. Member for Essex, South-East (Sir B. Braine).
Mr. Edward Lyons: Is it not an interesting aspect of the explosion at Canvey Island that it took place one hour and 20 minutes before the telephone warning was given to the Press Association? Does that not expose the callous unconcern of the IRA for human life?
Mr. Rees: When one considers what has happened over the years, one finds that the words of my hon. and learned Friend are an understatement.
Mr. Powell: In these circumstances, if they are to continue, will the right hon. Gentleman be careful, as far as possible, to avoid, and to advise others to avoid, giving unnecessary publicity to claims and statements purporting to emanate from the Provisional IRA, since that publicity is the main object at which the terrorist aims?
Mr. Rees: The right hon. Gentleman is absolutely right. Publicity is what is required by the terrorists, and the more that their actions are given publicity—I understand why they are—the more they believe that they have been successful.
Mr. Alan Lee Williams: Does my right hon. Friend appreciate that there is public anxiety about fire coverage on the lower reaches of the Thames? Will he agree to have urgent discussions with the Port of London Authority about this aspect, as it is causing considerable concern.
Mr. Rees: I shall do that in so far as it is my responsibility, and where it is not I shall see that it is pressed in the right quarter.
Mr. Hooson: Is the Home Secretary aware that Liberal Members appreciate the additional burden that is placed upon him and the police at this juncture when we have a number of industrial disputes taking place at the same time? We echo entirely his sentiments about the importance of public and police vigilance, but three bombs were planted without anyone being aware of them. Is it not necessary to use the media to draw attention to the sort and size of bombs that were planted and what the public should look out for? We are used to a peaceful regime in this country and, since we are not facing the same circumstances in Northern Ireland, it is sometimes difficult for people fully to appreciate what we need to look out for.
Mr. Rees: I am grateful for what the hon. and learned Gentleman said about the police. There is a danger in his suggestion that goes back to what was said by the right hon. Member for Down, South (Mr. Powell). My experience—I am sure that it has been shared by the right hon. Member for Penrith and The Border and my right hon. Friend the Secretary of State for Northern Ireland—is that when I used to return from Northern

1993
Ireland I was amazed by the laxity of security in this country. People in Northern Ireland are used to tight security. What matters is vigilance by people for anything the slightest bit unusual, rather than a detailed knowledge of what they should be looking for. I know from reading police reports that they knit together bits of information that seem almost useless when they are first received. When taken with other information, they add up to the final story. That is what good policing is all about. The police want information, and I am sure that people will be telephoning and contacting their local police station, and that in that way the police will find the people responsibly for planting the bombs.
Mr. Cartwright: Is my right hon. Friend aware that the gas plant at Greenwich occupies a large, exposed site, which has many consequent internal security problems? In view of the obvious risk to many thousands of homes in the area if such a site is to be a target for attacks, is my right hon. Friend sure that the gas industry can provide the security cover that is needed without a great deal of outside assistance?
Mr. Rees: The fuel industries receive a great deal of advice. It would be better if my hon. Friend and I spoke about how this advice should be given outside rather than in the House. The fuel industries do not like advice.
Mr. Peter Bottomley: Does the Home Secretary agree that we should congratulate not only the police but the fire services that had to deal with the initial consequences of the explosions? Will he repeat his advice to members of the public that they should not be frightened to pursue a wild goose chase by reporting information which they believe to be relevant or what might be a bomb? Is he aware that many people fear that they put an extra load on the police by reporting something that turns out to be unimportant?
Mr. Rees: People certainly should not fear that they are making fools of themselves by reporting something that turns out to be unimportant. Any piece of information matters. The fire service did a remarkable job overnight and showed the excellent work that it does.
Mr. Ward: Will my right hon. Friend include in his appreciation the stretched members of the emergency services who also had to deal with a major fire in the Strand and a large-scale evacuation of residents in Kennington? Will my right hon. Friend comment on the reasons for that evacuation?
Mr. Rees: The latest information that I have about the, fire in the Strand is that it does not involve the IRA. understand that there was a hoax at the Kennington Oval gasholder. I am glad to say that a man is helping the police with inquiries.

BUSINESS OF THE HOUSE
Mrs. Thatcher: May I ask the Lord President of the Council to state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The business for next week will be as follows:
MONDAY 22nd JANUARY—Motion to appoint the Joint Committee on the Special Commission on Oil Sanctions
TUESDAY 23rd JANUARY—Remaining stages of the Social Security Bill.
WEDNESDAY 24th JANUARY—Completion of remaining stages of the Public Lending Right Bill.
THURSDAY 25th JANUARY—Supply [5th Allotted Day]: debate on an Opposition Motion on the doubling of prices in under five years.
Motion on EEC documents R /1135/ 78, R/1221/78, R/1292/78 and R/3454/ 78 on the steel industry.
FRIDAY 26th JANUARY—Private Members' Bills.
MONDAY 29th JANUARY—Second Reading of the Weights and Measures Bill
Mrs. Thatcher: When do the Government propose to make any judgment whatsoever about the new arrangements that the Prime Minister announced this afternoon, whether they are effective, and when they propose to have a debate on the current situation?
Mr. Foot: As was indicated earlier by the Prime Minister and the Home Secretary, there should be another statement tomorrow and, no doubt, on Monday. We should wait and see how we proceed from there.
Mr. Radice: Will my right hon. Friend tell the House about the arrangements for the lobby of local authority and other workers on Monday?
Mr. Foot: I shall make a brief statement in reply to my hon. Friend. Hon. Members will be aware that a large number of people are expected to take part in a mass lobby of the House of Commons on Monday. The usual arrangements agreed by the Services Committee will be in operation. These arrangements are designed to ensure the orderly admission of as many lobbyists as possible to meet their Members, but we cannot hope to admit more than a small proportion of the lobby into the precincts. I therefore appeal to hon. Members to co-operate.
In particular, I ask hon. Members to refrain from taking parties of lobbyists from the queue outside the building, because that is always seen by others as queue jumping and causes unnecessary resentment.
Hon. Members can also help by assisting lobbyists to leave the Grand Committee Room by the North Door of Westminster Hall to New Palace Yard and by limiting their discussions with individual lobbyists in the Central Lobby.
If hon. Members have a complaint about the conduct of the lobby, they should speak to the Deputy Chief Whip, the Serjeant at Arms or myself. Notes of guidance on mass lobbies are available in the Whips' offices for any hon. Member who wishes to examine them.
Mr. Michael Marshall: In his statement the Home Secretary spoke mainly about the regions. Will the Lord President tell his right hon. Friend the Secretary of State for Industry that it would be helpful if we knew which industries are worst affected, so that we can identify them when giving help?
Mr. Foot: I shall take into account what the hon. Member has said and see how best we can deal with that in a statement next week.
Mr. Madden: Is my right hon. Friend aware that the director general of the BBC is seeking money from the Government in advance of the further increase in the price of the television licence? A prayer was tabled against the last increase in the television licence fee. When will the debate that was promised some time ago take place?
Mr. Foot: I cannot say at the moment, but I am aware of the undertaking that I gave.
Mr. Grylls: Will the Leader of the House reconsider this afternoon's business? We are to discuss a Bill that proposes to raise the borrowing limit of the National Enterprise Board to £4,500 million. The matter is of great importance to many hon. Members. Will the right hon. Gentleman reconsider the business so that we may have a proper debate in an adequate amount of time?
Mr. Foot: I understand the unavoidable inconvenience to which the House is subjected as a result of today's situation, but it is necessary for the Bill to proceed. We must accommodate the whole of the House. It would not be convenient for the House to change today's business.
Mr. Spearing: Does my right hon. Friend remember that he and the Government have yet to redeem the pledge given in November 1977 about a motion to be moved on the Floor of the House about Ministers assenting to Brussels legislation? When will the Government table the motion? Will it be before or after the promised debate on the Select Committee's report on procedure generally?
Mr. Foot: I cannot give my hon Friend a date, but I can assure him that I am fully aware of what has occurred. I am sure that if my memory lapses my hon. Friend will remind me.
Sir David Renton: We understand that the Attorney-General has been advising Ministers on the law of picketing. Will the Leader of the House ask the Attorney-General to make a statement to the House about that early next week, especially on its application to the present circumstances?
Mr. Foot: I shall consider that request without making a commitment. We shall have to deal with statements on the

1997
general situation. Such statements eat into the time of other debates. I am not sure whether we should have a statement on the legal aspect next week, but I shall consider the suggestion.
Mr. Hoyle: Will my right hon. Friend arrange for an early debate on microelectronics and word processing, because that will affect the life of all the people in the nation? It is an important and vital subject, which should be debated.
Mr. Foot: The Government issued an important statement on that subject just before Christmas. It is a strong candidate for a debate when we have the time.
Several Hon. Members rose—
Mr. Speaker: I shall call those hon. Members who have been standing.
Mr. Rhodes James: Will the Leader of the House ensure that the Minister of Agriculture, Fisheries and Food makes a statement to the House early in the week? There is profound concern, not only among those who represent agricultural constituencies, about the impact of the crisis on their areas.
Mr. Foot: That is a proper suggestion, and I shall consider it. We must consider which Ministers the House wishes to hear.
Mr. Wells: Will the Lord President arrange for the Home Secretary to make a statement early next week, or as soon as possible, about the staffing in the prison service and in particular in such prisons as Maidstone, where very naughty men are imprisoned for long periods?
Mr. Foot: I shall consult my right hon. Friend, but there are other strong candidates for statements in the next few days.
Mr. Silvester: Will the Lord President undertake to provide time for a debate on the report of the Select Committee on Procedure before Easter?
Mr. Foot: Yes, I certainly hope that we shall have one before Easter.
Mr. Michael Latham: Will the Lord President clarify the chain of command for dealing with the emergency, so that hon. Members may raise constituency problems directly? Many hon. Members, including myself, have had useful co-
1998
operation with the regional emergency committees and also with the private office of the Secretary of State for Transport. Are we now to deal with the Home Secretary, as it appears that he is in command of these matters, as far as anyone is?
Mr. Foot: As the hon. Gentleman has acknowledged, he has had useful results from the representations that he has already made, and I suggest that he should continue in that sense. But, as the Home Secretary indicated from the Dispatch Box in reply to a number of questions, he can also receive representations on the subject from Members of Parliament.
Mr. Teddy Taylor: I appreciate what the Prime Minister said this afternoon about the Home Secretary having a coordinating role in the present emergency. Will the Leader of the House invite the Secretary of State for Scotland to make a statement to the House early next week on the position in Scotland, bearing in mind that some aspects of the emergency are more serious in Scotland and that the Secretary of State for Scotland is alone responsible for most of the emergency services north of the border?
Mr. Foot: As has already been indicated, the Home Secretary presides over the committee dealing with this matter. Whether it would be helpful to the House to have a, series of Ministers who are also on the committee making replies is a matter for consideration. I am doubtful about it. but I shall take into consideration the hon. Gentleman's representations.

ESSENTIAL SUPPLIES AND SERVICES
Mr. William Shelton: 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,
"the present food shortages throughout the country and the hardship that these will increasingly cause as a result of the picketing taking place by the striking lorry drivers."
I have reason to believe that a state of emergency exists today, whatever the Government may say, and that the position is rapidly deteriorating. As we have

1999
heard from today's statement, the Government refuse to recognise the position, and this is having increasingly damaging consequences.
Responsible authorities today and yesterday have said that only 10 per cent. of processed food is reaching shops, that only 25 per cent. of all foodstuffs is reaching one major food chain, and that other food chains are in similar circumstances. It is also said that several major food companies have been forced to shut. These include Kelogg, Heinz, Cadbury-Schweppes, Cow & Gate, and no doubt many others. Thousands of tons of animal feed are locked in the docks. Cargoes of fruit are rotting in the docks and elsewhere. The consequence of this is that already certain basic foodstuffs are unobtainable in many stores. These include salt, sugar, butter, margarine, cereals and many processed foods. Bread will soon be in short supply because of the shortage of salt. Meat will soon be in short supply because the slaughterhouses will, I understand, have to be closed.
If supplies do not improve, the position will deteriorate in an accelerating fashion. I am led to believe that by the end of next week there will be serious hardship and, indeed, possibly hunger in parts of our country, especially for the old, the disabled and the poor.
It is clear that the unions have lost control over the strikers and that, in the words of a union leader, anarchy prevails. The Government have a duty to safeguard essential supplies. Clearly they are not doing so. This is a state of emergency, and it must be recognised as such by the Government.
Mr. Speaker: The hon. Member for Streatham (Mr. Shelton) gave me notice this morning that he would ask leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the present food shortages throughout the country and the hardship that these will increasingly cause as a result of the picketing taking place by the striking lorry drivers."
As the House will understand, I have obviously been giving a great deal of thought to this matter throughout the day. I listened with great care to the exchanges earlier today. I am prepared to look at the hon. Gentleman's appli-
2000
cation on Monday, with the possibility of a debate on Monday night. I think that that is the only action I can take at the present time. I give the hon. Gentleman an undertaking that I will look very closely at this application on Monday.

WATER SUPPLY (NORTH-WEST ENGLAND)
Mr. Churchill: 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,
"the continuing threat to public health in the North-West, where 1 million people are without a filtered and chemically treated water supply."
The Home Secretary has today made a statement. I fear that it will be regarded by the 1 million consumers as grossly inadequate. It was a statement of supine complacency and was directly in line with the Government's attempts to play down the gravity of the threat to vital supplies existing in so many aspects of our national life. In the course of his statement, the Home Secretary said that the North-West water authority is maintaining piped water supplies to the vast majority—
Mr. Speaker: Order. The hon. Member for Stretford (Mr. Churchill) must not make the speech that he would make if his application were granted. He must seek to make out the case for it to be granted.
Mr. Churchill: I can assure you, Mr. Speaker, that I shall make a different speech should the debate be granted. I was merely seeking to point out that the statement made to the House today by the Home Secretary in no way meets the point that is being made by hundreds of thousands of people who have been for a whole week now without any properly filtered and purified water supply.
The Home Secretary said that they still had water. That is true; but it is what is officially termed dirty water. It is not clean or purified water. The Minister of State, Department of the Environment is shaking his head. Perhaps he wishes to catch your eye, Mr. Speaker, so that he may put a different point of view

2001
on this, but I am assured by the North-West water authority officials that the present position constitutes a serious hazard to the health of up to 1 million of our citizens. From this point of view there is no question but that this is a specific and important matter, for so long as the present position persists—and the Home Secretary has made clear that no action is to be taken by the Government to resolve the problem—there is the serious possibility of an epidemic breaking out, or of children or others consuming unpurified water.
That it has become a matter of urgency is also clear in that today there are many Labour Members, as well as the hon. Member for Rochdale (Mr. Smith), who are very anxious that the matter should be debated in the House so that they may represent their constituents' anxieties.
As a matter of added urgency, there is the fact that several hospitals in the North-West of England are now having to close down as a result of the other industrial actions taking place. In the constituency represented by my hon. Friend the Member for Altrincham and Sale (Mr. Montgomery) and in my own constituency, no fewer than four hospitals have closed today because of the failure of surgical supplies to get through.
In the light of this position, Mr. Speaker, I submit that the question of a debate has become one of urgent necessity.
Mr. Speaker: The hon. Member for Stretford (Mr. Churchill) gave me notice this morning before 12 o'clock that he would seek to raise this matter today. The hon. Member asks leave to move the Adjournment of the House under Standing Order No. 9 so that the House may discuss
"the continuing threat to public health in the North-West where 1 million people are without a filtered and chemically treated water supply."
The hon. Member has undoubtedly raised a very important matter. I have given the same consideration to his application as I did to two further applications that are to come before the House, and I have applied the same criteria to this application as I did to the earlier one and as I shall apply to the two succeeding applications. I am quite prepared to look at it with great seriousness
2002
and urgency on Monday to see whether it is necessary to have a debate at seven o'clock on Monday night.

RAILWAYS (INDUSTRIAL DISPUTE)
Mr. Moate: 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,
"the national rail strike and the threat of continued disruption of the nation's railway system."
For the second time this week the whole of the railway network has been paralysed. hundreds of thousands of people have been prevented from going to work or have suffered immense inconvenience, essential freight movements have been prevented and British Rail will lose £2 million for every day of the stoppage.
That this matter is specific and important is self-evident. It is a matter which the House ought to consider urgently. Further daily stoppages now seem certain for next week and mention has also been made of other industrial action in the form of withdrawal of overtime working and a ban on weekend working. Negotiations have so far made matters rather worse and not better.
Furthermore, Mr. Speaker, whilst this issue is quite separate from other transport disputes, it is clearly exacerbating the situation—in particular, the stopping of goods moving in and out of ports.
In view of the nature of this dispute and its interlinking with major questions of productivity and the annual pay claim, possibly the nation could be facing weeks and months of disruption of the railway system. I therefore submit that this is a matter that should be urgently considered by the House.
Mr. Speaker: The hon. Member for Faversham (Mr. Moate) gave me notice before 12 o'clock this morning that he would submit this application to the House in order that the House may discuss
"the national rail strike and the threat of continued disruption of the nation's railway system."

2003
The hon. Gentleman will have heard the comments that I made on the last application, and I say to him and to the House that I shall look at this question again on Monday with a view to the possibility of a debate at seven o'clock on Monday night.
I hope that the House will not be under any misapprehension. If I agree to an emergency debate on Monday night, it can be on only one of the subjects mentioned today and not on all of them.

PICKETING (LIVERPOOL)
Mr. Steen: 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,
"the ruination of the port of Liverpool by unlawful picketing and its disastrous effect upon the future economy of the region."
The survival of Liverpool has always depended upon its ability to run a thriving port. The wealth of the city and the welfare of the people are intertwined with the prosperity of the port. The present strike has already laid off 1,900 dockers as well as many support staff. This means that the dock and harbour company is having to pay out at least £60 per week in fall-back pay to each docker without work, and the company will soon find itself unable to continue making payments while receiving nothing in return.
The tragedy is that the port of Liverpool has made great strides forward in business revival over the last few years with the full co-operation of the dockers, who are now deeply outraged and concerned as they helplessly watch their livelihood slip away.
For the smaller, independent dock employer, the present situation may well spell bankruptcy. In London today a private company in business for many years, employing 500 stevedores, is going into liquidation, I am told, because of the catastrophic effect of illegal picketing. This could well sow the seeds for a national
2004
dock strike. The matter is therefore, of the utmost urgency.
The port of Liverpool is today at a standstill. It is in the stranglehold grip of massive, unlawful picketing. The situation deteriorates hour by hour. The dock entrances are barred, swarming with this new infestation of the colloquially termed "secondary pickets". The port has ground to a halt, savaged by strikes and strangled by pickets.
The matter is specific. No goods can get into the port. This means that thousands of companies in the massive hinterland behind the port, which includes the Midlands and the Lancashire industrial belt, are either having to stockpile products or lay off workers, or a combination of both.
British companies are unable to fulfil their contractual dates for delivery and companies overseas arc picking up new business at our expense. This must affect the balance of payments, nationwide. Ships bound for Liverpool are being diverted to Continental ports and business will be permanently lost from Merseyside in both the short term and the long term as suppliers lose confidence that the port can reliably handle their cargoes.
Liverpool is set on a suicidal course with the major plank of the Government programme—the rejuvenation of the inner cities—in ruins. The matter is specific. urgent and of the utmost importance.
Mr. Speaker: The hon. Member for Liverpool, Wavertree (Mr. Steen) gave me notice before 12 o'clock this morning that he would seek, under Standing Order No. 9, to ask leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the ruination of the port of Liverpool by unlawful picketing and its disastrous effect upon the future economy of the region."
I have no doubt about the importance of the matters raised by the hon. Gentleman. He will have heard that I apply the same criteria to his application, and I shall look at this matter and let my opinion be known to the House on Monday.

INDUSTRY BILL
Mr. Hordern: On a point of order, Mr. Speaker. The time is now after a quarter to six and the House is due to consider a very important Bill which authorises the National Enterprise Board to spend, altogether, up to £4,500 million. I submit that any proper debate in the time that is available is now impossible. Ail we should get would be, I regret to say, a rather long speech by the Secretary of State for Industry setting out the matter for debate and most of the remaining time would be taken up by Front Bench speakers.
However much I regard the ability—as do my hon. Friends—of all Front Bench speakers in this House, the fact is that there will be very little time indeed for any Back Benchers to develop their arguments on this most important Bill.
I therefore ask, through you, Mr. Speaker, whether the Leader of the House will scrap the debate today and put it off to another occasion.
Mr. Henderson: Further to that point of order, Mr. Speaker. It is reasonable that today we should have dwelt on the statements which we have had, which were more important statements on matters of great concern. It is reasonable that we should be prepared to change our procedures and our systems of working when it is necessary to do so.
The debate on the Industry Bill on which we are about to embark does not cover just the National Enterprise Board. It covers the Scottish Development Agency and the Welsh Development Agency. I shall certainly seek—I hope with more success than previously—to catch your eye, Mr. Speaker, in this debate, as, I have no doubt, will other parliamentary colleagues from other parties who have Scottish constituencies, and as will Plaid Cymru Members and their parliamentary colleagues from the Welsh constituencies.
There are three very strong interests involved in this matter. Although the Secretary of State for Industry may be the soul of brevity, if not of wit, I hardly think that there will be sufficient time left after the opening speeches, and taking off the time for winding-up speeches,
2006
to allow all of us to express our views on this important matter.
There is no desire on cur part to see the Bill held back. I am sure that if the Lord President were to seek to catch your eye, Mr. Speaker, and announce that next week he would find time for this Bill, he would find a ready response on the Opposition Benches.
Mr. Richard Wainwright: Further to that point of order, Mr. Speaker. Only a few minutes ago you reminded the House that, in the event of your granting an evening's debate on Monday under Standing Order No. 9, only one of the subjects that have been drawn to your attention today could be debated. May I respectfully remind you, Mr. Sneaker, that the Bill which we had honed to be debating for the last two hours contains three quite separate and distinct matters relating to three separate statutory bodies—a sum of £3 billion, another sum of £500 million, and yet a third sum for a quite separate statutory body of £250 million.
In these circumstances, Mr. Speaker, with respect, your ruling that only one matter can be discussed in an evening seems to me to apply to this evening's proceedings.
Mr. Alexander Fletcher: Further to that point of order, Mr. Speaker. I should like to support the points made by my hon. Friend the Member for Horsham and Crawley (Mr. Hordern) and other hon. Members about tonight's business being held over. There are many reasons for this. It would be impossible for you, Mr. Speaker, to arrange the debate so that it dealt with all the local and regional interests in the country and contained discussion of the two Agencies and the NEB.
May I also respectfully suggest that the rail strike today does not help the situation, because there are no sleepers to the North tonight, and there is a threat of a strike at Heathrow airport tomorrow morning, which means that Members wishing to get home urgently for meetings in their constituencies tomorrow will have very little chance of doing so unless they can catch an aircraft later this evening. Therefore, Mr. Speaker, I would ask you whether you can see about something being done about holding over tonight's business
Several Hon. Members rose—
Mr. Speaker: Order. I shall take the points of order of those hon. Members who have been rising, but before doing so perhaps I may say that the arrangement of business is not my concern.
I should like to say to the hon. Member for Aberdeenshire, East (Mr. Henderson) that it always grieves me when I cannot call him. But I am not grieved very often.
I have no doubt that the House is anxious to get on to the business.
Mr. Michael Marshall: Further to that point of order, Mr. Speaker. I think that it would be fair to say that one must have a slight quarrel with my hon. Friend the Member for Horsham and Crawley (Mr. Hordern). We expect a very full statement from the Secretary of State. Indeed, the basis of the reasoned amendment which has been tabled by the Opposition is arguing that we are not getting sufficient information. Therefore, a grave responsibility hangs on the shoulders of the Secretary of State this evening.
Further to that, Mr. Speaker, to put some kind of numbers in this matter, if we assume one and a half hours for the Front Benches in opening the debate and one hour for them in closing it, we shall then have one and a half hours for Back-Bench speakers, three from each side, which would make it literally impossible for members of the Liberal Party, Plaid Cymru or the SNP to speak and we would have only three speakers from the Conservative Benches.
Sir Keith Joseph: Further to those points of order, Mr. Speaker. Perhaps I may emphasise what my hon. Friend the Member for Arundel (Mr. Marshall) has said.
As a House, we look to the Secretary of State to fill out the knowledge which has been so far lacking on why the vast sums of money referred to in the Bill should be needed. It is not good enough for the Secretary of State to promise to be brief. This is not an occasion when it is in the public interest for him to be brief. There just will not be enough time for the very large number of hon. Members who will want to put their questions and express their points of view to be heard. Therefore, Mr. Speaker, I appeal to the Lord President, through you, to consider
2008
whether the debate today—no one is blaming the Government for the truncation of time today—could be abandoned today and reinstated next week.
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): I really have nothing very much to add to what I said in response to an earlier question on the same subject. I fully appreciate the concern about the truncation of this very important debate. I am not minimising its importance in any sense. But, of course, one of the Government's concerns is that we must get the Bill through before—[HON. MEMBERS: "Why?"] That is one of the matters that will come out in the debate. We must get it through before Easter. If we were to hold up the Bill now, there would be further difficulties later.
I certainly think that it would be for the convenience of the House if we could proceed to the Second Reading very soon. without further hold-up.
However, let me say to my right hon. Friend the Secretary of State for Industry and to the right hon. Member for Leeds, North-East (Sir K. Joseph), who is in charge of the Bill for the Opposition, that I think that we shall have to take into account the fact that there has been somewhat less time for the Second Reading than had been previously arranged. and I would hope that if we have normal progress during the Committee stage, that can be—[HON. MEMBERS: "Oh."]
Sir Keith Joseph: That has nothing to do with it.
Mr. Foot: It has. [Interruption.] Hon. Members have not heard yet the conclusion of my remarks. Of course, I believe that that should be taken into account on Report. Therefore, I strongly urge the House not to devote any further time now to points of order but to proceed, because every point of order can only take away further time from the debate. I ask hon. Members to see how we proceed with the debate—[HON MEMBERS: "NO."]—and then after-wards to have the normal discussions that take place between the usual channels.
Sir Keith Joseph: Perhaps I may put a constructive suggestion to the Lord President. Will he take time to consider whether, if the Government defer this

2009
debate until next week, any day in Committee will be lost, because it is my bellef that the Committee of Selection does not meet until the middle of next week? If the Second Reading is deferred until next week the Bill can proceed to Committee, if it gets a Second Reading, no later than if the Second Reading took place in a totally unsatisfactory form today.
I ask the Lord President to bear in mind that there will he very few opportunities indeed for hon. Members, from both sides of the House and representing vital regional interests, to have their say at all if we embark upon the debate now.
Several Hon. Members rose—
Mr. Speaker: Order. I shall call another hon. Member in a moment, but I remind hon. Members that, since it is quite clear that we shall he getting down to the business, it will enable me to call additional Members if we are not too long.
Mr. Grylls: On a point of order, Mr. Speaker. I, of all people, do not want to cause any financial embarrassment to the NEB, but I should like to ask whether the Government are able to explain why it is essential to have the Bill tonight. Perhaps I may make a suggestion which might help you, Mr. Speaker. You have suggested that one of the Standing Order No. 9 debates referred to earlier might take place on Monday if you so decide. Are you able to give an instant reconsideration of one of the Standing Order No. 9 applications put forward by my hon. Friends and bring one of them forward now? Then we could have a debate on the NEB in a proper length of time
2010
on Monday. Would not that be a happy solution, help you and help the Government to explain their case?
Mr. Speaker: It would be a solution. It is a very ingenious suggestion, but I am afraid that I cannot do that.
Sir Anthony Meyer: Further to that point of order, Mr. Speaker. I am sure that the Lord President would not wish to put you in the very individious position of having to preside over what will clearly be a farce of a debate in which Back Benchers representing Wales will simply not be able to make any contribution to a debate which is of primary importance to Wales.
Mr. Teddy Taylor: Further to that point of order, Mr. Speaker. May I ask you whether there is some procedure whereby the House could decide itself not to proceed with the debate, bearing in mind that one of the Agencies dealt with in the Bill has been described by the Government as their main instrument for reviving the Scottish economy? It would be a farce if we had a debate with possibly only two Scottish speakers taking part. Under our rules, is the House able to determine that it shall adjourn?
Mr. Budgen: Further to that—
Mr. Speaker: Order. We follow the order of business as it is laid down. I think that it is in the interests of the House if I ask the Clerk to read the Orders of the Day.
Several Hon. Members rose—
Mr. Budgen: Further to that point of order, Mr. Speaker—
Mr. Speaker: Order. I shall take the point of order afterwards.

ORDERS OF THE DAY

  INDUSTRY BILL
  Order for Second Reading read.
  6.6 p.m.
  Mr. Nick Budgen: On a point of order, Mr. Speaker. May I point out that there will be about two hours available for those who are not members of either Front Bench—at most? I am trying to put the case against myself at its strongest. I am sure, Mr. Speaker, that you hope that a Member of the Welsh National Party will catch your eye, as will a Member of the SNP and a Member of the Liberal Party. But it is almost certain that nobody from the Back Benches proper will be able to catch your eye, particularly if a Privy Councillor happens to catch your eye.
  These are important issues. It is true, as the Lord President said, that we do not wish the Bill to pass. This measure goes to the root of the dispute between the Tory Party and the Labour Party. The Government believe that State power should be extended, and we have a right to be heard on this important matter. The high-handed action of the Lord President is preventing us from representing our constituents in this House.
  It is ridiculous to pretend that this matter is urgent. In the recently published Government White Paper on public expenditure there was no proposal for increased expenditure by the NEB in the next two or three years. This is an important partisan matter, but in terms of the practical running of the Government or of the NEB the Bill is unnecessary. A week's delay will do no harm to the Government or to the NEB, but it will allow us, on behalf of our constituents, to make proper representations in this House.
  The Lord President used to be a great supporter of Back Bench rights. It used to be said that, above all, he loved this House and believed that it was vital that every Back Bencher had an opportunity to represent his constituents. His behaviour tonight is a denial of everything that he has stood for in the past.
  Mr. Speaker: Order. Hon. Members must confine themselves to points of order which I can answer. I cannot
  2012
  answer the point of order which has just been raised.
  Mr. Robert Rhodes James: On a point of order, Mr. Speaker. It is clear that the House and you yourself are in a considerable difficulty. I wonder whether you would entertain a motion "That this House do now adjourn". If you were prepared to entertain that motion, I should be honoured to move it.
  Hon. Members: Hear, hear.
  Mr. Speaker: I am afraid that hon. Members have misunderstood the conversation that was under way at the Table. The advice that I was getting was not very encouraging to the hon. Gentleman as to my powers on this matter.
  Mr. Rhodes James: Further to that point of order, Mr. Speaker. The motion for the Second Reading of the Bill has not yet been moved. I am asking whether you would entertain a motion, which I shall now move, "That this House do now adjourn".
  The basis of that motion is that there are now fewer than four hours left in which to debate this extremely important Bill which affects a considerable number of hon. Members and their constituencies. I suggest that, in these circumstances, the most appropriate action for the House to take would be to move to adjourn and for the Leader of the House to find an alternative date next week or the week after. This matter could then be dealt with in a proper manner, which would enable hon. Members to deploy their arguments in full and to justify their constituents' interests in the Bill.
  Mr. Speaker: Standing Order No. 1 makes it clear that
  "no Member other than a Minister of the Crown"—
  and no Minister looks as though he intends to do so—
  "may make such a motion on any day before the orders of the day or notices of motions shall have been entered upon".
  Mr. William Clark: On a point of order, Mr. Speaker. I cannot understand the technicalities of this matter, and I seek your guidance. Many points of order were curtailed and the Orders of the Day were called. I

  2013
  understand that we are now in the technical position that only a Minister can move the Adjournment of the House. Many Opposition Members still wish to raise points of order. I am asking why it was necessary to call the Orders of the Day before those points of order were dealt with.
  Mr. Speaker: Because I wanted to call them and to get on. I was not trying any quick trick on the House. That is neither my way nor my custom. I thought that I was helping the House. But we have not yet proceeded with the motion that is before the House. We have not embarked upon it.
  Mr. William Clark: Further to that point of order, Mr. Speaker. You have ruled that, the Orders of the Day having been called, only a Minister of the Crown may move the Adjournment of the House. [HON. MEMBERS: "No. It is the other way round."] My hon. Friend the Member for Cambridge (Mr. Rhodes James) moved the Adjournment of the House and I thought you said that that could not be allowed because a Minister of the Crown had not called for the Adjournment of the House.
  Mr. Speaker: I am sorry that I did not make the position clear. I said that
  "no Member other than a Minister of the Crown may make such a motion on any day before the orders of the day or notices of motions shall have been entered upon".
  We have not entered upon the notices of motions.
  Mr. Kenneth Clarke: Further to that point of order, Mr. Speaker. It seems to me that we have entered upon the Orders of the Day. You called upon the Clerk to read the Orders of the Day, and we have now reached the stage where they have been entered upon. If that is not the case, could you indicate for the convenience of the House what steps have to be taken before the Orders of the Day are entered upon so that we know at what stage my hon. Friend the Member for Cambridge (Mr. Rhodes James) may rise to move such a motion?
  Mr. Speaker: When the motion has has been made for the Bill to be read a Second time, we shall have entered upon
  2014
  the business. No Question has yet been proposed by the Chair on that issue.
  Mr. Kenneth Clarke: Will you clarify my mind and the minds of other hon. Members on this matter? Is it the case that so soon as the Clerk of the House has risen to read the Order for the Second Reading, then, immediately before any speeches have begun, my hon. Friend the Member for Cambridge may rise to move his motion?
  Mr. Speaker: No. That may happen only after I have proposed the Question from the Chair. When I have proposed the Question, "That the Bill be now read a Second time", the dilatory motion, the moving of the Adjournment, would be in order.
  Mr. Rhodes James: With great respect, Mr. Speaker, it is not possible for the House to have two motions before it at the same time. The point of the procedure under Standing Order No. 1 is that after the House has entered upon the Orders of the Day and after the Clerk at the Table has read the title of the business, a motion for the Adjournment can be moved. It happens frequently in foreign affairs debates and on other occasions. It is not possible to move a motion for the Adjournment of the House immediately after you have proposed the motion that the Bill be read a Second time. The House cannot have two motions before it. I urge that the House should now be debating the motion which I ventured to propose, namely, "That this House do now adjourn".
  Mr. Speaker: With every respect to the hon. Gentleman, he seems to have forgotten that when, from time to time, the motion is moved "That this House do now adjourn" before we enter on business, it is always moved by a Minister of the Crown. That is the case without exception, and that is what the hon. Gentleman has overlooked.
  Mr. Alexander Fletcher: On a point of order, Mr. Speaker. It might help the House to consider the matter if the Lord President will elaborate a remark that he made a few moments ago. He said that it was important for the Bill to reach the statute book by Easter. If he will explain why that is the case, hon. Members might be able to consider the position more effectively.
  Mr. Michael Jopling: On a point of order, Mr. Speaker. I think that there is a way in which you could help the Government and the House in general on this difficult matter. It seems clear that when we reach the end of this important debate the closure will have to be moved. "Erskine May" says on page 449 that the
  "question must be put forthwith, without amendment or debate, unless it appears to the Chair that the motion is an abuse of the rules of the House or an infringement of the rights of the minority."
  In view of what has been said in points of order, it seems clear that there is a great likelihood—in fact a certainty—that the rights of the minority are likely to be abused very much indeed if this debate is held straightaway. You can help the House, Mr. Speaker, by indicating that you believe that if a vote were taken or asked for at 10 o'clock it would be an abuse of the rights of the minorities in this House. If you were to give that ruling or indication now, it may be that the Lord President of the Council would have the wisdom to decide to put off this debate.
  The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): Further to that point of order, Mr. Speaker. The hon. Member for Westmorland (Mr. Jopling) is perfectly right in his assessment of the position, as I understand it. I was urging that the House should embark upon the debate. I believe that is still the right course. Indeed, I think that it would have been wise if we had done that 20 minutes ago [Interruption.] I am just as much entitled to give my view to the House as hon. Members. I believe that it would have been better to have émbarked upon the debate.
  At 10 o'clock you will have to decide the matter. I presume, that you would not give a hypothetical ruling at this stage. I suggest that the House should start the debate, and at 10 o'clock you will be able to make up your mind about the submission that has been made to you. I suggest that to ask you to give a hypothetical ruling at this stage would be contrary to normal procedure. I suggest that we should start the debate. When we reach 10 o'clock you, in your wisdom, will give your judgment on what is put to you at that time.
  Mr. Hal Miller: Further to that point of order, Mr. Speaker. I wish that the Lord President would reconsider the urgency of the matter. It is now appreciated that the larger part of the NEB funds would be required for British Leyland. We were informed at Question Time earlier this week that the report of the NEB will not be available in the Library until next month. Therefore, it is not easy to understand why the debate has to be started tonight.
  As my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) has pointed out, the Committee of Selection will not have met and Members will not have had enough information about British Leyland in particular, which, whatever view one takes, must account for the lion's share of the funds which are said to be required. Therefore, there seems to be every reason for postponing the debate.
  Finally, on that point of order, I should wish to take part in the debate because I have an extremely strong constituency and industry interest.
  Several Hon. Members rose—
  Mr. Speaker: Order. I request that any hon. Members I now call submit points of order that I can answer rather than further argument against proceeding with the Bill tonight. That is not a matter for me. That is out of my hands.
  Mr. Churchill: Further to that part of order, Mr. Speaker. Would it be possible for the Lord President to assist you and the House in its difficulties by undertaking that, in the light of the lack of time left in which to debate this important matter, the Government will not tonight move the closure at 10 o'clock and the debate will be continued on Monday and the vote taken at 7 p.m.? That would leave time for a Standing Order No. 9 debate.
  Mr. Patrick Cormack: Would it not be helpful for the House to be suspended for half an hour, so that the usual channels can get to work?
  Mr. Budgen: Further to the point of order raised by the Lord President, Mr. Speaker. I respectfully suggest that you,

  2017
  from your great store of wisdom and knowledge of our proceedings, offer some advice to the Lord President. It would seem to be a most unsatisfactory procedure to start the debate and to break it off in order to conclude it at some time in future.
  In the old days, when the Lord President was true to himself, he used to demonstrate that the most important feature of a debate was that one hon. Member replied to the views of another, so that there was a genuine debate. If we start this debate today and attempt to conclude it, for instance, in 10 days' time, there will be no debate. There may be some reading of prepared statements, but the whole intimacy, the sense of giving and taking of ideas, will be gone. There will be no debate. It will, once again, be a denial of everything for which the Lord President used to stand.
  Mr. Robert Kilroy-Silk: It will be within your recollection, Mr. Speaker, that on many previous occasions when frivolous and irrelevant points of order have been raised, you have risen in your place and said that you will take no further points of order and that we shall begin the serious business of the House. Every point of order tonight has been frivolous. There is a clearly organised conspiracy to filibuster these proceedings. I ask you, Mr. Speaker, to stand up and ensure that we have no more frivolous points of order but begin the serious debate in the House.
  Mr. Speaker: I should tell the hon. Gentleman that I do not welcome such remarks. I do not expect the hon. Gentleman to apologise, but I do expect him to know that I shall choose the moment. Much as he might regret it, I do not need his assistance. I shall manage without it.
  Mr. Peter Ros: It would be helpful, Mr. Speaker, if you could give some guidance to the House and to the Leader of the House along the lines that you would not be likely to consent to the closure being put at 10 o'clock, in view of the fact that a large number of Members will not have had an opportunity to speak in the debate. Using precedents which obviously exist for such guidance—that not enough time is likely to be available—we
  2018
  should then know where we stand and the Leader of the House would be less likely to delay matters even further by trying to get the debate started.
  Mr. Speaker: I had that put to me earlier. Obviously, I cannot anticipate what will happen at 10 o'clock. I do not think that we can hold up a Bill by points of order which are simply delaying us.
  Sir Keith Joseph: Will die Lord President take into account that even if points of order had not been raised, after an opening speech from the Secretary of State, the response from the Opposition and the two winding-up speeches, there would have been left only 30 minutes each for the interests of Scotland and Wales and for the views of any other parties in the House. Surely, that cannot be justified for a Bill involving public spending on this scale.
  There is no suggestion of any defeat for the Government. We are only asking the Lord President to do his duty to all interests in the House, including those below the Gangway on the Government side. He should ensure that we have sufficient time in which to debate this important Bill. That would not lose any time, assuming that the Bill is given a Second Reading, before it goes to Committee.
  Mr. Foot: I suggest to the House that the best way to proceed is as I suggested. If my suggestion had been adopted we should already have embarked upon the debate on this important Bill and a considerable amount of time could have been devoted to it. At 10 o'clock the question of how much time has been devoted to the Bill will have to be taken into account by you, Mr. Speaker, and, before then. it may be taken into account by the usual channels.
  I suggested how we might take that into account. I believe that the proper way is by discussion in the usual channels. I urge the House to embark upon the debate which has been put down for today. In addition to those who have raised points of order, many other hon. Members have interests in this matter. Some hon. Members are very eager that the Bill should get on to the statute book. I know that some hon. Members, including the right hon. Lady the Leader of the Opposition, do not want it on the

  2019
  statute book at all. They are perfectly entitled to take such precautions as they can.
  I suggest that the right course is to follow the procedures which have been announced upon the Order Paper. We should start upon the debate and see how matters proceed. In the meantime, I am prepared to have discussions through the usual channels, without any commitment about what we might propose at 10 o'clock.
  I believe that the best suggestion was the one that I made about three-quarters of an hour ago. We can discuss these matters through the usual channels. If hon. Members insist on raising points of order for another half an hour or so, they will merely waste the time of the House of Commons.
  Mr. Norman Lamont: I should point out to the Lord President that although this is an extremely important Bill, it is also extremely short. The idea that there will be a prolonged Committee stage and that there is any real danger of the Government not getting the Bill before Easter is totally unreal, as the right hon. Gentleman must know. The Committee stage, by the very nature of this brief Bill, cannot be very long. Therefore, the right hon. Gentleman's fears and reasons for not having the debate on another day are totally groundless.
  Mr. Peter Hordern: On a point of order, Mr. Speaker. Will you advise us on how the interests of Back Benchers can be protected in this situation? The Leader of the House said that he was not prepared to give any undertaking now whether the debate would be extended. He prefers to do that through the usual channels. How can the interests of Back Benchers be properly protected?
  The Bill concerns not only the total sum to be advanced to the National Enterprise Board but the interests of Scotland, Wales and England and, not least, the Treasury. As one of my hon. Friends pointed out, whereas the Bill provides that the NEB is to be authorised to spend £4,500 million, the public expenditure White Paper allows no more than about £270 million for each of the next four years. Therefore, the least that the House should expect is the pres-
  2020
  ence of the Chancellor of the Exchequer or the Chief Secretary, but neither of those two right hon. Gentlemen is here. As time draws on, the possibility of any of these arguments being advanced dwindles into nothing. Therefore, will you advise the House how, in your opinion the interests of Back Benchers can be protected in this situation?
  Mr. Speaker: There is no means open to the House to stop the order of business on the Order Paper.
  Mr. Peter Bottomley rose—
  Mr. Speaker: Order. I believe that I have called everyone except the hon. Member for Woolwich, West (Mr. Bottomley). I shall take his point of order and then call on the Minister. [Interruption.] Order. I do not propose to stay here until 8 o'clock taking points of order because hon. Members do not want the Bill to be proceeded with. That is not my function. I cannot be expected to do that. I have been here since 2.30 p.m. as it is.
  Mr. Peter Bottomley: On a point of order, Mr. Speaker. I shall try to keep to my point of order rather than go into points which might be made in the debate on the Bill, if and when it comes.
  I understand that the Lord President, in his last point of order, made one suggestion and one recommendation which he put as a suggestion to the House. In his first suggestion he said that there should be discussions between the usual channels. It is quite plain that you alone, Mr. Speaker, have discretion to suspend the sitting so that those discussions can take place.
  The second suggestion made by the Lord President was that the House should continue to consider the Bill. He is far more expert than I am on these matters. I do not believe that he would have put that forward as a suggestion for the House to accept if it were not in some way possible for the House not to accept it.
  When you were ruling on the point of order raised by my hon. Friend the Member for Cambridge (Mr. Rhodes James) you kindly read part of Standing Order No. 1. You said that, in certain circumstances, it was not possible for any Member other than a Minister of the Crown

  2021
  to move the Adjournment of the House. Notwithstanding the difficulties which you expressed just now of having been here since half-past two, this seems to be a serious point. If there are circumstances in which the Chair may accept the motion for the Adjournment of the House proposed by my hon. Friend the Member for Cambridge, we need to be clear about the circumstances in which the restriction to a Minister of the Crown applies. I should be grateful if you could give us the information on that matter as well as dealing with the point made by the Lord President that he was making a suggestion on which, in one way or another, the House could find the opportunity to decide.
  Mr. Speaker: If the hon. Gentleman, when he has an opportunity, will look at page 354 of "Erskine May" he will find in the last paragraph the knowledge for which he has been searching.
  Mr. Bottomley: Further to that point of order, Mr. Speaker. The point that I was making related to Standing Order No. 1, of which you were kind enough to read all or part. That suggested that there certain circumstances when only a Minister of the Crown was able to move a motion for the Adjournment of the House. Is it possible that we are now in a different circumstance which is not covered by the provision that you read at that time?
  Mr. Speaker: The reference in "Erskine May" to which I directed the hon. Gentleman's attention was dealing with Standing Order No.1.
  Several Hon. Members rose—
  Mr. Speaker: I shall take one more point of order, and then I intend to call the Minister.
  Sir Keith Joseph: A number of constructive suggestions have been made. I wonder whether through you, Mr. Speaker, I may again draw to the attention of the Lord President the fact that because of the possibility that you will decide to devote the last three hours of Monday's business to a debate under Standing Order No. 9, that will leave a slot in the earlier part of the day when this debate could be continued. We would
  2022
  then, in effect, have a full day's debate, though spread over two days.
  I think that that suggestion would meet the convenience of the House more than any attempt to rely upon the uncertain chance of the Government not trying to move the closure and your inevitably uncertain response—we cannot know what you would decide at that stage—of trying to cram important matters of principle and of finance into so short a time today.
  No Opposition Member is seeking by any improper means to gainsay the Government's right to have the Bill considered. What is at stake is a matter of a couple of days if we adopt the proposal which has been put forward. That will not even delay the entering of the Bill into Committee, should it receive a Second Reading.
  Mr. Foot: On a point of order, Mr. Speaker. If the House will proceed on the lines that I have suggested, I believe that the whole matter can be perfectly well accommodated. If the right hon. Member for Leeds, North-East (Sir K. Joseph) had acceded to what I suggested earlier, it could have been dealt with.
  I suggest that we should start upon the debate now. I wish that it could have been done earlier. We can then have discussions through the usual channels—[HON. MEMBERS: "They have had them."]—and reach the same conclusion as I suggested to the House earlier. I believe that that is a reasonable way in which to proceed. How we proceed to continue the debate at a later stage is, I suggest, a suitable matter for discussion through the usual channels. I suggest that we can deal with that matter at 10 o'clock and in a further announcement in the House tomorrow. The whole matter can be dealt with satisfactorily. I suggest that the best course would have been for the House to have listened to me in the first place.
  Several Hon. Members rose—
  Mr. Speaker: Order. The House should be aware that discussions through the usual channels seem to have borne fruit. In my own interests, I shall suspend the House for 10 minutes.
  6.30 p.m.
  Sitting suspended.
  On resuming—
  6.40 p.m.
  Mr. Foot: May I suggest that the best way in which the House should proceed is to start upon the debate now but not to seek to reach a conclusion on the Second Reading at 10 o'clock. We shall make an announcement at the beginning of business tomorrow as to how we shall proceed with the Bill again at the beginning of next week.
  I hope that that will satisfy the requirements of the Government in wishing to proceed with the Bill but also satisfy the requirement of the House to have time to discuss it.
  Mr. Speaker: It seems that the suspension of the House was good for all.
  Sir Keith Joseph: I thank the right hon. Gentleman for what he has said, and I hope that Opposition Members will regard what he has suggested as a satisfactory method of carrying on with the debate.
  6.41 p.m.
  The Secretary of State for Industry (Mr. Eric G. Varley): I beg to move, That the Bill be now read a Second time.
  The purpose of the Bill is to raise the financial limits of the National Enterprise Board, the Scottish Development Agency and the Welsh Development Agency, and to amend the Acts governing them so that all the borrowings of their subsidiaries count against their financial limits.
  My right hon. Friend the Secretary of State for Northern Ireland intends to introduce an order increasing the statutory financial limit of the Northern Ireland Development Agency. This order, too, will require that borrowings by the Agency's subsidiaries should be charged against its financial limit. Because of the arrangements for legislation relating specifically to Northern Ireland, this order will be dealt with separately.
  The NEB is by any objective assessment one of the great success stories of British industry. It was a central feature of the industrial policies put forward in the Labour Party's manifestos in 1974. The legislation setting it up was carried as a matter of priority in the first Session of this Parliament. It has now been in
  2024
  operation for a little over three years, and it is already impossible to imagine the British industrial scene without it.
  Nine months ago I asked the House to approve an increase in the financial limit of the NEB in the manner provided under section 8 of the Industry Act 1975. We had a very full debate then, covering the whole range of the NEB's activities, at the end of which the House approved an increase in the limit from £700 million to £1,000 million. Now we must now look ahead to the time when the NEB has reached that limit.
  The charges that at present lie against the NEB's financial limits include issues of public dividend capital to the NEB, borrowings made and guaranteed by the NEB; and commercial borrowings by the NEB's wholly-owned subsidiaries whilst in the NEB's ownership. At 31st December last the NEB had drawn £439 million in public dividend capital; borrowed £160 million from the National Loans Fund; and guaranteed loans amounting to £5 million. At the same date its wholly-owned subsidiaries had borrowed £56 million. The total currently charged against the NEB's limit stands at £660 million. This figure is the charge that the law requires should be made against the NEB's financial limit. But the NEB is continually entering into firm forward commitments, to its subsidiaries and associates, which will present charges against the limit in due course. The total of these commitments varies widely over time, but at 31st December it stood at £170 million, excluding provision for British Leyland and Rolls-Royce.
  The total of firm commitments and actual charges now already amounts to £830 million, plus whatever is required for BL and Rolls-Royce. The latest corporate plans of these companies will not be endorsed for some time yet, but there is every reason to think that substantial investment will be required in the course of the coming months, and although some of this may be met by private sector borrowing and internally generated funds, a major part will be the responsibility of the NEB to provide.
  Mr. Kilroy-Silk: Can my right hon. Friend tell me why we should tonight support an additional grant of funds to

  2025
  the NEB, given its very shoddy performance in the North-West and on Merseyside, its persistent refusal to support the Kirkby co-operative, the fact that it is almost totally unaccountable to Parliament and the fact that the Secretary of State consistently refuses to give it directions? It has such a total disregard for the high unemployment in the regions that it can locate the headquarters and research and development facilities of INMOS outside an intermediate area. Given all the kind of things—
  Mr. Deputy Speaker(Mr. Bryant Godman Irvine): If the hon. Gentleman is making an intervention, it should be brief.
  Mr. Kilroy-Silk: May I ask my right hon. Friend to take some time to explain to his colleagues on the Labour Benches why we should support an enterprise which is becoming increasingly like a commercial bank?
  Mr. Varley: If my hon. Friend had been able to contain himself for 10 minutes or so, I should have into some of the areas that he has covered. He is factually wrong on a number of the points that he has raised, but I can understand his frustration and anger at not yet having been able to make his speech. I am not sure that I can take up his points now, because so many of them are wrong.
  Perhaps the best thing for my hon. Friend to do would be to try to catch the eye of the Chair and make his speech rather than make these wild assertions. I am sorry that I must say that to my hon. Friend. I am about five minutes into my speech, and he says that I have not explained everything. I object to that kind of intervention.
  The NEB's present financial limit is likely to be reached within a fairly short time of the Bill's becoming law. The Bill makes provision for a total increase of £3,500 million. If the Bill is carried, the borrowing limit will include all the borrowings of the NEB's subsidiaries, and we envisage that these might amount to perhaps £1,500 million over the next five years. After taking account of that, the Bill provides for an additional £2,000 million to enable the NEB to pursue its statutory purposes of promoting the effic-
  2026
  iency and competitiveness of United Kingdom industry, and so generating increased employment.
  We have taken account of the fact that over a period of five years the NEB's present annual public expenditure provision of £275 million would require £1,375 million. We also have regard to the desirability of no longer augmenting NEB funding of BL from funds provided under section 8 of the Industry Act 1972. and to the contingencies of many sorts which could present themselves for the NEB. I know that the hon. Member for Colne Valley (Mr. Wainwright) was very interested that we should go to the NEB for the funding of organisations such as BL rather than rely overmuch on the Industry Act 1972. We therefore concluded that it would be sensible to envisage a provision of £2,000 million for the purposes I have described. This sum, as I have said, when added to the £1,500 million for subsidiaries' borrowings, points to this increase of £3,500 million in the NEB's financial limit, for which this Bill provides.
  However, as is usual, the Bill provides that this increase should be approved by the House in stages, and therefore the limit initially is set at £3,000 million, an increase of £2,000 million, with further increases subject to affirmative order within the ultimate limit of £4.500 million. These increases in the financial limits of the NEB will not of themselves add a penny to public expenditure. What they will do is to enable the NEB to continue entering into financial commitments. Fly no means all the commitments involve public expenditure. We believe that between one-third and a half of the increases that we are seeking in the NEB's limit will be drawn from private sources of finance.
  Now I come to the borrowings of the NEB subsidiaries, which are specifically mentioned in the Bill. The secondary purpose of the Bill is to amend the Industry Act and the Scottish and Welsh Development Agencies Acts so that the borrowings of all their subsidiaries are charged against their financial limits.
  In the case of the NEB, under section 8 of the Industry Act 1975 the charges against the NEB's financial limit include the borrowings of its wholly-owned subsidiaries and loans of any sort which are

  2027
  guaranteed by the NEB. There are similar provisions in the Agencies' Acts.
  In March 1977 BL's auditors sought an assurance from the directors that BL's accounts could be prepared on a going-concern basis.
  The directors in turn sought assurances from the NEB. In reply, with the Government's approval, the NEB drew attention to the provision in the NEB guideline that
  "in deciding on their practice in relation to the debts of their subsidiaries the NEB shall have regard to the practice of companies in the private sector"
  and went on to say that, in the judgment of the NEB,
  "in the private sector, a company whose relationship with BL was the same as that of the NEB, by virtue both of the size of its shareholding and the closeness of its involvement in the affairs of BL, could not allow BL to be left in a position where it would not be able to meet its obligations."
  That assurance was made public when I reported it to the House, as hon. Members will recall, on 26th May 1977.
  We were advised that the assurance, which covered all BL's obligations, was not a guarantee in law, and so there was no question of BL's borrowings being charged against the NEB's financial limit on that account. Nor is BL a wholly owned subsidiary of the NEB, which would also require its borrowings to be charged against the limit. But we recognise that the assurance has a degree of force which makes it difficult to distinguish, for all practical purposes, from a guarantee, and we thought it right, therefore, to take the first legislative opportunity to charge BL's borrowings against the NEB's financial limit.
  Because the same principles apply to all NEB subsidiaries, it was appropriate to provide that all their borrowings should be included within the limit in future. In reaching that view we were fortified by recent views expressed by the Public Accounts Committee about financial limits.
  This has meant that we have to seek a much higher limit than would otherwise have been necessary, and the Government think that it would be right to extend the provisions to which I have referred to the Scottish Development Agency and the Welsh Development Agency, because their industrial investment tasks are essentially the same as those of the NEB. Subsections (5) and (7) of clause 1 have that effect.
  Mr. Hal Miller: Does that mean that creditors of BL are now in receipt of a Government guarantee? Has the principle been extended to that degree, or is the right hon. Gentleman referring only to the later borrowings of the company?
  Mr. Varley: The principle has not been extended. That is why I took a great deal of care over the words that I used, and I ask the hon. Gentleman and those who have an interest in these matters—companies, suppliers and the rest—to take careful note of what I have said. I have no doubt that this matter will be gone into much more thoroughly in Committee.
  Mr. Michael Grylls: May I ask for clarification? The Secretary of State has given a figure for the borrowings against the NEB on the present system under the 1975 Industry Act of the wholly-owned subsidiaries. Can he give us a new figure on the new accounting practice as if the Bill had received the Royal Assent today? Can he give us the figure which would be the equivalent of the £660 million which he is giving us now?
  Mr. Varley: The hon. Gentleman will, I am sure, recognise, that it is extremely difficult to do so. It is difficult, even if one knows exactly what the borrowings are, to give a figure, but, as he knows, and as the House knows, these figures are changing all the time, and we cannot give an accurate estimate at this stage. It may well be that in Committee something can be done—perhaps the Committee can be given a snapshot of the situation at that time—but I am not prepared to give that figure today. I understand the hon. Gentleman's point, but I hope he will understand the relevance of what we are doing and the explanation that I have given.
  I should like to come to the NEB's record. It is, of course, dominated by BL and Rolls-Royce, and really those two companies take up a great deal of the NEB's responsibility and time.
  BL is the NEB's largest subsidiary, and the Government's position on future funding remains exactly as I told the House when we debated the 1978 injection of equity funds in April last.
  Of the £1,000 million of public funds which the Ryder report recommended

  2029
  should be made available to BL between 1976 and 1981, £400 million remains to be provided. As I told the House last year, the Government are willing in principle to release sums up to this amount in total between now and 1981 if BL's performance and prospects remain in line with its corporate plan.
  No one concerned with BL's future—whether part of management or the work force or simply a taxpayer—should be under any illusion that the Bill implies an additional commitment on the Government's part to convey yet more funds to BL beyond the £1,000 million. But I must make clear to the House that unless this Bill is carried the NEB will not he able to fulfil the existing commitment. Failure to carry the Bill will throw the whole future of BL into jeopardy.
  The objective of the Government, the NEB and BL management continues to be to restore BL as a major commercially viable motor manufacturer. I want to make it clear to all concerned that the investment funds which an international motor manufacturer needs year by year to keep up with its competitors are on a scale well beyond what could possibly be spared out of public funds. BL will have to provide funds out of its generated profits, and certainly there will have to be borrowings from the private market. So, to survive into the 1980s, BL mast achieve a commercially acceptable level of profitability so that it can draw investment funds both from its own resources and from finance attracted from the private sector.
  Mr. Hal Miller: I am sorry to interrupt the right hon. Gentleman again, but can he tell us whether BL is still required to match on a 50-50 basis, or is he referring to some level of profitability? Is the original requirement to match over the period to 1981 still in existence?
  Mr. Varley: As the hon. Gentleman knows, we missed that objective some time ago owing to the troubles that we had, which we explained at the time during the toolmakers' dispute. I want to emphasise however—[interruption.] Of course I said it, and at that time it was utterly realistic to say it. There were internal difficulties in British Leyland at that time, which I need not go into now. But I assume that all hon. Members want
  2030
  British Leyland to be a success. I shall come in a moment or two to say exactly what success it has had over the last few weeks. I want to be as precise as I can. The original Ryder commitment was for £1,000 million of public funds, and we are ready to provide the other £400 million that remains out of that over a period to 1981, provided we are satisfied with the performance of the rest of it.
  Mr. Hordern: The right hon. Gentleman will recognise that the Public Accounts Committee considered BL's borrowing and the letters of comfort. It is plain that BL will have further recourse to letters of comfort. I think the right hon. Gentleman recognises that in the last resort the Government will be expected to stand behind BL. I believe that those are the words that he used. My recollection is that that was the recommendation of the PAC. That being so, is it not clear that that constitutes an addition to the central borrowing requirement? I understand that it need not come through from direct public dividend capital in grants toward BL or the NEB, but does it not follow from the letter of comfort that if the Government are standing behind the company that should constitute part of the general borrowing requirement? If so, where is that part of the general borrowing requirement expressed in the public expenditure White Paper?
  Mr. Varley: I am tempted to go into a long explanation. As the hon. Gentleman realises, that section of the NEB's responsibility to BL is a matter of much commercial sensitivity. Any words of mine in the House must be carefully weighed. At this stage I do not want to add to the words that I have used in clear and precise terms, which will be considered closely outside the House.
  The PAC's views were taken into account in drafting the Bill and in my speech. I shall return to accountability and the views of the PAC. It is not the Government who are standing behind BL but the NEB. I refer the hon. Gentleman to the guidelines. The NEB will treat BL as any other major holding company would treat one of its subsidiaries. The hon. Gentleman has raised an important matter and I do not want to say or imply that we are doing something that we are not.

  2031
  I have said that the funds remaining under the original Ryder proposals amount to about £400 million. Provided that in terms of the corporate plan BL makes satisfactory progress towards the target set by the BL board and approved by the NEB and the Government, we are prepared to make that money available.
  Mr. Michael Edwardes, BL's chairman, put the matter of further Government funding plainly enough last February in his speech to management and employees. I agree entirely with what he said:
  "There is no way that the Government can provide the funds we need"—
  those are the funds that it needs—
  "unless it is clear we are working as a team and towards the common objective of restoring BL to health and success."
  To operate profitably in fiercely competitive world markets BL needs to achieve sustained production, which in turn depends very largely on the avoidance of constant unofficial disputes.
  I am sure that the vast majority of the BL workforce want the company to succeed. Before Christmas we saw some encouraging signs. There was the two to one majority by which the BL work force accepted the management's pay and productivity package. That was an encouraging sign. BL's car business was turned from loss to profit in the first half of 1978. The new Rover saloons were successfully launched in Europe, with production at Solihull roughly doubling over the past 12 months. New engines were introduced into several of the company's vehicles.
  As I said at Question Time on Monday, decisions about public funding for 1979 must await the NEB's report on BL's 1979 corporate plan. I expect to receive the plan shortly. When we have studied it, I shall put the Government's conclusions before the House. This debate will not deprive the House of the opportunity to study and discuss funding arrangements for BL on a later occasion. I told the House on Monday that I wanted to provide additional information so that the House would have as much information as practicable.
  I must stress that the Bill is not a blank cheque for assistance to the company. The survival of the company and of the hundreds of thousands of jobs dependent upon it can be achieved only by the efforts of management and the work force.
  2032
  The only valid guarantee of their future is to maintain their competitiveness.
  If 1978 was a turnabout year for BL—I think it was—it may equally have been a commercial turning point for Rolls-Royce. In March it received an order for its RB211 engines to power the Lockheed TriStars for Pan-Am in the face of fierce competition from American engine manufacturers, especially General Electric. That was a vital deal for the company. It ensured that Rolls-Royce retained its position as the only engine supplier for the TriStar. It broke new ground with one of the world's major airlines.
  Since then, the RB211–535 engine has been chosen as the launch engine for Boeing's new 757 aircraft, which has been ordered by British Airways and Eastern Airlines. The Government have approved the launch of that engine, which will also be suitable for other aircraft in the new generation of civil airliners. The development will secure many jobs not only in Rolls-Royce's own factories but among the company's many suppliers throughout the country. It will preserve Britain's position in this high technology industry.
  The company has done well in other areas. The RB211 has been chosen to power the Boeing 747s used by both Cathay Pacific and Qantas. The company's other engines continue to sell well, and the Spey deal with Romania will help to ensure the continued production of the engine over the next few years. I must make it clear that the development of the 535 engine and the further improvements to the basic design of the RB211 will involve substantial expenditure over the next few years—expenditure which is vital if the company is to remain in the big league of world aeroengine manufacturers. Let the House be in no doubt that the passage of the Bill is essential for the continued prosperity of Rolls-Royce.
  Mr. Ian Lloyd: Will the right hon. Gentleman inform the House whether the scale of the research and development commitment for the new mark 211 engine is at the same level of magnitude as for the original 211 engine?
  Mr. Varley: Frankly, I do not know. I do not know whether the scale is the same. I assume—if this were not so I should not have had the recommendation that I received—that the scale of R & D

  2033
  and other resources devoted to it is adequate. I do not know whether it is on the same scale. I should think that it is not, given that perhaps there is some carry-over of transfer technology taking place from the original 211 engine to the 535. That is a, matter of interest to me. It is a matter on which I should obtain more information, and I shall write to the hon. Gentleman about it.
  BL and Rolls-Royce are the NEB's major commitments. However, it has important and profitable investments in other significant companies. Ferranti is a great success story. The NEB increased its shareholding in ICL last week and is now the principal single shareholder. Substantial profits are expected for 1978 from Fairey. Then there are the small companies for which the NEB is a crucial new source of capital.
  Mr. Frank Hooley: Has any directive been given to the NEB, or is it operating on any understanding, about the activities in South Africa of the companies for which it is the holding agency? It is known that British Leyland has important and expanding activities in South Africa. We know that ICL is indulging in the supply of computers to the South African police and armed forces. That supply has political implications, apart from economic ones. Has the NEB received any directives on this matter from the Government? If not, is it intended to give it any such directives?
  Mr. Varley: I should have anticipated my hon. Friend's question. I know that he takes a great interest in these matters. We have had correspondence on them. British investment in South Africa is something to which the Government have given some attention recently. My right hon. Friend the Minister of State has had discussions with ICL on that very issue. We shall have to ascertain the result of the discussions with ICL. When that has been done, and if it becomes necessary, we shall make suitable arrangements to inform the House.
  The NEB is an important instrument in the action in relation to the Government's industrial strategy. A notable success is the role that it is playing in computers, computer software and micro-
  2034
  electronics. The actions of the NEB in these sectors have helped. A major impetus has been given to the ability of the United Kingdom to compete in what promises to be a major new development between now and the end of the century.
  Another area of crucial importance is the development of the NEB's regional boards. I want to see the Board's interest increase. It has a statutory responsibility to promote productive employment throughout the United Kingdom. That is its primary responsibility. But sometimes the impression is given that it has little employment interest in the regions. That is not true. There is not a region in the United Kingdom in which the NEB does not have an interest. For example, it has a stake in companies in the North-West region, which are employing more than 25,000 people.
  I am sorry that I was rude to my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk) but he should realise that the NEB has a stake in the North-West. There are 25,000 jobs dependent upon the NEB. It ought to do better and I agree with him on that. It has to do more in the regions. There is no limit in the NEB's total budget to the funds available for regional purposes.
  Mr. Kilroy-Silk: I am grateful to my right hon. Friend for giving way, but he said that everything I had said was wrong. I hope that he will now contradict me and say that I am wrong when I say that the NEB will not help the Kirkby co-operative as a fall-back position and that the INMOS headquarters research and development facility will not be located in Bristol.
  Mr. Varley: With regard to Kirkby, my hon. Friend knows that that was not a recommendation of the working party. The working party on Kirkby was set up at the request of the workers' cooperative. We agreed to it and they agreed to abide by the findings. We now know they are not doing so, and there is an application by Kirkby before the Department. We are statutorily required to consider that under the terms of the Industry Act 1972 and we shall do so. Kirkby has been closed for the past two weeks, not by any action by the Government but by industrial action. I cannot understand why the Transport and General Workers' Union, by primary or

  2035
  secondary picketing, should want to close that co-operative. I hope my hon. Friend is using his influence to ensure that it gets the necessary supplies. It will not serve any purpose to keep that cooperative closed.
  With regard to INMOS, the headquarters has not been located in Bristol. The decision has been taken to locate the technology centre in Bristol but not the headquarters. I hope that the INMOS project will be a success. Even that must be put in perspective. About 90 per cent. of the expenditure and 90 per cent. of the jobs will be in the assisted areas. Everyone is expecting me to give the NEB some direction. At some stage one must follow the judgment of those with the responsibility.
  Some Conservative Members may say that the NEB should not be in microelectronics at all. I must rely on the judgment of the Board. Provided that it acts within the statute—and it does act within it— there is no reason for me to put my judgment over that of the Board. I should have been delighted if the technology centre had been located in Manchester or somewhere else in the North-West. I could not say to the National Enterprise Board and people with greater knowledge of microelectronics than mine that their judgment was wrong.
  With regard to general financial duty, on each investment that it undertakes on its own account the NEB is required to seek an adequate return within a reasonable period, not losing sight of profitability. On these investments the NEB is under a financial duty to earn a return on capital employed of 15 per cent. to 20 per cent. by end-1981, and to make steady progress towards that rate in the meantime. It is not essential that each and every investment should secure this rate, but the NEB's investments as a whole, other than in BL and Rolls-Royce, must do so.
  So the NEB has clear responsibilities in relation to financial performance. The duty is an essential discipline, and one to which the Government attach great importance, since it is the only satisfactory way of appraising the NEB's success. This was of great significance in the difficult issue of the NEB's accountability to Parliament.
  Mr. Michael Marshall: The House is grateful to the Secretary of
  2036
  State for giving way a number of times. The last unaudited accounts that we have were received some time ago. Will he give us the latest figures for return on capital as at 31st December on unaudited accounts?
  Mr. Varley: I cannot give that information, but steady progress is being made on these investments to meet that target of 15 per cent. to 20 per cent. by the end of 1981. It is significant and I do not want to play it down. I want to give the House as much information as I can about the National Enterprise Board, its targets and its performance. It is an organisation that is well worth supporting. I hope that Conservative Members will not in subsequent speeches stick to their original hostility or pursue a vendetta against the NEB.
  On the question of accountability, the Public Accounts Committee has urged that the Comptroller and Auditor General should have access to the NEB's books in order that the Committee may be advised in detail of the way in which the NEB has made its investment decisions. I know that this is a matter on which the Committee has the support of many hon. Members. The Government, for reasons which the Committee presented very fairly in its reports, has taken a different view.
  There are, however, some points that I should like to make briefly. It would be wrong to imagine that the NEB is somehow escaping parliamentary control. The NEB is accountable to Parliament and there is no doubt about that. My Department has clear arrangements for monitoring the NEB's activities, for examining its plans and for authorising major new investments and financial commitments. All my Department's records are accessible to the Comptroller and Auditor General. The Public Accounts Committee has every opportunity of examining the Department and the NEB about any aspect of the NEB's affairs. I am answerable to Parliament for the NEB's overall performance, within the well-established limits and procedure of parliamentary practice, as explained by my right hon. Friend the Leader of the House on 18th December 1975.
  But these matters need to be considered in the wider context of the Comptroller and Auditor General. My right hon.

  2037
  Friend the Minister of State, Civil Service Department, told the House on Monday that the Government had taken careful note of the views of the Expenditure Committee, the Public Accounts Committee and the Procedure Committee on this matter. In particular, the Expenditure Committee has made various recommendations concerning public audit arrangements, including the suggestion that the Exchequer and Audit Departments Acts need revision.
  The Government have been considering this carefully, together with the recommendation by the PAC that the Comptroller and Auditor General should have access to the books of the National Enterprise Board and the British National Oil Corporation. I hope the House will accept that our response should be made within the framework of a considered response and a proper look at this, rather than a piecemeal response.
  This would probably be done best by fresh legislation defining more directly and explicitly the responsibilities of the Comptroller and Auditor General in modern conditions. The Government have noted that the Comptroller and Auditor General has himself expressed support for this view. Accordingly, the Government have decided to put in hand a study of the Comptroller and Auditor General's present-day role and the corresponding new legislation that would be necessary, with a view to considering the introduction of a Bill in the next Parliament.
  We have noted that the Public Accounts Committee will conduct a further inquiry into its own possible developments in the role of the Comptroller and Auditor General. The Government will wish to consider any further proposals which may result and will, in any event, arrange for the appropriate parliamentary Committees to have the opportunity to express views in due course on the Government's specific proposals.
  Mr. Michael English: I thank my right hon. Friend.
  Mr. John Garrett: What kind of study is this? My right hon. Friend seems to have announced a major constitutional reform in the course of a debate where such an announcement would not be expected. Is this study to be a parliamentary one? Will a Com-
  2038
  mittee of the House carry it out? Also, what will be its relationship with the studies that have already been undertaken?
  Mr. Varley: It will be held in connection with studies which have already been carried out. The Procedure Committee had a good deal to say about this. My right hon. Friend the Chief Secretary to the Treasury will be in charge of this aspect, because it spans several Departments and organisations. He will fill out the details at an appropriate time.
  Mr. Hordern: The Secretary of State has made an important announcement. The powers of the Comptroller and Auditor General are very old and very important. Will he assure us that there will be no diminution of the responsibilities and powers of the Comptroller and Auditor General?
  Mr. Varley: It is certainly not in our mind to have any diminution in the powers. That has not been considered by the Government at all. I can give that assurance.
  Mr. Edward du Cann: The proposal that there should be an examination by Government of the function of the Comptroller and Auditor General and the Exchequer and Audit Department is to be welcomed. So is the rapid timetable that the Secretary of State has suggested in that regard. However, the rest of the statement is far from satisfactory. The suggestion that the Comptroller and Auditor General cannot have access to the books of the National Enterprise Board or the British National Oil Corporation is not acceptable. A Select Committee of this House has twice recommended—the first occasion 18 months ago —that a different situation should obtain, and the Secretary of State has a duty to accept that recommendation. There is no logic in the proposal that this should not be allowed.
  On Monday it was agreed that the Comptroller and Auditor General should have access to the books of the national Housing Corporation, and there can be no sense in denying him the opportunity to see the books of the NEB if he is allowed full access to the books of the Scottish Development Agency. I hope the Secretary of State will reconsider this.
  Mr. Varley: I stand by what I have said tonight. We shall have to see how the review takes place. I am not yet persuaded to go as far as the right hon. Member for Taunton (Mr. du Cann) has suggested, for the reasons that we have made plain on previous occasions. The Government's views have been conveyed to the PAC.
  An impression has been given that, by some means or another, the Government are evading their responsibilities under the 1975 Act. That is not true. The right hon. Gentleman and some of his hon. Friends say that this is inadequate, and that is a defensible point of view. Probably it is inadequate in their eyes, but we think it is satisfactory at present and that there is adequate scrutiny by Parliament of the NEB.
  At the end of the day the PAC has the power of all Select Committees and can send for persons, papers and records. It can hand those papers over to the Comptroller and Auditor General who can then decide, report and advise the Committee. I do not think that we shall persuade one another. As a Government we have gone a long way to meet the points that have been made.
  Mr. Budgen Mr. Budgen rose—
  Mr. Varley: No, I really must get on. I have already given way a great deal. I am not being discourteous to the hon. Member.
  I move on to the Scottish Development Agency and the Welsh Development Agency. Like the NEB, they have an important role as a source of investment finance for industry. The SDA and the WDA have powers that parallel very closely those of the NEB. But, in addition, the Agencies have powers and duties to undertake environmental improvement schemes, to build factories, to clear derelict land, to engage in industrial promotion and to provide loans and advisory services to small firms. My right hon. and learned Friend the Secretary of State for Wales and my right hon. Friend the Secretary of State for Scotland have asked me to pay a special tribute today to the imaginative and effective way in which their respective Agencies tackle their formidable and challenging tasks—[HON. MEMBERS: "Where are the Secretaries of
  2040
  State?"] I cannot understand the sudden enthusiasm of the Tories, because they voted against both these Agencies coming into being.
  The Scottish Development Agency has firmly established itself in the industrial scene and has gained widespread and genuine acceptance and support from the Scottish banks and industry and commerce generally. The SDA has built up equity investments in 35 companies throughout Scottish industry, amounting in total value to £20 million. That is in addition to its loan investments and the special help that it gives to small firms. Upwards of 35,000 jobs already depend directly or indirectly on the SDA's work. It has built and converted factories to the extent of 1·5 million sq. ft. It has taken a leading part in the special environmental and industrial renewal projects in the east end of Glasgow, and it is responsible for other major environmental schemes on Clydeside. It has approved £60 million worth of schemes for the clearance of derelict land in Scotland and developed a steadily expanding effort in industrial promotion both at home and overseas.
  The Welsh Development Agency has comparable achievements to its credit. In addition to its important role as a source of investment finance for Welsh industry, it is responsible for an ambitious and successful programme of factory building and for forming a "land bank"—
  Mr. Dafydd Wigley: The Secretary of State mentioned the number of equity holdings of the SDA in Scotland. How many equity holdings does the WDA have in Wales? Can he confirm that these are substantially fewer and that if £250 million is going to the WDA there is a strong case for more work in this direction?
  Mr. Varley: I do not think that I have the information with me, but when my right hon. Friend winds up this debate, whenever that may be, he will try to give that information. If the hon. Gentleman is saying that the Agencies must do even more—and he is one of the first to pay credit to their efforts so far—I agree with him.
  The hon. Gentleman knows that the WDA provides new sites for industry,

  2041
  housing and schools, especially in the South Wales valleys where industrial land is scarce. The WDA is responsible for a growing programme of environmental improvement which is important in the older industrial areas. Through its small business unit, the WDA provides loans and advisory services to many small businesses which are such a significant source of employment in the Principality. It is doing an outstanding job in promoting the attraction of Wales as a location for industrial development. In the three years since its establishment, the Agency has worked to support the Government's strategy in creating a diversified, modern industrial base in Wales. Its philosophy has been that of the industrial strategy. The key to better employment prospects lies in the creation of efficient, internationally competitive industries.
  The Agency's role as an instrument of economic development is widely accepted by both sides of industry in the Principality. I am sure that the House will recall the opposition of the Conservative Members to the Welsh Development Agency Bill—they voted against the Second Reading—although I understand that they have since had a change of heart. I hope that that is so and that the Scottish Tories have had a similar change of heart about the Scottish Development Agency. I hope that the English Members will also have a change of heart about the NEB at some stage.
  Mr. Wyn Roberts: In November we were told in the Welsh Grand Committee that the Welsh Development Agency had spent just under half of the £100 million that it was allowed to spend under the Welsh Development Agency Act 1975. The Government could, of course, have followed that up by coming hack to the House for an extra £50 million some time in the next financial year. Can the Secretary of State explain why there is this hurry to increase the money available to the Welsh Development Agency at this time when no increase in the rate of spending is anticipated?
  Mr. Varley: I do not want to avoid that question, but, as the hon. Gentleman knows, the WDA has the same powers of investment as the NEB. Even though Conservative Members opposite voted against the Agency, I expect, as does the
  2042
  Secretary of State for Wales, that the resources to be allotted to it will be needed over this period. I shall come to that in a moment. I think that the hon. Member for Pembroke (Mr. Edwards), who speaks on Welsh matters for the Opposition, will be the first to acknowledge that, far from being seen as some sort of menace to industry in Wales, the WDA is now very welcome and is encouraged—and I am sure the hon. Gentleman is encouraged—by the support that it gets from industry and the banks.
  Mr. Nicholas Edwards: The right hon. Gentleman has not so far given us a single figure about the Welsh Development Agency. Can he, therefore, give us the aggregate amount outstanding against the present limit and tell us how much of that aggregate amount outstanding relates to the general external borrowing of subsidiaries which is being brought in, we understand, for the first time?
  Mr. Varley: I am coming to those figures, but I am saying to the hon. Gentleman that I think he now realises that the Agency has an important role to play. He did not actually say so when he intervened, but I take it for granted that the Scottish and Welsh Tories have now repented on these matters and that they really do support the Agencies. The Agencies support the economies of Wales and Scotland and the Bill will give them the financial security to plan ahead. The point on which the two hon. Members from Wales who have just intervened ought to focus their minds is whether the Agecies will have the financial security to plan ahead. They need to know exactly what they have spent and that is the question to which I am coming now.
  The initial limit of the SDA is increased from £200 million to £500 million, which may be raised by an affirmative order to £800 million. In total, the limit is raised by £500 million, and this represents, as far as we can estimate, about five years of further activity for the Agency.
  Nobody can be absolutely precise about this matter. It may be that the spending will be higher, and in that case, with the encouragement of the House, we should have to come back and look at that. That is the plan at the moment. So far the

  2043
  Agency has spent, or committed, about £170 million against its financial limit, and my right hon. Friend the Secretary of State for Scotland thinks it right to take this opportunity to seek to raise the limits as a reflection of the Government's confidence in the Agency's work and of their determination, often stated in the House, that the Agency should not be hampered in discharging its vital task because of uncertainty about its finances.
  For the same reasons, the Bill provides for the raising of the Welsh Development Agency's financial limit to £250 million in the first instance, and to £400 million subject to affirmative order. The total increase envisaged is £250 million, which represents about five years' activity for the Agency.
  Mr. Richard Wainwright: Before the right hon. Gentleman leaves the two Agencies, will he be good enough to explain to the House—because he has already explained the many similarities between the Agencies and the National Enterprise Board, and has also explained his concern that the Agencies should not in any way be hampered—in what way the Agencies have suffered from the inspection of the Comptroller and Auditor General which they have to bear, while the National Enterprise Board has not?
  Mr. Varley: I understood the point made by the right hon. Member for Taunton although I did not take it up. I think that I can give the House the explanation. I am an honest fellow, as the hon. Gentleman knows and if I do not know all the answers I am prepared to come to the Dispatch Box and say so. But the significant difference is that the Agencies have environmental responsibilities. They have additional responsibilities over and above those of the NEB. We know that the Agencies, both in size and in their resources, are different. They have taken over some of the responsibilities that are currently borne by some local authorities. That is one explanation and I hope that the hon. Gentleman will consider that and take it into account.
  Mr. Douglas Henderson: Can the right hon. Gentleman tell us, concerning the figures put forward for the Scottish Development Agency in particular, whether any percentage of the National Enterprise
  2044
  Board's money has been invested in Scotland over and above the figures he has given to us, and if so how much?
  Mr. Varley: I cannot give the actual figures of the amounts which have been invested, but Rolls-Royce has operations in Scotland, as does British Leyland and other organisations. For example, when I referred to a point made by my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk), I said that the National Enterprise Board had a presence in every region and country within the United Kingdom. The interests of the NEB in Scotland are significant. During the debate on the NEB (Financial Limit) Order last April we had a lot of talk from the Opposition—and I dare say that we shall have a lot of double-talk today—about their hostility to the National Enterprise Board. They are changing their attitude somewhat from total hostility, so that we no longer have the kind of speeches from the right hon. Member for Leeds. North-East (Sir K. Joseph) that we used to have from the hon. Member for Henley (Mr. Heseltine) when he was the Opposition's industry spokesman. The right hon. Gentleman is not quite as hostile to the concept of the National Enterprise Board as was the hon. Member for Henley.
  However, I hope that the Opposition do not try to pretend, as their reasoned amendment suggests, that they can vote against the Bill without inflicting damage on the vital work being carried out by the Scottish and Welsh Development Agencies. The defeat of the Bill would be a serious blow to confidence in Scotland and in Wales, and I hope that they will not pretend that they can vote against the Bill without doing harm to British Leyland and to Rolls-Royce. The defeat of the Bill would inflict irrevocable harm on those companies. British Leyland and Rolls-Royce and other subsidiaries of the NEB must continue, and I do not think that the Opposition can cancel out their votes by saying that they would create some other methods of dealing with the Agencies, with BL or with Rolls-Royce. They cannot do that. They can be sincere when they say that they want to support Rolls-Royce and British Leyland only by re-thinking their opinions.
  We shall be voting for the continuation and progress of the good work of the Agencies and the National Enterprise

  2045
  Board, and that is why I confidently ask the House to give the Bill a Second Reading.
  Mr. Deputy Speaker: I should inform the House that Mr. Speaker has selected the amendment in the name of the right hon. Lady the Leader of the Opposition.
  7.40 p.m.
  Sir Keith Joseph: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House, while accepting the usefulness of a significant part of the work of the Scottish and Welsh Development Agencies, declines to give a Second Reading to a Bill which is based on totally inadequate documentary evidence of the performance and prospects of the National Enterprise Board."
  The House will have seen from our amendment that we distinguish between the work of the Scottish and Welsh Development Agencies and that of the National Enterprise Board. My hon. Friends the Members for Pembroke (Mr. Edwards) and Glasgow, Cathcart (Mr. Taylor) and other hon. Friends from Scottish and Welsh constituencies tell me that much of the work of the Agencies, which have functions over and above those of the NEB, is valued in Scotland and Wales. That is particularly true of the functions of the Agencies that are not connected with industrial investment and, subject to watching the powers and the spending of the Agencies, we intend when we are returned to office to leave them in operation.
  We have noted the work done by the Agencies. It is particularly interesting to us that in its investment activities the SDA has taken care to go into partnership with private enterprise on a number of occasions rather than embarking on ventures on its own. The main point for the debate is that there is no need for the Agencies to appear in the Bill. The Secretary of State tried to give the impression that the Bill is vital to the work of the Agencies. He knows that that is rubbish. They have packets of head room within their present spending powers. However fast they go, it is inconceivable that they could use the money available to them within the next significant parliamentary period. We have the impression that the Agencies feature in the Bill and are given huge increases in their borrowing powers
  2046
  simply in order to demonstrate to the Scottish and Welsh nationalists how much the Government love them.
  It is necessary to point out to any who may be gulled by this apparent affection that, while the Government have proposed in the Bill to increase the borrowing powers of the Agencies, no provision appears to have been made in the public expenditure White Paper published yesterday for any extra spending power for either of the Agencies or for the NEB. The Bill is strictly a cosmetic operation, and I am sure that constituents in Scotland and Wales will see it for what it is.
  Mr. Ted Leadbitter: I want not to change the right hon. Gentleman's chain of thought but to follow it through. He made abundantly clear that a future Conservative Government would leave the SDA and WDA alone, but he omitted to say what was the intention of the Conservatives in regard to the NEB.
  Sir K. Joseph: I have nothing new to say about our intentions in relation to the NEB. We have explained them a number of times. We shall keep the Board to run its existing fortfollo, with the instruction that it should, with due care for the public interest, sell its assets when it can, which will, no doubt, mean that it will retain British Leyland and, perhaps, Rolls-Royce for a little longer than it will retain a number of its other assets.
  I am coming now to discuss the NEB because we regard it as a symptom of a deep Labour misunderstanding of the national economic position and need. I shall be saying some critical things about the function of the Board, but it is not my purpose to say anything critical about the members of the Board or the NEB staff. I have a respect for those whom I know. They are hard-working, diligent, well-intentioned, public-spirited figures and nothing that I say is meant to be critical of them. In fact, every time that the hon. Member for Ormskirk (Mr. Kilroy-Silk) attacks the NEB for what he regards as its disgraceful prudence, the Board members go up in my estimation. Indeed, I shall add to their reputation for prudence by mentioning that the Board has sold three companies, two at a profit and one at a loss. We should like to see the NEB release its assets to the

  2047
  private investor as frequently and as fast as possible.
  I must tell the House that one group of business men who had had dealings with the Board took the trouble to come to see me, entirely spontaneously, to say that they had found the staff of the NEB extremely effective and courteous in their negotiations. I say nothing critical about the Board members or the staff.
  Indeed, I must recognise that industry's own attitude to the Board is ambivalent. On the one hand, industry welcomes, in the dangerous world that Governments, particularly Labour Governments, have created for business people in this country, another possible source of help, particularly if that help can be obtained at slightly below the going rate. I am not suggesting that it is always obtained below the going rate, but can one blame business men for being glad that there is another possible source of help?
  On the other hand, the same people and some other business men resent the Board because it provides yet another unpredictable factor in an already excessively unpredictable economic world. Which business man can be sure, as he assesses the competition and risks faced by his venture, when or whether the NEB will plunge in with what is, in effect, subsidised, unbankruptable competition?
  I shall not try to assess the performance of the NEB because my hon. Friend the Member for Surrey, North-West (Mr. Grylls) and other hon. Friends will have a number of valid points to make in that regard. As we emphasise in our amendment, the House is being asked to approve a massive increase in the authorised funds of the three Agencies with disgracefully minimal information, reports and prospects before us.
  On two essential pieces of information, the Government are behind their own timetable. I think that we have a right to expect that by now the target rate of return for Rolls-Royce should have been announced and I am sure that we have a right to expect that the promised review of British Leyland, which was intended to start in November, should have begun. I gather that it has not yet even started.
  The Secretary of State said that I must deal with the charge that, in voting
  2048
  against the Bill, we shall be jeopardising the immediate future of British Leyland and Rolls-Royce. That is rubbish. The NEB has, on the Secretary of State's own admission, a total of £170 million head room under its present authorised capital. In addition, it could sell some of its assets, and if there remained a gap and a sum necessary to deal with the immediate needs of Rolls-Royce and British Leyland—and the Opposition have much confidence in Michael Edwardes and his colleagues being able to judge when, and how much of, the promised help to British Leyland should be released—the Government have the power to vote money, the same money that they are proposing to make available through the Bill, by other means. There is no validity in any charge that we are endangering the next stages of development of British Leyland or Rolls-Royce.
  We are grateful to the Secretary of State for not skimping on the time he devoted to the Bill, though we still feel that he has not given us nearly enough information on which to make judgments on these important matters. I do not propose to emulate the length of the Secretary of State's speech, much of which was taken up by answering questions. I intend to go to the nub of our objections to the concept of the National Enterprise Board. It exists. For the moment it has the function of looking after Rolls-Royce and British Leyland. We intend to keep it for that purpose for the time being.
  Our objection to the Board starts from the grandiose and pretentious claims that accompanied its birth and which still reverberate in the mouths of Labour Ministers and Back Benchers. I have a series of quotations from the right hon. Member for Bristol, South-East (Mr. Benn). I shall not weary the House with the bombast of their claims. But even in recent publications the Scottish Development Agency has been spoken of as being likely to promote the regeneration of Scottish industries. The Secretary of State did not insult us by saying that the Board will regenerate British industry, but he said that it will promote "national competitiveness and efficiency". We regard such claims as grossly unjustified and overrated. We believe that words such as "regeneration" associated with one body, however well-meaning, reveal a lack of understanding of our economic

  2049
  plight which makes this Government a danger to the nation.
  Labour's attitude to private enterprise has been hostile since the birth of the Labour Party. I have a personal regard for the Secretary of State, and Ministers have learned in a hard school. They have learned that it is not easy to make business decisions as one hurtles from one nationalised industry crisis to another, under-briefed, under-slept, under-informed and under-educated about the risks and the options of a bitterly difficult and competitive economic world.
  I can sum up what the Labour Party, in its no doubt sincere attitude to industry, has taught its supporters. First, it has taught that there is a conflict of interest between workers, managers and owners, and that that conflict should lead to obstruction rather than co-operation on the shop floor. That has been Labour's preaching in recent generations. Alas, it has been emulated in many of the trade unions.
  The second lesson which the movement taught was that people matter more as producers than as consumers. But it is consumers, at home and abroad—and only consumers—who are the real employers of producers.
  The third thesis which the Labour Party has taught is that profits, even when earned in competition and subject to the law, are evil and involve exploitation.
  I do not accuse present Ministers of saying that now. I am explaining the teaching of the Labour Party over the generations. I can provide innumerable examples of that teaching. Only too often has the Labour Party given the impression that wealth comes from Governments and that jobs can be created by Governments. The plight of our economy today —partially de-industrialised, competitive only thanks to low rates of pay and low rates of profit—is the result largely but not entirely, because the Conservative Party has played its part in not managing the economy brilliantly, of decades of discouragement by Labour preaching of enterprise, co-operation on the shop floor and economic success.
  Let us examine the results. The principal feature of our economy is control. We have exchange controls, pay controls,
  2050
  price controls, dividend controls and rent controls. We have a more controlled economy than any other free society. Our economy is dominated by high personal taxation at a vicious level which is resented by those earning at all levels of income, earned and unearned. Our economy is dominated by an anti-enterprise spirit. It is an economy with a large element of nationalisation with the immunity from bankruptcy that breeds indifference to the consumer interest.
  Mr. Varley: The right hon. Member says that this Administration have learned some lessons over the years. Perhaps he would like to tell us about the lessons he learned between 1972 and 1974. As a senior Minister in a Conservative Government the right hon. Member put on the statute book the Industry Act 1972, which gave all the powers which we now use.
  The right hon. Member was a member of a Government with a statutory incomes policy. That Government had price controls and dividend controls. He was a member of a Government which falsified all the accounts of the nationalised industries and by their counter-inflation policy plunged each of them into huge deficits. If he talks of lessons, he must tell us the lessons that the Conservative Party has learned.
  Sir K. Joseph: I do not deny that we have learned lessons. The country would be more comforted if the present Government accepted the mistakes that they have made. I shall not be diverted from this brief catalogue of the real problems of the economy. I have already referred to nationalisation. On top of all these evils there is high Government spending, borrowing and printing which leads to high interest rates and the crowding out of private enterprise.
  The Minister of State, Department of Industry (Mr. Gerald Kaufman): The Conservatives were the greatest printers of money of all time.
  Sir K. Joseph: Should not the Minister of State avoid the mistakes that the Government blame upon others? They are not avoiding them. On top of the other evils is pervasive Luddism sanctioned by the strike threat. All those evids will remain, alas, when present miseries have disappeared.

  2051
  This unique combination of disincentives, disadvantages, discouragement and controls has weakened British business. This is the evil that results largely from Labour attitudes. This is what must be corrected.
  Against that background the National Enterprise Board and the Bill are not only irrelevant but misleading. So long as these major evils go uncorrected—and Ministers tend to make them worse rather than better—what is the point of fiddling around with the National Enterprise Board?
  I have searched my memory of school days to find a phrase which summarises the situation of the NEB in this context. It is ignis fatuus—a will-o'-the-wisp. That is a natural phenomenon which leads people into quagmires, swamps and away from safety.
  The NEB, because it symbolises the Labour Party's belief that the economy can be saved by intervention which distracts it from putting right the economic evils, operates as a will-o'-the-wisp. The Board is a token of the Socialist illusion that one can bash and bash private enterprise but that it will still deliver the goods to support the endless public spending promises which Socialists make.
  But, as we see, private enterprise will not be able to go on delivering the goods. That is not because of an inherent weakness or managerial inefficiency. It is not because of a weak capital market but because of the conditions that successive Governments—particularly Labour Governments and more particularly this Labour Government—have created. Against that background, the NEB is a distraction down a blind alley. It has some uses, as I have explained, in connection particularly with British Leyland and Rolls-Royce. A prospering economy could afford it and would not want it. A weakened economy, such as ours, does not want to see its role magnified in the way that the Bill proposes.
  What can it usefully do? It can manage a portfolio of assets. Some of those assets and some of those investments will be successes. Some will be failures. I am not suggesting that it would be more successful if it managed more, but, if it is suggested that we have to have a National Enterprise Board to buy into British equities because the British capital
  2052
  market is not strong enough, let us see what is reducing the strength of the British capital market. Let us at least wait to see what the Wilson committee finds. But in the light of the enormous success of the British capital market in financing North Sea oil, I do not see that there is much evidence of weakness other than caused by the high taxation, the high inflation and the crowding out to which I have referred.
  The Secretary of State suggested that the NEB is needed for innovation and spoke of microprocessors. It is true that the NEB has awakened the media to the drama inherent in microprocessors, but are we in this House really to be asked to believe that until the NEB came along the great firms in this country and abroad, the General Electric Company, Racal, Plessey, Texas Instruments and all the others—I do not wish to insult any of them by leaving them out—were not watching closely and with passionate interest the fate and prospects of different developments of the microprocess world? After all, recent industrial history is littered with the corpses of firms which embarked too soon or in the wrong way on microprocess developments.
  I do not believe that the NEB can justify itself by what it has done by awakening media interest in microprocessors. Are we to believe that the NEB is to be justified by some venture—if it ever embarks on such a thing—into restructuring British industry? I have no evidence of such an intention, but how could we tell, even if it were to propose some great restructuring, that the project would turn out to be a GEC rather than a British Leyland? Initiatives taken in the past by agencies such as the NEB have often made things worse and not better.
  I shall try now to sum up our case. Britain does not need Enterprise with a capital "E" enthroned in the midst of an over-manned, over-taxed and over-regulated economy. What Britain needs is enterprise with a small "e" in hundreds of thousands of firms, resulting from an encouraging economic climate. We do not think that it makes sense to seek salvation by the route of Enterprise with a capital "E" while ignoring completely the need to create an encouraging economic climate for enterprise with a small "e".

  2053
  The NEB is a sort of Janus, a two-faced totem of Socialism. The recommendation of the Select Committee that private borrowings should be counted into the authorised capital of the NEB is no doubt an honourable one, but it is also very convenient for the Government, because it allows them, at no cost in public spending, to dress up a massive figure of public finance authorised for the three agencies. The result is that the Bill contains figures which no doubt Labour Ministers will peddle round the country as demonstrating their powerful support for interventionist Socialism, while at the same time they are stressing to the City and to the financial press that no extra public spending is involved.
  The Bill fosters further the illusion and error that salvation can come from intervention, and further indifference to and incomprehension of the real problems. The Government and the Bill focus on a fraction of the economy instead of on the economic climate as a whole. The Bill is a token of a wrong diagnosis and a wrong prescription. That is why I shall ask my right hon. and hon. Friends to vote for the amendment and against the Bill.
  8.5 p.m.
  Mr. David Watkins: The right hon. Member for Leeds, North-East (Sir K. Joseph) really let the cat out of the bag in relation to his party's policy towards the NEB when he indicated that that policy would be to use the NEB with the public resources at its disposal to spend public money to rescue failures, and that as soon as they had been made profitable at the public expense they should be handed over to private interests. That, combined with the vast cuts in public expenditure which his party is also proposing—in order to give large tax relief to the very private interests to which he proposes to hand over industries which have been made profitable at the public expense—would give the country a singularly unattractive and disastrous bargain.
  When my right hon. Friend the Secretary of State made his telling intervention about the Tory Government's record and about the Industry Act 1972, he could also have added that that Act had to be introduced by that Government be-
  2054
  cause of their doctrinaire and disastrous sweeping away of the apparatus for regional development which had been set up by the previous Labour Government. The right hon. Gentleman talked about a wrong diagnosis of the national position but his own diagnosis and his own party's record in office, and currently in opposition, lay his own and his party's diagnosis very much open to question.
  I want to deal particularly with the provisions of the Bill which relate to the NEB. As my right hon. Friend said in opening the debate, the NEB clearly needs more money for its requirements in order to fulfil its existing obligations, and he listed BL and Rolls-Royce among those cases where that applied. I suggest to him that it also needs a much more dynamic approach to the use of the resources allocated to it than has been seen hitherto. The NEB has played relatively little part in regional policy or in the development of industrial democracy, and the main theme of my remarks is that the NEB should certainly receive the increased finances proposed in the Bill but that it should be accompanied by Government directives for a more dynamic approach in those two directions.
  As my right hon. Friend said, the NEB has some regional dimension, but it is really a sadly inadequate regional dimension. The scope of its activities, for example, within the assisted areas, in the more needy regions of England, is nothing like that of the Scottish Development Agency or the Welsh Development Agency. That, I emphasise to the Government, is a matter of very considerable concern in many regions of the country.
  The NEB has a regional presence in the Northern region but it has a disappointing record in industrial development there. Such efforts as have been made in the region have been small-scale rescue operations necessitated by entrepreneurial failures and they have been no more than mini-replicas of what it has done on a vastly bigger scale when it had to intervene in BL and in Rolls-Royce, for example.
  There has been in the Northern region —and, I think, in others of the most needy regions of England—no drive to establish new publicly-owned industries, which those of us who supported the idea from the start always thought would

  2055
  be one of the main features and policy operation of the NEB.
  In areas such as my constituency, over the years, where there has been an almost total rundown of the whole mining industry, and now a very severely contracting steel industry, not more than one job in four which has been lost has been replaced, notwithstanding that this is a special development area where the maximum subsidies and incentives exist in order to attract new industry. That is true not only of my constituency but of the West Durham area, the Northern region and other black spots of that region, as well as other regions in the country.
  Mr. T. W. Urwin: I am sure that my hon. Friend has not overlooked the intensity of the problems throughout the Northern region. He is quite justified in his remarks about his own constituency and similarly about others, but the general situation is applicable to virtually the whole of the Northern region.
  Mr. Watkins: I entirely agree with what my right hon. Friend has said. If I may hark back to the disastrous record of the previous Tory Government, one of the things that they did was to cut down the incentives as between the black spots and the lesser black spots and correspondingly worsen the whole situation. My right hon. Friend is absolutely right. I have obviously selected a certain area of the Northern region. He is quite right in saying that the Northern region as a whole is certainly in that category which I have already described in my earlier remarks as being among the needy regions of the country.
  I am well aware that the contractions in the coal and steel industries of which I have spoken arise from technological change and changing demands and that the creation of new employment opportunities, furthermore, is seriously hindered by the continuing world slump. But the NEB was created to provide an alternative system to counter that situation, not to go along with it, which is very largely what it has, in practice, done.
  In the Northern region there is too much Civil Service and academic thinking that is prepared to write off areas,
  2056
  such as West Durham which I have mentioned, as no-growth areas of declining population where new developments are no longer to be encouraged. I completely reject that attitude and I think that my right hon. and hon. Friends who are here from our region would similarly completely reject such an attitude.
  If the NEB is to receive the increased finances proposed in the Bill, it must use them much more dynamically and positively to establish new industries and new employment opportunities in areas such as the Northern region and other hard-hit regions of England.
  Unlike Scotland and Wales, the Northern region has no development agency. Until such time as that deficiency is rectified—and I choose my words very carefully—the NEB must have a much stronger regional role and its increased finance must be accompanied by clear Government commitment that it will have it.
  Mr. Leadbitter: This brings us to a point for my hon. Friend to underpin. The right hon. Member for Leeds, North-East (Sir K. Joseph) made abundantly clear what the objective of his party was regarding the NEB. He described the NEB as ambivalent, and said that there was a degree of opposition to it in the private sector and that he could not find much support for it anywhere. In underpinning his point, will my hon. Friend make it clear to the House that in the Northern region we find no evidence of that? The position is to the contrary. We want more intervention by the NEB, which could work in a complementary role with the private sector and with the public sector. With the contraction of the two main industries that my hon. Friend has mentioned, private enterprise and entrepreneurial decisions alone will not suffice.
  Mr. Watkins: My hon. Friend is, of course, entirely right, and I agree with what he has said. The remarks of the right hon. Member for Leeds, North-East (Sir K. Joseph) and the ambivalent nature of his own and his party's approach to the NEB and the economy in general is another demonstration of the schizophrenic splits which obviously exist in their thinking, which, if matters were under their control, would only result in an industrial wasteland in areas such as the Northern region.

  2057
  The reason why the geographically remoter regions of England did not get the development which they could have had previously was said to be the application of so-called market forces. In fact, powerful forces in the so-called market were just not interested in development in the Northern region and were in a position to rig the market to the disadvantage of that region and other regions similarly situated.
  Turning to the second part of my remarks, I shall refer to the NEB's involvement in industrial democracy. This is something which is at the heart and core of whether we as a nation shall be able to create the wealth which is absolutely necessary for us on a vaster scale than has been so previously. In the creation of wealth we continue to fall more and more behind other countries, and we have done so since well before the First World War. It is something that has not happened, as Opposition Members are so fond of saying, only within the last few years. Our economy, relatively, has been in a state of decline compared with those of other countries since well before the First World War. One reason the situation continues is the general failure to infuse people with a general sense of involvement in the enterprises, whether they are large or small, within which they work.
  It is for that reason that I stress that the NEB's role, as I see it, is that it should have some involvement in industrial democracy. The advancement of industrial democracy is nominally among the objectives of the Board, but in practice, in all of the NEB companies, from the giants such as BL or Rolls-Royce to the small ones, where the NEB has either complete ownership or major ownership and intervention it continued on an entirely conventional and—I put it in inverted commas—"two sides of industry" basis.
  Incidentally, if I may insert a parenthesis, we have talked a great deal about "BL", but I have always been at a loss to understand why the name was changed from British Leyland to BL. It seems to me to be one of the dafter episodes to take place during what I would call the "Edwardes regime". I am entirely at a loss to understand what is supposed to have been the advantage accruing from that change.
  2058
  These industries, although owned by the public through the National Enterprise Board, have no provision for the members of the public who work in them to exercise control except the established management. The NEB rightly requires all its companies to draw up detailed development plans. With the added finances which are proposed in the Bill, I would submit that the Government should issue a directive to the Board that the production of a democratic structure should be included in those company development plans, that financial support for companies will be conditional upon the adoption of a democratic structure and that each company—because it is each company's and each concern's own business—should be required to produce its own agreed proposals to meet its needs for industrial democracy within a given period of, say, six months.
  I remind the House that in the case of small firms we have legislation on the statute book which meets exactly the bill. I refer to the Industrial Common Ownership Act 1976 which—[HON. MEMBERS: "Hear, hear".] I am grateful for the cheers of my hon. Friends. They will be aware that I am referring to a specific legal definition of democratic ownership of enterprises which is contained within a Bill which I had the privilege of introducing and piloting through this House. I remind the House that I had the privilege of piloting it through the House with a strong measure of support from both sides of the House. Indeed, it could not have been put through the House if that had not been the case.
  The NEB's problem in the past has been that it has tried to operate too much within a conventional capitalist framework. It is rather interesting that we have not as yet in this debate heard the phrase "creeping Socialism" which hon. Gentlemen opposite are so often fond of using to describe the National Enterprise Board. But, far from being anything of the sort, it has been a pillar of State capitalism. The whole approach of that sort is no use in a country whose fundamental problem is a dying capitalist system, a system which uses every device of mass advertising to encourage people to expect ever-rising living standards but which has totally failed to produce the wealth to provide those standards.

  2059
  In many ways that is, perhaps, the crux of the whole argument in which we are indulging in this debate—the different analysis which the right hon. Member for Leeds, North-East put upon the approach to that, and that which we on the Labour Benches put upon it.
  If the NEB is to be an effective force in grappling with this fundamental national problem, it must have the additional finances proposed in the Bill, but it must also use its resources much more dynamically and more positively than it has done in the past.
  8.20 p.m.
  Mr. Michael Marshall: It is always a pleasure to be called to speak following the hon. Member for Consett (Mr. Watkins). He made a thoughtful speech, upon which it is worth pondering. I certainly recognise the work which he did in the Industrial Common Ownership Bill, which, as he said, carried support in all parts of the House.
  The reason why I particularly welcome the opportunity to speak in this debate tonight is that I think it comes directly into the Secretary of State's orbit. I am glad that he is present in the Chamber. I think that he would be the first to concede that this week he has had full warning of what was expected of him. At Question Time on Monday it was made abundantly plain that we required detailed documentation and, indeed, that we wanted to know precisely what the picture was in looking at the NEB. In his speech tonight the Secretary of State has helped us in a number of directions, but it would be disguising my criticisms right at the beginning if I implied that he had done anything other than a superficial job.
  The Secretary of State is an agreeable and elegant figure in his own right, but he reminded me of nothing so much as a grasshopper in a minefield. He skipped and he hopped, and he touched on a number of issues, but we got absolutely no depth. I intend to devote some attention to what the right hon. Gentleman said and to the omissions in his speech. I do that with no disrespect to the right hon. Gentleman. I hope that his right hon. Friend the Minister of State will pick up some of these points in his winding-up speech, because I genuinely want this information.
  2060
  However, I could not help feeling that the right hon. Gentleman was anxious, looking with one eye over his shoulder towards Ormskirk, and with the other eye looking over his other shoulder at the industrial chaos in the country behind him, and he has my sympathy. However, he must accept that what he gave tonight was a very cursory examination indeed.
  I put it in this context. The right hon. Gentleman rightly emphasised that much of the NEB's work is pre-empted by Rolls-Royce and British Leyland. I think that £400 million is intended for British Leyland, and £200 million or £300 million for Rolls-Royce. I take the view that that is the inheritance which has been put upon the NEB. In many ways, in trying to evaluate its performance and its prospects, one ought, therefore, to consider much more carefully the 45 investments that the NEB currently holds, I believe, which go much beyond those two inheritances—a very difficult inheritance in the case of British Leyland.
  In an intervention, the Secretary of State made clear that he does not have any overall trading results as at 31st December. That adds to our difficulties. I hope that the Minister of State will make clear at what point in Committee he hopes to let us have at least unaudited accounts for the year ended 31st December 1978. Otherwise, all that we have is the annual report and accounts for 1977. That is the only full document that we have. It is dated April 1978.
  Mr. Urwin: Having regard to the hon. Member's remarks a few seconds ago about not having enough information about the NEB's accounts from the end of December—only a few days ago—I wonder whether, during his peroration, he could give us some information about any private company which has a so highly advanced degree of accountability as to be able to provide such information.
  Mr. Marshall: Yes, I can. I think that the right hon. Gentleman is making a very fair point. We are now talking about an increase in borrowing of up to £4½ billion. If the right hon. Gentleman, a company or I wanted to go out and get that kind of money, we should have to justify our recent earning potential. We might have to show figures up to the end of October or November, or the

  2061
  latest figures that we could give. To leave us with the only up-to-date trading results which we have, which now go back to the half-year results as at 30th June, is going back a very long way. I hope that the Minister of State will make clear what more up-to-date figures will be made available to hon. Members in Committee.
  A whole range of other matters are part of the stautory obligations of the NEB, but the Secretary of State made no attempt to discuss them. The first and, perhaps, the most startling omission was that he told us nothing about the annual planning cycle, the corporate plan of the NEB. We know that this is something that must be looked at annually. We must carefully balance the needs of the major concerns, such as British Leyland and Rolls-Royce, against acquisitions, joint ventures and assistance operations. According to the NEB draft guidelines of 1976, those three categories of NEB work are examined annually. Between the Board and the Government there must be an annual discussion of the balance struck in those three areas. We heard nothing from the Secretary of State about that aspect of the matter. For example, where is the corporate plan, what is the latest assessment, and what confidence has the Secretary of State in its relevance?
  As for the statutory objectives required of the NEB, we heard nothing from the right hon. Gentleman about industrial efficiency and international competitiveness. He told the House nothing about the effect of various investments in companies in improving areas, other than to make in blanket passing reference to the fact that the Board would regenerate national competitiveness and efficiency. Surely we should have been given some case histories.
  On the subject of productive employment in areas of high unemployment, the right hon. Gentleman gave a figure of 25,000 in the North-West and instanced other figures. But as for the encouragement of exports, import substitution and the connection between service industry and manufacturing industry, in which investment has a vital link, we heard nothing. These are part of the detailed statutory objectives of the NEB. I am glad to see the Minister of State back in
  2062
  the Chamber. If he has a chance to catch up on my speech, he will see that I have dealt with a number of major omissions in the Secretary of State's speech.
  Mr. Kaufman: I am intervening not on the substance of the hon. Gentleman's remarks but to tell him that because of the rearrangement of this debate I shall have the advantage of reading the full text of his speech.
  Mr. Marshall: Then I shall have the advantage of a full answer—which will be something of a change for us both.
  This has been a good-humoured debate, but this is a serious and important matter. It goes much wider than the Secretary of State's view that if we do not pass the Bill British Leyland, the Scottish Development Agency and many other bodies will be in danger. This matter has already been argued. There are ample facilities for both the Scottish and Welsh Development Agencies. There are other ways in which British Leyland's financing can be carried out. Therefore, we must examine the Bill in totality and in a fair amount of detail.
  I wish to strike my own balance sheet, and I shall be as fair as possible. In considering what the NEB has been up to in the last year, it is unfortunate that we have been given no overall trading results, beyond the half-year figures to June 1978. I hope that the Minister of State will bear that factor in mind.
  The NEB can claim for companies such as Monotype that a good relationship with the bank has enabled it to convert the debt to Barclays Bank into an equity stake of £3·5 million. That is a significant achievement and is what my hon. Friend the Member for Horsham and Crawley (Mr. Hordern) regards as good merchant banking practice. The Fairey acquisition, which was made after the receiver was appointed, involved the NEB in a pragmatic piece of good sense. The Board picked up the company after the receiver came in, because that was a better way to get the company back on to its feet. I believe that that was a reasonable argument.
  On the other hand, in that context we should bear in mind Early-Day Motion No. 149. Many hon. Members feel somewhat aggrieved about the way in which

  2063
  that acquisition was carried out, particularly from the point of view of the selling off of prime site marinas on the Hamble river without giving British tenderers a proper opportuity to bid. It was insensitive if, as is claimed in the Early-Day Motion, the chairman was unwilling to see hon. Members of this House.
  Certainly, on the INMOS computer chip development the NEB can claim some pace-setting work. As my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said, one cannot imagine major companies in this area sitting on their hands betimes. I believe that the NEB can point to a certain pacesetting role in this merchant banking concept.
  It is ironical, but clear, that for carrying out that kind of investment the proposed amounts are minute in relation to the total national need. In addition, the difficulties involved in carrying out the INMOS investment have been heightened by the Government's own taxation policies which have driven many managers in this area to work in the Santa Clara Valley in California. We are now having the devil's own job to get them back. This is directly relevant to what my right hon. Friend was arguing—that the Government should be examining these matters, even if they are trying to help the NEB, let alone the rest of British industry.
  On the question of disposals made by the NEB, as my right hon. Friend said, three companies have been disposed of in this period—two at a profit and one at a loss. I do not believe that there is any need to run through the list in detail. Looking at previous disposals—the trading losses and closure costs of Fairey of £2·2 million and the £1·4 million loss provision for British Tanners—one can say that, in a commercial banking context, in simple terms the NEB can claim to have won a few, lost a few, but on balance is ahead. In the trading figures provided—I am taking on trust figures since 30th June—the NEB can show that its return on capital moving up to 10 per cent., leaving out British Leyland and Rolls-Royce, is moving in the right direction.
  I hope that I have shown to the House that I am trying to be fair in assessing the overall activities of the NEB. If the
  2064
  House is being asked to consider helping the NEB over the coming years, it has to ask itself: in what way is the NEB carrying out work which could not be carried out elsewhere?
  This is my first basic objection. I have described the activities of commercial banking. On balance, I am not convinced that this could not have been mopped up within the commercial banking system. However, I am not doctrinaire on the matter. I recognise that the NEB will be with us for a number of years. Therefore, I would not automatically say that the opportunity for this kind of flexibility should be ruled out.
  The speech made by my right hon. Friend was one which we should study. I believe that he is absolutely right. He put the essential differences between two major parties in clear form. He pointed to the whole paraphernalia of control, the whole notion of interventionism, which in so many ways I believe the Government are overstating in the case of the NEB. It simply cannot achieve all that is claimed for it by the architects on the other side. From our standpoint, it is a form of window dressing, a diversion away from tackling the necessary matters which have to be faced, such as high taxation.
  Mr. Leadbitter: The hon. Gentleman has approached this problem in a flexible manner in order not to emphasise too much the basic objections of his own party to the NEB. To that extent, there is some merit in his approach. Does he agree that without the NEB's proposals for INMOS and the silicon chip there would not be a pacesetting element in this direction? This is imperative, because hitherto competition has not come from private enterprise to meet the Japanese and the American rivals. Therefore, the complaint should be not that the NEB has intervened and is a pace-setter but that there should be a greater allocation of funding because it is imperative that we in England should get into the work on the silicon chip.
  Mr. Marshall: The hon. Gentleman has not quite taken on board what I said. I accepted that there was a certain pacesetting element in the NEB's approach to that subject. But I went on to say that what it was doing in relation to the massive need here was a drop in the ocean.

  2065
  There is no way that the NEB, with the assistance of the House, could begin to get into that sphere on the kind of scale to which the hon. Gentleman pointed. It is to the GEC-Fairchild mergers and the massive extension of commercial operations that we must look in this sphere. I believe that I fairly accepted the argument initially put forward by the hon. Gentleman.
  In view of the ruin of the Government's pay policy and the fact that we face industrial disputes, furthered by the Government's legislation, in overall terms the NEB has a limited part to play in industrial regeneration. Because of the numbers involved, it cannot begin to tackle the problems about which my right hon. Friend the Member for Leeds, North-East spoke earlier. In a philosophical sense this diversion—this window dressing element—is in governmental terms misleading and positively dangerous.
  I should like to voice my appreciation of those who work for the NEB. They are people of ability. They have worked hard and come forward in the national interest. But so would any similar group of people for any democratically elected Government. That is not the argument at stake here tonight. It is not an argument whether British Leyland or Rolls-Royce will be in difficulty. That has already been disposed of. In view of the way that subsidiary company borrowings have been handled, it is a way of artificially inflating figures. We are talking about figures on paper for the Scottish and Welsh Development Agencies which seem to have little relation to their take-up.
  Because of those areas of vagueness, the specific areas of missing information which I have instanced, and the fact that the Secretary of State is, in effect, trying to put through yet another piece of unquantified, wasteful and unjustified legislation—indeed, it is an exercise in public relations—I shall certainly have no hesitation in voting for our reasoned amendment.
  8.37 p.m.
  Mr. John Sever: I should like, first, to refer to some of the comments made by the right hon. Member for Leeds, North-East (Sir K. Joseph). I feel sure that hon. Members and, indeed, people throughout the coun-
  2066
  try will be somewhat startled at hearing the right hon. Gentleman on at least two occasions refer to British Leyland and Rolls-Royce being retained by any incoming Conservative Administration for the time being.
  It is interesting to try to understand the philosophy which prompts an Opposition Front Bench spokesman on industry, speaking for a party which believes itself to be capable of government, to argue in that flippant fashion that it will have to look to two of the largest employer companies within the framework of the National Enterprise Board being retained. That will be disappointing to many people who look to those two companies for their livelihoods, and it will be worrying in the extreme to those areas in this country which look to those companies as being fundamental to the growth of their regions.
  Those of us who came into Socialist political activities in the 1960s were fired with an imagination which expected movements, however slight and exploratory, by future Labour Governments towards public participation and even control of the "commanding heights of the economy".
  My hon. Friend the Member for Consett (Mr. Watkins) referred to Conservative Members not having mentioned the Labour Party and Labour Government going headlong into Socialism. But some of us would like us to move gradually and more enthusiastically along certain avenues towards what we consider to be a Socialist environment. Some of us were a little disappointed at the slow rate of progress along those roads. None the less, today, 15 years on, we can see definite progress. The commanding heights may not yet have been scaled in these sectors from which the taxpayer, as a shareholder in a State enterprise, might expect a profit, though large dividends are paid in the form of public service provisions. We can, at least, see Government participating in supporting industry and commerce in sectors vital to the national economy and fundamental to the provision of employment opportunities for hundreds of thousands of householders, none more clearly than in BL.
  BL is a source of income, directly and indirectly, for the largest single group of workers in the greater Birmingham area.

  2067
  The major plant at Longbridge and ancillary and dependent companies in the West Midlands are of paramount importance to the economic well-being of the region. We on this side of the House recognise the value and the wisdom of the interventionist policies of the Labour Government at a time when the future of the West Midlands region was in great jeopardy.
  I welcome the additional support for the National Enterprise Board provided in the Bill. I am confident that these measures will confirm and stimulate the growth of support from inside and outside BL and its associated companies that is now beginning to show. There is evidence of a build-up in confidence. Only this week, the company secured an order for £12 million worth of vehicles, won in competition. The order is for representative models across the company's product range.
  There is an increased product demand generally, encouraged by the spendid motor show presented at Birmingham's national exhibition center, to which, I hope, the show will return for several years to come. A most important ingredient for success at BL seems to have been the recent agreement on parity payments—a matter which had for so long bedevilled that company—which will, we hope, bring a degree of stability to BL wage bargaining in the future.
  In addition to continuing to support its existing commitments, I should like the Minister who responds to the debate to indicate whether the NEB can look more closely into the possibility of providing funds from these additional resources towards the establishment and development of new industry and new technology in Birmingham and the West Midlands. Our region has traditionally led the country in the progress of scientific and technical innovation, particularly in its commercial exploitation. The men and women who work in our large industrial complexes and in small engineering shops such as those in Ladywood will produce the goods. Those people need the encouragement that this Bill, as part of Labour's industrial strategy, can give, especially when we reflect upon the lack of investment from capitalists who seem shy of pushing forward West Midlands industry.
  2068
  Let us ask, then, with full justification, that the National Enterprise Board give a lead in this direction. No longer should it be assumed that the West Midlands can be left alone and forgotten. We demand and we have the right to expect additional Government support. We have been at the back of the queue in Britain's industrial development in the last few years. That is too long. We demand our place again in the economic development of the country. I am sure that the Minister will indicate how the West Midlands can benefit from policies now being pursued.
  8.44 p.m.
  Mr. Wyn Roberts: I shall not take up directly the remarks made by the hon. Member for Birmingham, Lady-wood (Mr. Sever), but he was surely wrong in his interpretation of what my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said about an incoming Conservative Government's treatment of British Leyland and Rolls-Royce. I advise the hon. Gentleman to look in the Official Report at what my right hon. Friend really said.
  As you may have guessed, Mr. Deputy Speaker, I wish to speak briefly about the Welsh Development Agency. Our amendment makes clear that we accept the Agency and the value of its work in Wales. My hon. Friend the Member for Pembroke (Mr. Edwards) said so at the last Welsh Grand Committee meeting on 29th November last year. He said:
  "As for the Welsh Development Agency and the Development Board for Rural Wales, we shall keep them and support their work in stimulating and assisting commercial enterprise … although, certainly, as we have always indicated, we would wish to see safeguards over their powers to buy into profitable firms and ensure that they do not hold equity shareholdings in industrial firms on a permanent basis."—[Official Report, Welsh Grand Committee, 29th November 1979; c. 17.]
  My hon. Friend's view was amply confirmed by my right hon. Friend the Member for Leeds, North-East. Therefore, there is no dispute between us and the Government on this score so far.
  As matters stand, the Agency's financial limit is £100 million, which can be increased with parliamentary approval to £150 million. The Bill proposes to change. those limits to £250 million and £400 million respectively. The subject was raised in the Welsh Grand Committee in

  2069
  November. Perhaps that is why we did not have many figures and details from the Secretary of State for Industry when he opened today's debate. He still should have given details of the Agency's expenditure now that he is asking for more money for the Agency. The case must be made out and the request for more money justified.
  The outcome of our discussion in the Committee was the Government's explanation that, although the Agency had so far incurred a charge of £45·7 million against the statutory financial limit, less than half the amount allowed,
  "The Agency is likely to exceed its current limit of £100 million in the next financial year."
  In that last sentence I was quoting the Under-Secretary of State for Wales, the hon. Member for Rhondda (Mr. Jones), who, alas, is not here but was present earlier. He added:
  "The increase by order to the maximum possible, £150 million, would prolong its life only by a further year or so."
  Therefore, under the present limits, the Government would have to come to the House some time in the next financial year to seek approval for the upper limit of £150 million. The House would then have an opportunity to consider the Agency's activities and the way in which its affairs were being conducted, because the increase of moneys available is subject to parliamentary approval.
  Assuming that the Agency is using up its allocation at the rate of about £50 million a year—an assumption clearly justified by the Under-Secretary's remarks in the Welsh Grand Committee and by the fact that there is no increase in the White Paper in the moneys to be made available to the Agency—if the Bill is passed, it will be by my calculation 1982–83 before the Government have to ask the House for approval for the new upper limit of £400 million.
  The Secretary of State confirmed that it was expected that the Agency would spend about £250 million over five years. So it would then be about 1982 to 1983 before the Government had to ask the House for an increase of the borrowing limit to £400 million.
  While I am referring to the lack of figures given by the Secretary of State, I
  2070
  must refer also to the fact that he seemed to fail totally to reply to the question of my hon. Friend the Member for Pembroke about the meaning of the change in terminology from "wholly-owned subsidiaries" to "subsidiaries" in general.
  This delay of five years before the Government come to the House to obtain the upper limit of £400 million seems to me to be postponing discussion for a considerable time, and the Welsh Office is laying itself open to the charge that it is seeking to avoid such discussions. The Government currently make much of the point that they wish to bring government closer to the people, yet it is noticeable that when there are opportunities for discussing the financial operations of governmental organisations and quasi-Government organisations the Government avoid those opportunities like the plague.
  Mr. Nicholas Edwards: Is not the truth summed up by what my hon. Friend is saying, that the Government, as is made clear in the White Paper on public expenditure, are not increasing the funds available to the Agency but simply removing any parliamentary control over that expenditure or over the work of the Agency?
  Mr. Roberts: My hon. Friend is absolutely correct. They are doing simply that; they are removing parliamentary control, and certainly postponing the day when the Government will have to ask us for approval of the higher limit.
  Of course, we appreciate the Welsh Office's point of view, which was well expressed by the Under-Secretary of State in the Welsh Grand Committee debate:
  "We are taking the opportunity of a Bill, which in any case would have to come to the House to deal with the funds of the National Enterprise Board, to ensure the continuation of the Agency's work and to enable it to plan ahead on a firm basis … it is absolutely essential that the Agency knows in advance what moneys are to be available so that it can plan ahead."—[Official Report, Welsh Grand Committee, 29th November 1978; c. 85–6.]
  I do not think that the Under-Secretary is as ingenuous as his explanation made him sound in the Welsh Grand Committee. He knows as well as I do that plans for public spending of this sort can be changed in any financial year and that this Bill does not give the Agency an absolute assurance that certain sums will be available to it. Many factors can affect

  2071
  the situation, and we were warned only yesterday by the Chief Secretary to the Treasury that public expenditure this coming financial year may be drastically altered if pay settlements in the pubic sector are higher than expected.
  I am therefore tempted to think that these higher limits are a bit of political window dressing—and we have heard that phrase before from these Benches. The proposed changes, of course, read well in the Queen's Speech at the beginning of the Session and no doubt impressed certain Members below the Gangway on both sides of the House, and helped to secure the support of some Labour Members below the Gangway, who, alas, are not with us this evening.
  Our vote against the Second Reading of this Bill will no doubt be interpreted to the Welsh electorate by the Secretary of State as opposition once again to the Agency and to increased finance for it, but I shall hope against hope that he will not mislead the electorate in that way. It would be very improper for him to do so in view of our amendment, which specifically accepts the usefulness of a significant part of the work of the Welsh and Scottish Development Agencies.
  By the Government's own admission the higher limits are not yet necessary. Even the higher limit under the 1975 Act is not necessary until later this year. Why not leave the matter until then? The real answer is that Welsh Office Ministers need a pre-election boost. However, that will not boost them back into office.
  The Government's industrial record in Wales has been deplorable. It is getting worse daily as a result of current industrial actions that are bringing work to a halt. Tomorrow will be a black Friday for many who are laid off in Wales. There may be more black Fridays to come.
  My right hon. Friend the Member for Leeds, North-East was right in his criticism of the principles behind the NEB. The same is true, to some extent, of the Welsh Development Agency. The same principles apply. However, we commend the Agency's activity because our worst fears have not been realised. It has operated on lines of which we approve. I am bound to say that it is the Government's one and only bright start in what
  2072
  is otherwise an abyss of governmental ineptitude.
  When all the praise has been given to the Agency, let us be clear that it will never be the salvation of the Welsh economy.
  8.57 p.m.
  Mr. Ivor Clemitson: I hope that the hon. Member for Conway (Mr. Roberts) will forgive me if I do not take up his line of thought. The hon. Gentleman was naturally and properly concerned with the Welsh dimension of the Bill. Although I have a Welsh name, I have no other connection with the Principality. I shall devote my remarks to the broad context in which I think the Bill should be considered.
  There is little argument between the parties in the House that more investment is needed in British industry. That is common ground. We may disagree in our analysis of why investment in British industry has been too low. We may also disagree about what should be done. We have heard yet again the analysis of the right hon. Member for Leeds, North-East (Sir K. Joseph). The right hon. Gentleman proved again what I have always suspected, namely, that he was born 100 years too late. I preferred the analysis offered by my right hon. Friend the Secretary of State.
  By and large, there is agreement about the need for investment. However, we pay far too little attention to the consequences of investment and where we should direct our investment. The result of paying insufficient attention to such matters is that we are in danger of assuming that merely by increasing investment we shall consequently and dramatically solve our other economic problems, especially the problem of unemployment. It seems that we look to investment in itself as a panacea.
  The thesis that I wish briefly to argue is that other policies are needed to deal with the consequences of the investment that we make. Indeed, they are needed if investment is to take place at all, and certainly if we are to reap from the investments that we make the returns for which we hope. Our problem has been that, by and large, we have had too little investment. In addition, we have failed to make the fullest use of the investment

  2073
  that we have had. The evidence that we have and the demands of logic indicate that the overall—note the adjectives—long-term effect of investment is to reduce the demand for labour, certainly in manufacturing industry and probably in the economy as a whole. Some of us have argued this for years. It is now common coinage and everybody seems to be saying the same. I welcome recent converts to this point of view. But we have yet to realise the consequences of adopting it or to devise adequate policies to deal with it.
  I want to rehearse one or two points of my argument to justify that proposition. First, there is abundant evidence that where large investment has taken place and large growth has been achieved—for example, in the chemical industry, oil refining, gas and electricity supply—the number of people employed has fallen, often substantially.
  Secondly, if we are to be competitive with other countries, logic demands that we should move increasingly either into new industries that are technologically advanced—I welcome the moves that the NEB has made in this area and believe that this should be the major thrust of the NEB's future activities—or we radically alter the production methods in existing industries. Both options mean a move to a less labour-intensive situation. The corollary is that certain older industries will and should die, or at least become less important in the economy. Those industries are of necessity labour-intensive.
  Thirdly, while certain other countries, such as Germany, Japan and France—they are always the three countries instanced—may have increased employment in manufacturing for a time, this was short-lived and it is now in decline. OECD reports confirm that that is mainly because of technological advances and investments that have been made over the past few years.
  Furthermore, no country has expanded employment in the manufacturing sector at the expense of the service sector. It is absurd to take the experience in other countries 15 or 20 years ago and assume that we should follow the same path in employment if we were to adopt a high investment strategy. This totally ignores the advance of technology in that period
  2074
  and the advancing pace of technological development over the coming years.
  I am not arguing against the necessity for investment or for growth in the economy. I am pointing out the obvious consequences. In passing, I should say that not all investment is desirable, nor is all growth. Cancer, after all, is a form of growth. We must be selective in our investment and in the areas in which we grow. One of the major arguments for funding investment through public agencies is that they can, in a better way than private investors, invest in a desirably selective fashion.
  Given that investment will increasingly have negative employment consequences, what do we do? First, we must regard it as an opportunity and not as a potential disaster. We must devise a policy of alternatives—note the plural—to unemployment. While, clearly, employment is one alternative to unemployment, it is not the only one. In any case, the only area in which I foresee increasing job opportunities in the longer run is in the public service sector. I am not talking about bureaucrats; I am talking about people in face-to-face service jobs.
  The other alternatives are shortening the working week or the working life, whether it be through early retirement or sabbatical leaves or whatever, and increasing the opportunities for such non-work alternatives to unemployment as increased educational opportunities.
  These things must be seen as an advance of human welfare and not just as a juggling of statistics from one column to another. We must work out a coherent and consistent package of such measures, and we must do it now.
  Unless we develop such policies at the same time as we increase investment, we shall not have the right climate for investment to take place, nor shall we reap the full benefits of that investment. We shall be faced inevitably and understandably with resistance to change because of fear of loss of jobs.
  We need also to advance towards greater industrial democracy, a point that my hon. Friend the Member for Consett (Mr. Watkins) stressed strongly earlier today. This will take different forms in different industries and companies. Of course, legislation in this area has its limits, though that does not mean that it is

  2075
  not important. Unless decisions about investment become more truly shared, too many arguments will be conducted in basically negative terms.
  We need to develop an incomes policy which is aimed primarily at getting people into a fair and agreed relationship with one another. The trouble with incomes policies up to now is that they have been primarily directed at restraining the growth of incomes. We can never satisfactorily, for longer than a couple of years, agree to reasonable restraint unless people feel that there is a basic fairness in the beginning. That basic fairness is lacking. Of course, what I am suggesting is incredibly difficult, but we must make an attempt. If we do not, there will be serious consequences for the size and success of investment.
  We need investment, and we need it in the right places. To channel that investment through public agencies is right, but wherever the investment comes from, public or private agencies, must must at the same time—note I say "at the same time"—as we invest provide the framework within which the investment is encouraged and is able to pay off.
  This can be done only if we deal with the consequences of investment in terms of a lower demand for labour. We must have a strategy of alternatives to unemployment and we must make a rapid advance in industrial democracy. We must also devise more rational and fairer pay structures.
  I welcome the Bill, but I fear that its intentions may be frustrated if these other policies are not pursued at the same time.
  9.10 p.m.
  Mr. Douglas Henderson: We have heard a very interesting contribution from the hon. Member for Luton, East (Mr. Clemitson) —one of a type which we rarely hear. Very often what we hear from the Government Front Bench is the claim that their Bill is the best thing since sliced bread, while from the Opposition Front Bench we hear that the Bill is the most terrible thing that the House has ever had to consider.
  One of the difficulties about the Bill was expressed by the hon. Member for Luton, East and can be seen only in terms of the total concept of where we are going. The Bill is only a small piece
  2076
  in a very big jigsaw, which represents the sort of world into which we are moving. I very much agreed with the hon. Gentleman's analysis that we face a situation where the demand for manufacturing will be satisfied more and more by investment in equipment and technology and less and less by the hands and brains of human beings. That is inevitable.
  There have been forecasts that by 1990 the entire manufacturing output of the world will be carried out by about 10 per cent. of the employed population. One cannot tell how accurate or sensitive that forecast is, but certainly that is the direction in which we are moving. The fact that we are seeing the export of almost entire industries to the countries of the Third World is a factor which will affect us most seriously. We are also seeing—and we have seen it with the oil producers—that countries which supply primary commodities—and let us be fair about the fact that we have had them in the past at very advantageous rates—are now demanding what they regard as a fairer price for their products, which are about all they have to sell. The advanced and industrial countries of the Western world will have to face these prices in the future.
  When we look at a Bill of this kind and other measures it is useful to relate them to a conceptual framework. I am sorry to say that, in that framework, the Bill is only a very small part of the jigsaw. I cannot understand the display of great indignation and anger against what is contained in the Bill.
  Naturally, I am concerned about the situation in Scotland, just as the hon. Member for Conway (Mr. Roberts) was concerned for the situation in Wales, and I shall not deal with the affairs of the National Enterprise Board but will stick to the Scottish Development Agency and its effect on the Scottish economy. I am amazed at the way in which the Conservative Party has completely turned its coat since 1975 when the Scottish Development Agency Bill came before the House.
  The Secretary of State for Industry said, in his usual kindly way, that he thought the Conservatives had had a change of heart. I should have thought that perhaps a change of head might have been more useful to them than a change of heart, but if they have had such a

  2077
  change and have abandoned some of their earlier reservations—and I can remember some of the wild comments that were made when the Bill was introduced—that is to be welcomed. It would be very useful to the development of the work of the Scottish Development Agency if there were a general measure of all-party support for its work.
  I am not saying that the Agency should be above criticism or that it should escape scrutiny, but I think that there should be a general all-party appreciation of the work that it is doing when such appreciation is justified. It is right to pay tribute to the board of the Agency, and to its staff, with whom many of us come into contact. We have found them to be interested, sympathetic, ready to listen to problems, and ready to deal with the problems of our constituents.
  The question that we have to ask in looking at the Bill is: to what extent will it affect the Scottish economy, and to what extent will it be an influence for good in the years ahead? The position in Scotland is that there are some features which have been good and some which are extremely black. Scottish exports have been a very bright feature. They were up by 24 per cent. in volume between 1974 and 1977, compared with a 14 per cent. volume increase in the United Kingdom as a whole. It speaks very well for the workers and managers in Scottish industry that they have produced such an increase right across the board, in chemicals, mechanical engineering and in every aspect of the Scottish economy in that period. Our growth rate between 1971 and 1976, mainly as a result of an increase in exports, has been above that of the United Kingdom by 2 per cent. per annum.
  The undoubted black spot of the Scottish economy is unemployment. When the former Secretary of State for Scotland, the right hon. Member for Kilmarnock (Mr. Ross), introduced the Scottish Development Agency Bill in 1975 he described the economic scene in Scotland as "sombre" because unemployment had risen to 4·7 per cent. I am sorry that the right hon. Gentleman is not in the Chamber because we always welcome his robust contributions to any debate on Scottish unemployment, and I am sure that he welcomes the robust answers that
  2078
  he gets from other people on the same subject. I do not know what he would say now that the Scottish unemployment rate is 7·8 per cent.
  We also have the depressing spectacle of a large number of redundancies that will come into effect in the next few months, having been notified to the Department of Employment. Redundancies are proposed at Massey-Ferguson in Kilmarnock, at Dunlop at Inchinnan and at Singer's at Clydebank. There is also the unknown factor, of which the Secretary of State may be able to tell us more, of what is to happen at British Shipbuilders in Scotland.
  I remember the Secretary of State wisely declining to give the guarantees about future employment in the shipbuilding industry for which we asked when the nationalisation Bill was before the House. It looks as though the chickens are coming home to roost in that sector of the economy.
  One of the incredible aspects of the Scottish economy is the shortage of skilled labour in many key areas. I have had reports that there are shortages of millers, turners, grinders and fitters which are holding up development in many Scottish companies. Of course, when that skilled labour shortage cannot be satisfied, opportunities do not exist for the semiskilled and unskilled jobs that come in the wake of the creation of skilled jobs. What are the Government doing about that?
  The Financial Times carries a report today published by estate agents Kenneth Ryden and Partners and written by Professor Donald MacKay of Heriot-Watt university. He predicts that manufacturing investment in Scotland will continue to rise in the first half of this year but will drop sharply in the remaining part of the year. He gives as the reason the fact that private investment has been squeezed out and says that
  "the higher the rate of wage and salary settlements this year, the more private investment will be crowded out".
  Professor MacKay makes an important point which is relevant to our discussion of the SDA. The report says:
  "the activities of the Scottish Development Agency would not be sufficient to make up the deficiency. So far the agency had been spending only about £24 million a year on industrial projects. This had been more than

  2079
  offset by a substantial fall in the level of government expenditure on regional industrial aid to Scotland."
  The regional employment premium. which was worth £70 million a year to Scotland, has been withdrawn, and when one looks at the amount spent by the SDA one realises that it is totally inadequate to make up that shortfall. We have to ask whether the amount proposed in the Bill is anywhere near enough to cope with the problems of the Scottish economy.
  The right hon. Member for Kilmarnock said that the Scottish Development Agency Bill was one of "historic significance." He said on Second Reading that the prime purpose of the Agency would be the provision, maintainance and safeguarding of employment. There is a danger that the Government may have oversold the benefit of the SDA to the Scottish community by letting people believe that it can do far more than it can. The Government will have much more credit and respect if they make clear that the Agency can, at best, make only a marginal contribution to the Scottish economy.
  A total of £19 million or 25 per cent. of the Agency's total budget spent on jobs is not likely to create much. It is inadequate when compared to the spending of the Northern Ireland Development Agency. A report in the Financial Times refers to figures released this month which show that it approved over 30,000 new jobs in industry in 1978. If the Minister responsible for the Scottish Development Agency could say that that Agency has been responsible for providing over 30,000 jobs in Scotland, many of us would feel that that was an outstanding result and that it was the type of job that the SDA should be doing. One wonders to what extent the Government are relying on cosmetics. One wonders to what extent the figures meet the needs of the Scottish economy.
  Perhaps the Minister should examine the matter referred to by the hon. Member for Luton, East of the contraction in manufacturing industry and the growth in service industry As I see the SDA portfolio, little is done for service industry. When I saw the chairman and chief executive of the Agency, I asked if there was any inhibition to invest in the service industries. In all countries that is
  2080
  the growth sector. I was told that there was no inhibition. I hope that the Minister will bring home to the chairman that manufacturing industry, in terms of job creation, is declining but that service industry has a great potential and a great future in terms of the Scottish economy.
  The money involved is peanuts compared to the Scottish oil revenue which is preserving the United Kingdom's balance of payments. The oil revenue will be worth about £3 billion in the coming year. A few extra hundred million pounds is only a small slice of what the people of Scotland would have if they had control of the revenues, as they will decide to have shortly.
  We shall support the Bill. The Government are right to introduce it. But the sum involved is totally inadequate. We expect to hear more about additional remedies.
  9.23 p.m.
  Mr. Richard Page: I shall deal only with the part of the measure which involves the National Enterprise Board. I shall leave to other hon. Members who are more directly concerned with the Development Agencies matters which involve Scotland and Wales.
  The NEB was unaware that such a large sum was to be proposed and I understand that it has no immediate plans for the utilisation of anything more than a part of the sum involved for British Leyland and Rolls-Royce. I regret that I do not take a charitable view of this Bill. The sheer amount of the sums involved points to the conclusion that it is simply a straight political measure which is way and above the future requirements of British Leyland and Rolls-Royce. In this I declare an interest, and I believe that the requirements of Rolls-Royce and British Leyland should be honoured. Nevertheless, these requirements could be part funded by the disposal of other NEB assets.
  My hon. Friend the Member for Arundel (Mr. Marshall) asked some searching questions. Perhaps the most important one was "Where is the Board's corporate plan?" He asked where else in any financial institution one could propose such a vast sum of money without providing a full prospectus. We do not have such a prospectus tonight.

  2081
  The hon. Member for Consett (Mr. Watkins) said that he had not heard any cries about creeping Socialism. I wish that he were here because I am about to cry that the Bill is not creeping Socialism but galloping Socialism. The Bill is designed, in a devious way, to satisfy the appetite for nationalisation of the Left wing of the Labour Party. The amount involved is equivalent to taking £140 out of the pockets of every working man and woman in the country. It could be the oblique instrument for achieving the manifesto of the home affairs committee of the NEC which was published just before Christmas by courtesy of that organ of democratic thought, the Morning Star.
  Despite the NEB's wish to have independence of thought, word and deed, it must be accepted that these amounts could so easily be used as a back-door method for State control. It is a very short step from the close relationship at the moment between the regional sector working parties and the NEB to further future directives from the Minister.
  It will not be surprising to find that, as time ticks by, the NEB receives greater and greater pressure from the working parties. From that base in each sector I can see the tentacles of State control wriggling their way in and expanding. This huge sum of money to be taken from the taxpayers' pocket has raised quite a lot of comment and remarks, but it is a typical example of what happens when the electors place rabbits in Government in charge of the lettuce patch. We must not be surprised when they start eating the lettuce, and the more they eat the bigger they grow.
  Mr. Henderson: It is the breeding.
  Mr. Page: I do not want to get on to the subject of the Government's breeding. The more they eat, the bigger they grow, and the bigger they grow the more they want. What I know for certain is that the British taxpayer is getting sick and tired of providing the lettuce.
  I should not mind any investment that was successful. With my industrial background, having worked on the shop floor, I have a fairly pragmatic approach to investment and to the utilisation of finance, provided that one criterion is
  2082
  achieved, and that is the criterion of success. During the last Session I pointed out to the Minister, at one Department of Industry Question Time, the concern that we are already heading down the road taken by the Italian equivalent of the NEB. I hope that the House will forgive me if I do not try to pronounce the name of the Italian equivalent. That organisation, six months ago, had debts of £11 billion, and it urgently needed then an injection of new funds of over £1,000 million to complete its investment programme. Does not that have a familiar ring about it? In addition, there was a figure of £2,000 million to cover the accumulated losses of certain of its investments.
  When we look at the record of the NEB, we have an awful feeling that the story is to be repeated, as more and more companies add their names to the list of the NEB.
  Mr. Kaufman: The hon. Gentleman talks about more and more companies adding their names to the list of the NEB. Why did he write to me asking for INMOS to be sited in his area?
  Mr. Page: I have two comments to make on the Minister's intervention. First, I did not say "my area". I mentioned the Northern region, and I particularly referred to the university advantages, not in my area but in the Northern region. Second, it is the duty of any Member of Parliament, while this Government are throwing money around, to grab as much for his constituency as possible. That is the truth.
  Mr. Kaufman: The letter reads:
  "Whilst I fully recognise that the west coast of Cumbria is most unlikely to be chosen for this new technology, I do feel that the Northern region as a whole does have an extremely strong claim. Naturally, I hope there will be a spin-off in the whole of the region which will benefit industry which is located on the west coast."
  Mr. Page: Is not that what I said? There are now over 40 companies in the NEB, and it is only right that we should carry out some comparison between the NEB and other industrial companies to measure the success of the NEB operation. There are, of course, the straight accounting difficulties of drawing direct comparisons, and my hon. Friend the Member for Arundel pointed

  2083
  out the difficulty of doing any form of comparison with some unaudited sixmonths-old figures. In this case I shall take those first six months' figures of 1978 because they appear to be marginally better than before. However, I suppose that if one were to take into account inflation accounting, one would find that in real terms the situation had regressed.
  Nevertheless, from its own figures, the NEB, without British Leyland and Rolls-Royce, has made a profit of £5·6 million on a turnover of £153 million. If we include Rolls-Royce and British Leyland, the NEB shows a profit of £18·5 million on a turnover of just over £2,000 million. If we compare other industrial companies, we find that on a similar turnover GEC made a profit of £325 million. If we were to look at ICI in 1977—and I take the Minister's point about the difficulty in preparing annual accounts so quickly, so the ICI figures are for 1977—its profit, on just over a double turnover, was £483 million. If we equate it back to the same turnover as that for the NEB, it is a profit of £210 million. Again, one can carry these examples on and cite Trafalgar House, with its profit of £60·6 million on a turnover of £825 million.
  All those organisations show between 10 and 20 times more profit on turnover than the NEB and they can generate their own investment from their earnings. Obviously, the NEB cannot do so from its profits.
  Mr. George Rodgers: Does not the hon. Gentleman think that it would be more reasonable at least to compare like with like? Would he not accept that the National Enterprise Board rescued many industries which were previously in the hands of private enterprise? Would it not be common sense and common fairness to strike a comparison along those lines rather than to pretend that there is a comparison between what private enterprise is currently doing and what the National Enterprise Board is doing?
  Mr. Page: I take the hon. Gentleman's point. I believe that this is one of the problems with the NEB, that it is trying to be several things it should not be, and I should like to come on to the point of what I see as the real role of the NEB in our economy later.
  2084
  The NEB, of course, cannot provide the investment required from this sort of profitability. As I have already said, parallels with the Italian equivalent of the NEB become even more obvious. I am aware that I have taken companies which are market leaders, but in comparison the NEB regrettably lags behind. It must be only too obvious that, whilst this funding operation might seem desirable in theory, it is almost certainly bound to end in disaster, possibly because the percentage of companies that come to the NEB for help, particularly in the early days, are those that have been rejected by the usual financial institutions for aid without severe financial and managerial changes which have been too painful for them to accept—changes which, in some cases, the NEB did not initially find necessary.
  I regret that I cannot accept that this organisation can continue to operate effectively in this way, to watch over, as we have now, investments of £1,000 million, with a full-time staff of about 100 people, let alone increasing it to £4,500 million. The amounts become so large that they are almost unbelievable.
  I proposed to move on from this point to the question of non-accountability, but in view of the Minister's statement I should prefer to leave that well alone and leave it to my right hon. Friend the Member for Taunton (Mr. du Cann). No doubt my hon. Friend the Member for Surrey, North-West (Mr. Grylls) will also wish to say a few words on this matter. The only thing that I shall say about it is that paragraph 21 of the NEB's guidelines, drawn up by the Department of Industry, states:
  "It follows that the appropriate accounting officers will be answerable to the Public Accounts Committee for having satisfied themselves that the NEB has adequate arrangements for monitoring the financial assistance provided for companies."
  I could go on and on about that point, but shall make one generalised comment on financial controls in our public industries. It seems to me that the controls that this House should have do not exist. They seem to have slipped from our fingers. Sadly, Parliament today is a political law-making sausage machine without the power or the time to monitor the activities of the very children that it has created.

  2085
  Finally, I comment on what I see as the future role of the NEB under a Conservative Government after the next election. Whilst I appreciate that the NEB wishes to establish itself as an independent body, in its enthusiasm to do so it has rushed many of its investment decisions. I do not see it as a vast State holding company. If it were that, it would inevitably multiply the errors already made and would require vast armies of staff and investigating bodies to investigate companies in which it had invested. From then on, it is but a short step to direct State control.
  I see the NEB far more in the role of a State doctor. Taking companies of national and strategic importance, we can say that Rolls-Royce and British Leyland fall very firmly into that category. I see it taking companies of importance which are in economic trouble and sending in teams of skilled, highly knowledgeable people to provide the expertise to repair those companies and bring them back to profitable operation. Then, when they are profitable, they can be put back on to the open market. I see the NEB as a casualty clearing station—not the present tendency towards a geriatric ward—a role of vital importance within the framework of our democratic society.
  9.38 p.m.
  Mr. Donald Dewar: I do not intend to follow the hon. Member for Workington (Mr. Page) in his dissertation on the dietary habits of rabbits. However, I noted his remarks about the splendid profit performance of some parts of British industry. The hon. Gentleman concedes to some extent that there is room for increased industrial costs to be met without added impact on the consumer. That is an argument about which we shall hear more in the next few weeks when the Price Commission Bill comes before the House.
  I suppose that we are all parochial in our interests. I want to look at the problems of Scotland and the Scottish Development Agency. I agree with the hon. Member for Aberdeenshire, East (Mr. Henderson) that unemployment is one of the dominating and difficult issues which all parties will have to face in Scotland over the next year or so, irrespective of
  2086
  whether they are in Government or in opposition.
  At my by-election the view was taken by some before it started that one could afford to be cynical, at least in electoral terms, about unemployment. The theory was that the only people who worried about unemployment were those actually unemployed and that, as something that cost one votes, it was comparatively unimportant. Certainly, from talking to electors at the time, and since, I have found that large numbers of people are properly alarmed about what is happening in the Scottish economy at present, not only in the immediate short-term but in terms of the obvious structural difficulties that we shall face on a continuing basis over a considerable time.
  The hon. Member for Aberdeenshire, East mentioned, in particular, the shipbuilding industry. Of course, I share his anxieties about that. The Garscadden constituency is firmly based on shipbuilding. A number of shipyards are either in or on the edge of my constituency, and they are major employers. None of us is looking forward to the difficult period which undoubtedly will mean contraction in terms of the labour force over the coming months. I hope that in Scotland there will be a certain amount of unanimity in seeking to minimise these difficulties and in seeking to persuade the Government, shipbuilders and ship owners to preserve a viable industry in order to cope with the hoped-for upturn in the market in the mid-1980s.
  I have one reservation about the speech of the hon. Member for Aberdeenshire, East. He spoke of certain matters coming home to roost, as though suggesting that these difficulties were avoidable or had been lightly discounted by my Front Bench colleagues.
  Mr. Henderson: The hon. Gentleman was not in the House at the time when the shipbuilding industry legislation went through. It was our bitter experience that, although the Government pretended that nationalisation would be a panacea and would protect employment, it did not happen.
  Mr. Dewar: I was not in the House at that time, but I was an interested spectator. I have been fairly closely in

  2087
  touch with opinion in the industry since. At no time was the Bill held out to be a panacea. It was understandably seen as a necessary defensive measure to try to make nationalisation more effective and humane and to ensure that resources of capital development were available.
  People who work in the industry whose jobs are directly at risk are anxious to obtain all that they can out of British Shipbuilders. However, it is wrong to suggest that nationalisation was put for-ward as an easy option. My right hon. Friend the Minister of State did not suggest that no hard bargaining took place, or that there were no redundancies in prospect as a result of nationalisation.
  Mr. Kaufman: I have made it clear, not only in the House but on visits to many shipyards in England and Scotland—including a visit to Govan in April last year, and also in a meeting with the Scottish TUC in Glasgow two yearsago—that nationalisation would not guarantee one job in industry. I have said that to every group of shop stewards since the shipbuilding legislation went through the House.
  Mr.Dewar: My right hon. Friend's visit in April last year was most welcome. I accept that a great deal of tough, realistic talking has taken place, and will take place in the months ahead, in the shipbuilding industry.
  We must face these problems. The activities of the Scottish Development Agency must be seen in that context. I agree with the hon. Member for Aberdeenshire, East that there is always a danger of overselling an agency. If one has to defend such a body against ignorant and prejudiced attacks from the Scottish Conservative Party, one may push the boat out too far and back a prospectus which the Agency cannot live up to. I am very much aware of that danger. However, the Opposition parties tend to take that view also. That is clear from the extravagance of their attack.
  The hon. Member for Aberdeenshire, East said that the SDA was not getting enough money to cope with the problems of the Scottish economy. However, he cast the Agency in far too ambitious a role. There is no way in which the SDA can cope in global terms with the problems of the Scottish economy. The
  2088
  Agency was designed to make a valuable and useful contribution in providing risk capital, in preserving and creating jobs, and in assuming the role of an industrial catalyst. That applies particularly to areas such as west-central Scotland, in which there are many structural problems and the looming threat of unemployment.
  Mr. Gordon Wilson:Does the hon. Gentleman appreciate that the Scottish Development Agency has spent under £380,000 in risk capital or equity investment in the city of Dundee, which he will agree is an insufficient amount? There are whole areas of the country which are not covered by the Agency.
  Mr. Dewar: The hon. Gentleman says "not covered by the SDA". The SDA is an organisation which must consider where its money can most usefully be used, where there are opportunities to invest sensibly and to create jobs and thereby help the Scottish economy. I do not know enough about the situation in Dundee to say whether opportunities there have been passed up. I agree that there are problems in Dundee. I hope that the SDA will find opportunities to help Dundee at some date. However, I am not prepared to accept the implied criticism that in some way Dundee has in the past been neglected by the Scottish Development Agency—if that is what the hon. Gentleman was endeavouring to suggest.
  We all have reservations about the policy. I think that sometimes we spend too much of the SDA's money on environmental improvement and that we could do more in terms of industrial investment. That is a matter of argument. Environmental improvement work has been valuable. There is no doubt that the SDA has made a valuable contribution. I have seen evidence of that in my constituency. Such evidence has under-lined the worth of the organisation. For example, the SDA provided £50,000—not a large sum, but an amount which was vital in my area—to the Singer Sewing Machine Company. The SDA, with encouragement from Ministers, for which I was grateful, put up the necessary £50,000 to get the consultants' report off the ground to produce an alter-native strategy because 4,800 jobs were

  2089
  to be cut to 2,000. That may not sound overdramatic, but it was a severe blow not only in absolute terms but in morale terms in an area which could ill stand that kind of punishment.
  With the help of some able, imaginative shop stewards, we worked out a compromise solution with management which the work force accepted. That will save another 500 jobs, and that is important. I know that there is an enormous amount to be done and that there is along and no doubt at times rocky road still to travel, but if we can make that plant viable and establish it on a long-term platform for future development, in cost-effectiveness terms that £50,000 will have been extremely well spent. One can go to many parts of Scotland and find plants in strategic positions which owe their existence and continued prosperity to the SDA having been prepared to invest.
  Of course, there have been failures and mistakes. But if there had not been failures and mistakes we might today be complaining about the timidity and conservatism of the Scottish Development Agency. I am prepared to see it lose money on occasions if there have been honest attempts to preserve platforms for future prosperity in areas where they are very much needed.
  I make the obvious point that the SDA, in addition to its environmental improvement and industrial investment aspect, has played a central role in the restructuring of some of the difficult city areas in west-central Scotland. It has played a key part in the "GEAR" project for the rejuvenation and reconstruction of the east end of Glasgow.
  I suggest that we have to look not only at the SDA but at the NEB and its contribution. We in Scotland are some-times very parochial. We see the SDA only in terms of a specific Scottish institution. The very word "Scottish" receives almost exclusive attention, and that is not a healthy or necessarily accurate picture.
  The Albion works in my constituency remind me of the enormous contribution that the NEB has made to British Leyland. I appreciate that this is criticised particularly by many Opposition Members, but I believe that a viable car
  2090
  industry is an important aim and objective in this country. The intervention of the NEB, despite all the troubles and difficulties at British Leyland, has been extremely helpful and valuable. The NEB has made a real contribution to Bathgate and to the Albion works in my part of Glasgow.
  About 24,000 jobs in firms in Scotland are supported by NEB money. Frankly, at the end of the day, however much people may carp and see the NEB as offensive to the pure doctrine of the free market economy, those 24,000 jobs are very important in Scotland. Therefore, I should support any organisation, such as the NEB, which did something constructive and important in an effort to preserve those jobs. It underlines the point that the Scottish economy is not a self-contained unit that can be lifted out of the British context and left to flourish. We shall always have close connections with the market south of the border, which will remain our main market, and the public sector ordering power of the British Government will be the foundation of the prosperity of a large part of Scottish industry. The self-evident sense of that proposition has coloured a lot of the political attitudes over the last few months in Scotland.
  It has contributed—if I may say so without rubbing salt into the wounds of the Scottish National Party—to the dramatic decline in the fortunes of that party and the popular support which it temporarily enjoyed. I believe that the Labour Party in Scotland can look for-ward to an election, whenever it happens, with considerably more confidence—it is a qualified boast—than the Scottish National Party.
  We are seen as an integrated economy. It makes no sense to cast ourselves off and to see ourselves as some sort of self-contained economic unit, removed politically and, in a sense, economically from our main markets.
  Another reason for our confidence stems from the attacks by, and the prejudiced, bigoted and almost instinctive reaction of, the Scottish Conservative Party to any suggestion that we should intervene and extend the public sector. We should use agencies such as the Scottish Development Agency to prime the pump, to put in risk capital and to try to ameliorate the difficulties of a free market

  2091
  economy in an area that is particularly vulnerable to swings and to recession. So long as hon. Members on the Conservative Benches take the narrow view, their approach will have no relevance to the problems of the economy of Scotland and to the future of Scotland. That is why the Conservative Party will continue to be a rump in Scottish politics—a party which has to look south of the border in the hope that something will happen to sweep that miserable minority to a position of some transitory power in Scotland.
  No one is suggesting that the Scottish Development Agency has not made mistakes. I agree with the hon. Member for Aberdeenshire, East. I should like to see it pay more attention to the service sector. That is an important and relevant point. Its investment policy has probably been too narrowly based, and attention should be paid to the service sector which will expand and make a considerable contribution on the East and West coasts of Scotland.
  I am certain that the Scottish economic future and prospects would be distinctly impoverished if we did not have the SDA, and adequate funds for the SDA. It would come as a great shock to a large number of people who are perhaps tempted occasionally to look with a benign glance at the Conservative Party if they realised the opposition to this kind of development that, on occasion, is mouthed by representative and import-ant figures in the Scottish Conservative Party. I believe that people in Scotland appreciate what the SDA has done and see that its contribution, although limited, is valuable. I hope that the Bill will receive a resounding Second Reading.
  9.54 p.m.
  Mr. Richard Wainwright: Had the Government treated the House in a civilised and reasonable way and brought first before the House a separate Bill devoted just to the two Agencies, even the extravagant sermonisings of the hon. Member for Glasgow, Garscadden (Mr. Dewar) would not have deterred my hon. Friends and myself from following him into the Lobby in support of some extra borrowing powers for the two Agencies. But the Government, carried away by the superficial success of their atrocious combination of shipbuilding and aerospace in one Bill, have chosen
  2092
  —as some of us warned at the time—totreat the House in an appalling way by serving up three separate bodies for almost astronomical sums belonging to two quite disparate orders of statutory organisation.
  The NEB has virtually nothing in common in its structure with the two Agencies which are so badly coupled with it in the Bill. It is asking far too much to expect the House—in the ragged way in which we must debate the matter, with a weekend for reflection in between, and goodness knows what that may pro-duce—to have to discuss the three bodies all in one debate.
  As regards the NEB, we consider that the debate is ill timed in addition to being ill structured. To produce this demand for extraordinary increases in borrowing powers just a few weeks, presumably, before at any rate the unaudited accounts for 1978 become available is very little short of sharp practice. It has already put the House into a very difficult position when trying to assess the NEB's record.
  We have also had the usual sad illustration, which causes so much despair throughout industry, of the real curse of British industry, which is the zigzag of British politics. Tonight, for example, we first had a gross over-selling of the NEB which was, to put it kindly, premature. Even if some people have golden hopes of that organisation, no one can say that they have been realised in the latest accounts that we have before us, those for1977. The uninistructed among us do not know what the 1978 accounts have in store.
  On the other side, we have the most remarkable scenario. First, we have an extraordinary example of the way in which the powerful intervention of a thirdparty—in this case the Scottish nationa-lists—can induce the Tory Party to turn the most inelegant of somersaults. Agencies which were gall and wormwood only a few years ago and which have attracted, even to my anglicised know-ledge, some appalling attacks from the hon. Member for Glasgow, Cathcart (Mr.Taylor) now receive encomiums of praise in an amendment on the Order Paper. That is undoubtedly because the Tory Party is only just convalescent in Scot-land at present and needs to nurse its

  2093
  wounded voting figures with every possible care, even to the sacrifice of consistency.
  As for the major matter, the NEB, we were treated to an extravaganza by the right hon. Member for Leeds, North-East(Sir K. Joseph) which left me in a state of shuddering astonishment at the thought of what might happen were he ever en-trusted with the Department of Industry or an allied Department in a future Government. His caricature of British industry as the most controlled in any free society seems to me absurd when one recollects that for the past four years British industry, almost alone in the free world, has enjoyed the extraordinary benefit of scarcely having to pay any company tax whatever if it looked after its stock figures on only one day of the year.
  Any Front Bench politician who ignores the fantastic benefits of stock relief—I am sure not actually intended by the Government when it slipped through—benefits which have absolved British companies very largely from corporate taxation during recent years, must be deliberately caricaturing the position when he says that British industry is suffering from an excess of control.
  Mr. Hordern: Will the hon. Gentle-man name any other country in which industry has to contend with borrowing rates of not less than 15 per cent., with the possible exception of Italy?
  Mr. Wainwright: The hon. Gentleman cannot have it both ways. If he wants a strict monetary policy, and if he wants spending to be carefully organised, he cannot object to a certain amount of discipline being imposed.
  Mr. Budgen: Would the hon. Gentle-man agree that industry does not exist by itself—it is composed of people? What the Tory Party is complaining about most of all is high rates of tax on individuals, because it is by their motivation that they make industry and companies.
  Mr. Wainwright: I can see that there is something in that, but what I was objecting to was the wholly one-sided aspect of the zig-zag, in which all the admittedly distressing features are heavily underlined and no allowance is made for some of the brighter things on the horizon. It has not all been bad for British
  2094
  industry during the last few years, and some of the crashing mistakes—
  It being Ten o'clock, the debate stood adjourned.
  Debate to be resumed tomorrow.

  FLUORINE POLLUTION
  Motion made and Question proposed,That this House do now adjourn.—[Mr. Bates.]
  10 p.m.
  Mr. Peter Hardy: It is not my purpose to discuss the desirability of ensuring that drinking water contains a tiny proportion of fluoride for reasons of dental health. It may be that in that context it could have advantage. However, in more significant proportions fluoride can be very harmful indeed. It certainly has caused enormous problems for my constituent, Mr. Reg Ellis, of Warren House farm, Upper Haugh, in Rother Valley. As a result of my consideration of his experience and matters related to it, I shall be asking my hon. Friend to respond to a number of questions.
  Warren House farm is part of the Wentworth Estate, one of many farms in this part of my constituency which have been operated with general success since important agricultural reforms were carried out during the eighteenth century. The farm adjoins the site of the Warren House colliery, which closed many years ago. The seam from which it is named stretches to the Selby coalfield and beyond. Mr. Ellis succeeded his father as tenant of the farm and is now a veteran farmer.
  Over many years he built up a herd of Shorthorns, a herd which I had observed since my boyhood and which provided a pleasing balance to the much more common Friesian cattle. Reg Ellis was satisfied with both the meat and milk production his strain provided. Then came the tragedies which I raise tonight.
  First, in 1976 and within a month 17head of cattle were lost and all value sacrificed by the onset of what has proved to be fluorosis. As the months passed other cattle were lost. One of the later ones was Mr. Ellis's good bull which, with other animals, went lame and was lost last autumn.

  2095
  I am not an expert in animal health, but the cattle I saw at the farm last July were quite obviously badly and distressingly affected and a far cry from the animals I have seen on the Warren House fields over the years. Those cattle had deteriorated very badly and very swiftly. Altogether Reg Ellis has lost 34 head of cattle. He is not a big farmer and that loss represents the disappearance of a substantial part of his capital. I doubt if the total received for the whole 34, such was the effect of the disease, reached four figures.
  I hope my hon. Friend will take my word for it that this farm should hold a total of 60 or more animals, including the young stock. Mr. Ellis needs to buy re-placements, and I really do not think he can be expected to do so, given the modern costs of cattle. A good dairy cow will cost at least £400. His herd should be a dairy herd, but he has seen his milk production diminish from 60 or 70 to about two gallons a day. Commercial operation has been destroyed, and that means that income has gone as well as capital.
  Following my visit immediately after the local NFU contacted me, I wrote to my hon. Friend the Parliamentary Secretary at the Ministry of Agriculture. His initial response was, as we would expect, one of sympathy and interest. I was able to inform Mr. Ellis almost immediately that studies were in hand.
  The Ministry seemed to suggest that atmospheric pollution was the cause. There may have been historic reasons for this, for fluoride contamination and fluorosis were once not rare in South Yorkshire. This is shown in the Burns and Allcroft report, which mapped the position fairly clearly 15 or 20 years ago. But, since then, there has been a vast change in our polluting activities. Indus-try has taken more care or dramatically changed its character. The British Steel Corporation is now able to tell me that it does not emit fluorides in the South Yorkshire area, yet 20 years ago the areas windward of the steel works at Stocks-bridge and Rotherham were very often terribly polluted by fluoride. That is not now the case.
  I maintained my open mind about the source as the months passed. I also kept up pressure until by chance I learned that Mr. Ellis's earlier suspicions were justified. The sewage sludge provided by the
  2096
  Yorkshire water authority was heavily contaminated.
  I regret, and I must stress, that the water authority has not yet replied to a letter that I sent to Leeds as soon as I felt sure that sewage sludge was the real cause of the havoc wreaked on my constituent's farm. That belief has been reinforced by the commendable and detailed care shown by the local authority, the Rotherham borough council.
  The environmental health department of the council commenced and maintained detailed monitoring of not only the farm but other sites. The monitoring suggested that fluoride pollution in the area has fallen substantially in recent years and that at Warren House farm it is now quite insignificant. The highest weekly average measurement at Warren House farm was a factor of 50 below the threshold limit value, an American measurement adopted in 1957. On occasions there was no trace of the substance.
  I gather from the grapevine, which sometimes serves us a little better than public bodies, that the sewage sludge used at Warren House contained 25,000 parts per million. It may be that fluoride content was high at the time when the disease struck. It may have been that the unaccustomed drought conditions, in association with the high level of pollution, was responsible for the rapid development of the disease. I hope that my hon. Friend will comment on that.
  I hope that my hon. Friend will agree that the Yorkshire water authority should accept responsibility without delay and ensure that Mr. Ellis is able to pursue his occupation with disadvantage re-stored. I should deplore any delay or any attempt to defer justice by complex procedures or litigation. I understand that an officer of the authority has visited Mr. Ellis recently. I hope that that is a good sign and that there will soon be a happy outcome.
  My hon. Friend will appreciate that when I saw the bad condition of Reg Ellis's cows last July I was deeply anxious about human health. A mile or two south of the farm there are thousands of my Rawmarsh constituents. Fortunately, the authorities proved swift in their response. I am especially grateful to Mr. Neil Morton, the director of environmental health at Rotherham, and to the present

  2097
  mayor, Councillor Charles Breet, who chaired the committee and who is the representative of the ward.
  The council has been able to provide me with detailed information. It has provided expert advice about fluorosis. It has provided details published by the Health and Safety Executive. That information allowed me to feel rather re-assured. At the same time, I was given reassurance by an experienced alkali inspector. Initial anxiety was relieved although it was not allayed entirely.
  I do not wish to sensationalise, but I hope that my hon. Friend has had an opportunity to read either Mr. Malcolm Stewart's report in The Guardian or the Journal of Occupational Medicine of America of January 1977. Those sources suggest that public bodies in this country may be offering reassurance that is not entirely justified.
  We have known about the disease for some time. It was recognised in the1930s when it was known that skeletal abnormalities, calcification of ligaments and certain non-skeletal conditions could result from exposure to fluoride pollution in significant quantities. I accept that we are less likely to incur disadvantage than cattle. We do not eat like cattle, which graze short and redigest. However, it seems fairly obvious that there can be extremely harmful effects upon man as well as upon farm beasts.
  Given what happened at Warren House farm before the sludge contamination was established, we could surely have seen amore alert and vigorous national response. I do not criticise our local alkali inspector, and certainly not the local authority. But I believe that the assurance that I was given about the lack of harm to human beings was not wholly justified. I say that as a result of consideration of experience in Bedfordshire, where substantial emissions from brick works occur.
  It seems that in the Bedfordshire area also reassurance is offered. The liaison committee sponsored by the county authority suggested in a press release last November that there was no cause for concern. However, one resident in the area, a Mr. P. Goode, who farms in Ridgmont, near Bedford, who has been extremely helpful and supplied me with a great deal of information, was told by
  2098
  the deputy chief alkali inspector that there has been no organised monitoring. Clearly, present arrangements do not allow adequate supervision of fluoride emission. How anyone can say that there is no evidence of a public health hazard is somewhat suspect.
  It has been stated that if harmful effect is shown the appropriate Government Departments will investigate. However, anxiety is not relieved by the knowledge that the DHSS may not keep adequate records on relevant matters and that there is an absence of organised monitoring. This absence of monitoring and of relevant records might make investigation rather abortive in any case. Mr. Goode was right to remind the authorities in his area that since evidence is lacking they should not have offered such categoric assurances.
  The experience in Bedfordshire, and my own doubts about the swift reassurance that I was given, suggest that we do not know enough. Nor do we monitor enough or keep sufficient relevant records to be absolutely confident. There should be more research on a sustained basis to ascertain whether, for example, there is a long-term link between this contamination and arthritis. Certainly, we should take much more care about levels of fluoride in the atmosphere.
  I have asked my area health authority to consider the incidence of limb fractures among the elderly in my area which once suffered severe pollution. I want it to compare that with a similar group of people from an area where there has been no pollution. Perhaps my hon. Friend will indicate whether the Department will pursue the matter. I cannot see how existing arrangements are adequate. Possibly the Open university will make a helpful contribution, because I gather from The Guardian that it is to be involved. I welcome the concern which has developed.
  Also there is cause for relief in that those responsible for the aluminium smelter at Invergordon have established an arrangement whereby, if a local farmer loses cattle as a result of fluorosis, a veterinary surgeon gives certification and compensation is paid without delay. Whether the long-term interest is sufficient to ascertain whether the farmer

  2099
  involved is affected is rather more doubtful. The United States Department of Agriculture regards airborne fluorides as the most damaging of pollutants.
  The Ministry of Agriculture published advice last year—AF 51—a document concerned with the use of sewage sludge as a fertiliser. I stress that we should not waste this valuable substance. We need fertiliser and that is a very good source. However, I regret that in the report there is no reference to fluoride, although there is to other dangers. Could additional advice be given if there is any use of contaminated sludge or sludge which has not been analysed which might be contaminated? In such cases it should not be used, particularly on grazing land. If there is any risk of a combination of moderately contaminated sludge with the use of compound rations with a high phosphorous content, great caution should be exercised.
  I welcome the much safer air of South Yorkshire today. It may be that what we had in our air is now being increasingly concentrated in our sewage effluent. This would imperil wise use of material for fertilising our fields. At least our air is cleaner. It would be rather nice to make sure that we used our waste wisely as well.
  On the other hand, we do not face the same problems of areas such as Bedford-shire, where pollution continues. Obviously my concern must be about the Rother Valley, and I ask my hon. Firend whether he will ensure that there is adequate analysis of sewage and whether there is any possibility of an arrangement to filter the noxious substances out. Can we be absolutely sure that no more contaminated sludge will be deposited on curpastures?
  I emphasise that the official view is that fluoro-emissions in Britain today are not a danger to human health. I believe that that reassurance should be re-examined and, if there is any doubt at all, adequate research should begin. I hope that we can have that assurance without delay.
  I repeat that my constituent's dreadful experience should not be ignored. It illustrates the need for adequate safe-guards and secure arrangements. It also demonstrates how tragic damage has been caused to an individual without any fault
  2100
  on his part. He should be compensated and I hope that the Minister will encourage the water authority to ensure that this is swiftly provided. Then that farm can soon resume its long history of good quality and palatable food production.
  10.15 p.m.
  Mr. Peter Doig: May I make a short point? There is a brain-washing campaign going on concerning toothpaste which contains fluoride. One may buy toothpaste but it is very difficult to know whether it contains fluoride. Can the Government do something, first, to stop this brainwashing campaign? Secondly, could they make it compulsory for those who sell toothpaste to say which toothpastes do not contain fluoride, because many people are looking for such toothpaste?
  10.16 p.m.
  The Under-Secretary of State, Department for the Environment (Mr. Kenneth Marks): I shall ask my right hon. Friend the Secretary of State for Social Services to take note of what my hon. Friend the Member for Dundee, West (Mr. Doig) has said.
  I am grateful to my hon. Friend the Member for Rother Valley (Mr. Hardy)for raising this matter on the Adjournment because it provides a valuable opportunity for me to deal, so far as I can, with the specific problem of my hon. Friend's constituent, Mr. Ellis, as well as to answer other questions which this subject may raise generally in the minds of hon. Members.
  The subject spans several Departments' interests and I have been in close touch this week with the Ministry of Agriculture,Fisheries and Food and the Department of Health and Social Security, as well as with the Yorkshire water authority and other local bodies. I endorse what my hon. Friend said about Rotherham metropolitan district and its environmental health officers because of the work that they had done.
  I have read both articles in The Guardian on the case to which my hon. Friend referred, as well as the Bedford-shire case, and I propose to have further meetings with the various Departments and to include the Alkali Inspectorate in future meetings.

  2101
  The Yorkshire water authority has invited Mr. Ellis to approach it with a representative of the National Farmers' Union to discuss ways of assisting him with his problem. I understand that the authority enjoys good relations with Mr. Ellis and that it took the initiative before this debate was requested. My hon. Friend will, however, be aware that there has been some speculation and, as I have realised this week, some controversy, about the source of the fluoride contamination which caused the illness in these animals, although I know my hon. Friend has his own opinions about the cause. Results of investigations are still inconclusive and incomplete. I believe that my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food has explained that point, and I know my hon. Friend will appreciate that, with the sensitive question of compensation in mind, the Ministry has been concerned to avoid premature comment and conjecture.
  I am sure my hon. Friend will appreciate that I cannot comment to night on the question of compensation. Never the less, I know that the water authority is sympathetic to Mr. Ellis's problem of financial loss and appreciates that he does not want to await the results of the various investigations being carried out and it has, without prejudice to the out-come of the investigations, offered to help where it can.
  However, I am sure the water authority would like to stress that, whatever the cause, the situation that has arisen is extremely rare and that the combination of circumstances involved is quite unusual. As my hon. Friend said, the contamination caused by atmospheric pollution is one possibility and has been a certain factor in the past. The spreading of digested sludge on the land is another. We have to ask our selves whether there has been a combination of these factors.
  In the past, fluorosis in cattle was generally associated with certain industrial areas producing high emissions of fluorides into the atmosphere. Rotherham was one such area, with a history of fluorosis going back to the 1940s. In fact Rotherham is, I believe, one of the few areas, if not the only one, manufacturing fluorine compounds as the main
  2102
  product, as distinct from those produced as by-products of other processes. Tighter emission standards required by the Alkali Inspectorate have, in the past decade or so, brought about considerable improvement in airborne pollution although evidence exists to show that intermittent atmospheric contamination has affected some farms in the area up to 1975.
  The case is the first brought to my attention where it has been suggested that contamination stems from a high concentration of fluorides in sewage sludge. The argument, of course, is that the reduction of fluorides in the atmosphere has transferred the problem from atmospheric pollution to the liquid trade effluent received at Aldwarke sewage works and applied to Mr. Ellis's land. However, from investigations conducted so far, a number of factors cannot be reconciled to show that the sewage sludge is necessarily the cause of the contamination which started in 1976. One factor concerns the timing of the application of sludge to the land in relation to the normal course and manifestation of the disease. Sludge was first applied in May1976 and in the same year well established clinical symptoms are known to have appeared. I am advised by the Ministry of Agriculture's veterinary service that the symptoms take at least a year to manifest themselves, which means that if sludge was the cause it would have to have been spread in 1975or earlier. My hon. Friend has pointed out that 1975 and 1976 were drought years and that that may have had an effect. I shall follow up that idea.
  Other factors concern the fluctuations of fluorine in the soil. Though tests have shown that some levels have been un-deniably high—the implications of different patterns of farming in the area—Iunderstand that Mr. Ellis's cattle are in pasture all year round, whereas other cattle are taken in for winter feeding. There is a lack of similar evidence from any of the other 35 farms in the area which have received Aldwarke sludge,18 of which have cattle.
  Take-up of fluorine by vegetation and herbage is minimal as only the soluble fluorine is available, but it is arguable whether the insoluble portion remaining in the soil could be ingested continually by cattle. All these aspects need further

  2103
  investigation and I hope that my hon. Friend will accept that position.
  But I should like to make a number of points generally by way of assurance for the future. First, my Department's guidelines on sludge disposal do not refer to a limit or analysis for fluorine be-cause it has not been regarded as a problem in the past. However, I am considering suitable modifications to the guide-lines for the future for all water authorities, although I see no reason to depart from the views expressed in 1970 by the working party on sewage disposal which advocated the application of sewage sludge to land as good agricultural practice. My hon. Friend has confirmed that view. The South Yorkshire code has already been adopted for analysis of fluorine. I shall draw the attention of the DHSS and the Minister of Agriculture to what my hon. Friend said about the need for analysis of certain cases.
  Secondly, although the water authority's current agreement with industrialists for the reception and treatment of trade waste containing fluoride cannot be altered until1980, it is the authority's intention to reduce the fluoride content in the waste as soon as it can legally do so.
  Thirdly, disposal on pasture land was discontinued as soon as the fluorosis was confirmed. The water authority does not propose to resume this practice until the levels of fluoride in the industrial effluent have been reduced. Disposal on arable land was discontinued because of weather conditions and, when resumed, will continue to be applied strictly within accept-able limits.
  My hon. Friend also expressed concern about the wider aspects of human health. These matters are more for my right hon. Friend the Secretary of State for Social Services. I refer him to a written reply on 11th April last year when it was said that no human hazard had been shown by inhalation of fluoride. I also refer him to the Adjournment debate on 10thNovember 1978.
  Other reports and investigations have shown that man's fluoride intake from vegetables in contaminated areas is insignificant that the fluoride content of milk from cows suffering from fluorosis is negligible and that there is no specific accumulation of fluoride in the meat.
  2104
  and prolonged boiling of bones from cattle bred in contaminataed areas has shown that there is no hazard to man in the making of soups and stews. The negligible intake of fluorides from the meat or milk of affected cattle would not affect the safety of the consumption by humans of fluoridated water containing one part per million of fluoride—a concentration which takes account of dietary intake.
  I am aware of the emissions from the London Brick Company's works in Bedfordshire and the case of Peter Goode to which my hon. Friend referred. The company has been farming dairy herds local to the Stewart by works in Bedford-shire for many years, and appears to have demonstrated that good husbandry methods make it possible for farming to be successfully carried out in the area despite the presence of fluorides. How-ever, this matter is currently under discussion with the Ministry of Agriculture central veterinary laboratory at Weybridge, and a further investigation is being considered.
  I am assured that the Alkali Inspector-ate is concerned about the problems associated with these brickworks. I understand that a liaison committee, including the relevant local authorities, was established in 1974. The inspectorate considers that continued external monitoring might pro-vide additional information and is accordingly co-operating fully with the company, the local authorities and other organisations.
  The case of the Invergordon smelting plant is not directly comparable with this case. Invergordon involved planning per-mission with a condition relating to monitoring procedures. Although the power under English law to impose planning conditions is wide, case law has limited the discretion of planning authorities and it is accepted that conditions must serve a genuine planning purpose. Monitoring might be included as a planning condition but anything wider than that would not be acceptable under planning law.
  Finally, I return to the subject of compensation. We are, of course, always ready to consider measures to deal with hardships, where no other remedy is avail-able. But a formalised compensation system is not the answer. Where responsibility for damage can be allocated with-out difficulty, the court or other tribunal will be able to assess the compensation

  2105
  under the law as it stands—usually on the basis of restoring the injured party to the position that he was in before the damage. But where, as in this case, responsibility cannot easily be ascertained, and there may be no breach of a statutory function, formal rules clearly have no part to play. But the water authority is meeting my hon. Friend's constituent informally on that matter.
  Mr. Hardy: Will my hon. Friend en-sure that the water authority writes to me and that consideration is given to the possibility of another national survey?
  Mr. Marks: I give my hon. Friend that assurance. I shall keep in close touch with the Yorkshire water authority. My right hon. Friends the Minister of Agriculture, Fisheries and Food and the Secretary of State for Social Services will maintain a watch on the considerable re-search that is being carried out into atmospheric and possible soil pollution from the disposal of sewage sludge in this way.
  Question put and agreed to.
  Adjourned accordingly at twenty-eight minutes past Ten o'clock.

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Preamble
The House met at three of the clock: The LORD CHANCEIIOR on the Woolsack.
Prayers—Read by the Lord Bishop of Newcastle.

PENSION FUND INVESTMENT
Lord CULLEN of ASHBOURNE: My Lords, on behalf of my noble friend Lord Sandys, I beg leave to ask the Question which stands in his name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they recognise the dangers of setting up a State agency for the compulsory direction of pension fund investment and whether they will unequivocally reject any such proposal.
The MINISTER of STATE, PRIVY COUNCIL OFFICE (Baroness Birk): My Lords, Her Majesty's Government do not intend to set up such an agency.
Lord CULLEN of ASHBOURNE: My Lords, I am very grateful to the Minister for that reply, as will be the 14 million people who are either drawing pensions or who will in due course draw pensions from occupational pension schemes.
Lord ORR-EWING: My Lords, is the noble Baroness aware that the Labour Party Conference, the Labour Party National Executive and the Labour Party/TUC joint document have all strongly recommended this? Can the noble Baroness reconfirm to the House that all these recommendations are to be neglected in the forthcoming Manifesto and that we can really rely on the fact that the investment in pension funds will in the future be made by pension fund managers and not by politicians or bureaucrats?
Baroness BIRK: My Lords, the noble Lord is jumping things a bit. The Wilson
1156
Committee will be reporting in the early summer and it is for the Committee to take a view on the proposals to be expressed in that report. Nothing has gone further than that now; but the Government—I stick to my original Answer—do not intend to set up such an agency.
Lord BYERS: My Lords, may I ask the noble Baroness this: when she comes to use her influence on the writing of the Manifesto, will she bear in mind that the chances of a State agency investing funds more profitably than is done under the present arrangements are very remote? Pensioners, now and in the future, are likely to have their pensions reduced if the investments are less profitable than they are at the moment.
Baroness BIRK: Yes, my Lords. All this is being taken into account by the Committee and the Government, and certainly the Treasury, are very well aware of it. In particular, the Government, who have really done so much by their actions to include so many people in occupational pensions, believe that it is obviously to their advantage to keep an eye on their interests and to protect them.
Lord PAGET of NORTHAMPTON: My Lords, are these various points not perhaps rather surprising from a Government that talks so much about the fact that industry ought to be self-financing? Are not the pension funds one of the most important savings of industry and, as regards some form of direction, may not some people take the view that funds may be better employed in supporting British industry than in buying a Louis IV commode?
Baroness BIRK: My Lords, I would thank my noble friend for his question. I think it is agreed that there is probably some room for more communication and discussion between the Government and the institutions and industry.
Lord HAILSHAM of SAINT MARY-LEBONE: My Lords, is the noble Baroness aware that a Government composed of the Party on this side of the House will certainly never set up such an agency?
Lord HARMAR-NICHOLLS: My Lords, is the noble Baroness aware that her Answer was what might be called "a timetable Answer"?—the Government are not setting up an agency at this time. Is she in a position to say whether or not the Government, with all the special knowledge to which she has referred, are against the principle of doing this at any time, or was this just a "timetable Answer"?
Baroness BIRK: My Lords, the Government are against the principle of an agency with compulsory direction.

CHARTER 77 APPEAL: HUMAN RIGHTS
3.13 p.m.
Lord CHELWOOD: 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 will summarise the main points in the appeal recently sent by spokesmen for Charter 77 and the Committee for the Defence of Persons Unjustly Prosecuted to the Secretary-General of the United Nations, with copies to Heads of Governments that signed the Helsinki Final Act, and the reply that has been sent; and whether they will place the full text of both in the Library.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, the appeal alleges continued persecution of dissidents in Czechoslovakia and urges the United Nations and foreign Governments to maintain their concern. The reply sent by the Prime Minister's office expressed his deep concern at the actions taken against defenders of human rights. The text of the appeal and the reply sent will be placed in the Library.
Lord CHELWOOD: My Lords, since this first appeal by Charter 77 to the West followed 21 public appeals to their own Government, all of which were ignored, may I put two brief questions to the noble Lord? First, do the Government broadly—I emphasise that word—accept the detailed account of the harassment and persecution
1158
of Czechoslovak dissidents, bearing in mind their right to try to keep their Government up to the mark is actually written into the Final Act of Helsinki? Secondly, apart from ineffective verbal protests, what action are the Government considering in conjunction with our Western allies to try to bring home to the Czechoslovak Government that they have duties and obligations under the United Nations Covenants on Human Rights and under the Helsinki Final Act?
Lord GORONWY-ROBERTS: My Lords, I have no doubt that broadly speaking the allegations are true: persecution, harassment continues in Czechoslovakia and so does our condemnation of these practices, which are wholly in contravention of the signed agreements in the Final Act of Helsinki. As to our further action, while we maintain our bilateral pressures on Czechoslovakia and similar like-minded countries and with our allies, who similarly take action to put their points forward, I should like to add that this country is foremost in promoting the necessary preparations for the follow-up conference in Madrid, which will probably be held in 1980, when we hope to build on the results of Belgrade, and indeed markedly improve upon them, especially in the field of the observation of human rights.
Lord AVEBURY: My Lords, can the Minister confirm that none of the Socialist countries, including Czechoslovakia, has signed the optional protocol to the covenant on civil and political rights, which allows for individual complaints against the violation of human rights in one's country? In view of this fact, would the noble Lord not think that it was entirely proper that individuals, such as those members of Charter 77 who are referred to in this Question, should be able to present their case through Western Governments at the review in Madrid which the noble Lord mentioned?
Lord GORONWY-ROBERTS: My Lords, that is perfectly possible. It is not for me to anticipate in detail the agenda or the forms of the follow-up meeting in Madrid, but certainly the suggestion made by the noble Lord is one for very careful and, I would say, favourable consideration. As to the participation of Eastern European and other

1159
States in various protocols and conventions relating to the observance of human rights, I could not off-hand answer for every country, but I think that what he has said is unfortunately all too true in too many cases.
Baroness ELLES: My Lords, although we do not now have a representative on the Commission of Human Rights of the United Nations, which I think is regrettable, can the Minister inform the House whether, in view of the next session which is to be held in Geneva towards the end of February or the beginning of March, the Government have considered taking any concerted action with those Western members who have representatives on the Commission of Human Rights to raise this issue?
Lord GORONWY-ROBERTS: My Lords, certainly it is a continuing practice and policy to consult and to concert with like-minded countries, and of course our partners and allies, particularly in democratic Europe. We can, of course, build on this and add to our consultations and concerted action with members of the non-aligned group who, I am delighted to say, are much more ready to address themselves to the important points raised in this Question than they were a few years ago.
Lord BROCKWAY: My Lords, does the Minister remember that the recent conference of the International Labour Office considered these charges in detail and decided, with the support of Her Majesty's Government, to make representations to the Czechoslovakian Government? Has any reply been received to those representations?
Lord GORONWY-ROBERTS: My Lords, if my noble friend is referring to representations by the ILO, I should need notice of that question.

GREY SQUIRREL CONTROL IN SCOTLAND
3.17 p.m.
Lord DULVERTON: 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 of the extreme damage done to hardwoods in many areas of Scotland by grey squirrels and whether they are prepared to allow the use of anti-coagulant pesticide (Warfarin) in Scotland, as has been the case in England and Wales for a number of years.
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): My Lords, in 1973 an order was made under the Agriculture (Miscellaneous Provisions) Act 1972 allowing the controlled use of Warfarin against grey squirrels in woodlands in certain limited areas of England and Wales. At that time Scottish forestry interests indicated that grey squirrel damage did not justify a similar measure for Scotland. The Scottish Woodland Owners' Association have now indicated their belief that grey squirrels are causing increasing damage to hardwoods. The Association are currently seeking evidence of such damage to justify requesting a Warfarin order for Scotland. If convincing evidence is produced, the Secretary of State will consider consulting all the interests concerned about the propriety of laying an order before Parliament.
Lord DULVERTON: My Lords, I am very grateful to the noble and learned Lord for his Answer, but may I press him a little further? Despite the timing of my Question being somewhat premature, in view of the fact that Scottish woodland owners have not yet completed their collection of evidence, is the noble and learned Lord aware, first, that the damage to hardwoods is intensive in certain areas of Scotland; secondly, that while the Forestry Commission plants very few hardwoods, the private sector owns practically all the hardwoods in Scotland which are so greatly valued by the public: and, thirdly, that grey squirrels have spread northwards right into Perthshire, and are displacing the native red squirrels as they go? Will the noble and learned Lord assure me and the House that the minimum delay will occur, when the Scottish woodland owners have finished collecting their evidence, in getting an order before Parliament, because in the meantime the damage is going on and it will get worse?
Lord McCLUSKEY: My Lords, we certainly have some indication of the spread of grey squirrels in the way that the noble Lord has indicated. I am certainly aware, too, that the Forestry Commission has a somewhat different kind of tree from that of the private owners. But the most important point to bear in mind is that when in 1972 Parliament approved the Act which I mentioned, consultation with all the interests was made obligatory upon the Secretary of State; and, of course, there are interests other than the forestry and agricultural interests. There are the wildlife preservation interests as well. Furthermore, the Secretary of State has to bring his order for Affirmative Resolution of each House of Parliament. In these circumstances, the Secretary of State must have convincing evidence. Of course, if such evidence is put before him there will certainly be no unnecessary delay.
Lord INGLEWOOD: My Lords, may I ask the noble and learned Lord whether or not he will agree that when dealing with the eradication of vermin such as the grey squirrel it is very much better to do it when the numbers are very small rather than wait until the numbers are very large? Furthermore, can the noble Lord see that there is anything to be said for waiting until the grey squirrels have had another breeding season, for that, in fact, is what his answer amounts to?
Lord McCLUSKEY: My Lords, as I have already said, the Secretary of State cannot act until he is persuaded that there is sufficient evidence. Then he can consult the relevant bodies. It is not just a question of the grey squirrel. Any measures taken against a non-indigenous pest such as the grey squirrel are equally harmful to the indigenous red squirrel. There are many interests, as one knows from the Orkneys seal cull, which wish to ensure the preservation of animal species and not see them threatened by poison measures. So we need convincing evidence.
Lord HALE: My Lords, has my noble and learned friend observed on his visits South of the Border that this pest is to be seen in increasing numbers all over the country? Does he recognise that the grey squirrel is destructive of trees and is almost impossible to deal with under any
1162
of the provisions of the 1972 legislation in some very beautiful metropolitan areas where it is multiplying visibly and rapidly, since it cannot be treated by poison because the poison is too dangerous to other animals and it is impossible in an urban area to use the methods prescribed? Will my noble and learned friend consider, as we understand that the destructive season is March, what steps can be taken to help to deal with the problem during the appropriate season, as his own Department recommends?
Lord McCLUSKEY: My Lords, I am sure that the House will appreciate that although my responsibilities have recently been enlarged I have none for England and Wales. Secondly, as my noble friend has indicated, in the Act we are concerned with agricultural land and land of that kind, so I cannot say more than that the Government are aware, and have been made aware by the interests concerned, of the character of the problem.
Lord CAMPBELL of CROY: My Lords, in relation to what the noble and learned Lord said about the red squirrel, is he aware, in addition to the point made by my noble friend, that there are some areas in Scotland—for example parts of the North—into which the grey squirrel has not yet spread and where the friendly red squirrel still survives and that the grey squirrel pest is likely to invade those areas, too, unless severe measures to control it can be taken in the areas of Scotland concerned?
Lord McCLUSKEY: Yes, my Lords, I am aware of that, and I do not think that I can usefully add to what I have said in relation to the position of the Secretary of State.
Lord GISBOROUGH: My Lords, will the noble and learned Lord keep in mind the fact that most of the damage done by the grey squirrel is done during the second week of July when the bark is stripped off sycamores? Therefore, it is of the utmost urgency that action should be taken in time.
Lord McCLUSKEY: My Lords, I would merely repeat my assurance that, being aware of that circumstance, the Secretary of State will not lose any time

1163
over laying an appropriate order before Parliament if the evidence justifies it.
Lord DAVIES of LEEK: My Lords, is my noble and learned friend aware of the effect of the drug warfarin? Is my noble and learned friend aware that if a human being should get some of it on to his fingers and nibble at it he will have more hallucinations than anybody seeing an unidentified flying object?
Lord McCLUSKEY: My Lords, the method of applying this poison, permitted under the order, is such that a human being would have great difficulty in obtaining access to it.

SOCIAL WORKERS: INQUIRY PROPOSAL
3.24 p.m.
Baroness FAITHFULL: 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 the long-drawn-out strike, they will set up an independent inquiry into the conditions of service and responsibilities of social workers.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Stedman): My Lords, local authority employers are responsible for the terms and conditions of service of their own employees. They are at present negotiating with representatives of the social workers in the National Joint Council for Local Authority Administrative, Professional, Technical and Clerical Services. While these negotiations are continuing, it would not be proper for my right honourable friends the Secretaries of State for the Environment and for Social Services, who play no direct part in these negotiations, to try to intervene.
Baroness FAITHFULL: My Lords, while thanking the Minister for that reply, may I ask whether she is fully aware that the strike started six months ago in two authorities and has escalated to 14 authorities and that during these long months
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it is the most vulnerable and those without a voice in society who have been suffering? By that I mean children waiting for adoption, the mentally ill and handicapped, the elderly and the disabled. Would not the Minister's right honourable friend reconsider the position regarding setting up an inquiry to look into not only the conditions of pay but the management and structure of the social services?
Baroness STEDMAN: My Lords, I note the concern of the noble Baroness opposite, and we in the Government share it. However, to set up an independent inquiry while the negotiations are still in progress is a hypothetical question just at this time. It would be a very serious matter if the Government decided at this point to take these negotiations out of the hands of the independent employers and unions. I understand that they had a meeting yesterday. They will be reporting to the NALGO full committee on 26th January. I can only hope that they realise the damage that they are doing not only to their own profession and service but to the unfortunate people who depend upon them so much. I hope that the strikers will not continue their action but will go ahead with their negotiations with all speed possible.
Lord CULLEN of ASHBOURNE: My Lords, in view of the length of time these troubles have been going on, is it not the province of government to see that the provisions of statutes such as the Chronically Sick and Disabled Persons Act and the Public Health Act are carried out?
Baroness STEDMAN: My Lords, we are doing our best. This applies at the moment to 14 authorities. What I am afraid of is that some of these authorities may decide—because they have not seen the damage which is being done since they have not been able to contact cases—that there is not the need for so much in the way of social services and welfare services as there really is. I can only hope that the strikers will realise what a charge they have in terms of looking after these people—who are usually the inarticulate who need their help and need it desperately—and that they will also

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realise that they are doing their service no good and their authorities no good by continuing with the strike.
Lord BOYD-CARPENTER: My Lords, while the noble Baroness stresses, no doubt accurately, that these negotiations in respect of their own employees are handled by the local authorities, may I ask whether it is not a fact that these local authorities are subject to the Government's pay guidelines and that this has been made clear to them and will be reflected in the level of the grants that they receive?
Baroness STEDMAN: Yes, my Lords, but further advice has also been given to them. The Secretary of State for the Environment has made it clear to the negotiators on both sides that the pay policy ought to present no significant obstacle to continuing and concluding these negotiations. We gathered in the course of informal discussions that at one time they thought that they would have to wait for any regrading, because it would be classed as a mass regrading which they could not get until their next pay round was due. My Secretary of State has now made it plain that these will not be regarded as mass regradings and that if they will only get on with the job we can get it done.
Lord PANNELL: My Lords, is the Minister aware that the progress of the negotiations has shown a degree of indolence which would not be put up with by any other body of workers and that it is principally because it falls upon people who are not in a position to hit back that we think that these negotiations have been so protracted and delayed?
Baroness STEDMAN: My Lords, negotiations, particularly when they affect pay, are often protracted and are often, so it would seem to the outsider, unduly delayed. The National Joint Council is comprised of representatives of the local authorities as the employers and all kinds of people who are local authority employees. The social workers are only one part of it. NALGO are another part of it. It is much more difficult to negotiate when you are covering the whole field of local government employees, as this national council is, than when you are dealing with just one straightforward
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part of it. There can be repercussions from one part to the other.
Lord AVEBURY: My Lords, I gather from the reply given to the noble Lord, Lord Boyd-Carpenter, that the Government have indicated to the employers that they need not stick to the 5 per cent. guidelines. If they do give more than 5 per cent., will that be reflected in any increase in the rate support grant?—because, if not, then surely an award higher than 5 per cent. simply means that the local authorities will be able to afford to employ fewer social workers.
Baroness STEDMAN: No, my Lords, what we have indicated is that these need not be considered as mass regradings. If there are regradings some of them will get quite a bit more than 5 per cent. We have indicated that they are not to be considered as mass regradings and therefore any regradings that are agreed by the National Joint Council can be implemented right away and need not wait until the round on pay talks.
Lord BANKS: My Lords, can the noble Baroness say whether the Government have formed an opinion about the demand of the strikers for local negotiation rather than national negotiation?
Baroness STEDMAN: No, my Lords. At this stage this is a matter between the local authority as the employers and the unions as the employees. It is not at this stage for the Government to intervene.
Baroness WARD of NORTH TYNE- SIDE: My Lords, is the noble Baroness aware that I fully support the Question put by my noble friend Lady Faithfull, and is she further aware that I honestly do not think that she has given a very satisfactory reply? The noble Baroness will be aware that I come from that part of the country where we have the head quarters of the Social Services Department. It seems to me, from certain experience during 38 years in another place, that the noble Baroness would have done much better to cut out many of the odd things she has said and accept what my noble friend said, because some interesting letters have been written by very important people—
Several noble Lords: Question!
Baroness WARD of NORTH TYNE-SIDE: I am not at all satisfied, my Lords, and I intend to say so. I do not think that the answer given by the noble Baroness is satisfactory.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I know that the House appreciates the indignation felt by the noble Baroness, Lady Ward of North Tyneside, but I think we really must have a question and not a speech. I feel that she has made her point and, as we have three Statements to come, I feel sure the House will agree that we should proceed.

GOVERNMENT STATEMENTS
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. my noble friend the Leader of the House will repeat a Statement being made in another place on the road haulage dispute. He will then repeat a Statement on the effects of the current industrial disputes. This will be followed by my noble friend Lord Boston of Faversham repeating a Statement on the bomb incidents.

ANCIENT MONUMENTS AND ARCHAEOLOGICAL AREAS BILL [H.L.]
3.33 p.m.
Baroness STEDMAN: My Lords, I beg to introduce a Bill to consolidate and amend the law relating to ancient monuments; to make provision for the investigation, preservation and recording of matters of archaeological or historical interest and (in connection therewith) for the regulation of operations or activities affecting such matters; to provide for the recovery of grants under Section 10 of the Town and Country Planning (Amendment) Act 1972 or under Section 4 of the Historic Buildings and Ancient Monuments Act 1953 in certain circumstances; and to provide for grants by the Secretary of State to the Architectural Heritage Fund. I beg to move that this Bill be read a first time.
Moved, that the Bill be now read la.—(Baroness Stedman.)
On Question, Bill read la, and to be printed.

CARRIAGE BY AIR BILL [H.L.]
Lord STRABOLGI: My Lords, on behalf of my noble friend Lord Jacques I beg to introduce a Bill to enable effect to be given to provisions of certain protocols signed at Montreal on 25th September 1975 which further amend the Convention relating to carriage by air known as the Warsaw Convention as amended at The Hague in 1955: to modify Article 26(2) of the said Convention both as in force apart from those protocols and as in force by virtue of them; to provide for the amendment of certain Acts relating to carriage by air or road in consequence of the revision of relevant Conventions; and to replace reference to gold Francs in the Carriage of Goods by Road Act 1965, and the Carriage of Passengers by Road Act 1974 by references to special drawing rights. I beg to move that this Bill be now read a first time.
Moved, that the Bill be now read la.—(Lord Strabolgi.)
On Question, Bill read la, and to be printed.

CRIMINAL EVIDENCE BILL [H.L.]
Viscount DILHORNE: My Lords, I beg to introduce a Bill to amend paragraph (f)(iii) of the proviso to Section 1 of the Criminal Evidence Act 1898 and corresponding enactments extending to Scotland and Northern Ireland. I beg to move that this Bill be read a first time.
Moved, That the Bill be now read 1a.—(Viscount Dilhorne.)
On Question, Bill read 1a, and to be printed.

HOUSE OF COMMONS (REDISTRIBUTION OF SEATS) BILL
Brought from the Commons; read la, and to be printed.

ALCOHOLIC LIQUOR DUTIES BILL [H.L.]
3.36 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to move that this Bill be now read a second time. This is the first of seven Bills together consolidating most of the law of customs and excise, all of which are for Second Reading this afternoon. It may be convenient if, with the leave of the House. I speak briefly now to all seven Bills before the others are put in turn to your Lordships, and moved formally.
The Customs and Excise Management Bill, which is the largest of these Bills, deals with the administration, management and overall control of customs and excise while the Customs and Excise Duties (General Reliefs) Bill consolidates certain general reliefs from customs and excise duties. There are four Bills dealing specifically with the individual excise duties on alcoholic liquors; oil, petrol and similar fuels; tobacco products, and matches and lighters. Finally, one Bill consolidates the so-called "regulator" powers by which the Chancellor of the Exchequer may by order vary the rate of certain excise duties.
All but one of the Bills are pure consolidation Bills, the exception being the Management Bill which contains four minor changes in drafting recommended by the Law Commission and the Scottish Law Commission in their report on the consolidation. None of these recommendations relates to the charge of duty, nor would they make any change in current practice. My Lords, if these Bills receive a Second Reading today they will all be referred in the ordinary way to the Joint Committee on Consolidation Bills. I beg to move.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

HYDROCARBON OIL DUTIES BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. I had been
1170
asked to take the Bills together, but on excellent authority I am told that I cannot do so.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

MATCHES AND MECHANICAL LIGHTERS DUTIES BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

TOBACCO PRODUCTS DUTY BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

CUSTOMS AND EXCISE MANAGEMENT BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

CUSTOMS AND EXCISE DUTIES (GENERAL RELIEFS) BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

EXCISE DUTIES (SURCHARGES OR REBATES) BILL [H.L.]
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

PUBLIC HEALTH LABORATORY SERVICE BILL [H.L.]
Read 3a; an Amendment (privilege) made; Bill passed, and sent to the Commons.

ARBITRATION BILL [H.L.]
3.40 p.m.
The LORD CHANCELLOR: 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 Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 1 [Judicial Review of arbitration awards.]:
Lord LLOYD of KILGERRAN Lord LLOYD of KILGERRAN moved Amendment No. 1:
Page 2, line 5, leave out ("court") and insert ("arbitrator or umpire").
The noble Lord said: When this Bill passed before the House on Second Reading the noble and learned Lord the Lord Chancellor emphasised that the purpose of the Bill was to remove certain
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legal obstacles which at present stand in the way of London being used to its full potential as an international centre for arbitration. He stressed that it was most important that our arbitration law should conform with the needs and wishes of the commercial community, and he emphasised how important to the City of London were the measures in this Bill. He said that it is important that the City of London and other centres of arbitration should not be hampered in the maintenance and expansion of their important and historic role in arbitration matters. As your Lordships are aware, the London arbitrators have a famous international reputation. He indicated that the Bill would be important to our balance of payments from the City's services, and those balance of payments are very considerable, and he emphasised that the Bill would remove the deterrents in our arbitration practice which have discouraged arbitrations taking place in this country.
There is one deterrent that I am seeking to remove by my first Amendment to this Bill, one of the deterrents to arbitration taking place in this country at the present time. It relates to the procedure for appeal. It is very easy, as many of your Lordships know, to invoke the practices of the court by appeal procedures, to delay the final decision. The appeal provisions of the Bill with which I am concerned are to be found in Clause 1(3). An appeal under this subsection can, of course, be brought
"… by any of the parties to the reference with the consent of all other parties to the reference",
but the other ground of appeal in this subsection, as the Bill now reads, is:
"… subject to section 3 below, with the leave of the court".
My Amendment is to bring the arbitrator more nearly to the procedure of appeal, for reasons which. I shall indicate later. Therefore, instead of the word "court"—the necessity to have the leave of the court—my Amendment is directed to omitting "court" and giving the power to grant leave to the arbitrator or umpire. I understand, of course, that there are difficulties about this, but your Lordships will realise that the umpire or arbitrator has been all through the facts and he is usually a very experienced man. It is very rare there is any matter of misconduct on the part of an arbitrator. But serious

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delays can arise by this appeal to the court. The arbitrator having listened to the parties will know whether or not any of the parties are just introducing procedures to delay a final decision.
Therefore, it seems to me from a practical point of view very helpful to give a power to the arbitrator or umpire to grant leave if it is asked by one of the parties. He is the man who has studied all the facts and he should be able to decide whether or not it is a proper case for appeal, rather than allow the matter to go further to the court. It does also seem quite wrong to me that the arbitrator is not brought into the procedures in other parts of this Bill, but those are matters to which we will come later. This Amendment is directed to giving power to the arbitrator to decide whether there should be leave to appeal after he has heard the case. I beg to move.
The LORD CHANCELLOR: My Lords, this Amendment would have the effect of substituting the leave of the arbitrator or the umpire for that of the High Court to bring an appeal under Clause 1(2) upon a question of law arising out of the arbitrator's or the umpire's award. I submit this is not acceptable. The court's power to supervise and to review arbitrations should not depend on the arbitrator's leave. For it to do so would be to make the arbitrator in effect judge in his own cause, and without further amendment there would be no appeal against his refusal of leave as such. It might be reassuring to the arbitrator, but I doubt whether it would reassure anyone else. Amendments Nos. 3 to 7 are consequential on this Amendment and deal with the same point. Accordingly, I am afraid I cannot support the Amendment.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

ROAD HAULAGE STRIKE
3.48 p.m.
The LORD PRIVY SEAL (Lord Peart): My Lords, with the leave of the
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House, I will now repeat a Statement being made in another place by my right honourable friend the Prime Minister. The Statement is as follows:
"With permission, Mr. Speaker, I will make a Statement about the road haulage strike. My right honourable friend the Home Secretary hopes to make a Statement, Mr. Speaker, when this is concluded, on the effects of the current industrial disputes and the Government's contingency arrangements.
"I regret to inform the House that there appears to be no prospect of an immediate end to the strike and the movement of supplies of all kinds is being held up. Hardship and considerable dislocation is being caused to the general public and to trade and industry, particularly because of the severe effects of secondary picketing. I therefore asked the General Secretary of the TGWU, Mr. Moss Evans, and the General Secretary of the TUC, Mr. Len Murray, to come to see me for discussions last night.
"Mr. Evans made it clear that his union stand by its agreement to maintain the priority supplies of essential goods. He also repeated that it stands by its instructions to its own members that the strike and the picketing should be confined to those companies who are in dispute with the Road Haulage Association. Mr. Evans undertook to take further urgent action to ensure that these priority supplies are maintained and that action by pickets is not extended to companies and employees who are not involved in the dispute.
"Nevertheless it is clear that some picketing practices and in particular secondary picketing have given rise to the present serious situation; I told Mr. Evans that there had been little amelioration in the position and that it was essential that pickets and in particular secondary picketing should be properly controlled. I have already made clear to the House that, in the Government's view, this control is likely to be more effective by a voluntary code of practice than by attempts at unenforceable legislation. As a result of our discussion the Transport and General Workers' Union has agreed to

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a voluntary code of practice in relation to picketing during this dispute and this has been issued by it today. The code explicitly provides that "picketing should be confined to the drivers and vehicles in the hire and reward section of the industry who are employed by firms in dispute with the union", that is, it rules out secondary picketing. The union is making clear to all its members that no member of the union would be penalised or suffer in any way as regards his rights as a member of the union if he follows this code of practice.
"My right honourable friend the Secretary of State for the Home Department will be dealing with the general question of contingency arrangements in his Statement. But, in relation to the road haulage dispute, I should say that in the current grave situation the Government have given careful consideration as to whether they should seek the powers that would become available by proclaiming a State of Emergency today. The critical question is whether the proclamation of a State of Emergency would increase the supply of essential goods and services. At the moment the Government's view is that essential supplies would be better maintained by the members of the Transport and General Workers' Union observing the code of practice issued by their union and so putting an end to secondary picketing. But the Government will keep the matter under review day by day.
"The Government will keep the House informed of developments."
My Lords, that concludes the Statement.
3.52 p.m.
Lord CARRINGTON: My Lords, the House will be obliged to the noble Lord the Leader of the House for repeating that Statement. No doubt your Lordships will take note of, and will welcome so far as it goes, the proposal that Mr. Moss Evans and the Transport and General Workers' Union will issue a code of practice about secondary picketing. However, we shall also recollect that Mr. Moss Evans said that that was precisely what he was going to do. Indeed, he said that one of
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the reasons for declaring the strike official was to control picketing. To say the least of it, that does not seem to have been the experience in the past few days. We also have observed in the newspapers this morning the statement made by Mr. Kitson that secondary picketing was essential if the union was to win the strike. Moreover, I do not think that the Government should under-estimate the anger of ordinary persons at what is happening about secondary picketing. They will certainly expect the code of practice to be effective. If it is not effective, they will expect the Government to ensure that it is effective, and very quickly at that.
As regards the State of Emergency which was referred to in the last part of the Statement, I think that it must be for the Government to make their own decision. We cannot possibly have all the facts at our disposal. But, certainly from our observation and from what we hear, the situation does seem to be a great deal more serious than one would suppose from some of the statements that have been made by Ministers. We see the lay-offs and the shortages in the shops. We on this side of the House—emergency or no emergency—shall expect the Government to ensure that essential supplies are kept going.
3.54 p.m.
Lord BYERS: My Lords, I must say to the noble Lord the Leader of the House that I listened to the Statement with mounting misgivings. It refers to the need to control secondary picketing. Surely what is needed is to stop secondary picketing, especially in the docks and the factories. Surely the form of secondary picketing which we have witnessed in the last few days and the obstruction and intimidation must be illegal and there must, therefore, be grounds for taking action against it.
I gain the impression that the first thing that must be done is for the union leaders to regain control of their militant members. If they do not do that, I do not see the value of a code of practice at all, because unless they regain control of their militant members they cannot put it into practice. Therefore, I ask the Government to make it clear to the union leaders that the first thing is to regain control, and, if necessary, they should use the powers which they

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have under the closed shop system to force compliance with union instructions, and also to force compliance with the undertakings which the union have given to the Government themself. If that is not done we have made no progress.
Finally, I would ask the noble Lord the Leader of the House whether it is not essential that the union leadership should take immediate action against those who indulge in corrupt practices by extorting cash from employers through a Mafia-type protection racket which I never thought we would see in this country.
3.56 p.m.
Lord PEART: My Lords, first, may I say to the noble Lord, Lord Carrington, that I am grateful for his positive approach. This is a difficult situation and he is quite right in saying that it is for the Government to decide, because inevitably we are involved. If the facts show the need for something more urgent, then we shall be entitled to act. Therefore, I am grateful for the remarks which he made. I accept what he said about the code of practice. However, before we receive biting criticism which I think the noble Lord, Lord Byers, made of the code of practice, and before the noble Lord makes a final judgment, he should read the code of practice. I hope that there will be copies of it available for noble Lords to study carefully.
I believe that if there can be voluntary action it would be far better than thinking in terms of legislation, because it would take a long time to get legislation through. So, we feel that the course that we have followed is the right course in the present circumstances; but if the situation became worse, then naturally we may have to take other action.
Lord WIGG: My Lords, will the Minister be good enough to realise that the kind of picture one has depends upon one's sources of information. If, therefore, one relies upon the media—the BBC, radio or television—or one reads the Press, with the honourable exception of the Financial Times, which has tried to be objective, one receives the type of picture painted by the two Front Bench speakers.
On the other hand, not being a devotee of the Press as an unadulterated force of
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truth, I did some checking myself. Does the Minister realise that last night and this morning I made checks in the Eastern region—that is, Suffolk and Cambridgeshire, which are areas which have a very great number of food firms? There is not one single food factory which is not getting its supplies, and that is because of the energetic and competent action of the Transport and General Workers' Union. Therefore, the pictures about secondary picketing are grossly overstated, as indeed are the reports about bribes and all the other fun and games. If noble Lords would take the trouble to make inquiries they would find that to be so.
Is the Minister further aware that the Press, with the honourable exception of the Sporting——
Several noble Lords: Oh!
Lord WIGG: My Lords, I shall own up to noble Lords that I read the Sporting Life; that is perfectly true! And if I have made a Freudian slip I am proud of it. I should have said "With the exception of the Financial Times". The Press in this country has made no effort whatever to present the simple fact that the lorry drivers have a case—indeed, a very substantial case—which has been grossly distorted. Will the Government bear in mind that in so far as the Press does not present objectively the lorry drivers' and the strikers' case, it embitters the strikers and that is one of the main causes of vicious picketing?
Lord PEART: My Lords, I have noted carefully what the noble Lord, Lord Wigg, has said. I shall repeat another Statement which deals with the state of supply of goods and services and contingency arrangements. I hope that the noble Lord still receives his Sporting Life.
Lord HARMAR-NICHOLLS: My Lords, is the noble Lord aware of the danger of the phraseology used in the Statement? It uses the term "unenforceable legislation". What is unenforceable legislation? It cannot be legislation unless it has the approval of the whole of Parliament, which represents the interests of the whole nation. Who is in a position to make unlawful legislation which has passed that test? Does not

1179
the phraseology which the noble Lord has used mean that the Government are not in charge of the situation, even in the area that they should be covering? If the Government are so dispirited as to what they can do within their proper powers, ought they not to hand over to someone who is not so dispirited? Is not that one of the contributions that could be made at this difficult time?
Lord PEART: My Lords, I should not have thought that that was a positive suggestion. The noble Lord is a member of a Party that has had some strange difficulties in the area of industrial relations, as he knows only too well, and which led to the fall of one of its Prime Ministers. The noble Lord is an old Parliamentarian. He knows very well that sometimes legislation which is passed cannot properly be enforced as those who initiated the Act thought.
Lord MACKIE of BENSHIE: My Lords, as the Government are apparently going to back the code of practice, will the noble Lord ensure that the widest publicity, in simple language, is given to that code? To be quite frank, trade union language is often so complicated that I cannot understand it. The people of this country seem to have an extraordinary idea of the power of pickets and do not realise their own rights. Therefore, if a code of practice is to be put into effect, will the Government ensure that it is fully understood, or understood as fully as possible, by those who are affected by it in this country?
Lord PEART: My Lords, that is a good, positive point. As I have said, I hope that the code of practice will be available to noble Lords. However, I agree that it must be simple, clear and understood by rank and file trade unionists, which is very important.
My Lords, I understand the next Statement has not yet been cleared.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, we are in a difficult situation because we do not yet have clearance for the next Statement. Therefore, perhaps we ought to resume consideration of the Arbitration Bill.
Lord HAILSHAM of SAINT MARY-LEBONE: My Lords, I think that that is probably the best course to pursue. We are dealing with quite a short Amendment. If that is convenient to both sides of the House, I should not propose to detain the House very long and perhaps other noble Lords will adopt the same course.

ARBITRATION BILL [H.L.]
4.3 p.m.
House again in Committee on Amendment No. 1.
Lord LLOYD of KILGERRAN: I should like to express my gratitude to the noble and learned Lord the Lord Chancellor for his concise and short reply. But he fully realises that since the Second Reading a number of representations have been made to him by commercial interests and arbitrators' associations. I have in my hand copies of correspondence and statements from the London Maritime Arbitrators' Association and the Institute of Arbitrators, who believe that there are serious difficulties in regard to the procedures adopted under this Bill for this kind of appeal. I fully realise the problems which the noble and learned Lord has and that, so far as he is concerned, there is a considerable matter of public policy that arbitrators should not be judges in their own cause. However, he realises that there are hundreds of arbitrations where the reference to the court is usually introduced to delay matters. Therefore, I wonder whether the noble and learned Lord would reconsider this Amendment and allow it to be dealt with again at a later stage.
Lord HAILSHAM of SAINT MARY-LEBONE: Perhaps I might intervene very shortly becausefconditional upon notification by the party to the onclusion as he reached in his original reply. I do not think that this Amendment is acceptable. I simply want to give two or three general reasons why I think that is so. It is very important that law reform should be fully ventilated through the professional organisations and through proper inquiry before we introduce it hurriedly into Parliament. This is not because Parliament does not have an absolute right to interfere with

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and amend the reports of committees, but because sometimes hasty changes lead to unforeseen results. This is a proposal which would absolutely revolutionise the whole practice and law of arbitration in this country.
It is basic to the law of arbitration in this country that we should not be able to exclude the jurisdiction of the courts. Once we put into effect that the only appeal from an arbitrator is by leave of the arbitrator, we completely revolutionise the fundamental principle on which arbitration law is based. We really cannot use this Bill as a vehicle for that. I venture to say that with some emphasis because the first book I ever wrote was not about politics but about the law of arbitration. I think that I have studied the subject fairly continuously ever since. When we come to discuss whether the clause should stand part of the Bill, I want to refer to my noble and learned friend Lord Diplock because I have a little bone to pick with him.
On the other hand, it is important to remember that the very reason that arbitration in this country has been so popular in the commercial world internationally is that we have developed a code of arbitration practice under the general supervision of the courts which has proved acceptable in the international world. To introduce into our domestic law—because that would be the effect of the Amendment of the noble Lord, Lord Lloyd of Kilgerran—something as revolutionary as this would be a mistake. I am sure that in this matter the judgement of the noble and learned Lord the Lord Chancellor is correct.
However, I should like to add a few more words because I shall be expanding on this aspect a little later. I think that there has been a genuine misunderstanding in the commercial world, which we must put right during this Committee stage, as to the purpose and effect of the Bill. We have always received the various documents to which the noble Lord, Lord Lloyd of Kilgerran, has referred. From having read them, it is fairly apparent to me that they have misunderstood what is being done. They believe that what is being given is a freer access to the courts than we previously had. That is not the effect of the Bill; it is to substitute Clause 1 for the previous special case procedure
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under Section 21 of the Arbitration Act. So far from making an appeal easier, if anything, it makes it a little more difficult. Once that is generally understood, I believe that much of the dismay which has been expressed in the professional Press and even through the Institute—in which, again, I must disclose a moderate interest because I am a Fellow of it—would be dispelled. Therefore, I would respectfully suggest to the Committee that in this matter the noble and learned Lord is right.
Lord HARMAR-NICHOLLS: There is also a layman's reason why the noble and learned Lord the Lord Chancellor should be supported. I believe that there is a real risk that if this Amendment were accepted, it would interfere with the objectivity of the arbitrator. Like anyone else—like a judge—the arbitrator is human, and the knowledge that he could be appealed against on a point of law is very salutary in ensuring that on the evidence submitted to him he is as objective and impartial in his decisions as he possibly can be. Indeed we are very proud of our judges. But I venture to suggest that there are many occasions when the risk of a judge's decision being appealed against, with the effect it would have on his reputation as a judge, is a very salutary bounty in getting the best out of the judge, or the arbitrator. Purely from the layman's point of view, I would suggest that we must not interfere with the objectivity, which I believe is strengthened by the knowledge that, on a point of law at any rate, a decision could be appealed against.
Lord DIPLOCK: In the hopes of mollifying my noble and learned friend Lord Hailsham before he picks a bone with me, may I say that I entirely agree with what he has said about this Amendment, which goes to the root principle of the Bill. May I simply add that this section applies to every arbitration in this country except those which are excluded. International arbitrations are outside it. It applies to the consumer arbitrations; it applies to the tourist industry arbitrations; it applies to the National Council of Housebuilders' arbitrations; it applies to thousands of arbitrations.
I am perfectly well aware that there are many experienced arbitrators, particularly

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in the commercial arbitrations, who would be perfectly capable of deciding whether this particular case is an appropriate one for a reference to the courts. But without that experience—and most of the arbitrations we are talking of are done by people without that experience—what you have done is to leave it to the whim of the arbitrator to decide whether or not the court can look at his award to see whether he has made a mistake of law. If in perfect innocence he has made a glaring and obvious mistake of law, you can do nothing about it under this Amendment, unless he says, "I am willing that you should go to the court".
The LORD CHANCELLOR: I am gratified by the notable support my opposition to the Amendment has received from the noble and learned Lord, Lord Hailsham, who is a great authority in this field, as of course he is in so many other fields. I hope that although this was the first book he wrote it may not be the last. I am reinforced also by the layman's valuable contribution, and that of the noble and learned Lord, Lord Diplock. I hope, in the face of this weighty opposition, the noble Lord, Lord Lloyd of Kilgerran, who is always so reasonable in these matters, will think it appropriate to withdraw the Amendment.
Lord LLOYD of KILGERRAN: I express my gratitude to the noble and learned Lord, Lord Hailsham, for having disclosed, as a member of the Institute of Arbitrators, the concern that has been shown by that institute about the appeal procedure under this Bill. Of course the noble and learned Lord, Lord Diplock, is the president of that institute. However, I have in my hand a letter from the director and secretary-general of that institute saying that the appeal procedure under this Bill is a deterrent to many people coming to London in order to have their matters arbitrated. In the face of this overwhelming opposition from so many noble and learned Lords, I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
4.13 p.m.
Lord LLOYD of KILGERRAN Lord LLOYD of KILGERRAN moved Amendment No. 2:
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Page 2, line 5, at end insert ("but on condition that the arbitrator or umpire shall be notified prior to the close of the hearing that his award is likely to be the subject of an appeal and that this notification shall form part of his award.").
The noble Lord said: This Amendment is directed to a procedural matter; that is, that an umpire or arbitrator should be told whether or not it is intended that the award is likely to be subject to an appeal. The matter arises in this way. The arbitrator goes ahead with his arbitration. Then, at the end, one party wants to appeal and they go to the court. They ask leave of the court. The court then has powers to ask the arbitrator to amplify his award and his decision, and long delays ensue at that stage. This Amendment says that there should be a leave to appeal to the court,
"… but on condition that the arbitrator or umpire shall be notified prior to the close of the hearing that his award is likely to be the subject of an appeal and that this notification shall form part of his award".
This Amendment again has strong support from professional arbitrators and from commerce. It is intended to avoid further delays that may arise now, and frequently arise, in the course of the conduct of arbitration proceedings. All that this Amendment requires is that at some time during the course of the arbitration the arbitrator should be notified that a party is likely to lodge an appeal. It becomes clear in the course of an arbitration whether you are going to lose, or what will happen. It often happens in this way. If you notify the arbitrator that you are likely to appeal, he can then amend his award, and write his award in such a way to take care of that point. I beg to move.
The LORD CHANCELLOR: This Amendment would, in effect, make an appeal under Clause 1(2) conditional upon notification by the party to the arbitration before the hearing of the arbitration closed that an appeal was being contemplated. It would require the notification to form part of the award. In many cases, however, it would not be until the award was made that the question of an appeal would arise, or the grounds of appeal would become apparent. In the result, if this Amendment was accepted either party with good grounds of appeal might be barred from appealing by the failure to give preliminary notice, or alternatively all parties would issue a notification as a protective

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measure, and that, I think, would be a most unfortunate development in the arbitration proceedings.
Lord LLOYD of KILGERRAN: Before the noble and learned Lord sits down, may I ask whether he has overlooked the word, "likely"? You do not have to decide in the course of the hearing that you are going to appeal, but you should give an indication to the arbitrator that there is a likelihood of an appeal. It is not a definite decision in the course of the case that you are going to. It means that if the arbitrator feels that there is a likelihood of an appeal, and this is a circumstance that arises quite reasonably in the course of an arbitration, then he knows what is going to happen and will modify the award accordingly.
Lord HAILSHAM of SAINT MARY-LEBONE: I should like again to express my concurrence with the noble and learned Lord the Lord Chancellor in this matter. I do not think that he has overlooked the word, "likely". Often you cannot possibly tell when you are dealing with a judge, an arbitrator, a magistrate, or whatever, whether he is likely to make a mistake. On the contrary, until you hear his judgment you sometimes are lulled into a false sense of security. I think that the noble and learned Lord the Lord Chancellor is right.
Lord LLOYD of KILGERRAN: I have often been in the position to find in the course of a case before the High Court that I am likely to lose, and I am sure that many parties before an arbitrator can tell whether they are likely to lose. Again this is a matter which is of great concern to professional arbitrators and to commercial interests, but has aroused no sympathy with the Lord Chancellor. In those circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Amendments Nos. 3 to 8 not moved.
Lord HACKING Lord HACKING moved Amendment No. 9:
Page 2, line 19, after ("set out") insert ("the facts as found by the arbitrator or umpire together with").
The noble Lord said: This is a simple Amendment which I hope will have the acceptance of the Committee. This
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Amendment concerns the order that the court can give on appeal, and on an appeal the court may be provided with both the facts and the reasons. If there is power to order the reasons, in my submission there also ought to be power to order the facts. It can be argued that it is not necessary to add (his Amendment to the Bill, not necessary to include these words, and that it is universal practice to provide both facts and reasons. But we are considering a new appeal procedure from arbitrations to courts of law. What about the shorthand notes? Will there be shorthand notes? Will there be arbitrator's notes available, and so forth? Secondly, there could be occasions when only further facts are needed. What order is to be mode then? An order for more reasons?
As it affects international agreements—and I refer to the admiralty, commodity and insurance agreements, which are excluded from the exclusion clause of the Bill, and to parties to international agreements who choose, in any event, not to contract out under the new exclusion agreement—it is enormously helpful for overseas lawyers to see the chapter and verse rather than have to delve into English procedural law. As for all other arbitrations, why have a grey area when the law could so easily be remedied?
To make a nice small point, the Committee will have seen that I use the phraseology "facts as found" rather than the usual "findings of fact". I chose those words purposely because in the Commercial Court Committee's Report a great deal of emphasis was laid on the need for arbitrators to feel free to use ordinary language when presenting both the facts and the reasons for their awards, and the report said:
"He would have had some reasons for making the award and all that he would need to do would be to summarise them in ordinary language. Nothing formal would be required".
I think I am right in saying that; Sir John Donaldson, Senior Judge in the Commercial Court, subsequently spoke to the Institute of Arbitrators and again emphasised that feature as a part of the relationship he would like between an arbitration and a court of law. I beg to move
Baroness LLEWELYN-DAVIES of HASTOE: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

INDUSTRIAL DISPUTES
4.22 p.m.
Lord PEART: My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for the Home Department.
The Statement is as follows:
"With permission, Mr. Speaker, I will report to the House on developments in the arrangements for ensuring that essential supplies and services are maintained.
"The broad picture has been, as the House knows, one of some deterioration in the last day or so in the supply situation, though the extent of this varies from region to region.
"As regards food, shortages are becoming more marked all over the country, more so in some regions than others. There has been some improvements in supplies of salt, but in some areas there are difficulties in the supply of some basic manufactured foodstuffs, such as sugar and margarine.
"As to animal feeding-stuffs, there has been or is expected to be some improvement in Humberside and in Wales, though the situation at Hull remains critical. The general situation is still, however, one of growing shortage.
"On the health side, there are reports of difficulties in supply to hospitals as a result of production disruptions at suppliers.
"Looking at industry as a whole, lay-offs have increased in some degree. Many industries and firms face problems in the supply of raw materials and in the storage of stocks of products which are not being moved out to customers.
"Many of these problems are the result of secondary picketing. Picketing is not being confined to drivers and vehicles in the hire and reward section
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of the industry, and it is interfering with the movement of essential supplies of services covered by the list of priorities which we have agreed with the unions concerned. I have had reports from chief officers of police about the conduct of the picketing. On the whole it remains peaceful, but there are beginning to be some exceptions to that, and there have in some instances been signs of intimidation.
"The police will, as always, carry out their responsibilities under the law. But the need is to confine the picketing in accordance with the code of practice described by my right honourable friend. Arrangements have been made, under my direction, for Government officials and senior officials of the Transport and General Workers' Union to meet so that any problems relating to priority supplies or extension of the dispute to unauthorised areas which is reported to the Government from the regions can be taken up forthwith by union officers. Monitoring meetings will be held daily, and the Government and the union officials will maintain continuing contacts.
"The implementation of the code of practice on picketing to be issued by the T & GWU and the monitoring arrangements I have described to the House would lead to an early and marked improvement in the movement of essential supplies and services all over the country. As my right honourable friend has said, the Government believe the balance of advantage lies in those voluntary measures to control the dispute and maintain priority supplies, rather than in the Government introducing direct emergency action. But we continue to be ready to call on the assistance of the Services or to proclaim a State of Emergency if need be, and the necessary contingency plans for this are at a high state of readiness.
"As regards the unofficial dispute in the London Ambulance Service, my right honourable friend the Secretary of State for Defence and I have already made contingency plans for emergency arrangements to be provided by the Services, if this should prove necessary.
"In the Pennine Division the North-West Water Authority is maintaining

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piped water supplies to the vast majority of the population and industry. Of 350,000 households in the division, about 2,200 are without piped water due to burst mains which have not been repaired. Most of these are scattered across the division in small groups. No one is without access to water. Standpipes have been erected for all except a few properties. Elsewhere, people are able to go to neighbours down the street. Nearly all sewage treatment plants are fully working, but it has been necessary to divert part of the flow at Bolton into the river. Water flow in the river is reducing the effects of pollution.
"Negotiations on pay in the water industry are taking place today and we must await the outcome. However, I can assure the House that there are contingency arrangements to help the North-West Water Authority at short notice."
My Lords, that concludes the Statement.
4.27 p.m.
Lord CAMPBELL of CROY: My Lords, we are grateful to the noble Lord for repeating the second Statement which has been made in another place. It follows in some detail the first Statement and it should be examined with care. It categorically states that there are shortages, and serious shortages, and that many of them are the result of secondary picketing and some intimidation. My noble friend Lord Carrington has already pointed out that firms and their employees not involved in disputes are being forced to stop work and that the public in this country see no reason why pickets should behave as petty tyrants.
The information in the second Statement should really have been listened to by the noble Lord, Lord Wigg, before he made his comments because the general public regard secondary picketing as indefensible, and it is clear that he was completely wrong in his assessment of the situation. There must be anxiety about shortages of essential food and about the hospitals and raw material and transport problems for industry.
I should like to put some brief questions to the noble Lord. First, the Statement
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announces that there will be daily meetings between officials on the code of practice, but that code of practice is still to be issued. It is stated that the meetings "would lead to an early and marked improvement" in the situation. When will the Government take further action if the code does not lead to the hoped-for improvement? Futhermore, it is hoped that the code will apply to pickets under the control of unions. What is it proposed to do about pickets who are not members of unions or who are not under the influence or control of unions? It is clear from Press reports that there are numbers of these pickets operating in the country.
With regard to what is said in the Statement regarding ambulances, can the noble Lord clarify whether the contingency plan for the use of Servicemen can be brought into action before a state of emergency is announced, should this be urgently required? Finally, with regard to the arrangements announced concerning water in the North-West of England, have contingency plans yet been made to deal with water and sewerage problems, which are important both from a health point of view and in regard to the essentials of normal life, should disruption spread beyond the North of England to other parts of the country?
Lord BYERS: My Lords, I have already made my views clear on much of this matter following the first Statement. However, I should like to question the noble Leader of the House on the aspect of the matter which particularly worries me; namely, the question of water. There does not appear to be any sense of emergency, yet the health of the people is at risk in the area which is described in the Statement. In those circumstances, surely we cannot be asked merely to await the outcome of pay negotiations which are taking place. I wish to ask the Leader of the House whether, should there be no settlement in the course of the day, the Government will put the contingency plans into operation, so that people can at least have some assurance that something is being done to look after their needs? I must say to the noble Leader of the House that this is the wettest Statement on water that I have ever heard.
Lord PEART: I do not think that it could be anything else other than wet, my Lords. However, to be serious, I note very carefully what the noble Lord has said. We have what we believe are satisfactory emergency arrangements. The situation has improved, and I hope that something will emerge today which will mean an end to the dispute——
Lord HARMAR-NICHOLLS: My Lords, is the noble Lord aware that these Statements are beginning to sound farcical?
Lord PEART: I have not finished dealing with the earlier points raised, my Lords. I agree with the noble Lord, Lord Campbell of Croy, that there are serious shortages. As an ex-Minister of Agriculture, I was very worried about supplies, including feeding stuffs, to the industry. This is a vital matter, but we have acted, and the situation is being monitored daily. The shortages vary, as was mentioned in the other Statement. With regard to the question of picketing, I stand by what I said earlier. I agree with the noble Lord that secondary picketing is not an activity which we should condone, and we have not done so. I believe that I have dealt with the matter of the ambulance services. We feel that we have all the contingency plans and that everything will be satisfactory.
Lord HARMAR-NICHOLLS: My Lords, is the noble Lord aware that these Statements are becoming farcical? All they amount to is a recital ofinformation which we have already read in the newspapers. There is nothing new in the Statements. What is contained in them is merely dressed up under the heading "Government Statement". In the light of all that is happening, is it not possible for the Lord Privy Seal to suggest to his colleagues in the Government that they should do something about the situation? For instance, the second Statement read to us has been made by the Home Secretary, who states that he has been told by the police that there is intimidation. Therefore, why does the Home Secretary not use his powers, even by way of sending a circular giving advice to the police and stating that they would have his support in carrying out the legislation that is already on the Statute Book? I
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am not asking the Home Secretary to instruct the police, but circulars are issued from Government Departments giving advice to the people who have to apply that advice in relation to every item that comes under the Government's purview. Merely to re-state what is already in the newspapers and to pretend that that is doing something about the matter is to cause the country to become disillusioned, and people will doubt whether they can ever be rescued from the chaos surrounding all of us.
Lord PEART: My Lords, I am rather surprised by the extravagant language of the noble Lord. I do not particularly like giving Statements. I should like to be reading the Sporting Life elsewhere. But I am a man of several tastes, and I see nothing wrong in being interested in horse-racing. I recall that when I was a Minister noble Lords opposite were very worried when there was no racing because of certain difficulties, and I sympathised with them. However, I say to the noble Lord that I think it right and proper that I, as Leader of the House, should repeat important Statements made in another place; and I do not treat your Lordships' House casually. What I have said today is what I sincerely feel, and I believe it right that noble Lords should be here to cross-examine me as I represent the Government in this House.
Lord WIGG: My Lords, apparently I have to apologise to the Leader of the House for a slip of mine in confusing the Financial Times with the Sporting Life. Both papers are concerned with gambling, but one is more respectable than the other. The noble Lord, Lord Campbell of Croy, seemed to think that what the Minister has said contradicts what I said—nothing of the kind! The Minister said that the police have reported that there are some excesses. Of course there are. I said that I had carried out a detailed check in the Eastern region covering the food factories there, and there was no secondary picketing. Of course there will be excesses. Is the Minister aware that there must after all be a settlement of the strike at some time?—or is it going to go on for ever? If we want a settlement of a strike, the men involved in it must feel that they are getting a fair deal and that someone is speaking up for them.

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I came into politics for one purpose, and for one purpose only: to defend the beliefs trade unions stand for. There was a time when the Labour Party did that, but sometimes it becomes a little faint. I am here today to say that of course there is a strike, but the men on strike have a case, and that case has not been presented. The Press take good care that it is not presented; indeed, the whole media take care that it is not presented. When there are excesses they arc of course distorted. The Tory Party, which after all has always wanted to slam the unions, makes the most of it——
Several noble Lords: No, no.
Lord WIGG: Yes, they have always done that, and they are doing it again today.
Lord PEART: My Lords, the noble Lord has made his point, but I want to see a settlement: I think we all do. The sooner we settle the strikes in which we are involved, the better it will be for the country, and for trade unionists, too.
Lord HA1LSHAM of SAINT MARY-LEBONE: My Lords, does not the noble Lord agree that on the whole both my noble friends the Leader of the Opposition and Lord Campbell of Croy have deliberately sought to take a constructive and a conciliatory view, and that there has been no attempt on this side by this Party to exacerbate the situation, whatever we may feel? What we were really saying about the intervention of the noble Lord, Lord Wigg, was that the Government Statement confirmed what we have been reading in the Press, and that therefore the noble Lord's attack on the media was wholly unjustified. The media are one of the most responsible sources of information in the world, and what the Government have said in fact confirms what the media have been saying about the present situation.
Lord PEART: My Lords, I agree with the noble and learned Lord about the responsible attitude that has been taken, including that adopted today in this House and in another place, and I hope that this will continue. But, above all, I am sure we all wish that we can get the dispute out of the way and have it settled amicably.
Lord HARRIS of GREENWICH: My Lords, is my noble friend aware—as I am sure he is—that he has today repeated a Statement which is of very considerable gravity? He has indicated that there is a growing threat to the jobs of many hundreds of thousands of decent trade unionists Who are in no way directly involved in the dispute. He has alluded also to the serious situation in the North-West affecting water supplies and sewerage, as well as the growing threat to the London ambulance service. Will my noble friend give an undertaking to make regular Statements to the House about this developing situation? As a result of accident so far as our procedure is concerned, this is the first Statement we have had on this matter this week, and I think it desirable to have regular Statements as the situation develops.
I should like to ask my noble friend a second question. Will he make inquiries into the issue raised by the Leader of the Liberal Party regarding evidence of extortion by pickets who have apparently been demanding money in return for allowing lorries to cross picket lines? This is an extremely serious matter, as I am sure my noble friend will agree. Will he make inquiries about it with the appropriate chief constables and include the matter in any Statement that he may make next week?
Lord PEART: My Lords, I shall certainly follow up and inquire into the allegation of extortion by pickets. Such a thing would be deplorable. On the question of regular Statements, I am here merely repeating a Statement made by the Home Secretary—and the noble Lord was recently in the Home Office. If it is necessary, we will make a Statement. Whether it should be a regular procedure, I cannot say. I have been attacked today for making Statements.
Lord HARRIS of GREENWICH: My Lords, with great respect to my noble friend, what I said was that, notwithstanding the situation in another place, this is the first time that this House has had a Statement from a Minister about this very serious situation. All I am asking him is to give an undertaking to keep this House informed, if necessary by Statements next week, so that we can keep in touch with this situation.
Baroness VICKERS: My Lords, may I ask the noble Lord a question with regard to sewage going into rivers? Will he have this very carefully monitored and, if it is going into rivers in great quantities, could he have notices put up warning people not to drink the water? Because a lot of people will be fetching water, perhaps, because they have not got any in their own homes.
Lord PEART: My Lords, may I say to the noble Baroness that we are doing this.
The Earl of LAUDERDALE: My Lords, could the noble Lord add to what the Statement said about intimidation? If I heard it right, the Statement admitted that there had been incidents. Would the noble Lord not agree that all of us, whatever our political position, are very concerned that these incidents of violence should happen, and that their happening should be confirmed by the Government? Some of us, I think, in the interests of civil liberties generally, are anxious to know what steps the Government propose to take to monitor these incidents, to record the facts, to obtain police reports on them and so on. Could he perhaps help us about that?
Lord PEART: My Lords, I think that is an important point, and I shall inform the Home Secretary accordingly. I will link it with the request that has been made by my noble friend Lord Harris. Yes, this is important, and I think I should follow it through.
Lord GORE-BOOTH: My Lords, I think the Statement mentioned ambulances. I realise that making exceptions does not help the Government generally. None the less, there is now such a strong feeling in the country about any interference with hospitals that I hope that this matter will be given a special place in the considerations of the Government, in the measures they take and in the statements they make, and that if there is interference with hospitals then action will be taken as quickly as possible whenever it becomes necessary.
Lord PEART: Certainly, my Lords, and I am glad that the noble Lord has raised that point. Yes, I give that assurance.
Lord CHELWOOD: My Lords, perhaps I may ask the noble Lord the Leader of the House two brief questions, first of all about secondary picketing. In reply to a supplementary question from my noble friend on the Front Bench he said that this is something which in his opinion we should not condone. From that, do I take it that he thinks that a code of conduct which is not being complied with is insufficient, and that legislation is necessary in this very important field? Secondly, can he give noble Lords a little more information about lay-offs and short time? He said almost nothing about that, and presumably the Government have the latest figures.
Lord PEART: My Lords, I am afraid there is nothing about that in the Statement. My view on secondary picketing is this: let us examine how the code of conduct works. I cannot commit anyone here to legislation. I think I know what the noble Lord is thinking, but I cannot go further than that. On supplies and stocks, et cetera—I know that this has been raised—and also on issues like intimidation, what is remarkable is that there has been so little violence in this dispute so far compared with scenes in other cases and considering the extension. I hope that we do not get any violence.
Lord SHINWELL: My Lords, may I ask my noble friend about the general situation, as to which none of us can feel very happy? What action is being taken by the Government through the medium of the General Council of the TUC in order to bring the existing disputes to an end and also to take whatever measures are within their authority in order to deal with the disputes which are impending and are likely to occur? What action is being taken? If meetings are taking place between members of the Government and the TUC, can we be informed what is in fact happening? Have the Government left it entirely to the TUC to do whatever it wishes, or to do nothing at all?
Lord PEART: My Lords, in reply to my noble friend Lord Shinwell, the Prime Minister has met the General Council of the TUC. Also, we have been in continual touch with the TUC. We believe that they are anxious, as we are, to see that there is an end to the

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dispute, and that no damage is done, not only to the trade unionists concerned but also to the citizens who are affected. So there is no attempt on the part of the Government to dilly-dally, if I may use that phrase. They are anxious to have positive action supported by the General Council of the TUC, and the General Council have been very positive.
Lord HEWLETT: My Lords, is the Minister not aware that in the debate yesterday we spent a long time discussing the actual figures and that I quoted, from Manchester alone, an additional 50,000 lay-offs this week and the fact that the chemical industry estimated one-fifth of a million by next week? With great respect, I should have thought that Ministers would have been informed on these matters, not least because I gave them from authoritative sources—for Manchester, the President of the Chamber of Commerce, and, for the chemical industry, the Chemical Industry Association.
Lord PEART: My Lords, I agree with the noble Lord. I in fact said that lay-offs have increased, though I did not give any specific figure. But I am grateful to the noble Lord for the remarks he made yesterday.
Lord W1GG: My Lords, did I understand my noble friend the Leader of the House to say in his supplementary remarks that there have been no reports of violence at all?
Several noble Lords: No!
Lord WIGG: My Lords, I am sorry. Then perhaps he would be good enough to repeat what he said.
Lord PEART: No, my Lords, I did not say that. The noble Lord has had a good innings today, and I have been very tolerant—quite rightly. I respect the noble Lord, and I know his sympathies; but I think I have gone far enough. I think we should get on to the next business.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, we are in the same difficulty—the other Statement has not been cleared from the other House; they seem to be taking a long time over it all—
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so if noble Lords are with me I think we should again resolve ourselves into a Committee on the Arbitration Bill.

ARBITRATION BILL [H.L.]
House again in Committee on Amendment No. 9.
4.49 p.m.
Lord HAILSHAM of SAINT MARY-LEBONE: I think we are in the position of having heard the noble Lord, Lord Hacking, move his Amendment, and we are looking forward eagerly to the noble and learned Lord the Lord Chancellor.
The LORD CHANCELLOR: I am sorry the noble and learned Lord has been so frustrated and has been denied the pleasure of putting up with me so repeatedly. I think we are considering Amendments Nos. 9 and 10 together. These Amendments would empower the court, under Clause 1(5), to require an arbitrator or an umpire to give his findings of fact in addition to the reasons for his award. Clause 1(5) empowers the court, on the application of a party, to order the arbitrator or umpire to state the reasons for his award in sufficient detail to enable the court, should an appeal be brought under Clause 1, to consider any question of law arising out of the award. Such reasons would, I should have thought, necessarily include the relevant findings of fact; and, in my view, not only would this Amendment be otiose but, in involving a distinction between facts and reasons—not always easy to draw—could well cause confusion and, I think, add to the burden of arbitrators. Looking at the matter realistically, I think that what is suggested would be potentially more a source of trouble than of enlightenment.
Lord HACKING: I came to your Lordships' House trying to be a source of enlightenment and not of trouble. I should be grateful, however, if the noble and learned Lord, having heard my submissions, would take an opportunity to consider them further; but at this stage I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
(Amendment No. 10 not moved.]
4.51 p.m.
On Question, Whether Clause 1 shall stand part of the Bill?
Lord HAILSHAM of SAINT MARY-LEBONE: I wanted to say only one or two rather short things about Clause 1. The first was to ask the opinion of the noble and learned Lord the Lord Chancellor upon a matter raised on Second Reading. This is the bone which, I hope not fiercely but in the most emollient form, I am raising with my noble and learned friend on the Cross-Benches. At columns 461 and 462 of the report of Second Reading debate on 12th December, my noble and learned friend Lord Diplock—interrupting my peroration, I am sorry to say—said:
"We are not abolishing the case stated procedure as far as domestic arbitrations are concerned. The jurisdictions to which the noble and learned Lord"—
that is, me—"
is referring are domestic".
My noble and learned friend is such a tremendous expert on this subject, apart from being president of the Institute of Arbitrators, that I was shaken to the core when I received this intervention because it happened not to coincide with my own reading of the Act. I was so intimidated by my noble and learned friend that although I expressed mild surprise at his statement I did not venture to contradict him. But my own reading of the Act continues to be somewhat different from his. My own reading is that section 21 of the principal Act is repealed and that what the Bill is doing is to substitute the new appeal procedure for the old case-stated procedure for domestic arbitrations principally. As this was my reading of it—and is now my reading of it—and as my noble and learned friend is such a tremendous authority, I think the matter must be made clear beyond peradventure. That is the first point.
The second thing is really in slight amplification of what I said in answer to the Amendment of the noble Lord, Lord Lloyd of Kilgerran, the first Amendment on the Marshalled List. I ventured to say to the noble Lord on Second Reading that this had been a debate of grandees. By that I meant that the people who had taken part in it were almost all people concerned with these
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enormous one-off arbitrations with construction contracts and the contracts which are, broadly speaking, those referred to in Clause 3 which enable the jurisdiction of the courts to be excluded; and the consequence was that the debate had overlooked the fact that by far the largest number of arbitrations in this country are domestic arbitrations. A very large number of them are arbitrations about the quality of goods which are sold and delivered and in which the arbitrator takes a good smell at the sample and at the bulk. He tells whether the sample and the bulk coincide or looks at the quality of the goods and decides whether they are of merchantable quality, or decides some question of expertise in which he really forms an opinion about the question in dispute based on his expert knowledge rather than on any judicial procedure that he may have to subject himself to.
I had the impression that the debate, therefore, had created a false impression. That conclusion has been very largely borne out by the volume of literature that I have received in the last week from various persons who expressed grave misgivings as to the effect of Clause 1, which is the clause under discussion. I think that those misgivings are without justification. I think they have overlooked the fact that all that is happening is that a less formal method of approaching the courts on questions of law is being substituted for the old case-stated procedure under Section 21 of the principal Act and that, if anything, the approach of the courts towards Clause 1 will be a little more reserved than in the past the courts have been towards the old Section 21; because, under the old Section 21, the courts on the whole—and I see that the Master of the Rolls is here and I hope he will forgive my saying this—have been rather freer in the past to order to case-stated in some of the older authorities to which we are all subject and they have been too ready perhaps to order cases stated when the effect has been really only to delay the effect of an award. My own reading of Clause 1, as I have read it and as I have ventured to expound it, is that, on the whole, it gives more power to the arbitrator, and that the courts, under Clause 1, will approach the question of interference with the arbitrator's discretion with greater reserve than in the past.

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I should like the opinion of the noble and learned Lord the Lord Chancellor on this, because if I am wrong, obviously, some of the misgivings will remain. If I am right, I think that he could take the opportunity of allaying some of them and reassuring the various persons who I know have bombarded us with literature expressing the gravest doubts about the wisdom of this whole Bill, based, I think, upon a misreading of what Clause 1 is doing.
Lord DIPLOCK: My noble and learned friend Lord Hailsham, as always, is right, in that I spoke loosely in saying that the case-stated procedure was preserved. If I had been more accurate I would have said that the method of appealing to the court on a question of law is preserved although the form in which it is done is somewhat altered. That brings me to the matter in regard to Clause 1 which has caused a good deal of anxiety among arbitrators, anxiety which I think is misplaced. Obviously, it is the desire that, in cases where that is appropriate, reasoned awards should be given. But there are many hundreds, indeed, many thousands, of arbitrations, which I may describe generally as "holiday" arbitrations, where what the arbitrator does is look at the sample from the shipment and say: "These beans are not f.a.q. and I award for the diminution in value, so much."
To require him to give reasons in that sort of arbitration—and they are very common—is simply a waste of time and money. There are other cases where it is most unlikely that anyone would possibly want to have reasons if that is going to cost more money because it is unlikely that there can be any question of law involved. What representations have been made to me, on all hands, I think, by arbitrators who are worried about the possibility that at greater expense they have to give reasoned awards in all sorts of cases is that they would like to be told that before making their awards whether or not (and to what extent) reasons are required. Otherwise, without that warning—and this is the point put to me by perhaps the most experienced commercial arbitrator in London: "If we are not given warning in time but, a couple of months afterwards, we are then asked to give reasons, by that time we have probably put away the papers and dismissed the case from our minds."
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The reason why I rose—as it turned out a little too late—on Amendment No. 2, proposed by the noble Lord, Lord Lloyd of Kilgerran, was that, with great respect, I think he had put forward an Amendment which in principle I would approve and commend to the noble and learned Lord the Lord Chancellor for consideration, but he had put it in the wrong place. The Amendment should have gone not to subsection (2) but to subsection (5), so that it would be made a condition precedent to an application to the court to get the arbitrator to state further reasons that notice be given him before the end of the hearing that the type of reasons were wanted that might be necessary if the case went to appeal.
That is how I understood the Amendment which the arbitrators on all hands were urging should be included in the Bill. I should like to commend it particularly to the noble and learned Lord the Lord Chancellor for consideration before the Report stage. I would not, if I may say so without any disrespect, simply be tied to the wording which was, as I think, put in the wrong place in Amendment No. 2. It is a fairly simple Amendment to make it clear that it should be a condition precedent to applying for further reasons that the arbitrator should be told before the end of the hearing that reasons were wanted.
Lord DENNING: May I just endorse what my noble and learned friend has said. It seems to me very important that the arbitrator should know before the end of the hearing that he has to give reasons. If so, he can keep everything in his mind and take notes and give reasons straight away. Otherwise the matter might wait 2 or 3 months before he returns to the case again. The proposal which has just been made by my noble and learned friend is a good improvement to the Bill.
The LORD CHANCELLOR: The noble and learned Lord, Lord Diplock, will now know what a dangerous thing it is to interrupt the noble and learned Lord, Lord Hailsham of Saint Mary-lebone, when he is making his peroration. That bone has now been satisfactorily picked and I hope that the noble and learned Lord's pride now feels fully

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restored in the face of the earlier disagreement that the noble and learned Lord, Lord Diplock, expressed. He has confessed that in the haste of dealing quickly with the point he may not have put it as accurately as he would have liked.
On the matter of the general proposition that reasons should be expected and be the practice of arbitrators, I think it is a good basic proposition that that should be done. Indeed, in all arbitrations outside this country reasons are always given. At least, I think so. In a case such as that of the beans cited by the noble and learned Lord, Lord Diplock, the statement of fact there so fully embodies all the reasons that one would not expect any requirement that reasons should be given in that case.
I understand the anxiety that has been expressed about this. I am certainly very willing to look at Report stage at the proposition that there should be provision for notice to be given to the arbitrator that he will be asked to give reasons before the conclusion of the arbitration. As the noble and learned Lord, Lord Denning, has said, it is very convenient that he should be forewarned about that and not be asked at a later point in time when the facts would not be so clearly in his mind.
I do not think that, even in respect of small arbitrations, the requirement that reasons be given need be either a delaying factor or oppressive. The practice has now become pretty general in this country that in the various stages of the giving of judgments reasons should also accompany the judgment. I cannot assure the noble and learned Lord more than that. I only hope I am right and it will not prove oppressive in the large number of small arbitrations.
5.5 p.m.
Lord HACKING: May I venture to put a few words to this Committee? My Amendments are directed towards the reform of English arbitration law as our arbitration law affects parties to international contracts who wish to use London as the forum for their arbitration. Therefore I stand today in this Committee with some trepidation, to make some observations on the English law of arbitration, in front of such a distinguished forum,
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including the noble and learned Lord the Master of the Rolls. I do so to express the concern that there may still be means by which arbitration proceedings can be open to abuse even after the passing of this Bill, as they have been abused under Section 21.
In order to develop this point, I am going to be even braver and take a small thread through English arbitration law in the hope that it will not be snapped before it reaches the end of its journey. It is recognised in both the Bill and the Commercial Court committee Report that the powers of the Courts to intervene in the conduct of arbitration proceedings rest partially on statutory power, which is vested primarily in the 1950 Act, and partly upon inherent powers derived from common law. One can take the two examples from Clause 1(1) of the Bill; namely, the case stated procedure, which has its authority in Section 21 of the 1950 Act, and in the power to set aside an award for errors on its face which rests in common law.
The Arbitration Act was a consolidation Act and made no attempt to state the law of arbitration or was not, in the words of my American colleagues, a "Restatement of the Law of Arbitration". The result is that some sections of the Act give power to the courts both to intervene and to give orders once seized of the matter. I refer for example, to Section 23 of the Act where the court is given both the power to intervene and also the power to give orders after its intervention.
Other sections of the Act just give power to the courts to make orders after they have exercised their inherent jurisdiction under common law to be seized of the matter. I refer, for example, to powers under Section 22 of the 1950 Act. My concern is that the Bill, in setting up this new appeal procedure—and indeed in the reference procedure under Clause 2—is limiting itself only to repealing two out of a number of inherent statutory powers which the court possesses. Hence some parties, if they are so minded (if the Bill becomes law in its present form) will seek to abuse other powers of the courts in order to defeat the main purport of the Bill.
This is fairly strong language so may I analyse the point further. I can best do it by listing such present inherent powers

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of the courts that I have been able to ascertain. First of all is the setting aside of an award for error on its face. This is dealt with in Clause 1(1). Secondly, there is the power of remitting awards under Section 22 when an arbitrator has admitted a mistake which cannot be rectified under Section 17 of the Act. That is more than a simple clerical error arising out of an accidental slip, for example, if an arbitrator misread an important document or forgot that document's existence before making his award. It should be noted that an arbitrator is functus officio once he has made his award. Therefore, he himself cannot exercise any power to put matters right. For that reason, the court has to exercise its inherent jurisdiction.
Thirdly to exercise jurisdiction when there has been a discovery of fresh evidence—again the arbitrator acts as functus officio once the matter has passed from him in giving his award. Fourthly, when an arbitrator has acted without, or in excess of, authority—the court has an inherent Jurisdiction to intervene. Fifthly, as a kind of combination of common law and statutory power, there is the misconduct provision, which was originally under common law and now falls under statute under Section 23. It was with a wry smile that I read the editor of Russell's comment that Section 23 is a declaratory clause although somewhat in disguise. Specifically, the concern is that the misconduct provision—and I refer to misconduct in the conduct of proceedings rather than misconduct on the part of the arbitrator himself—and possibly Section 22, could be used as a means of avoiding the new provisions and forcing arbitration proceedings back again into the court, or, more importantly—this is where my concern comes to bear—it could be thought to be capable of so doing.
There would still be parties who could find benefit in abusing the system. It is no use shutting the front door, if I may use a trite example, if the back door is still left open. I merely ask this question—we shall not be able to consider it further here but I hope that my observations will be read: would it not be appropriate to bring all the inherent powers of the courts under this Act and to amend Section 23 for all arbitrations (in the terms of my
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Amendment which is to be taken later!) so that it cannot be used as a vehicle for abuse?
Baroness DAVID: We now have clearance for the Statement and I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

BOMB INCIDENTS
5.12 p.m.
The MINISTER of STATE, HOME OFFICE (Lord Boston of Faversham): My Lords, with the leave of the House, I will now repeat a Statement being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"At 2240 hours last night a bomb exploded at a Texaco oil terminal on Canvey Island, producing an 18 inch diameter hole in a tank containing aviation fuel. The fuel escaped from the tank into a safety moat and did not catch fire. The Essex police had received no advance warning that a bomb had been planted.
"At midnight a caller told the Press Association that the Provisional IRA had planted a bomb on Canvey Island and another bomb in the Blackwall Tunnel, both of which were to explode at midnight. This message was passed immediately to the Essex police and the Metropolitan Police, but the explosion at Canvey Island had already taken place. The Metropolitan Police searched the Blackwall Tunnel and while they were doing so, at 0040 hours, a bomb exploded at a gas holder near the south exit of the tunnel, causing an explosion and fire. At 0130 hours a second gas holder caught fire. By 0315 hours both fires had been extinguished and a secondary fire at 0415 was quickly dealt with.
"There were no injuries as a result of these explosions. In addition to the two bombs which exploded, a further explosive device was discovered yesterday lying partly covered at the side of the M60 in Leicestershire. Army bomb disposal experts were called and safely defused the device.

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"The police are carrying out detailed investigations into all these incidents. The debris from the bomb which exploded and the unexploded device will be carefully examined for any evidence which may help the police to trace those responsible for these and the earlier incidents.
"It was fortunate that no one was either killed or injured by these explosions, but their potential danger cannot be overstated. No estimate has yet been made of the damage caused to property.
"I am sure that the House will join me in condemning these attacks and will support the Government in their determination not to be swayed by such methods. The vigilance of the public and co-operation with the police are of the utmost importance as the threat of further attacks remains high."
My Lords, that concludes the Statement.
5.16 p.m.
Lord HAILSHAM of SAINT MARY-LEBONE: My Lords, I am sure the House is grateful to the noble Lord for repeating this Statement, and his doing so gives me the opportunity of saying two things which really have nothing to do with the Statement. The first is that we are very sorry not to have the noble Lord, Lord Harris of Greenwich, any longer facing us on the Front Bench. I see him sitting in his new position, and think he would agree that our relationship has always been a particularly happy one. I and my noble friends Lord Mansfield and others have debated many matters with him in the course of the last three years, and we wish him the best of good fortune in the new career which he has chosen for himself. I am only sorry that we shall perhaps be seeing him a little less often.
The second thing I wanted to say was that we welcome to his new position the noble Lord, Lord Boston, who was known to some of us in the other place for some years. Perhaps I may say to him not only that he is a very welcome addition to the Front Bench but that one recognises that a member of the Bar—
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and he has been a practising member of the Bar—does make a certain sacrifice, especially in this House, by assuming public duties. I think this fact should be underlined. I think he should be not only welcomed and congratulated but also commended for what he has done. I hope that his disappearance as, I believe, head of chambers will not cause too much disruption, as my own certainly did shortly after the disappearance of the noble Lord, Lord Diplock, when I became First Lord of the Admiralty. I wish the noble Lord, Lord Boston, and his former colleagues in chambers great good fortune in their endeavours.
I am glad that the Statement has been repeated because it is important that this House should be kept in touch with these really rather disquieting events. The noble Lord can be quite sure that on this side we do respond to his call to condemn what has been done; but the language of vituperation and condemnation on the subject of the Provisional IRA has almost been exhausted and I do not think it improves with repetition. I shall therefore not repeat it.
I would just say this: I would underline what is said in the last sentence of the Statement, where it calls for vigilance on the part of the public and of course on the part of the authorities. This side of the House reiterates and supports what the Government have said about this and I would only add this banal but none the less important point—I hope those who are responsible for these outrages realise what they are doing to the population of Irish extraction in this country. I suppose there are very few people in this House who are neither Irish nor have Irish blood in their veins or who are not closely related by marriage or otherwise to persons who are. I myself am: my late wife was from Galway and my own family comes from Lisburn in Northern Ireland. We happen to be Protestants but we have always been proud of our Irish connection, and so, I suppose, have been many Members of this House who happen to share this origin. Also, an immense number of people living in the Irish Republic and in Ulster have British blood in their veins.
I hope that those who are responsible for these outrages do realise what they are

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doing to us and to the Irish population, who are very welcome additions to our workforce in our great cities. They are making life more difficult for us and more difficult for them, and they are performing a very bad service to Ireland by doing this. I have more than once in this House responded rather sharply to any criticism of Irish people in our cities. They are very welcome people, indeed. But they would be performing a real service to themselves and to other people by noting what the Government have said about the vigilance of the public, co-operating with us all in seeking out the offenders and treating them as they deserve to be treated.
Lord WIGODER: My Lords, may we on these Benches also express the warmest of welcomes to my learned friend the noble Lord, Lord Boston of Faversham, on his appointment? Those of us who know him anticipate with confidence that he will always display the same unfailing courtesy, and the same extremely high level of competence, as was invariably displayed by his predecessor in the position which he now occupies.
May I make only two observations on the Statement. First, would the noble Lord find a way of expressing what, I am sure, is the feeling of the whole House, which is our admiration of the very conspicuous bravery that is always shown on these occasions by the bomb disposal experts, the fire-fighting services and the police? Secondly, may I echo what the noble and learned Lord, Lord Hailsham, has said, about the extreme importance of maintaining the highest possible standard of security in the coming months? It has been, I suspect, the experience of many of us that high standards are imposed immediately after every incident, and they gradually become more and more relaxed as the weeks go by, till eventually there is a further incident which might have been avoided if only the standards had been maintained. That is particularly important in relation to Government and public buildings, and I am sure that the Government will want to see that the highest possible standards are maintained in the weeks to come.
Lord BOSTON of FAVERSHAM: My Lords, may I first thank the noble and learned Lord, Lord Hailsham, and
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the noble Lord, Lord Wigoder, very warmly indeed for their personal remarks. They are very greatly appreciated, indeed. Perhaps I may thank the noble and learned Lord for what he has said about my chambers, and it may well be—who knows?—that some of those members of chambers will perhaps see this as an opportunity for some of them. So I want to thank the noble and learned Lord, Lord Hailsham, and the noble Lord, Lord Wigoder, very much indeed for what they have been very kind enough to say about me personally, and about my chambers as well.
Perhaps I may also take this opportunity to join them both in what they have said about my predecessor, my noble friend Lord Harris of Greenwich, whom I am very pleased to see in his place today. I must say that I think it is felt in all parts of the House, as indeed has been said by the noble and learned Lord, Lord Hailsham, and by the noble Lord, Lord Wigoder, that my noble friend achieved a consistently high standard of competence in his performance at this Dispatch Box. I can only say that if I can manage to approach that high level of competence on even a few occasions, I shall certainly be very much encouraged in that.
Turning now to the matters which have been mentioned by the noble and learned Lord, Lord Hailsham, I wholly support what he has underlined on the question of vigilance. It cannot be said too often that the police, who, of course, have sources of information open to them, rely a tremendous amount on information being provided by members of the public, and in this kind of operation this is of immense value to them. So I am immensely grateful to the noble and learned Lord and the noble Lord who have mentioned the question of co-operation.
Perhaps also I might be forgiven for taking this opportunity, especially as I was not there with my noble friend and my right honourable friend the Home Secretary when that operation took place, to pay a very warm tribute to the police for what can only be described as a magnificent exercise over the Christmas period, which they carried out with expertise and diligence and with a sense of self-sacrifice.

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May I also join the noble Lord, Lord Wigoder, in what he has said about the bomb disposal experts? They face an immense task, as we know, and achieve our warmest admiration. So far as the question of relaxation is concerned, I also join with the noble Lord, Lord Wigoder, in emphasising this again. Of course, this once more comes down to the question of co-operation with the public. The police and all the authorities seek to maintain this close co-operation, and also seek to ask the public not to relax when there is a gap between one incident and another. Again, the observations of the noble and learned Lord and the noble Lord are very much appreciated.

ARBITRATION BILL [H.L.]
5.26 p.m.
House again in Committee on the Question, Whether Clause 1 shall stand part of the Bill?
Lord LLOYD of KILGERRAN: Before the Question is put, may I briefly express my thanks to the noble and learned Lord, Lord Diplock, for the general sympathy which he has expressed to your Lordships in regard to the second Amendment which I discussed earlier this afternoon, albeit that I have put it in the wrong place. That sympathy had the support of the noble and learned Lord, Lord Denning, the Master of the Rolls, and the combined effects of the two noble and learned Lords has, it appears, diluted the opposition of the noble and learned Lord the Lord Chancellor in this matter, because I understand that it will be considered later on.
The LORD CHANCELLOR: I do not know that your Lordships will want me to follow the detail of the learned and interesting discourse which the noble Lord, Lord Hacking, gave us on the whole law of arbitration. The objects of this Bill are rather concentrated on removing the deterrent created by the case stated to the use of London for arbitration, and we have also provided in the Bill a new system of judicial review of arbitration awards, but we certainly have not sought to cover the whole ground. But some of the matters that
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he has raised will be dealt with in the subsequent stages of our discussion, and we shall no doubt be able to return to them at that point. But I understood the noble Lord not to be opposing Clause 1. On the contrary, I know that he warmly supports the main objects of the Bill.
Clause 1 agreed to.
Clause 2 [Determination of preliminary point of law by court]:
On Question, Whether Clause 2 shall stand part of the Bill?
Lord DIPLOCK: May I raise a small point on Clause 2? This is a practical point which was drawn to my attention by a very experienced arbitrator. This clause provides for a consultative case, and it provides that that may be applied for in two circumstances, one of which is by an arbitrator or umpire who has entered on a reference—that is to say, the arbitrator or umpire acting upon his own initiative—and the other is by any of the parties to the reference with the consent of all the other parties. It has been drawn to my attention that if paragraph (a) stands as it is now, it will in practice be a dead letter, because it will mean that the arbitrator will have to incur the costs of himself instructing a solicitor, the solicitor instructing counsel and the like.
What has been suggested to me as an alternative, which would not result in a dead letter, is that the right to make an application should be by any of the parties to the reference, with the concurrence of the arbitrator or umpire. I am not suggesting the exact form of the Amendment. I am suggesting, however, that the kind of Amendment I have in mind is to strike out paragraph (a) and at the end of paragraph (b), which reads:
"by any of the parties to the reference with the consent of all the other parties",
to add:
"or with the concurrence of the arbitrator or umpire".
I think that that will carry out the intention of the clause, but carry it out in a practical way and a way which will not become a dead letter.
The LORD CHANCELLOR: That is a good and useful point, and I shall

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certainly consider in what terms we can give effect to it at the Report stage.
Clause 2 agreed to.
Clause 3 [Exclusion of rights under sections 1 and 2]:
5.31 p.m.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 11:
Page 3, leave out line 24 and insert—
("(b) the High Court shall not, under section 1(5)(b) above, grant leave to make an application").
The noble and learned Lord said: This is a drafting Amendment which makes no change of substance to the Bill but merely brings the wording in paragraph (b) of subsection (1) into line with the wording of paragraph (a), there being no reason for the present difference of expression. I beg to move.
On Question, Amendment agreed to.
Lord HACKING Lord HACKING moved Amendment No. 12:
Page 3, line 27, at end insert ("and—
(d) no application may be made under subsection 22(1) Arbitration Act (1950), and")
The noble Lord said: I beg to move Amendment No. 12. I intend to address the Committee also on Amendments Nos. 13, 14 and 15, as well as Amendment No. 12, and I shall also be making reference to Amendments Nos. 26 and 27. I recognise that, owing to the inadequacy of my drafting, even if the principles are accepted by the Government, I shall be compelled to withdraw these Amendments at the end of the Committee stage. I am, however, moving towards the central ground of my concern; namely, international contracts, to which reference has already been made.
The purpose of these Amendments is to permit parties to international agreements to contract out, by means of the exclusion agreement which is to be found in Clause 3(1) of the Bill, of other provisions where English courts have power to intervene in arbitrations.
Amendment No. 12 concerns the powers of the court to remit matters back again to the arbitrator after the exercise of the court's inherent jurisdiction, which I tried to describe to your Lordships in my
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earlier observations on Clause 1 of the Bill. Amendment No. 13 seeks to exclude parties to international contracts from the operation of Section 23, subsections (1) and (2), which concern arbitrator misconduct. This is misconduct—and very rare, at that—of the arbitrator himself or, more frequently with this unfortunate terminology of misconduct, it is when an arbitrator has made an error in conducting the proceedings, an error which entitles the party to make an application under Section 23 of the Act.
In the rare and unhappy event of an arbitrator acting dishonestly or grossly in breach of natural justice or—to take a third example that comes under inherent jurisdiction and not under the Act—acting in excess of his authority, clearly there must be a power to remove him. For that reason, I have also tabled Amendments Nos. 26 and 27, in a rough sketch form, to indicate that if one removes, as I am asking this Committee to do, subsections (1) and (2) of Section 23 for the purpose of international contracts, then one must bring in another clause on the lines of my Amendments Nos. 26 and 27, with the proviso that there should be added to Amendments Nos. 26 and 27 the third circumstance—the case of an arbitrator acting in excess of his authority.
Turning to Amendment No. 14, this concerns subsection (2) of Section 24 of the Arbitration Act 1950 and the matter of fraud. I addressed the House on this subject at Second Reading and I do not intend to weary the Committee with a second speech on the same subject. My suggestion then was that subsection (2) of Section 24 should be repealed altogether for all arbitrations. Having reflected upon it, however, I recognise that in the case of domestic agreements there can be circumstances when the victim to a false allegation of fraud, albeit made in the privacy of arbitration proceedings, feels so strongly about his integrity and reputation that he would wish to exercise his right to invite the court to transfer the arbitration proceedings from the arbitrator under subsection (2) of Section 24 of the Act.
My submission to the Committee is that the same circumstances do not surround the parties to international agreements. Most of those parties are vast corporations and are not injured

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private citizens. My suggestion, therefore, is that to leave subsection (2) of Section 24 in the Act in its present form so as to be available to parties of international contracts will leave an avenue of abuse. Whether that abuse is used or not, it is going to be seen as a gap in our attempt to reform the law.
That deals with the main points on my Amendments. I do not think that I need to address the Committee on Amendment No. 15 because this was an attempt, in an inadequate way, to brush up the end of the clause, these earlier clauses having been introduced. Those are the submissions which I have to make on these Amendments.
Lord DIPLOCK: I should like to support Amendment No. 14 which deals with fraud. Section 24 of the Arbitration Act is couched in very wide terms. In effect, what it enables a party to an arbitration agreement to do if fraud is alleged is to demand that the matter be dealt with by the court instead of by arbitration. In domestic arbitrations the great protection is that the rule of ethics at the Bar provides that as counsel you do not put down an allegation of fraud until you are satisfied that there is material upon which to base it. That I think almost any foreign lawyer would say is a peculiarity of English practice. Allegations of fraud are not regarded with the same seriousness either in America, where they are freely put without any real further consideration, or in other jurisdictions. If an allegation of fraud is made as a matter of common form, as sometimes it is, the risk is that a foreign arbitration will be brought before the jurisdiction of an English court.
As a matter of presentation, in the case of arbitration—where the parties to the big, one-off contracts, with which we are concerned to a considerable extent in the exclusion clause, are very often Governments or Government entities—the prospect of being dragged before an English court, even upon an allegation of fraud and even if it be unsuccessful, is something which ought to be avoided, if it can be.
Furthermore, if there is an allegation of fraud, while it is quite true that the party who sought to get the matter transferred
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to the courts would have to go through an English solicitor, or at any rate would have to have an English solicitor and counsel present, this really is not a sufficient safeguard in that sort of case because it may well be that the legal representatives of the parties in the arbitration itself are not English lawyers. It may also be that under the Directive of the EEC legal representation it will be the foreign lawyer with the different code of ethics who is able to appear in the High Court to make the application. If English counsel is only brought in at that stage it is a difficult matter for him to be able to be sure one way or the other whether the allegation of fraud is one which is justified as a prima facie case or not.
This matter has been the subject of representations to me from a number of different sources and I would therefore urge that consideration be given to enabling the parties in an exclusion agreement to exclude the power to apply to the court, on an allegation of fraud, to get the matter decided by the court rather than under the arbitration agreement. Unless we do that I think it will continue to be a serious obstacle to attracting the international contract to arbitration in England.
For that reason I warmly support Amendment No. 14. I hope the noble Lord, Lord Hacking, will forgive me if I say that while I attach importance to his Amendment No. 14 I feel rather indifferent about Amendments Nos. 12 and 13 because I do not think they will have any serious effect.
5.42 p.m.
The LORD CHANCELLOR: These Amendments are similar in purpose. Their effect would be that when an exclusion agreement is effective, that is to say an agreement to contract out of a new right of appeal at any stage in relation to an international arbitration or after an arbitration has commenced in domestic cases, it will also operate to exclude applications to the court under Section 22, which gives power to the court to remit an award to an arbitrator; Section 23—the power of the court to remove an arbitrator or to set aside an award on the ground of the arbitrator's misconduct, and Section 24(2), the power of the court to intervene when fraud is alleged.

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I notice that the noble and learned Lord, Lord Diplock, has shown less than enthusiasm for Amendments Nos. 12 and 13, an approach which, if I may say so, I share with him. Amendment No. 12 would confer on the parties the right to exclude by agreement the court's power to remit an award to an arbitrator under Section 22(1) of the Arbitration Act. I find the practical aim of that Amendment the most difficult to identify as it does not as such restrict applications to the High Court under the Bill or the Arbitration Act 1950, but where invoked by parties would merely limit the court's power under Section 22(1) to remit any matter to the arbitrator or umpire after it has been determined by the court. In my view, not only would such a limitation be undesirable, but it seems to be at odds with Clause 1(2)(b) which allows remission following an appeal on a point of law under Clause 1(2).
As to Amendment No. 13, this would confer upon the parties the right to exclude by agreement the court's power under Section 23(1) and (2) of the 1950 Act to remove an arbitrator or umpire and/or to set aside his award for misconducting himself or the proceedings. It seems to me to be rather undesirable for an arbitrator to know in advance that he could with impunity act improperly or incompetently or, for example, in breach of the agreed procedures. In my view, in the last resort the court should have power to intervene in such circumstances if a party to the arbitration applies to it.
Amendment No. 14 would confer on the parties a power to exclude by agreement the power of the High Court under Section 24(2) of the 1950 Act to order that an arbitration agreement shall cease to have effect, and to revoke an arbitrator's authority in so far as it is necessary to enable the High Court to determine any question of fraud alleged against a party to the agreement. In the past at any rate, as a matter of public policy it has been thought essential that allegations of fraud should be determined by the court. The protection against the abuse of Section 24(2) of the 1950 Act is that, save for the case of an applicant in person, an application to the High Court under Section 24(2) would be made by a member of the Bar of England and Wales who would be bound by strict rules, as the noble and learned Lord, Lord Diplock, has intimated,
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forbidding a plea of fraud save in the face of clear evidence. But it would seem that there is a greater willingness—putting it as delicately as I can—in other jurisdictions to allege fraud and to use the allegation of fraud as a means of delay in respect of foreign agreements. Therefore it may well be desirable that this suggestion should be looked at again, unattractive as it is to put our own standards here apparently above those in other jurisdictions. Perhaps that is not the proper way to put it. I will certainly look at that aspect of the matter again at a later stage. I fear that in respect of Amendments Nos. 12 and 13 my own advice to the Committee would be that they are really not helpful, but we will look again at Amendment No. 14.
5.49 p.m.
Lord HAILSHAM of SAINT MARY-LEBONE: I am sure the House will be grateful to the noble and learned Lord for expounding his views upon this question. I think it is probable that at Report stage we shall have to come back at least to the subject matter of Amendment No. 14, but I would reiterate the general comment that I was making at a much earlier stage this afternoon. It is very difficult on a highly technical matter like this, in dealing with a Bill the purpose of which is largely to give effect to the recommendations of a Committee, to use the Bill as a vehicle for reforming the law outside the recommendations of the Committee. Sometimes unexpected results are obtained by this procedure and, on the whole, I should be as conservative as I usually am about using the Bill for this kind of purpose.
I do point out that of course in favour of the noble Lord, Lord Hacking, as I have read his Amendments, being Amendments to Clause 3 they only really deal with exclusion agreements in international contracts as defined, and therefore they do not affect domestic arbitration, otherwise I should feel much more deeply about the matter. But I would point out to him that under the combined effect of subsections (6) and (8) of Clause 3, as I read them, there is room for extending Clause 3 to a wider range of contracts. The effect of his Amendments, if the Secretary of State exercised his powers, I think ought to be considered carefully.

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I suggest that the right course at the present stage is to withdraw these Amendments, but to revert, at any rate, to the subject matter of Amendment No. 14, when the Lord Chancellor has had an opportunity of consulting perhaps the chairman of the Donaldson Committee or other persons who may be interested, and also the Parliamentary draftsmen, as to the way in which an Amendment of this kind could properly be drafted.
I make one final point, and I am going to make it again at a later stage when we come to the Amendments. It was to deal with points of this kind that on Second Reading I ventured to support the noble Lord, Lord Hacking, in his suggestion for an arbitration rules committee, because my doubts about introducing into a Bill Amendments outside the scope of the deliberations of the Committee which it is designed to implement would be met if there were in existence a permanent body which could give effect to suggestions of this kind, after the appropriate consultation, and subject to the authority of both Houses of Parliament.
I know the noble and learned Lord's objection because we have been in correspondence. I think he described it as a Henry VIII type of Committee with power to amend statute law. But this is a very highly technical matter. One does not want to hold up desirable law reform. Having regard to the difficulties of Parliamentary time, I very much doubt whether, if we had not been living in this kind of Parliamentary limbo, the Lord Chancellor would ever have got time for this Bill. If he had a rules committee we would not be troubled in Parliament with having to debate these very highly technical problems on the Floor of the House, unless, the Rules Committee having recommended it, there was a general feeling that they had gone too far or not far enough.
Lord DENNING: May I say that I would have some sympathy with Amendment No. 13 coupled with Amendment No. 26, for this reason: that the courts have been apt to set aside awards, or remit them, for what we often call technical misconduct and not real misconduct. It would be undesirable if the courts would interfere more under that provision, which
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still remains in the law. On the other hand, I hope that after the passage of this Bill we shall not be inclined to give a technical meaning to the word "misconduct", but that we will interpret it properly as it ought to be. So I would not press these Amendments, but I would have some sympathy with the suggestion.
The LORD CHANCELLOR: I willingly concur with the approach of the noble and learned Lord, Lord Hailsham, and I hope that in the light of my assurance the noble Lord, Lord Hacking, may be disposed to withdraw the Amendments, certainly with the knowledge that we will revert to a reconsideration of them at a later stage.
5.54 p.m.
Lord HACKING: I undertook to withdraw the Amendments even before I presented them to the Committee and I am going to remain faithful to that undertaking. I am very grateful for the support of the noble and learned Lord, Lord Diplock, and indeed the Master of the Rolls at a later stage. Perhaps I may just observe, without, I hope, any impertinence to the noble and learned Lord the Lord Chancellor, that perhaps when he was making his observations—and I know the difficulty in trying to join up different Amendments in the Bill—he was not sufficiently focussing on the relationship between the proposal made in Amendment No. 13 with that made in Amendment No. 26. Therefore, I would be very grateful if the noble and learned Lord could at least consider that Amendment as well as Amendment No. 14.
If the noble and learned Lord is able to do that, we will find entirely common ground, because on further research, whether it be right or wrong, I certainly have come to the view that my Amendment No. 12 is inappropriate on the line of the observations I made earlier on the inherent jurisdiction of the court. Of course, this subsection only comes into being—or to use an American phrase, it can only be activated—when the court itself has exercised its inherent jurisdiction to take the matter, and having taken the matter decided that it is right to send it back to the arbitrator. For that reason I concede that Amendment No. 12 is not appropriate; but I do ask the noble and learned Lord to consider No. 13 coupled

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with No. 26, together with Amendment No. 14. If my other Amendments were to find any favour with the noble and learned Lord, I leave No. 15 entirely, to the Parliamentary draftsmen.
The LORD CHANCELLOR: As I have said, I am perfectly willing to accede to that request. If I have been a little out of focus, having gyrated so much in the course of the afternoon, I am not entirely surprised.
Amendment, by leave withdrawn.
[Amendments Nos. 13, 14 and 15 not moved.]
5.58 p.m.
Lord LLOYD of KILGERRAN Lord LLOYD of KILGERRAN moved Amendment No. 16:
Page 3, line 33, at end insert—
("An Agreement in writing shall include any agreement in the written or typed form but shall exclude all agreements in printed form.").
The noble Lord said: This is a simple Amendment intended to define what is meant by "agreement in writing" under this clause, for the purpose of trying to extend the special category of cases with which the clause is concerned. The Amendment says that:
"An Agreement in writing shall include any agreement in the written or typed form but shall exclude all agreements in printed form".
The noble and learned Lord, Lord Diplock, spoke at length about what he referred to as the standard term contracts, and he indicated that there were many commercial branches where it is impossible to practise, to trade, or to enter into a transaction except upon the standard form prepared by a trade association. He referred to the Baltic practice. Therefore, if you want to enter into a transaction of that kind you are for practical purposes forced to contract upon the standard form, it being a printed form. He went on to say, which rather surprised me, that he felt that many of such contracts were not freely negotiable between the parties of contract; they just had to accept the printed form. He indicated that the Committee upon which he was serving had considered this matter very carefully and he had had many representations about extending the definition of the written agreement in that form.
What my Amendment is concerned with is saying that the written agreement which can be classified in the special category must be one which the parties have considered; therefore, prima facie if you have an agreement which is in writing or which is in typed form, not printed, it shows that the parties have made some attempt to consider the terms and that the contract has been negotiated. I fully realise the difficulties of drafting that arise in a matter of this kind, and this is a humble attempt to try to extend that special category of cases to which the clause refers. I beg to move.
The LORD CHANCELLOR: As I understand it, the effect of the Amendment would be to invalidate terms of agreements, excluding the right to apply to the High Court under the Bill, which appeared in print as opposed to writing or typewriting. The aim appears to be to prevent exclusion clauses being forced on unwilling parties in standard form contracts. I submit that the Amendment is impracticable as a party who wished to exclude the new right of appeal would merely have the standard contract typed or written out. In addition, the Amendment gives no guidance as to the effect of exclusion terms in standard form contracts which have been modified or altered in writing or typing. So I am afraid that in my submission it will not do.
Lord HAILSHAM of SAINT MARY-LEBONE: I do not think that it is simply a question of drafting, either. With respect to the noble Lord, Lord Lloyd of Kilgerran, one understands, of course, the reluctance of lawyers and judges to accept exclusion clauses in ordinary contracts. Indeed, the noble and learned Lord the Master of the Rolls quite recently made an eloquent speech which we all remember on the Unfair Contract Terms Act. But, the kind of arbitration clause to which we are referring is not between parties of that particular character: it is between—as I ventured to call them on Second Reading and earlier this afternoon—grandees. The fact is that in contracts of the type which we are discussing the uninequality which applies between parties, who may have unfair terms imposed upon them in domestic affairs, hardly applies. I should think, on reflection, that having aired this subject the noble Lord, Lord Lloyd of Kilgerran,

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will realise that it is not merely impracticable from the point of view of drafting, but there is, in fact, no need for a clause of this kind at all.
Lord LLOYD of KILGERRAN: I was trying to deal with the objections which I understood had been raised by the noble and learned Lord, Lord Diplock, who said that the special category contract ought to be excluded for the time being. He seemed to indicate that it was because the contract was in printed form and just shovelled out at the parties. But, it seems that perhaps I should consider what the noble and learned Lord has said and revert to this matter at a later stage. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.4 p.m.
Lord HACKING Lord HACKING moved Amendment No. 17:
Page 4, line 11, after ("Section 1") insert ("as amended by this Act").
The noble Lord said: This Amendment is related to Amendments Nos. 29 and 30. I hope that the noble and learned Lord has been able to cross index and to relate the later Amendments which I have mentioned to Amendment No. 17. The Amendment concerns the problem of the definition of international contracts, which is perhaps the matter of the greatest concern of all the Amendments that I have tabled for the Committee stage.
So far as I know international agreements were first defined separately from domestic agreements in the Arbitration Act 1975. If my memory is right, the noble and learned Lord, Lord Diplock, played a prominent part in the introduction of that Bill. I see that the noble and learned Lord, Lord Diplock, is shaking his head. However, in any event, that Bill was introduced into this House in 1975 and its purport was to give effect to the New York Convention of 1958.
Without going into other areas of concern which were also dealt with in the short 1975 Act, Section 1 dealt with the problem when, during the subsistence of a valid arbitration agreement, one of the parties to that arbitration agreement took court proceedings. The 1975 Act, for international agreements, changed the
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provision of an earlier Act—if I am correct it was Section 4 of the 1950 Act—which made it a discretionary matter for the courts whether to stay court proceedings. As regards international agreements what was a discretionary power in the court was converted into an obligatory power. The key word in Section 1(1) of the 1975 Act is "shall" which I think replaced the word "may" in the earlier legislation. Therefore, for the purpose of this Act it was necessary to distinguish those agreements which were to be affected by Section 1 from those domestic agreements which were not to be affected.
The approach in the 1975 Act was to define domestic agreements and hence to treat all other agreements as international or non-domestic agreements. The crucial time was the time when the proceedings were brought. Therefore, the distinction—again speaking very broadly to your Lordships—is that when a party is a person who is not a national of this country and not resident, or in the case of a corporation when that corporation is incorporated outside the United Kingdom or has no central control or management within the United Kingdom, then there is a non-domestic agreement. Therefore, the time which was fixed for ascertaining whether an agreement was non-domestic or domestic, was the time when the proceedings commenced. For the purposes of the 1975 Act that worked perfectly well.
However, the Bill seeks to adopt that section of the 1975 Act and with it the timing that was chosen. That is of crucial importance because the vital time is when the contract is being negotiated, when parties to agreements are considering putting in an arbitration clause which will enable London to be the forum of an arbitration. It is essential that those parties know at that time that the agreement which they are entering will be operative and binding upon the other parties. Therefore, if the time is fixed at a later stage in possibly the distant future when proceedings are commenced, those parties at the critical time they are carrying out the negotiations cannot feel fully protected.
Let us take the example of an English resident company entering into an agreement with an American company. It is possible that an American company—and

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I make no aspersions against an anonymous American company—could deliberately and wilfully convert itself into a domestic company and hence take that agreement out of the exclusion. The much more likely event is that the American company, having prospered, hopefully on the agreement to which I referred your Lordships, decides that the time has come to establish a business in the United Kingdom; and when that business is established, as a matter of commercial convenience all the contracts which then existed between the parent company and other companies, are assigned to their new resident English company. So at a later time, after the agreement is signed, the effect of the exclusion arrangements would be a nullity. The exclusion agreement itself would be a nullity because the parties to that agreement were no longer, within the definition of the Act, non-domestic.
I recognise that my drafting is quite inadequate, but for the reasons that I have put forward, I urge the noble and learned Lord to accept the concept of the Amendment. I beg to move.
The LORD CHANCELLOR: The noble Lord, Lord Hacking, has raised some very interesting matters as regards this Amendment. In view of the proceedings which are to follow this Committee stage perhaps I can shorten matters by saying that I shall consider most carefully what he has said in regard to these somewhat difficult Amendments—at least difficult in my mind—and we shall revert to them at the Report stage.
Lord HACKING: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord LLOYD of KILGERRAN Lord LLOYD of KILGERRAN had given Notice of his intention to move Amendment No. 18:
Page 4, line 15, at end insert—
("Any reference under an arbitration agreement relating to (a) Intellectual Property or (b) the Treaties or Community Treaties as defined in the European Communities Act 1972 or Articles 85 or 86 of the Rome Treaty shall not be deemed a domestic arbitration agreement within the meaning of section 1 of the Arbitration Act 1975").
The noble Lord said: I was minded to introduce this Amendment in view of the qualified sympathetic approach which the
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noble and learned Lord the Lord Chancellor had made in his letter of 20th December to the noble and learned Lord, Lord Hailsham of Saint Mary-lebone. It seemed to me that he was sympathetic to the suggestion of the noble Lord, Lord Hacking, about a foreign law declaratory clause being introduced into the Bill. Therefore, my Amendment is very much of a probing nature. In view of the fact that the noble Lord, Lord Hacking, has proposed another Amendment on this matter—Amendment No. 22—with the leave of the House, I shall not move Amendment No. 18 but raise the principle embodied in my Amendment during the debate on Clause 3 stand part.
[Amendment No. 18 not moved.]
[Amendments Nos. 19, 20 and 21 not moved.]
Clause 3, as amended, agreed to.
6.11 p.m.
Lord HACKING Lord HACKING moved Amendment
No. 22:
After Clause 3, insert the following new clause:
Exclusion of foreign law from judicial review
(".—(1) For avoidance of doubt and subject to subsection (2) below, questions of foreign law, as denned in subsection (3) below, are not to be considered as questions of law which arise under this Act.
(2) Notwithstanding subsection (1) parties to any arbitration proceedings, being conducted within the jurisdiction of England and Wales, may agree in writing, concerning questions of foreign law, as denned by subsection (3) below, to make the arbitration proceedings, in whole or in part, subject to the provisions contained in sections 1 and 2 of this Act.
(3) Questions of foreign law are questions of law which do not fall under the law of England and Wales").
The noble Lord said: I am afraid that noble Lords will be troubled by my words again, but I shall try to be brief because of matters coming before the House shortly. This new clause is a foreign declaratory clause and I invite the noble and learned Lord the Lord Chancellor to include such a clause in the Bill. There are two parts to this Amendment and I shall address the Committee on them in the order in which they come. The first part of my Amendment is simply an attempt—again, with inadequate drafting—to draft a foreign declaratory clause.
I invite the noble and learned Lord to accept the concept of this clause because over this matter there is more than a doubt whether foreign law forms part of a question of law in England. Indeed, it is widely held among lawyers from overseas that a question of foreign law still remains—and one cannot criticise them for taking this stand because, after all, it concerns their own law—a question of law and not a question of fact. For that reason I commend to your Lordships the inclusion in the Bill of a clause which, when properly drafted, sets the matter beyond any doubt. This recommendation was covered in the Commercial Court Committee's Report, and indeed it was also recommended by the London Arbitration Group. I recognise that there is a reluctance over a declaratory clause, but as I have suggested, it is very important that the matter should be put beyond doubt. Indeed, why should overseas lawyers burden themselves studying and going through English law when this matter is so easy of remedy.
The second part of my proposed Amendment—subsection (2)—also seeks to follow the recommendations of the Commercial Court Committee in paragraph 52 at page 13 of the report. However, there is an essential difference. In choosing the drafting of both subsections (1) and (3), I was directing attention not to the proper law of contracts being followed, but simply to questions of law. By taking this extract out of the rather wider concept in the Commercial Court Committee's Report, I believe that I have answered the two concerns that were expressed in the report; namely, those concerning lex fori—that is when the arbitration is taking place in England under a foreign law contract—and also the problem of renvoi.
In certain circumstances it may be helpful to parties who are arbitrating in England to have the assistance of the English courts on a matter of foreign law. This may sound a slightly bizarre proposition but there are many matters of interpretation of documents, clauses and conventions which are common to a number of countries in the world. Recently I attended a seminar in New York which considered the new Hamburg Rules on the transport of goods by ships. It is proposed that those new rules replace The Hague Rules. It is clearly foreseeable
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that arbitration proceedings could be conducted in London under, for example, New York law, where it could be helpful to the parties to make a reference to the English court in order to ascertain the interpretation of a clause. It may be rare circumstances when this would arise, but it would be a hospitable act on behalf of the forum country to leave the door open if any such help can be by the English court to parties participating in an arbitration in London.
Lord HAILSHAM of SAINT MARY-LEBONE: I see a little difficulty about this and I hope that the noble and learned Lord will be able to assist me one way or the other, either by removing my doubts or by supporting them. I believe it to be a general rule of English law that questions of foreign law are questions of fact. The noble Lord, Lord Hacking, says that perhaps foreign lawyers do not know this and why not have a declaratory clause. I suspect declaratory clauses for the reason that if we start including them in statutes for the avoidance of doubt, the only ultimate effect is to cast doubt on the whole sequence of disputes where there is no statute containing a declaratory clause. In other words, we undermine the doctrine of the law in other cases than that in which the statute applies. If we say, "In this Act it is declared for the avoidance of doubt that questions of foreign law are questions of fact", we underline the whole doctrine throughout the whole of the rest of English law. I think that it creates doubt, and does not avoid it, if we start inserting declaratory clauses in particular statutes when the general law is perfectly well established and well known.
Secondly, turning to subsection (2) of the proposed new clause, what worries me about this is how we are going to try it. Let us take, for example, a Danish contract, which presumably contains some question of construction, perhaps in the Danish language or possibly under Danish law. It is all very well to say that we are entitled to contract ourselves into Clauses 1 and 2 of this statute, but how are we going to try it if it gets here? Ex hypothesi, in proceedings under Clauses 1 and 2 of this statute, where they take place by way of appeal from an arbitrator on a question of law, the court will not hear any witnesses. It will not be

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allowed to because it is a question of law. How do you contract yourself into an English court by way of appeal from an arbitrator and into deciding a question of fact unless you are going to call witnesses? If a question of foreign law is written in a foreign language, you first get a translator to translate it and he would be a witness. Secondly, you get a foreign lawyer—sometimes one on each side—saying what the foreign law is and how it applies to the facts of the particular case. I have had a number of these disputes in my life, and I do not see how these difficulties can be resolved. Perhaps the noble and learned Lord will say that they can, in which case I wish the noble Lord, Lord Hacking, every possible success with his Amendment. However, at the moment I am in difficulty about it.
6.20 p.m.
The LORD CHANCELLOR: I share the noble and learned Lord's difficulties. Since subsections (1) and (3) of the proposed new clause are merely declaratory and add nothing to our law, it seems to, me that the new clause in that respect serves less than a useful purpose for the reasons the noble and learned Lord gave. In the absence of a provision on the lines of the proposed subsection (2), as has indeed been admitted so far in the discussion, points of foreign law being questions of fact in English law could not be the subject of an application under the Bill because Clause 1(2) and Clause 2 of the Bill are limited to points of law only. Therefore, it would appear to be inappropriate to purport to confer on the High Court in this country a jurisdiction to determine appeals on points of foreign law. It may be that I have missed something from what the noble Lord, Lord Hacking, has said, but I am afraid I cannot go with him on my present understanding with regard to this new clause.
Lord DENNING: I am not quite sure about this. Take a contract in New York on the New York Produce Exchange form in the English language. We have to interpret it very often on cases stated. It may be said to be foreign law, but it is in the English language and the interpretation of the English language is a question of law. It may be that commercial men on both sides of the Atlantic might like a ruling on the proper interpretation
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of those words in the New York Produce Exchange form and to get an authoritative ruling upon it. Even though it may be technically a matter of foreign law, it is an interpretation of the English language which most of them are inclined to leave to us. So I have only that little reservation about it, and I wonder whether there is something in the Amendment after all.
The LORD CHANCELLOR: It may well be. I approached the matter fairly modestly. Perhaps there is something in it which I am bound to say again escapes me. But in the light of the views of the noble Lord who moved the Amendments, and particularly of the energetic willingness of the Master of the Rolls to undertake this sort of further incursion, perhaps I shall be willing to look at it again.
Lord DIPLOCK: Like the noble Lord, Lord Hacking, I have been concerned in presiding over a colloquium on the new Hamburg Rules. This was in Vienna only last week. One of the things we did at that colloquium was to discuss the knotty points of construction in the Hamburg Rules, and there are a great many of them. There were present at the colloquium and engaged in the discussion lawyers from a large number of different jurisdictions. All I can sav is that if the court were to be required to deal with questions of foreign law, God help them!
Lord WILBERFORCE: I should like to suggest in another way perhaps that there may be some valuable thought behind Lord Hacking's Amendment, although it may be that what I am going to suggest is not what he has suggested. He made some reference to it in his speech. The distinction he is making in his Amendments is between questions of foreign law, on the one hand, which he says are not to be considered as questions of law but questions of fact, and questions of English law which are of course questions of law and therefore subject to the Bill.
There is another distinction which is an important one which I suspect he has also in mind; that is, the distinction between contracts, the proper law of which is English, and contracts the proper law of which is a foreign law. I have in the back of my mind that there is a case

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for saying that the latter type of contract—namely, contracts the proper law of which is not English law—should not be subject to the exclusion provision requirements of this Bill. There is a case for saying that. It has been urged and the noble Lord has advocated it at some time. So if the noble and learned Lord is considering this clause, could he also address his mind to whether or not what we ought to be trying to do, when we are dealing with foreign law, is to treat contracts, the proper law of which is a foreign law, as a separate class of categories which are not within the procedure of exclusionary clauses as laid down in the Bill. I am not convinced whether or not that is right, but I feel this is a point which requires consideration.
Lord DIPLOCK: I should like to support what my noble and learned friend has said about considering whether one should not allow exclusionary agreements in all contracts of which the proper law is not English law. But it did not seem to me that this had anything to do with the Amendment we are discussing at the moment. It was a matter which I had in fact recommended before. I think there is a recommendation in the commercial court committee.
Lord LLOYD of KILGERRAN: If the Lord Chancellor is going to reconsider this question, might I remind him of my letter of 9th January to him, to which he has not yet had time to reply, but to which I hope in due course he will send a reply. It is concerned with the position of intellectual property in relation to the EEC. I mentioned it at Second Reading. I had suggested that, in view of the position in EEC matters, the scope of the Bill might be amended in the context of certain developments in the EEC. My letter of 9th January covers this point. Perhaps he would be good enough to consider the matter.
The LORD CHANCELLOR: I shall consider the points that have been raised. I would hope that we could have an intellectual discussion on intellectual property on the basis of one of the earlier Amendments of the noble Lord. I do not regret that he withdrew them, and the time presses, but I will certainly give consideration to the matters raised by
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noble and learned Lords, and the noble Lord, in further examination of these proposals.
Lord HACKING: Once again I am grateful to noble and learned Lords who have lifted me up from the very low position in which I find myself when the Lord Chancellor completes his first comments on my Amendments. When the noble and learned Lord considers this matter could he put at the front of his mind, the first part of this Amendment; namely, the declaratory clause. This is a matter of extreme importance. It is a funny thing about your Lordships' House that contributions can be made from all quarters of the community, and from odd quarters of the world. I have a certain amount of experience abroad. The matter of foreign law is of great concern and should be put beyond any doubt whatever. It is an important matter for those of us who are overseas, and I would be most grateful if the noble and learned Lord could give this earnest consideration.
The LORD CHANCELLOR: May I say, on behalf of the Committee, that all contributions are thankfully received.
Amendment, by leave withdrawn.
6.28 p.m.
Lord HACKING Lord HACKING moved Amendment No. 23:
After Clause 3, insert the following new clause: Appointment of Rules Committee
(".—(1) The Lord Chancellor shall have power to appoint an Arbitration Rules Committee.
(2) The Arbitration Rules Committee shall have power to prescribe such rules as may be required to support the proper conduct of arbitration proceedings in England and Wales.
(3) Rules made under this section shall be laid before Parliament and shall be subject to annulment in pursuance of the resolution of either House of Parliament'").
The noble Lord said: I hope at long last that I might get some support at least from one of the Front Benches because this Amendment concerns the proposal that there should be an Arbitration Rules Committee. May I draw your Lordships' attention to the sketch—and I use that word as an admission regarding the clause which I have drafted in Amendment No. 23 which in no way attempts to be the appropriate clause to go into a Bill if the concept of this clause is accepted. All I

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sought to do here was to set out the marker posts. I sought to set out the proposition that the Lord Chancellor should have power to appoint an Arbitration Rules Committee. I sought, secondly, to direct attention to the area of operation of that Arbitration Rules Committee; namely, to deal with rules to support—these are the crucial words—the proper conduct of arbitration proceedings in England and Wales. Thirdly, I laid down the requirement that such rules should be laid before both Houses of Parliament.
Clearly there are many matters of detail that should be considered; for example, on the representation on such an Arbitration Rules Committee. But I am sure that if the concept is accepted, then with ease and with welcome the noble and learned Lord would extend invitations to many persons who are concerned in matters of arbitration: the London arbitration bodies: trade associations in London who have arbitration processes as part of the association. Indeed consideration should be given to representatives from arbitration bodies overseas, for example, the International Chamber of Commerce in Paris, with whom I spent the last three days, from Monday through to Wednesday evening.
It will also be necessary, if this new clause finds acceptance—and I am aware of the opposition I shall get from the "other" Front Bench in your Lordships' House—to give the noble and learned Lord power to repeal a number of sections of Part I of the Act. It would be necessary, for example, to repeal Section 12, but within the ambit of giving the Rules Committee powers to deal only with rules to support the proper conduct of arbitrations (as opposed to giving the Rules Committee any power to make rules and law to give rights of intervention in arbitration proceedings). It is this dividing line I have sought to make in drafting the Amendment.
The rather fearful description of Henry VIII has been alluded to the proposal for an Arbitration Rules Committee. I do not quite know what activity of Henry VIII the noble and learned Lord had in mind when he referred to the Henry VIII powers, but in my submission that, bearing in mind the dividing line I have urged, no fierce powers would exist. I also appreciate that there
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is increasing concern over the number of rule-making bodies; and any lawyer who has been exposed, even to a small degree, to the plethora of Statutory Instruments which pour from various bodies which have rule-making powers, will treat with a great deal of respect any proposal that there should be another body with such powers. But if wrongs are being committed in other areas and if there are too many bodies with rule-making powers, there is no reason per se to turn down this Amendment.
There would be a number of advantages in having an Arbitration Rules Committee. It would provide an easy vehicle for the reform of procedural law, it could support arbitration associations in the making of their own rules—for example, the "payment into court" recommendation which the Commercial Court Users' Committee considered. It would provide a regular meeting point of the Commercial Court and arbitration bodies and hence keep their relationship in good order. There would be a number of other advantages which would flow from having an Arbitration Rules Committee. I believe this suggestion is good and that it is certainly worthy of further consideration.
Lord HAILSHAM of SAINT MARY-LEBONE: Obviously one does not want to tie oneself to the particular wording of an Amendment, but, as the noble and learned Lord the Lord Chancellor is aware, we have been in correspondence about this and the subject was to some extent ventilated on Second Reading. The noble and learned Lord was good enough to send me a letter, which I understand has been circulated to other noble and learned Lords who have interested themselves in the matter, and his argument, if I summarise it correctly, fell under three heads.
The noble and learned Lord said that we must first of all clear our minds as to what a committee of this kind could do, and that was a useful exercise. He pointed out that the procedure in arbitrations was basically founded on contract and that the parties could decide what procedure they wanted to follow: and even when they could not, then, within limits, the arbitrator had it within his authority, conferred by the submission, to decide what procedure he should follow.

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In my view, that is sensible, healthy and true. What, therefore, asked the noble and learned Lord, rhetorically and with reason, could a Rules Committee do for that? In my view there is a good deal in that argument.
The second point the noble and learned Lord made was this: supposing it did not really interfere with contract, could you hope to get a set of model rules out of the Rules Committee? Some of the literature I have seen—and I dare say some of the literature others have been sent by various bodies—has suggested that the Rules Committee could provide a series of model rules. The noble and learned Lord says, I think with a good deal of reason, that arbitrations vary enormously in type and subject-matter and that a set of model rules will not be any good because there is too great a variation. I tend to think that may be true. I would rather rely on the Institute of Arbitrators, for example, putting forward rules for arbitrations under that Institute—or rules of the Baltic Exchange or what-have-you—than on a Rules Committee trying to impose some form of uniformity. I would rather see the expert bodies in particular branches of arbitration laying down what ought to be done where they think there is a gap or a need for some degree of uniformity in arbitrations of that class. Thus, I believe the noble and learned Lord has reason on his side in the second point he makes to me in that letter.
I come to the third point, where Henry VIII comes into it, and I must tell the Committee that the person who brought Henry VIII into this argument was the noble and learned Lord and not I. The spectacle of the noble and learned Lord in any respect resembling Henry VIII is not one which had naturally occurred to me, except perhaps that Henry VIII was a Welshman and the noble and learned Lord could make that claim too. At any rate, I come back to paragraph 55 of the Donaldson Report, which said they were:
"acutely aware that Parliamentary time is at a premium and that unless an amendment to the law of arbitration has great legal and economic importance, as is without doubt the case in relation to the powers of judicial review"—
which is the main subject-matter of this Bill—
"it is difficult to obtain such time".
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It would have been impossible, even in this case, if we had not been living in what I have described as a period of Parliamentary limbo.
"However, the making of minor improvements in arbitration procedure is not the most controversial field of human endeavour and the Committee hope it will prove possible to remedy these minor defects in addition to dealing with the powers of judicial review. In this context, we think that consideration should be given to establishing an arbitration rules committee with powers similar to those of the Supreme Court Rules Committee. This would relieve Parliament of the need to consider detailed amendments to the Act both now and in the future".
On that third point, I am not sure that I do not part company with the cautious approach adopted by the noble and learned Lord, because in this connection I am not afraid of Henry VIII. In the ordinary course, I agree that amendments to statute law should be made by statute, by Parliament—it should go through three readings, both Houses stage by stage and, if need be, line by line—and I am perhaps, as noble Lords will remember in some more controversial debates we have had, a great enthusiast for this general point of view. However, I wonder whether this is not possibly an exceptional situation. Arbitration law is very technical. Half, probably all, the Amendments we have discussed so far this afternoon would never have come before Parliament and stopped a large and excited audience from listening to and discussing unidentified flying objects for so many minutes and hours if we had had an Arbitration Rules Committee to decide these technical questions, after consulting the relevant bodies.
I ask the noble and learned Lord whether it is possible that a Committee on the lines recommended in paragraph 55 of the Donaldson Report might serve a useful purpose. My own view is that it would. Of course Parliament would retain the ultimate control. Rules would be produced, and I suppose that they could be made subject either to Affirmative or Negative Resolution procedure. I am not suggesting that we ought to spend a great deal of time discussing UFOs; but I question whether we ought to spend quite so much time discussing whether questions of foreign law are questions of fact, as we have been doing, when the matter could in fact be referred to a committee of experts. Little difficulties are involved, but they are real

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difficulties and difficulties of importance, which have been raised by the noble Lords, Lord Hacking, Lord Lloyd of Kilgerran, and others. These matters could be discussed in a rather more intimate atmosphere before a forum specially qualified to deal with the question. I wonder whether the noble and learned Lord cannot think again along the lines of paragraph 55 of the Donaldson Report.
6.42 p.m.
Lord DIPLOCK: My noble and learned friend Lord Hailsham of Saint Marylebone has referred to the genesis of the proposal for an Arbitration Rules Committee which is to be found in paragraph 55 of the Donaldson Report, in which it was stated:
"We think consideration should be given to establishing an Arbitration Rules Committee".
I entirely agree that that is a matter to which consideration should be given. The trouble is that it has not—it has not yet—and my great anxiety is that the Bill should get through in the Parliamentary time available to it. It appears that large numbers of people, upon seeing that sentence in the Commercial Court Committee's Report, have latched on to it and said, "Wouldn't it be lovely to have an Arbitration Rules Committee. It could do all sorts of things". A number of people have written to me about this matter. Some of them think that the committee's function should be to lay down rules for the conduct of arbitration, whereas I agree with my noble and learned friend that that is the kind of matter which is dealt with by agreement. He referred to the rules of the Institute of Arbitrators. In fact they are the rules of the London Court of Arbitration. They are fresh rules, recently drafted. There is a wide selection of rules: the Commodity Trade Rules, the GAFTA rules, and the rest.
Then there are those who think along the same lines as those suggested in the report and believe that the committe should deal with amendments to the powers of the High Court in relation to arbitration. Some people think that the committee should do everything, of both kinds, and some think that it should consider detailed amendments to the Act. It is worth noting that the Commercial
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Court Committee suggested that the Arbitration Rules Committee should be given powers similar to those of the Supreme Court Rules Committee. If powers of subordinate legislation are to be given, it is most essential that we define what those powers are. The Supreme Court Rules Committee's powers are conferred by Section 99 of the Supreme Court of Judicature Act 1925, and it is perhaps worth noting that the definition of its powers take up a couple of pages of the Statute Book. There are no fewer than 10 different paragraphs all giving close definitions of the powers. If we are to set up an Arbitration Rules Committee with legislative powers, which is what they are—and there is much to be said for so doing—it is absolutely essential that we decide and define what those powers are to be. That has not been done. It is a matter in which there is room for much controversy. It is a matter upon which one wants to consult the interests concerned, and there is no practical possibility of doing that in the time available, unless we are to lose the Bill.
With great respect I recommend to the noble and learned Lord the Lord Chancellor that he should respond to what I think is an invitation by the Commercial Court Committee of referring to that committee the matter of considering whether or not to set up an Arbitration Rules Committee, and, in particular—and this will take much time and thought—defining what its powers are to be. I suggest that if the Amendment is insisted upon, we shall land ourselves in a mess and lose the Bill because sufficient consideration has not been given to what the powers of the committee should be.
Lord DENNING: It seems to me that many trades always have had their own rules, such as the commodity trades, with GAFTA forms and so forth, and in the International Chamber of Commerce. They all have their rules of practice laid out, and I imagine that a new rules committee could not interfere with these rules because they are matters of contract. With regard to other matters ordinary rules of High Court are often applied by analogy. I agree that in a sense there may be room for a Rules Committee, but as my noble and learned friend Lord Diplock has said, it could not be done under such a general formula as we have here. It

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would need detailed consideration to see exactly what the powers of the committee should be, especially if there were to be powers to amend or to alter any provisions of Acts of Parliament. So perhaps this is not the right stage for the Amendment to be accepted.
The LORD CHANCELLOR: I approach the matter very much in the same way as the two noble and learned Lords who have just spoken. In my letter to which the noble and learned Lord, Lord Hailsham of Saint Marylebone, was kind enough to refer, I said that if the proposal in the Amendment is to be pursued further, it seems to me to call for a separate report of its own by the Commercial Court Committee if it thinks fit to make one, rather than simply to have a paragraph at the end of a report not directly aimed at this particular question. As the noble and learned Lord, Lord Diplock, has pointed out, although the Commercial Court Committee recommended that consideration should be given—I emphasise those words—to establishing an Arbitration Rules Committee with powers similar to those of the Supreme Court Rules Committee, neither the report, nor the Amendment, is explicit about the type of rules which such a committee should have power to make or the matters for which such rules should provide.
The noble and learned Lord, Lord Hailsham, has analysed the reasons which I put forward in my letter for thinking that, unless we clear our minds in practical detail on what ground could be covered by such a rules committee, we shall be in danger of creating a body which will not have the faintest idea of what it is expected to do, or of what its powers would be, and we should indeed be landed in grave difficulties. I think it is much better to have a clear idea what we have in mind before we proceed further with the proposal which should be embodied in the Bill, rather than to commit ourselves at this point of time, before we really know what is needed by way of the setting up of an Arbitration Rules Committee. But, as I have said, I am very willing to do what I suggested in the letter, and to approach the Commercial Court Committee (or, if it is not willing to undertake it, perhaps some other body) to get some
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further guidance on the way we should proceed.
Lord LLOYD of KILGERRAN: In view of what the noble and learned Lord has said about looking at the matter and seeking guidance, I wonder whether I may refer him to my Amendment No. 24, which I shall not be moving, because I extracted that Amendment from the Patents Act. It has always been the practice of a Patents Act to have a section in it empowering the Secretary of State to
"make such rules as he thinks expedient for regulating all matters placed by this Act under the direction or control"
of the Comptroller General of Patents. Instead of the Comptroller General of Patents I have indicated that matters should be put under the direction or control of the arbitrator or umpire, and have gone on to say,
"or cause to be appointed an Arbitration Rules Committee …."
There has therefore been a precedent for years in the Patents Act for making rules, but I agree with the noble and learned Lord, Lord Diplock, that of course it will take a long time before the rules are adequately prepared and that it is important to get this Bill through very quickly.
Lord HACKING: I readily join all noble Lords who have expressed concern that this Bill should pass quickly through both your Lordships' House and the other House so that it may become law as soon as possible. I tabled this Amendment because I was anxious to investigate further in Committee, as I think the noble and learned Lord knows, the concept of an Arbitration Rules Committee. The noble and learned Lord, in his final words, has certainly left me with the hope that that concept can be further considered, and on that basis I am more than willing to withdraw this Amendment. Indeed, I have no intention, as I believe the noble and learned Lord also knows, of tabling it again at Report or Third Reading. I do not give that undertaking concerning others of my Amendments.
Amendment, by leave, withdrawn.
[Amendment No. 24 not moved.]
Clause 4 agreed to.
Clause 5 [Minor amendments relating to awards and appointment of arbitrators and umpires]:
Lord LLOYD of KILGERRAN Lord LLOYD of KILGERRAN moved Amendment No. 25:
Page 5, line 44, after ("agreement") insert ("in the event of two arbitrators appointed by the parties agreeing to make a joint award then no third arbitrator need be appointed, but").
The noble Lord said: I was pressed by a very experienced arbitrator to put forward this simple Amendment in the context of Clause 5. It was put to me that there are hundreds and hundreds of small cases where two arbitrators are appointed to give a joint decision, and my Amendment is to the effect that where the two arbitrators appointed by the parties agree to make a joint award, no third arbitrator need be appointed. This will save some time and some expense. I have put to experienced arbitrators the question as to what happens if the two arbitrators should disagree, and they have said that this rarely happens in the circumstances of their cases but then, of course, you would have to go back and appoint a third arbitrator to try to resolve the matter. This is a small matter, but it is apparently of commercial importance. I beg to move.
Lord DIPLOCK: I would suggest that there is here a matter which is worth considering. With the greatest respect to the noble Lord, Lord Lloyd of Kilgerran, I think the Amendment should be in Section 8(1) rather than Section 9, which is where he has sought to put it. The position which arises is this. Under Section 8, if there is a provision as to two arbitrators being appointed by each of the parties, then there is a requirement that they appoint an umpire, and once you have appointed an umpire you have added to the cost. What in fact happens in maritime arbitrations is that arbitrators appointed by the parties not infrequently agree, and then they do not in fact appoint an umpire, but the statute requires them to do so. It is a waste of time and money. I do not think this can possibly be a controversial Amendment. It has been drawn to my attention by the London maritime arbitrators, and I would venture to suggest that that is worth while considering, although I think the Amendment should be in Section 8(1) rather than in Section 9.
Lord DENNING: I would agree. We have had many cases in which the two arbitrators have agreed and where there has been an umpire who has had to be paid although there has been no need to call on him. It is a very good thing to have this Amendment, or words to its effect.
The LORD CHANCELLOR: There is apparently a fear that the new Section 9 in the Arbitration Act might result in two arbitrators appointed by the parties having to appoint an umpire in spite of the fact that they have agreed to an award. That, of course, is an absurdity, and I am certainly willing to look to see whether the words in the Amendment deal with it.
Lord LLOYD of KILGERRAN: I am very much obliged. In those circumstances, I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
6.58 p.m.
Lord HACKING moved Lord HACKING moved Amendment No. 26:
After Clause 5, insert the following new clause:
Amendment of s. 23(1) of principal Act
(". In section 23(1) of the principal Act for the words" misconducted himself or the proceedings "there shall be substituted the words" to the prejudice of one or more of the parties acted dishonestly or in gross breach of the rules of natural justice".").
The noble Lord said: I have already addressed the Committee to a certain extent on this new clause, and your Lordships will know the relationship between this clause and the earlier Amendments that I moved concerning Clause 3 of the Bill. I will not repeat the arguments that I presented then. This would be an essential clause if your Lordships were to accept Amendment No. 13—and I say that looking to the future rather than to the past—at Report stage. Section 23 of the 1950 Act, which, as I have already reminded your Lordships, consolidated earlier Arbitration Acts, is a section of the Act which has always caused difficulty, if not offence, to arbitrators. Your Lordships will be mindful of paragraph 67 of the Commercial Court Committee's report, and indeed mindful, no doubt out of personal experience, of

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the number of occasions when a judge has had to deal with applications under this section, principally applications in which the allegation was that the arbitrator had misconducted the proceedings. The whole terminology of misconduct did not come into arbitration law until, I think, 1899, and in so far as the concept of misconducting proceedings is concerned, that did not come into our law until the 1934 Act.
It is my submission to this Committee that those words are unfortunate, inappropriate and unnecessary now, at this stage of our law. It is also my submission to your Lordships, therefore, not only in the case of international contracts but of all arbitration law, that the time has come for this clause to be replaced by a clause on the lines of that which I have drafted in Amendments Nos. 26 and 27. Those are the circumstances in which an arbitrator should be removed; those rare circumstances when an arbitrator has been either dishonest or in gross breach of the rules of natural justice and, as I added earlier on in Committee, has acted in excess of his authority.
Even though the circumstances are very rare in which it will ever be necessary to use and make an application under a section such as I have proposed in these Amendments, clearly the law of England must have such a section in the Act, it must have that as part of it, and I suggest to your Lordships that this is the appropriate way of doing it. But, as with all my other Amendments, of course, before I go any further I undertake to withdraw it, because it is obviously a matter for consideration; but what I am anxious to hear from the noble and learned Lord is that this, too, is a matter which will be considered. It creates real difficulties. The other factor that I hope the noble and learned Lord will bear in mind is that Section 23 as currently drafted provides a route in both domestic and international arbitration as in all arbitration conducted in England, a route for abuse and a route that in my submission to your Lordships' Committee should be stopped.
Lord HAILSHAM of SAINT MARY-LEBONE: May I support not the Amendment but some of the things that have been said in support of the Amendment by the noble Lord, Lord Hacking. I
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think that the Donaldson Committee in paragraph 67 of their report have drawn attention to a matter which has caused needless offence to the commercial world. The term "misconduct" has a very special sense in relation to arbitrations which has developed with the years and which covers a number of things which would not be called misconduct, for intance, by the right reverend Prelate who has been such an attentive and welcome Member of this Committee, though not a particularly eloquent one so far. At any rate the word "misconduct" is an offensive one. The fact of the new procedure under Clauses 1 and 2 of the Bill I think justifies a reconsideration of the language which defines the circumstances in which an arbitrator may be removed.
I do not myself take the view that only "dishonesty" is good enough, because "gross incompetence" may not be dishonest but circumstances may come in which you want to get rid of an arbitrator because he is no good. That is not dishonest; nor is it a gross breach of natural justice. I must add that I do not like the word "gross" among the words of an Act of Parliament because even when we have had discussion in the courts from time to time in connection with the meaning of "gross negligence", it has been said that the word simply means "negligence" with a vituperative epithet added. It is somewhat lacking in precision and probably the noble Lord, Lord Hacking, would be the first to admit that this is a ballon d'essai rather than an attempt at Parliamentary draftsmanship. I think that the noble and learned Lord the Lord Chancellor would be gratifying not only the noble Lord, Lord Hacking, but others and the commercial world in general if he gave some gracious assurance in relation to paragraph 67 of the report.
The LORD CHANCELLOR: The word "misconduct" in our understanding of it connotes some moral obloquy. I understand the feelings in the commercial world, where this is brought in to deal with perhaps procedural errors, that to use that phrase in that connection is wholly inappropriate. All that I think that I can say at this stage is that I will look at this. I am not enamoured of the language of the Amendment but I am willing to look at it in consultation with others before or at the Report stage.
Lord HACKING: I say nothing, but beg leave to withdraw.
Amendment, by leave, withdrawn.
[Amendment No. 27 not moved.]
7.3 p.m.
Lord HACKING Lord HACKING moved Amendment No. 28:
After Clause 5, insert the following new clause:
Amendment of principal Act relating to appointment of new arbitrators
(". At the end of section 23 of the principal Act there shall be added the following:
"Where an Arbitrator or Umpire has been removed under subsection 23(1) above, any party to the reference may serve on the other parties to the reference, a written notice to appoint, or, as the case may be, to concur in appointing, an Arbitrator or Umpire in place of the Arbitrator or Umpire so removed, and if the appointment is not made within seven clear days after the service of the notice, the High Court or a Judge thereof may, on application by the party who gave the notice, appoint an Arbitrator or Umpire who shall have the like powers to act within the reference and make an award as had the Arbitrator or Umpire who has been removed.".").
The noble Lord said: Before I withdraw this Amendment, may I mention that I drafted this Amendment within the ambit of the new clause that I am proposing to replace Section 23. It is more appropriate to have the appointment of another arbitrator under terms (which other terms come from other clauses of this Bill) than to use the terms used in Section 25 of the Arbitration Act 1950. I beg to move.
The LORD CHANCELLOR: The Amendment allowing the court to replace an arbitrator removed for misconduct is, I am advised, unnecessary. Section 25 of the 1950 Act deals with the matter and gives the court adequate powers to replace a removed arbitrator. I do not know whether that covers the point that the noble Lord has made or not; but if he is still reverting to the use of the concept of misconduct in this connection, then, as I have said, I am willing to look at that again in other connections.
Lord HACKING: I will leave the matter there. I have already mentioned to the noble and learned Lord that I believe these words are better than those in Section 25. That is the reason why I drafted them. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord HACKING Lord HACKING moved Amendment No. 29:
After Clause 5, insert the following new clause:
Amendment of s. 1(4) of Arbitration Act 1975
(". In subsection 1(4) Arbitration Act 1975 after "is a party" there shall be added the words "to the proceedings".").
The noble Lord said: I shall briefly address the Committee on Amendments 29 and 30. The noble and learned Lord has already replied to my Amendment No. 17 which is related to these Amendments and he has left me in a position of suspension. I do not know the noble and learned Lord's mind, but I am happy to remain in suspension until the Report stage or until such time as he is able to take me out of it. I beg to move.
The LORD CHANCELLOR: I hope that the noble Lord will not suffer unduly in a state that I prefer to call suspended animation rather than suspension.
Amendment, by leave, withdrawn.
[Amendment 30 not moved.]
Remaining clauses agreed to.
House resumed: Bill reported with an Amendment.

UNIDENTIFIED FLYING OBJECTS
7.7 p.m.
The Earl of CLANCARTY The Earl of CLANCARTY rose to call attention to the increasing number of sightings and landings on a worldwide scale of unidentified flying objects (UFOs), and to the need for an intra-governmental study of UFOs; and to move for Papers. The noble Earl said: It is with much pleasure that I introduce this debate this evening about unidentified flying objects—known more briefly as UFOs and sometimes as flying saucers. I understand that this is the first time the subject of UFOs has been debated in your Lordships' House, so that this is indeed a unique occasion. Before proceeding further I think I should declare an interest, in that I have written a number of books about UFOs. I am grateful to those noble Lords who are going to follow me in this debate and I am sure that it will be a most stimulating discussion.
Before speaking about the need for an intra-governmental study of UFOs, which is the basis of my Motion being debated today, I think it advisable to give your Lordships some background to this fascinating subject of UFOs. I shall briefly cover a little history, the classes of witnesses, the characteristics of UFOs and some important sightings, and then I shall deal with the vital subject of the attitude of governments to these important phenomena.
Although UFOs have come to the fore since the end of the last World War, there are reports of them all through history. Among the papers of the late Professor Alberto Tulli, former director of the Egyptian Museum at the Vatican, was found one of the earliest known records of a fleet of flying saucers. It was written on papryus long ago in ancient Egypt—actually, it was at the time of Thutmose III, circa 1504 to 1450 BC, who, with his army witnessed the sighting of what we today would call UFOs.
Now, I am not going to bore your Lordships with accounts of UFOs in every century because I want to get on to the very interesting things happening today. In modern times things began to happen during World War II when both allied and German pilots saw strange circular lights around their planes. We called them Foo fighters. Both Allied and German pilots thought that they were secret weapons of the other side. After the war, on 24th June 1947, an American called Kenneth Arnold, piloting his own plane, was on a mercy mission trying to find another aircraft that had crashed somewhere in the Cascade Mountains in the State of Washington. Suddenly, he spotted nine gleaming objects, crescent shaped, flying in a zigzag fashion between his plane and the mountains. He managed to calculate their speed because he was able to get a fix—I think that is the technical term—between two mountain peaks, Rainier and Baker. It appeared that the objects were travelling at some 1,400 miles per hour—a very fast speed in 1947.
Some time after landing, Arnold, in answer to a question from the Press, described the motion of the flying objects as being like saucers skimming over water. Next day the Press headlined them as "flying saucers". Since Arnold's sighting
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in 1947, millions of people all over the world have seen the UFOs. This brings me to the class of witnesses that see UFOs. It is true that occasionally one gets the odd crank or hoaxer; but the majority of witnesses are sincere people. Then again many witnesses are pilots, police officers, coastguards, radar operators—in short, trained observers. Many astronauts have seen UFOs. Many people ask me: "Why is it that astronomers do not see them?" The answer is that they do. In a letter published in the Daily Telegraph on 4th January last year, I listed eight well-known astronomers who had seen UFOs, including Dr. Clyde Tombaugh, discoverer of the planet Pluto.
Now a few words, my Lords, about the UFOs themselves. Actually, the name "flying saucer" given by the Press in 1947 was a misnomer as they come in all sorts of shapes and sizes: cigar, oval, disc, sphere, doughnut, crescent and tadpole shaped. You name it, my Lords, the list is endless. I should like to say a few words about their characteristics. UFOs often have very bright lights and sometimes when in flight change colours all the way through the colour spectrum. Sometimes the light from a UFO is so intense that its shape is obscured from view. This light energy is so powerful that witnesses have been burned on the face and hands if in too close a proximity to a UFO.
Another characteristic of the UFOs is electrical interference with various machines. UFOs have been notorious for stopping cars at short range. The driver will hear his engine splutter and it stops running. Besides cars, many other machines have been affected, including aircraft, motor cycles, buses, lorries and tractors. UFOs are said to be the cause of some of the power blackouts in the USA, Mexico and other countries. Indeed, UFOs have been seen flying along power lines in the USA just before black-outs. Furthermore, I have a picture on the wall of my study at home of a UFO doing just that!
Now, I will mention one or two of the more impressive sightings since the war. On 29th June, 1954, a BO AC Boeing stratocruiser "Centaurus" had taken off from New York for London. Dinner had been served. The time was just after sunset when the skipper, Captain James

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Howard, first sighted the UFOs. Some of the passengers by then were asleep. There was one big object with six smaller ones. Captain Howard pointed them out to his co-pilot, First Officer Lee Boyd, who flew with the famous Pathfinder force in World War II. The objects were five miles from the "Centaurus". They stayed parallel with the aircraft for 80 miles. From time to time the big object appeared to change shape. The radio officer checked with Goose Bay, Labrador, to see if any other aircraft were in the area and was told, No. Goose Bay sent a fighter up to investigate. All the crew saw the objects. Just before the fighter arrived, the objects began to disappear, and it seemed that the smaller ones went inside the large one. Altogether, a crew of eight and 14 of the 51 passengers saw the UFOs.
In November 1975, at Strategic Air Command Bases in Michigan, Montana, North Dakota and Maine, a number of UFOs were sighted over a 13 day period. Several were hovering near nuclear weapons storage areas. When interceptor planes were sent up to investigate, the UFOs dimmed their lights and became invisible. One of the most amazing UFO incidents ever occurred in September, 1976. A report of this event written by Geoffrey Levy appeared in the Daily Express on 27th February, last year. I shall try and give you his account in my own words. A very large glowing object was seen over Teheran, Iran. Hundreds of witnesses telephoned the authorities. At 1.30 a.m. the Iranian Air Force scrambled a Phantom jet to investigate the UFO which was some 70 miles away. As the jet reached about half the distance to the UFO, all of the Iranian plane's communications and instrument systems malfunctioned. The pilot had no alternative but to return to base.
A second Phantom jet took off flying faster than the speed of sound. The UFO began to move at a very fast speed indeed, and soon outpaced the jet. Then, an extraordinary thing happened. Suddenly a second smaller UFO came out of the big one, and headed straight for the jet. The jet pilot tried to release an AIM-9 air-to-air missile at the glowing object. No success at all. The weapons control panel was not working and all electronic systems were out of action. There was only one thing for the pilot to do, and that
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was to make his escape. He put his plane in to a dive. Then something extraordinary happened. The second UFO turned around and went back inside the "mother ship". The jet pilot's instruments started working again. So once more he tried to pursue the UFO, but it moved away too rapidly, and so the Phantom jet returned to base.
There are literally vast numbers of these astounding reports. Indeed, my Lords, this worldwide UFO invasion of every country's air space is of growingimportance and therefore I suggest that Parliament keeps a continuous watch on the situation. I have thought of one way of doing this. In the same way that there is a House of Lords Defence Study Group ably chaired by the noble Lord, Lord Shinwell, perhaps we could have a House of Lords UFO Study Group to meet periodically. If any of your Lordships are interested, please let me know!
I should like to touch on the attitudes of Governments towards this subject and to stress the need for an intra-govern-mental study, which is the object of my Motion. I am only going to talk about four Governments, your Lordships will probably be pleased to know. First, let us take a look at the United States. I think that one of the reasons for "playing down" UFOs some years ago in the United States was the fear of panic among the public. This was partly based on an actual panic that did occur in 1938 due to a very realistic broadcast by Orson Welles of H. G. Wells' War of the Worlds. Thousands of people left their homes.
However, after the war, the United States Air Force investigated pilots' reports without any debunking. Then the Central Intelligence Agency, the CIA, stepped in. The CIA controls the intelligence departments of the United States military services. They ordered the United States Air Force to clamp down on UFO reports. That was, I believe in 1953 and it has been going on ever since. Pilots who reported seeing UFOs were ridiculed, and after a time other pilots did not report them for fear of damaging their reputation. We had high hopes during President Carter's election campaign that there was a strong possibility of a breakthrough to the truth about UFOs. He disclosed during his campaign that he had seen a UFO a few years previously in Georgia, and he added that if he got into

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the White House he would release to the public all the UFO information in the Pentagon. Unfortunately, that election pledge has not been fulfilled.
What has been happening in the Soviet Union? Probably the leading ufologist in that country is Dr. Felix Zigel, Professor of Higher Mathematics and Astronomy at the Moscow Aeronautical Institute. For a long time he had been trying to form a big UFO research group on a worldwide scale. Many UFOs have been seen over the Soviet Union. In July, August, September and October 1967, for instance, giant space ships were seen over various parts of the USSR by astronomers and other witnesses. On 10th November of that year, it was announced that there was to be a full investigation of UFOs. This was announced on Russian television. The operation was to be headed by Major General Anatoly Stolyerov, with Dr. Zigel as Number Two. Thousands of UFO cases were to be analysed by scientists and Soviet Air Force officers. However, the Russian Academy for Sciences came down hard on the new UFO group and on 27th February, 1968, Pravda published the official attitude of the authorities, and the cover-up was on.
There is, however, one country which can be relied upon to take a line independent from others over many matters, and UFOs proved to be no exception. In February, 1974, the then French Minister of Defence, M. Robert Galley, was interviewed entirely about UFOs on France-Inter radio station. The interviewer was Jean Claude-Bourret. At the time there was tremendous publicity in France, but for some reason our newspapers did not even mention the broadcast. M. Galley stated that the UFOs were real but admitted that it was not known where they came from. He said that since 1954, there had been a unit in the French Ministry of Defence collecting UFO reports. Some of this material was sent to the National Centre for Space Studies in Toulouse, the French equivalent of the American NASA. In this Centre there was also a unit—a scientific one—studying both UFO sighting and landing reports.
A little over a year ago, I received some information that this particular unit was under government sponsorships and so I put down a Question for Written Answer.
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The noble Lord, Lord Donaldson of Kingsbridge, kindly confirmed to me in his reply that the GEPAN unit—those are the initials of the group—had been set up under the French Ministry of Industry, Commerce and Artisans at the centre in Toulouse. M. Galley also added that the gendarmerie were playing a very important part in UFO investigations, questioning witnesses and examining burnt circular marks on the ground where UFOs had landed, or were alleged to have landed. So the French have been taking it all seriously and keeping their own people informed. Nobody panicked and people did not rush like lemmings into the sea.
Is it not time that Her Majesty's Government informed our people of what they know about UFOs? The UFOs have been coming in increasing numbers for 30 years since the war, and I think it is time our people were told the truth. We have not been invaded from outer space. Most incidents have not been hostile. Indeed it is us, the earthlings, who have fired on them. There may have been a few allegedly hostile incidents, but I maintain that if there is a disturbing element in a phenomenon which is pretty friendly on the whole, we should be told the truth. Whatever the truth is, I am sure that an informed public is a prepared one. Another thing: it is on record that both sighting and landing reports are increasing all the time. Just suppose the "ufonauts" decided to make mass landings tomorrow in this country—there could well be panic here, because our people have not been prepared.
The noble Lord, Lord Strabolgi, is to reply for Her Majesty's Government at the end of this debate. I should like to ask the noble Lord whether he will contact his right honourable friend the Minister of Defence about the possibility of giving a broadcast interview about UFOs, as his counterpart across the Channel did in 1974. That would go a long way to discredit the view held by a lot of people in this country that there is a cover-up here and that in some way we are playing along with the United States over this. I should also like to see an intra-governmental study of the UFOs. All Governments should get together and pool their knowledge about UFOs, and the results should be passed on to the

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public. Finally, I should like to thank your Lordships for your kind attention, and I beg to move for Papers.
7.29 p.m.
Lord TREFGARNE: My Lords, I am bound to say that I face making this speech with some trepidation. I had wondered whether we could justify the holding of what is in effect a full debate on this matter; but having seen the audience we have tonight, and indeed having heard the speech of the noble Earl, Lord Clancarty, I can see that that sort of thought would not go down too well. I may well be shouted down before I finish anyway, but let us see if we can avoid that right at the start.
The noble Earl asked us in his Motion to support a proposal particularly for an intra-governmental study—I suppose he means, as indeed he has described, between Governments. No doubt he would wish to see the co-operation of the United States. But I should not want to support that kind of proposal. I do not think the time has yet come when we can view this matter with sufficient certainty to justify the expenditure of public money on it.
I certainly agree that the numerous voluntary bodies, including those with which the noble Earl is associated, ought to be encouraged, and indeed I should not be opposed to informal links between those bodies—or, at least the responsible ones—and others, such as the Ministry of Defence. But I am ashamed to say, in the midst of all this faith, that I am not myself a believer in UFOs described, as I believe they are, as objects or vehicles from another planet or from another universe.
I have some 2,500 hours as a pilot. I have flown across the Atlantic a few times as a pilot. But, unlike with the aircraft reported by the noble Earl, I have never seen one. I presume—indeed, I believe—that a good many of the sightings can be explained by logical scientific theory and I am, so far at least, convinced that those that cannot so far be so explained could be, if our knowledge were more advanced or if we had more information about the sightings in question. It is these unexplained sightings upon which ufologists rely so heavily in asking us to accept their theories. But I believe,
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as I say, that these unexplained sightings could be—and, indeed, would be—explained, if we had more knowledge about them; for example, better photographs. How many clear photographs of UFOs have your Lordships seen? All I have seen are hazy, fudgy photographs which could, or could not, be genuine.
Ufologists often rely upon radar information for evidence in their case, but I must tell your Lordships that radar plays more tricks even than the camera, and I do not believe that radar information, in this context, is valid. For example, the recent sightings in New Zealand, which were widely reported just before Christmas, including some rather strange-looking photographs which appeared on television, were also said to have been confirmed by radar information which was available to the aircraft in question. But I know from my own experience that radar is frequently used, and, indeed, is so designed, for detecting anomalies in atmospheric conditions and in weather patterns, and I am not persuaded that radar is a valid supporting argument in this case.
Since time immemorial, man has ascribed those phenomena that he could not explain to some supernatural or extraterrestrial agents. Eventually, as scientific wisdom has advanced, these phenomena are understood more fully, until now, today, no one takes witchcraft seriously and there are no fairies at the bottom of my garden. It is not so long ago that magnetism, as it occurs naturally in the form of lodestone, was thought to be the work of the Devil, as indeed were some of the hot springs found in Iceland, Australia and elsewhere.
An eclipse of the sun or the moon, now fully understood, was once thought to be an expression of the Almighty's displeasure. Perhaps this derives from the description in the Gospels of the events following the Crucifixion. I recall the 44th and 45th verses of the 23rd chapter of St. Luke's Gospel, and I shall read it if I may:
"And it was about the sixth hour, and there was a darkness over all the earth until the ninth hour.
And the sun was darkened, and the veil of the temple was rent in the midst".
St. Matthew described it rather well also:
"And, behold, the veil of the temple was rent in twain from the top to the bottom; and the earth did quake, and the rocks rent".

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No one would now seriously doubt that those happenings were, in fact, an eclipse of the sun and an earthquake respectively. I would not deny that there may have been divine intervention in respect of the timing of those events, but certainly I would say that they were caused by terrestrial forces which we now fully understand.
Without wishing to pre-empt anything that the right reverend Prelate the Bishop of Norwich may say, perhaps I may pose the question as to whether the existence of another race or races outside our universe is compatible with our Christian principles. I speak only as a simple member of the Christian faith, but I think I believe that He loves us and us alone. I am not aware that there is any suggestion in the words of Christ or in the words of the Almighty, as recorded that we must share his goodness with people from another universe. There is no suggestion that there is, indeed, any other such people. I acknowledge, however, that, for example, the works of Darwin were once thought incompatible with the Christian faith, and so perhaps my view of the credibility of these things, from a Christian point of view, is open to correction. Perhaps the right reverend Prelate will be able to help us when he comes to speak.
I emphasise that I do not for a moment doubt the sincerity and conviction of those who believe in these objects, who believe that they are visitors from another universe or, at least, some supernatural force beyond our reason. I simply do not happen to agree with them. I certainly do not agree with the learned professor, speaking on the radio the other morning, who said: "Anyone who believes in UFOs is a loony". But as for the suggestion that an international study group should be set up, I do not think that I could countenance that as a serious proposal at this time. I emphasise, however, that I would be happy to encourage informal links between, for example, the RAF and the very worthy groups who believe differently from the way I do.
Before I sit down, I should just like to say how much I am looking forward to the maiden speech of my noble friend Lord Oxfuird, who is to speak later in the debate. His name has, of course,
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appeared on the Order Paper before today, and I hope that it appears on the list of speakers a good many times in the future. The noble Earl, Lord Clancarty, has done us a service by bringing this matter forward, but I would counsel caution and care.
7.38 p.m.
The Earl of KIMBERLEY: My Lords, as the noble Lord, Lord Trefgarne, has said, the majority of noble Lords in this Chamber will be greatly indebted to the noble Earl, Lord Clancarty, for raising this fascinating and controversial subject this evening. Before I begin, perhaps I should say that I have an interest in it, because I am a director of a company which is to make an identified flying object—a thermo skyship, which is saucer shaped. I shall not get that muddled up. But in spite of sceptics, such as the noble Lord, Lord Wigg, the other day in a newspaper, and Sir Bernard Lovell from Jodrell Bank, who says that UFOs do not exist, we must agree that they do, because otherwise there would be no unidentified flying objects. Furthermore, we should not have throughout the world radio telescopes listening to try to pick up signals from intelligences in outer space.
As the noble Earl, Lord Clancarty, said, UFOs are not products of the 20th century imagination. They have been observed here for years—by the North American Indians, by the monks of Byland Abbey in 1290, who were terrified by the appearance of a huge silver disc. Right through history up to today, millions of people have seen UFOs, and I will go so far as to say that I am the first to admit that the very large majority of them can be explained as natural or man-made phenomena—meteorites, satellite debris, weather balloons, military flares, et cetera. But there are still many which are completely unexplained.
It has been reported that the United States and the USSR signed a pact in 1971 to swop UFO information, but the pact stated that they were to keep the rest of the world in the dark. I believe that the pact was signed so that neither super-Power would make mistakes about UFOs being atomic missiles. I am also led to understand that quite recently the three United States balloonists who crossed the Atlantic were followed for up to 12

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hours by UFOs but were ordered by United States Government agents not to discuss them.
We know that war in space, once a figment of the imagination and a subject much beloved by science fiction writers, is very nearly a fact now. Both super-Powers have, or will have, killer satellites and laser beams operating in space. May I ask the noble Lord, Lord Strabolgi, whether he agrees that this may perhaps be one of the reasons for the reticence of the United States towards being more forthcoming about their UFO information?
In 1977, Sir Eric Gairy, the Prime Minister of Grenada, backed by President Carter, wanted the United Nations to declare 1978 as the Year of the UFO. They both failed. However, the proposition was finally tabled for 29th September 1978. This proposition was postponed through October, November and December. It was finally threatened by the veto of the United States and Russia. Hopefully, however, it will now be considered in June of this year. I believe that at last there has been a unanimous vote that the proposition will not be rejected.
As the noble Lord, Lord Trefgarne, said, I agree entirely that we do not understand many of these unidentified flying objects because of our lack of knowledge. UFOs defy worldly logic. Even if one accepts that there may be life elsewhere in our galaxy, or even in other galaxies, the human mind cannot begin to comprehend UFO characteristics: their propulsion, their sudden appearance, their disapperance, their great speeds, their silence, their manoeuvres, their apparent anti-gravity, their changing shapes. They defy our present knowledge and laws of matter. Of course, this naturally upsets our earthly scientists because it is outside their earthly terms of reference and knowledge, but to try to present UFOs in a more mundane light let us briefly examine the last 30 years.
In 1947, the United States Air Force started an official project called "SIGN". By 1949, 243 reports of UFOs had been submitted, but no conclusive evidence came to the public's knowledge from this project. Project Blue Book was then born, and its findings produced the same conclusions. So it appears that the United States Air Force concern was
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threefold: first, to see whether UFOs were a threat to the security of the United States; secondly, to see whether UFOs could contribute technical and scientific knowledge; and, thirdly, to explain to the general American public what was going on in their air space. However, as UFOs appeared to offer no threat to security, Project Blue Book became just a public relations exercise to not inform the public, despite numerous unidentified radar trackings and close approaches made by UFOs to both civil and military aircraft. The military staff in America said that, as there was no threat or danger, they were not interested in pursuing the subject any further. So Project Blue Book was abandoned.
This may be good enough to fob off the American public, but it is not good enough to fob off the British public. Too many people—ordinary people as well as famous people—have seen UFOs. Ten Governments now openly admit that UFOs exist and are real: France, Norway, Sweden, Brazil, the Argentine, Venezuela, Mexico, the Philippines, Peru and Grenada. Other Governments know that UFOs exist but do not admit it publicly. President Carter has personally seen a UFO.
Let me give a small sample of prominent, scientific and sane people who have seen UFOs or believe, through evidence, that they exist: Commander Robert McLaughlin, United States Navy missile expert; John McCormack, Speaker, United States House of Representatives; the late Air Chief Marshall Lord Dowding; the late President Truman; Dr. Stanton Friedman, United States Nuclear Physicist; Ed Mitchell, Apollo astronaut; Gordon Cooper, Apollo astronaut; Dr. Allen Hynek, Professor of Astronomy, North West University; Walter Cronkite, United States newscaster; Neil Armstrong, first man on the moon; and, lastly, Dr. Felix Zigel, Professor of Higher Mathematics and Astronomy, Moscow Aeronautical Institute. Can any of your Lordships sincerely believe that these aforementioned people all suffer either from hallucinations or believe in fairy stories?
Despite the United States and the USSR embargo on UFO information, funnily enough the Russians appear more inclined to think that UFOs have extra-terrestrial origins. Further, some

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Russian scientists see a connection between UFOs and paranormal phenomena. In fact, there is an ever-growing belief that space travel has a connection with telepathy and telekinesis, because cosmonauts in orbit have discovered through scientific tests that they have an increased level of telepathic communication. If we assume that extra-terrestrial intelligences who travel to earth are more advanced than we are—and in that respect I think that they must be—then UFOs could be tele-kinetic phenomena: in other words, controlled by thought pulses.
Since thought is not subject to the physical limitations of matter, then velocities in excess of the speed of light would be possible. It is interesting to me that in 1968 I was speaking to Sir Frank Whittle, the inventor of the jet engine and an eminent scientist, about interstellar space travel. It was just before the Americans had landed on the moon. Sir Frank said that he thought that it would be perfectly feasible one day to go to the stars, as he did not believe in Einstein's theory of relativity. A remark like this, coming from an ordinary man like myself, would probably, quite rightly, be laughed at. But one can certainly not laugh when a remark like that is made by such an eminent person as Sir Frank Whittle.
What is interesting is that two years later, in 1970, Dr. Fomin, a Russian doctor of telekinesis and automation, argued that, to traverse interstellar space, we would have to grapple with physical laws different from those we know at present and which so far are only theory. However, these principles have been established in mathematical formulae. Therefore, Einstein's concept of time and space possibly may not apply.
In 1976, President Carter, in a preelection pledge stated:
"If I become President, I'll make every piece of information this country has about UFO sitings available to the public and the scientists. I am convinced that UFOs exist. I have seen them".
This statement was a breakthrough against the United States cover-up as it admitted that not all UFO information is, or has been, available to the American public. For instance, do your Lordships' know that three former United States Presidents before their election proclaimed their belief in UFOs? They were President
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Eisenhower, President Lyndon Johnson and President Ford, who I agree was appointed. During their presidencies they became completely silent and did not fulfil their promises. Why? I strongly suspect that Her Majesty's Government know why, and if they do know, why then, they should inform your Lordships.
I believe that there is much material evidence on UFOs in the national archives in the United States of America which has never been made known to the public, and even President Carter is finding it difficult to carry out his pre-election pledge. I am led to believe that he has tried unsuccessfully with NASA to do UFO research. The answer he has been given is "No, due to expense". That research which NASA has been required to do would cost a few million dollars, but a few million dollars is only the cost of two astronauts' suits. Therefore it appears obvious that for some reason there is a cover-up in the United States.
We in the United Kingdom are in a strange position because we have had thousands of sightings, yet I am led to understand that the Ministry of Defence have only two clerks working on UFO sightings. Further, they claim that they are not spending any money on UFO research. They appear reluctant to investigate publicly connected phenomena such as alleged messages from outer space. They say that this is the responsibility of the BBC and the Post Office. Can the Minister say whether the BBC and the Post Office know that they have this responsibility?
Further, when the noble Lord, Lord Strabolgi, replies to the debate will he confirm that Her Majesty's Government might be sympathetic and give support to the efforts of President Carter, Dr. Kurt Waldheim and Sir Eric Gairy to get the United Nations to debate the resolution
"to discover the origin, nature and intent of UFOs".
The noble Earl, Lord Clancarty, said that we should set up a Parliamentary UFO group to meet a few times a year. I would concur with him. Further, I think the general public should be encouraged to come forward with evidence. Many do not, for fear of being ridiculed. Let them be open; let them be honest; let them badger their Member of Parliament and the Government to be open

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with them and to cease what I am convinced is a cover-up here. The people of Britain have a right to know all that the Governments, not only of this country but others throughout the world, know about UFOs.
Before I sit down I ask the noble Lord, Lord Strabolgi, whether he will tell your Lordships why the Ministry of Defence has not informed the public of 18 contacts from 23rd May 1977 up to 22nd February 1978, numbered K 5634 to K 5651 inclusive. Further, what do the classification numbers 5, 3, 20, 16, 6, 8 and 23 mean for these 18 contacts? Moreover, does the noble Lord realise that 13 out of these 18 contacts were seen during the hours of daylight? There need be no fear that the people of this country may panic, since if UFOs are extra-terrestrial their intelligence and knowledge is far ahead of our primitive understanding. My Lords, I heartily support the Motion moved by the noble Earl, Lord Clancarty, for an intra-governmental body to research UFOs. Let Her Majesty's Government give an example to the rest of the world by being the leader in this investigation.
7.55 p.m.
The Viscount of OXFUIRD: My Lords, first I should like to thank the noble Earl, Lord Clancarty, for initiating this extremely interesting debate. Of course it is really much above my head, but I have enjoyed it already and I hope I shall enjoy it for the rest of the evening. To me, the first question really is, where have these UFOs come from? There could be a great many answers to that, but in the first place we can look at our own planet and there is no doubt that there is very little chance of their having come from anything in our own solar system. In fact I think I should quote a few words from Professor Kopal's recent book on the solar system which finishes up, after lamenting the fact of what they found out about Mars, by saying:
"The hope of finding life on Mars has evaporated, together with the canals, into the thin Martian air. It is now almost certain that as living beings we are alone in the solar system".
I think that is a very good example of the fact that we cannot look to the solar system to discover where these things come from, if they come from anywhere.
The next possibility which has been paraded is that they might come from the sister sun in our own galaxy. Of course
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that is quite possible if you believe in the now accepted—or shall we say more popular—theory of the "big bang" for the start of the universe. Undoubtedly, our sun and its solar system must have been shared with many others at that moment when we suddenly appeared. They even give dates for it now; they talk about 5,000 million years ago, which fits in with our own geological background.
There are many stars which have a solar system which might well be in the same position; they might have one planet, as we have, as good as ours and with the same amount of knowledge. On the other hand, we must accept the fact, as the noble Earl, Lord Kimberley, was saying, that it would have to be something which we have not been able to attain on this earth and something that we do not understand on this earth, because if one wanted to get, say, from A Centauri, which is our nearest star, to here, it would take half a lifetime. Even travelling faster than anything we have ever produced in the way of space ships in this world of ours, the distance is 250,000 times the distance that we are from our sun, which is 93 million miles. It is a distance which would certainly take half a lifetime, even at 100,000 miles an hour. So I do not think it would be reasonable to look at another solar system, say A Centauri, which is very near, being only roughly 4¼ light years from us, which is not very much in space. There is of course the possibility that the UFOs may come from some secret effort on this earth. This I very much doubt because one could not keep a thing like that secret for 20 or 30 years. I very much doubt the possibility of its being on this earth.
So we get an entirely different picture. We have progressed in the last 30 years both in cosmology and in many other sciences, more than we have ever done before, certainly in my lifetime. I think the feeling really is that we are now on the edge of something in the universe which we do not understand yet. However, if we are going to understand the UFO question, we have got to move to the extent of understanding something beyond cosmology today. From our point of view, what we are looking at is the tip of the iceberg. We know perfectly well that we get information, we put it into computers and come out at the other

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end with a new model. Then in five or 10 years the model is thrown away and we are back with the one answer which applies, unfortunately, to so much of science today; we just do not know. But one hopes that it will be possible.
If the suggestion of the noble Earl, Lord Clancarty, backed by the noble Earl, Lord Kimberley, is adopted—that is, that we should have a worldwide organisation—to look into this matter and to go further than we have ever done, why should we not be the leaders of it? It would twist science back into a new field. Is it possible that there is not merely another solar system in our galaxy, but that somewhere in one of the many galaxies in the expanding universe there are other places where these things could come from with their amazingly vast scientific knowledge? I personally see no valid reason why we must accept that at this time, but we should start working for it. If we had a worldwide organisation to try to control that, perhaps we should be able to solve many of the problems which face us today in the universe; and nothing could be better. Then we might possibly find the answer to our UFOs.
8.2 p.m.
Lord DAVIES of LEEK: My Lords, as the lone figure on this side of the House who has dared to come in on this debate, may I say that it has been a pleasure to listen to the noble Viscount, Lord Oxfuird, who has just spoken and, who has, in his own inimitable way, as a result of his military and other experience over the years, brought a certain depth and profundity to the request for some investigation into the phenomenon with which mankind is presented today. Consequently, with all sincerity I can say that I hope this House will have the pleasure of listening to the noble Viscount on many occasions adding his voice to our deliberations, and I thank him for what he has said.
Now I want to attack the problem in my own way. First, I want to ask what are we talking about. Secondly, after expressing my gratitude for the maiden Speech, I would also express thanks to the noble Earl, Lord Clancarty, who initiated this debate to call attention to the increasing number of sightings and
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landings on a worldwide scale of unidentified flying objects. There is no argument about that. Do not let the noble Earl be a little bit sad because of dandy intellectualism that may approach this debate. The world oozes with intellectuality and at the present moment it is completely lacking in wisdom. Let us remember what I have said many times here, and it was my old mother who taught me this; she made me go to Sunday school and quote the text. She would say in Welsh: "Always remember, my boy, Solomon did not ask for cleverness, he asked for wisdom". There is a vast difference between the dandy intellectualism of some of the reporters on newspapers' approach to this problem and the wise approach that we have just heard in this maiden speech. Let us anchor that down. What else does the noble Earl ask for. He says on a worldwide scale and that there is need for intergovernmental study. I will add to it from the other side of the House that the expense would be so small that we should not neglect this.
Anybody who knows something about laser beams—and I saw in a laboratory in Switzerland for the first time the effect of a laser beam—knows it would be quite possible to throw on to that table now an identified or unidentified object that would look palpable, like Macbeth's dagger. Your Lordships remember the famous dagger scene:
"Is this a dagger I see before me
The handle toward my hand? …
In form as palpable
As this which now I draw".
We could with a laser beam throw a dagger that would look as palpable on to that table. There may be an understanding of the power of the laser and its effect existing in some kind of technology that is beyond the dimension in which we can work. We have been looking in mathematics for the fifth and even the sixth dimension.
I had better pick up my notes, lest we be here a long time. Noble Lords need not worry; so much has been quoted that it saves me a lot of quotation. I want to ask the 64,000 dollar question. Do noble Lords believe in angels? The answer from some will be, Yes, and yet they have never seen one. We are asking you to believe in the phenomena of flying saucers, seen by now by, I should think,

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probably millions, at any rate hundreds of thousands, without exaggeration. If we are studying hagiography—and I had better be careful—which is the history of the saints, if I came off my Welsh mountains and came down as a little boy of 12 and said I had seen the Virgin Mary springing out of a rock, some devout religious people would believe me; but if I said I had seen a flying saucer they would not believe me. What is the difference? It is a question that has to be asked; it is a philosophical question that has to be asked, when intellectuality, in its pompous way in its Sunday newspaper articles, is dealing in print with mysteries that Shakespeare described—to misquote him: "There is more in heaven and earth than is thought of in man's philosophy".
So this deserves not being pushed aside. Mark you, my Lords, I was told today outside those doors that an ambassador of 8 ft. 6 ins. with green feet and webbed feet as well had asked whether he could park his flying saucer in our car park, according to some of the telephones that have been ringing here today, because some people have treated the whole matter as a joke. I would, therefore, suggest to them that they read H. G. Wells' Final Essay. They can read it in half an hour. It is slim, it is cogent, it is succinct. He says the human mind is at the end of its tether.
There is a queerness in the cosmology of the world in which we are now living. Was Wells right? We certainly see mankind acting queer when petrol is short. He is snarling and worse than any being from outer space. The anthropological arrogance of 20th century man in his tinpot motor-cars riding through the streets of the lovely spaceship we call the world is heartbreaking. He has learnt nothing from his two wars; and if we had another, God help mankind, in view of the way that he has shown his greed, selfishness and tendency to panic as never before since the days of the Crusades. The greatest delusion in the history of man was the delusion of the Crusades. But men went on them after the days of Peter the Hermit with a fiery and fierce belief in what they were doing.
The noble Earl, Lord Clancarty, is an expert who has been written about. In fact, he dropped everything else to write about this matter. His seven books
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have been translated into many languages and I congratulate him. He has done a job of work and I hope that the debate initiated by the noble Earl will receive some attention. People tend to scoff, but it is only a few days ago that we were sitting at the piano, playing and knocking out—not with the brilliance of a top pianist—"We three kings of Orient are". What did they follow? They followed a star. What was that star? We have had an intellectual analysis of why after the Crucifixion darkness spread over the earth. The noble Lord, Lord Trefgarne—who has piloted from one side of the ocean to the other—made intellectual assumptions about earthquakes and eclipses. We are not completely sure how to explain eclipses or earthquakes, but we have a kind of Kepler mathematics that times things rather nicely. It is not quite enough to explain the earthquakes. It does not mean that the mystery of the UFOs is something that can be brushed aside, and it is an anthropological arrogance to so say.
Good heavens, I have been speaking for nine minutes! My Lords, do not worry, I shall be about another five. The House has heard a number of laudable people quoted. Ordinary little people have sometimes been laughed at, especially those concerned in the famous sighting at Pascagoula in Mississippi when one little fellow fainted when he saw a chap with one leg jumping towards him with a wizened and wrinkled face, with pointed ears, crab claws for hands, slits for eyes and holes beneath his nostrils—they would not be nostrils without holes, at least I should hope so! We shall not develop fantastic descriptions like that. We shall not go into those realms. But we must say that there are many people who have said that they have experienced these phenomena.
I agree that the New Zealand incident has reawakened man's interest and as the noble Lord, Lord Trefgarne, said, they were not clear pictures. However, I attended a scientific lecture in this noble building not so long ago, given by someone who believed faithfully in the Loch Ness monster. He showed us masses of films. He was a scientist and he swore that the Loch Ness monster existed. There is just as much case for the existence of flying saucers. We know that they exist. All we are saying is that they are

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unidentified. They may be terrestrial or celestial. We are asking Governments to find an answer and that is all that this debate is about. There is no magic, we have nothing up our sleeves, but let the world know what is going on.
This renewed interest poses many problems and there are many research organisations which are looking into the matter and which know that they exist, but I shall not bore the House by going into them now. Let us ask a couple of questions. How can a flying saucer fly faster than sound and not create a supersonic boom? What is it? Secondly, have we the right to assume that we alone are in the universe? This anthropomorphic view of God that some people have built up does not build for the spirit and does not, I think, build for true holiness. It does not build up for real Christian spirit if it is followed too fully. Therefore, I should say that we have no right to assume that we are the only intelligent beings in the universe. Is the earth the only planet populated by intelligent technological life? I do not know and I do not suppose that we shall be able to find an answer yet. If in a year of Queen Elizabeth I had said to someone in London that I could show him a picture of Philip of Spain in Madrid on a piece of glass in his room, I would probably have been burnt at the stake as a wizard, or as a witch if I were a woman. However, we can do that today. We have broken through. We have the miracle on earth of television, even from the moon.
Are there flying saucers? Can these objects be explained? There are two basic facts. First, the scientific examination of the probability. That is due to mankind and Governments should look into it. The second aspect is to fathom the possibilities of the existence of this phenomena. Astronomers are now increasing their search for extra-territorial radio signals, but so far—despite what the noble Earl, Lord Kimberley, has said—none has really or truly been discovered. The billions of stars in the galaxy make the problem at present too much for us.
Then there is the question of speed. In a light year a ray of light travels 6 trillion miles, but we do not want to go into that. The question of relativity
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is interesting. I am not qualified to argue about it: I never reached that standard of mathematics. However, I know that Einstein believed that electro magnetic waves have no mass and are therefore not affected by his theory. However, he said that as an object—if it has mass—approaches the speed of light, its mass becomes infinite. That might explain the black holes about which we talk. We are talking of mysteries that we never knew anything about.
For a couple of generations now thousands of magazines and so on have reported these sightings. We want to know whether these objects that are unidentified deserve real research in depth. Whether or not it is true, only our prejudices can decide, and it becomes more difficult to listen to such weird experiences from apparently honest, sane and unself-seeking men who place their findings before papers and Governments. Are we right to call these men liars, hallucinators or sensationalists? If one human being out of the tens of thousands who allege to have seen these phenomena is telling the truth, then there is a dire need for us to look into the matter. Those who believe in psychic phenomena or spiritualism and those who believe in the synchronicity of ghosts—as they try to explain them—should not scoff at the possibility of these unidentified objects. We know that poltergeists exist; we know about their activities. Therefore, do not be so ready to scoff at UFOs when, in another moment if I catch you talking, you will agree with me that poltergeists exist. This is a serious Debate. It deserves study and understanding.
8.30 p.m.
The Lord Bishop of NORWICH: My Lords, I count it a privilege to follow the noble Viscount, Lord Oxfuird, and to link myself with the words of the noble Lord, Lord Davies of Leek, in congratulating the noble Viscount on his maiden speech. At the beginning of his speech I jotted down that I should like to thank him for his "down-to-earth remarks", but when he got right out to A Centauri I realised that that phrase was of no use anyway. However, we congratulate him and look forward to hearing his voice again and often.
I am glad to be able to follow—without of course the Welsh fire or fervour—what

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the noble Lord, Lord Davies of Leek said. I have a little Irish blood in my veins and that is why I understand everything he says. I am sure that the request by the noble Earl, Lord Clancarty:
"To call attention to the increasing number of sightings and landings on a world-wide scale of unidentified flying objects"
is a proper one. I am most glad that we have brought this whole issue out into the open and have been given the unhurried opportunity of talking about it tonight.
It is right that we should give a cool and scientific look at all unidentified flying objects, not only because of natural curiosity, not even only—as I think the noble Earl, Lord Kimberley, suggested—because of national security but also for reasons of scientific research. There was a time when leaders in the Church were not always so enthusiastic about pushing out the frontiers of knowledge as I believe we are today. I very much hope that such a search will continue. Whether or not it should be an intra-governmental study I am not sure. We shall listen with interest to what the noble Lord, Lord Strabolgi, says to us on that. But that it should be studied, and seriously studied, I believe to be true.
The interesting thing is that when a suggested UFO is seen in one part of the world it seems to spark off many sightings in other parts. The fact of the New Zealand sightings a short time ago seems to have produced many sightings in Norfolk; and our Eastern Daily Press—which is a magnificent daily paper, accurate, fair and always helpful to the Church—has told us all about this recently. When I was talking on television at lunchtime today in Norwich my immediate reaction was to ring up the commanding officer of one of our stations—and for the sake of national security I shall not name the actual establishment lest other ears in other spaces should be listening to me—to ask whether (and I am quite serious about this), when sightings were suggested in Norfolk last week, one of our particularly important RAF stations had anything to say about them.
I think that we should be quite cool, firm and scientific and try to extend our knowledge in this area. But, with the wealth of scientific, aeronautical and erudite knowledge in your Lordships' House, what is a bishop doing moving
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among the various parts of this chequered chessboard? I felt that I wanted to share anxieties on a rather narrow level with your Lordships. First, I believe that UFOs and the mystery surrounding them today are helping to build up a climate of credulity and, in certain cases, even of superstition, with the danger of a sort of ersatz spirituality almost reacting against the impersonality of modern civilisation, but not wholly involved in the total Christian commitment, which is a balanced commitment. Last summer at our Lambeth Conference the phrase was used:
"The Church gathers for worship; the Church scatters for mission".
Those are the two sides of activity: the Church of God meets to worship God but the Church of Christ scatters to spread the good news of the Gospel. My concern here is that the mystery surrounding UFOs today—and I think it is helped by the variety of films and programmes on the subject—is in danger of producing a 20th century superstition in our modern and scientific days which is not unlike the superstition of past years. That is my first anxiety.
The second is that UFOs and their study seem, from my limited research in this area, to link with a certain religious subculture which seems to do three things. It offers a substitute for true, catholic religion. I use "catholic" with a small 'c'; I mean the Christian faith in its widest, but received, sense. Secondly, I think it draws serious, sincere and often very charming people—and young people too—into a sub-Christian, and I am afraid sometimes a non-Christian cult, often controlled by a dominant leader, and reproduces something of the gnostic—I suppose one wants to help people by saying "g-nostic"—heresies of the tight-knit, esoteric groups of the first, second and third centuries. In fact, I believe that Archbishop William Temple was right when he said the Church of Christ was the only society founded for its non-members to take what it knew of God and of Christ into the world that others might know too.
I see a certain danger of the linking of religion with the UFO situation at that level. Some Christian researchers suggest that those who become deeply involved in the religious aspects of the UFO situation come under a psychic domination

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which can cause serious distress to them and to their personal life. That is my anxiety. I may be wrong, but I put it forward with some care, having thought about it and studied it a good deal. Therefore, my third anxiety—and I am sorry to be negative but it is important to share both the light and the dark sides—is the danger of the religious aspect of the UFO situation leading to the obscuring of basic Christian truths. When all is said and done, Christ himself is the agent of God in the creation of the world. I quote from Colossians;
"Christ is the image of the invisible God, the first-born of all creation: for in Christ all things were created in heaven and on earth, visible and invisible—whether thrones or dominions, or principalities or authorities … All things were created through Him and for Him".
This fascinating chapter in Colossians, which is perhaps one of the highest levels of Christological teaching, speaks of Christ being before all things: "by him all things consist", as the Authorised Version put it. All things hold together; He is the great unifying, holding-together principle of God's universe.
I say this in this debate recognising the danger of, as it were, preaching a sermon. However, I do not think that is true in this case because the very subject we are debating is helping to widen our horizons—and the noble Viscount, Lord Oxfuird, stressed this point of looking far out in his maiden speech. I believe that Christ has not only a terrestial, not only a cosmic significance but literally a galactic significance. I believe that He is God's vice-regent concerning His great creative world. It is good that our minds and eyes should be stretched further out because I do not believe that at any point of the universe we get beyond the hand of God. Therefore, it helps us to understand the majesty of the Godhead when we begin to stretch our minds to reach out to the far corners of creation.
Lord TREFGARNE: My Lords, will the right reverend Prelate allow me to intervene? Is he actually offering ecclesiastical authority for the existence of another race of people in another universe? Is he saying that the existence of UFOs, together with their inhabitants such as are so often described to us, is compatible with Christian faith?
The Lord BISHOP of NORWICH: My Lords, I thank the noble Lord, Lord Tregfarne, for his interjection because it shows that he must have been listening carefully, because the next thing on my notes is, "Say something about Lord Trefgame's remarks". However, there are about 20 seconds to go before I get to the noble Lord. Perhaps in the meantime he can have a glass of water from Lord Davies of Leek, or something, but I am almost with the noble Lord. I am glad for that interjection because I obviously was not getting right what I was trying to say. I believe that all the far corners of the creative world, right out further than we can ever see or even know by radio, are within the plan of the Creator. I believe they are within the majestic purposes of God. I believe that Christ, as Creator under the Godhead, is concerned with it all.
Now may I come to the noble Lord's particular question a few minutes ago. His question went something like this: "Do we believe in the existence of another race? Is it possible that there is another race further afield?" I must say that I do not know. I believe there is a place for reverent Christian agnosticism concerning what is not revealed to us in scripture and by our Lord. Having said that, I believe that God may have other plans for other worlds, but I believe that God's plan for this world is Jesus. That at least is how I view the question. The emphasis in scripture is most interesting on the fact that there never seems a point beyond the revelation of scripture where there is not God.
I quote, if I may follow Lord Trefgarne once more before finishing what I had to say, from the most majectic opening letter to the Hebrews.
"In these last days, God has spoken to us by his Son, whom he hath appointed heir of all things, by whom also he made the worlds. He reflects the glory of God. He bears the stamp of his nature, upholding the universe by his word of power".
My point is that the danger of getting the UFO thing linked with the religious thing is that it obscures the fact that Christ is the image of the invisible God, and that all God's purposes and plans for humanity are in and through his Son, our Lord.
This is not popular. This is not agreed by dozens of people. Plenty of people

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think that Christians make a proud and exclusive claim when they claim the words of our Lord,
"All power is given unto me in Heaven and in Earth".
But this is part of the belief of a Christian which he has to put humbly and lovingly, and in the light of seeking to serve people. In the incarnation of our Blessed Lord he clearly revealed to us the mind of the Godhead, and we should be careful in our study of the UFOs in a religious context because I believe that the Gospel of Christ, and his death upon the Cross for the salvation of sinners, can never be by-passed by other forms of religious expression which may be esoteric, may be unusual, and may appear to come to us in unusual ways. For that reason therefore I am happy that we should make a cool, clear, careful study of the whole UFO situation, but let it not be at the price of the obscuring of the fullness of the Christian faith and its power to transform lives.
Viscount BARRINGTON: My Lords, before the right reverend Prelate sits down, may I ask one question? Although I agreed with much of what he said, I did not entirely understand, when he was telling us that one should not study UFOs in a religious context, whether that meant that one should not study music, art or other things that we all have, good, bad and indifferent, in a religious context. If it means that we must not worship them, then I would be entirely in agreement, as a professing Christian. We must not worship art, architecture, or music. But when he tells us not to study them in a religious context, I am not clear whether I will be doing so or not.
The Lord Bishop of NORWICH: My Lords, will the House give me permission to seek to answer that in a sentence? Just as it is important that the boys and girls in our schools today should know some basic facts about the great world religions, I still believe that it is essential that in a so-called and named Christian country our boys and girls should have the opportunity of knowing the great facts of the Christian faith. I am simply suggesting that, if, in fact, people seeking for religious experience bypass the revelation of God in Christ and revealed in scripture, then they may
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get into difficulties which will hurt and harm them. It is simply the obscuring of the Gospel that is my concern.
8.36 p.m.
Lord GLADWYN: My Lords, I must begin with an apology. Before I knew that the debate was to start so late I entered into an obligation for this evening from which I find it difficult to escape. Therefore, I may be unable to stay the course. One happy thing about UFOs is that they have nothing whatever to do with Party politics! Another is that they take one's mind off the absolutely frightful everyday events. Besides that, no theory as regards them can possibly be laughed out of court, nor need angels in respect of them fear to tread! I am sure that the noble Lord, Lord Davies of Leek, would agree.
Though many alleged sightings are of identifiable objects of terrestrial origin, such as disintegrating satellites, balloons or meteors, or even some sort of reflection, others are of things which, on the face of it, cannot be accounted for in this way. The evidence of this is obviously too circumstantial to be disregarded. The evidence produced by the noble Earl, Lord Clancarty, and my noble friend Lord Kimberley, is obviously too circumstantial. You cannot disregard that. These things almost certainly do exist. It is difficult to say that they do not exist. Therefore, unlike the noble Lord, Lord Trefgarne, I do not contest their existence.
Some objects may be of terrestrial origin, but equally some may not. Whatever their origin, it has certainly not as yet been proved that they contain, or are controlled by, sentient beings of any sort. Still less has it been demonstrated that such sentient beings come from another planet, of which we are told there are many millions in the universe and no doubt many thousands on which conditions may well be similar to those on earth. It is conceivable, therefore, that UFOs come from another world; but that, to say the least, is not certain or, let us say, is not yet certain. Let us therefore for a moment examine the terrestrial and the non-terrestrial hypotheses.
If these objects are terrestrial, they come somewhere from our world, then they may conceivably be attributable to

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some condition of the atmosphere, or upper atmosphere, unknown to us, producing electrical or similar phenomena which no doubt interfere with compasses, and for some reason dart about the sky, sometimes even coming to earth. The difficulty about such an explanation is that they never seem to come into actual contact with aircraft, or any other airborne objects. Even if collisions have sometimes been suspected, they have not been proved to have occurred. Nor, apparently, do they ever crash into anything important on the ground. When they are alleged to have been seen on the ground it is always, incidentally, away from houses. I suppose it is conceivable that they may be capable of passing right through physical objects, their mindless trajectory being therefore harmless, and dictated by some unknown physical cause, and their apparent presence on the ground being due to some local conditions on the surface. All I say is that this is a conceivable hypothesis. In any case, the fact that their occasional presence is so far inexplicable does not in itself invalidate the terrestrial hypothesis. There are, as the noble Lord, Lord Davies of Leek, said, more things in Heaven than are dreamt of in our philosophy.
One terrestrial possibility at least can be discarded, that which attributes them to some Soviet activity in Central Asia, in some way heralding World War III. This hypothesis was current, as I remember well, in America at the time of the Korean war, when I was in New York. Indeed, it was responsible for, as far as I know, the only known joke ever perpetrated by a Soviet functionary, namely Mr. Gromyko, who when asked what he thought about flying saucers said, "Some people say these objects are due to the excessive consumption in the United States of Scotch whisky. I say that is not so. They are due to the activities of a Soviet athlete, a discus thrower, in Eastern Siberia, practising for the Olympic Games and quite unconscious of his strength."
If these objects are not terrestrial, then admittedly, always supposing they exist and are not mere illusions, they must be of some non-terrestrial origin. We can, I think, discard the possibility that they come from any of the other planets, as was said by the noble Viscount,
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Lord Oxfuird, whose maiden speech we so much appreciated; I hope we shall hear from him again shortly. Venus is too hot, Mars is a lifeless wilderness, and conditions on the others are extremely unlikely to be compatible with any form of life.
Thus, from whence do they come? They can only come from a planet in some other starry system, of which the nearest, as the noble Viscount said, is the star Proxima Centauri, which is 4½ light years away. Always supposing, therefore, that UFOs are manned by sentient beings who travel at the speed of light—and if you travel at 186,000 miles a second, how do you slow down on approaching the earth? (how wonderful to imagine!)—these creatures must have been cooped up in their small machines for no less than 4·5 terrestrial years before appearing in our atmosphere. One can perhaps imagine that they may somehow have been able to escape from time and consequently not need any sustenance or sleep, but it is difficult, even on that hypothesis, to believe their machines are somehow time-exempt and can consequently contain enough propellant to keep them steady on their millennary way.
If a UFO was launched near Proxima Centauri and proceeded at the rate at which astronauts go to the moon, it would take, I am reliably informed, not 100,000 years but more like 900,000 years before it reached the earth. In which case, it is indisputable that any non-terrestrial UFO now sighted over New Zealand or anywhere else must have started on its journey something like a million years ago. In other words, since after all the human race lives within time, it must have left long before any kind of recognisable human society existed here below.
It is, however, also indisputable that UFOs have been observed for many hundreds of years in Europe, China and elsewhere. There are records of mediaeval monks seeing cigar-like objects in the heavens; and indeed it is quite possible that such sightings have been observed during the last few thousand years. There may be more sightings now simply because we have better facilities for observing them. If so, what conclusion must we draw as regards the whole non-terrestrial hypothesis? It is simply that

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these sentient and obviously highly intelligent beings from another planet, if such they be, at the end of an interminable journey, are content simply to hover about our atmosphere and not attempt a landing, or at least a landing of which we have any uncontrovertible evidence.
What could be the point of such strange proceedings? These sentient and obviously intelligent beings must have picked up enough information to conclude that a serious landing was feasible or, if not feasible, then to abandon the whole idea. Perhaps they may even in some mysterious way have been able to master our language and penetrate our thoughts. I think it was my noble friend Lord Kimberley who said that conceivably they were under some sort of thought control from a planet in the neighbourhood of Proxima Centauri. If that is so and it is simply a question of thought control, then it comes down apparently to a sort of cosmic joke being played by these sentient beings from 4½ light years away on the unfortunate inhabitants of this globe; they are a sort of hallucination in that they induce us by thought control to believe in them. It is a conceivable theory but I do not think it is a tenable one.
There are, it is true, those who believe that major landings from outer space have taken place in the past resulting in the inauguration of a new era, beings who then apparently withdrew after leaving behind some kind of representative, presumably to see how it would all work out; that is, the new civilisation which they had brought down to this world. In Colombia and Peru there are, I understand, strange markings on the ground thought to have been utilized by some sort of space ships, together with traditions of an other-wordly father of the race, notably of the Inca race, who came down from the sky. In fact, such traditions are fairly widespread in the world, although of course there is no proof that such father figures ever really descended from the sky.
The nearest one in time to our own era—I quote this only to draw attention to the lengths to which this kind of belief can go—is the theory, quite popular I believe in Russia, that Christ was a cosmonaut, the star of Bethlehem being a large UFO from which, to the amazement of the shepherds, emerged "the Heavenly Host" who left
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the Babe in the manger, to the great benefit of all mankind, and then departed whence they came. You can believe such heretical imaginings if you will, and perhaps if you believe in the divine origin of Christ and his teachings it would not matter very much if you held that, in my view, rather nonsensical belief. And you can certainly believe, if you want, that UFOs contain people from another world which is watching us and whose intentions are benevolent and perhaps designed to save our distracted planet from the horrors of another war by somehow disposing of the wicked and thus inaugurating a new era. Believe that if you like.
I am afraid, however, that all such imaginings are due chiefly to the discontent with the present human condition and to an unconscious desire to escape from the horrors or potential horrors of our earthly life. When we believed that if we were good we would, when we died, go to Heaven, there was no inclination to go to some new world near Andromeda; and whether another world other than Heaven itself was watching us did not worry us overmuch. Presumably, it was the angels.
The more over-populated our planet becomes, the greater the violence and the more appalling the wars, the more, unconsciously perhaps, we want to leave it if we can or trust in other worldly intervention; and the more intense therefore the longing, the greater the temptation to believe that there actually is somewhere else to which we can physically go or to which we can somehow make an appeal. It was a great disappointment when the moon was discovered to be a mass of grey plasticine, that Mars was even more unpleasant than the middle of the Sahara and that Venus was the nearest thing to Hell.
What is the moral? I agree with the right reverend Prelate, who said so eloquently—we are indebted to him for his intervention—that perhaps the moral is that we had better not put our trust in saucers for salvation but, rather, concentrate on how best to conduct ourselves here below so as to live in charity with our neighbours and eventually die in peace. If the UFOs contain sentient beings, we can only leave it to such beings to get in touch with us when, and if, they will. Up to now, if they exist, they have

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done no harm of any kind. Apparently they have done no harm for the last two or three thousand years. So there seems to be no great need to set up intra-governmental machinery to investigate the whole phenomena. The mystery may suitably remain a mystery, and so far as I can see nobody will be in any way the worse off if it does.
8.50 p.m.
Lord KINGS NORTON: My Lords, I should like to add my thanks to those which the noble Earl, Lord Clancarty, has already received for opening the debate in such an extremely interesting way. I found my imagination boggling a little at some of the things he told us. Nevertheless, I feel that it is of immense value that this matter has been brought out into the open by the debate in the House, and I hope that as a result of it there will be some progress in the understanding of what is an extremely serious matter. I feel that we must be careful about our terminology in discussing the UFO problem, and I believe that I shall make clear in the course of my remarks what I mean by that. For example, in the past few days, since it was known to my friends that I was to take part in the debate, I have had over and over again the question: Do you believe in UFOs? I must say that I think that is rather a silly question, because if I saw something in the sky which neither I, nor whoever happened to be with me, could identify—I have not, but let us suppose that I did—then I should have seen an unidentified flying object, a UFO. I do not have to believe in it. I should believe merely that I had seen it—something that I could not explain; and I believe that many people are in that position.
It has been said more than once this evening that this is no new phenomenon. I think that the noble Earl, Lord Clancarty, dated it back to about 1300 BC. Whether my researches have taken me further back, I am not quite sure. However, I am sure that your Lordships will be as familiar as I am with the 10th Chapter of the Book of the Prophet Ezekiel. He certainly saw something very unfamilar in the firmament, and it certainly could be called a UFO. It was very different from the modern ones. It appears to have been coal-fired, to have been stabilised by
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gyroscopes, and crewed by cherubim; and it was a model which has not, so far as I know, been developed. There have been a good many sightings probably before Ezekiel, and certainly there have been many thousands since, and I fear that there has grown up a belief in many minds that if an object in the skies is unidentifiable, it must be from outer space; and this is quite unwarranted.
I think that it is worthwhile once again to consider the possibilities. I know that this has been done once or twice this evening, but it is part of my argument. I should say that there are possibly two kinds of objects to be seen in the skies: those of terrestrial origin, and those of extra-terrestrial origin. Typical of the first kind are man-made flying machines, satellites and rockets, and the like. Identifiable objects of the second kind are meteorites and phenomena such as the Northern Lights.
I am sure that many—and perhaps most—of the sightings recorded and reported are terrestrial in origin: aeroplanes with navigation lights glowing at night; satellite launching rockets burning up on re-entry; remotely piloted vehicles, now beginning to be called RPVs, up on trial flights; weather balloons; trick reflections of light. In the extra-terrestrial class I am afraid that I cannot think of anything other than meteorites, Northern Lights and ball lightning, but there are probably other well known physical phenomena within the knowledge of astronomers and meteorologists.
I feel, however, that some of the reports we have had—and we can for the time being leave out Ezekiel—are not readily explained in terms of any of the possibilities which I have mentioned. The New Zealand phenomena are worth much more investigation than they have yet had, but so far, in so far as I have been able to understand what has been reported, they do not appear to be explicable in terms of any of the suggestions which I have so far made. That seems to go for the quite extraordinary widespread sightings recently in Italy, where hundreds of people as reasonble as you and I, my Lords, seem to have seen quite inexplicable things in the sky. It would be worthwhile trying to explain them, and if there are people who know what they are, they ought to tell us. The high probability in my mind is that

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they are terrestrial in origin, and the only extra-terrestrial possibilities do not seem to be feasible because of the very eccentric paths which the objects, or lights, which were seen seem to have taken. But if they are terrestrial phenomena, we ought to be able to identify them.
I believe that any dispassionate investigation, such as I understand the noble Earl, Lord Clancarty, would wish to have, could not ignore the possibility of the phenomena having their origins outside the earth and perhaps outside the solar system. Just as meteorites are chance material projectiles originating in the solar system, may there not be random matter of a different character—perhaps a luminous but insubstantial character—that in certain circumstances becomes visible and attracted to our area? I certainly should be readier to accept some explanation in terms of what I might call the atsronomical phenomena than ships from outer space. It would, I suppose, be foolish to deny that possibility, but as an explanation of phenomena—and I think that the noble Lord, Lord Gladwyn, exposed this—it is surely a very long shot indeed.
If we are to conduct any dispassionate inquiry—and I think that we should—we must listen to the proponents of what one might call the Star Trek view. It can be argued, not unreasonably, that we in our humble way are probing nearby solar space with our Venus and Jupiter and other vehicular probes. We have ventured on to the Moon. Is it not presumptuous, the argument goes, to suppose that elsewhere in space creatures more advanced than us are probing into our space, probing with means now occasionally visible to us, using their own RPVs, controlled from stations light years away, rather on the lines which the noble Earl, Lord Kimberley, mentioned? It is a possibility which we must be prepared to consider. It is a possibility, though not many of us, I feel, would call it a probability.
But if we do have a study of UFOs, as the noble Earl desires, we could not exclude the possibility of extra-terrestrial intelligences from our consideration. This quotation has been given twice this evening, as well as a dozen times outside this House in this connection, but,
"There are more things in Heaven and Earth, Horatio",
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Hamlet said,
"than are dreamt of in your philosophy".
And Heaven, my Lords, has always offered us more possibilities than earth. Although I remain sceptical of intelligent invasion from outer space, I recall the dictum of the late Mr. Sherlock Holmes when he was investigating the curious matter of the Sign of Four:
"When you have eliminated the impossible, whatever remains, however improbable, must be the truth".
The desirability of getting rational and acceptable explanations for the odd phenomena which are being reported—even if, like some other para-normal phenomena, they are subjective—in my opinion is not, or should not be, merely to satisfy our curiosity. Here I am coming from rather a different angle to something which was discussed in greater depth by the right reverend Prelate the Bishop of Norwich.
There is a social danger, in my view, in leaving people in ignorance of the origins of these phenomena. I have recently learned from a number of sources that there have grown up, in North America particularly, many groups and cults whose attitudes are based on beliefs that UFOs are influential outer-spatial manifestations interested in this earth. In some cases these groups are looking to outer space for Man's salvation. If this is right, it is rather disturbing.
I find, too, that in this country there are groups interested, other than purely scientifically, in the UFO phenomena. I had a letter—and I think that other noble Lords may have had the same letter—earlier this week from an ecumenical Christian group which believes, among other things, that UFOs menace the spiritual health of the nation; that they are anti-Christian and that information exists about them which is being withheld. It seems to me that this association of UFOs with mysticism and religion makes explanation of the true origins of the phenomena a matter of great importance and of some urgency. The sooner that each reported sighting or landing is satisfactorily explained, the better. It is no good just laughing them off or trying to laugh them off; we must seek the truth and tell it.
My Lords, I remain sceptical, perhaps more sceptical than anyone who has

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spoken this evening except the noble Lord, Lord Trefgarne. I remain sceptical of the more bizarre extra-terrestrial explanations. I remain more than sceptical, indeed, incredulous, of what the noble Earl in his Motion called "landings"; but I support him wholeheartedly in his wish for a serious inquiry. I hope that the Government will take steps to put such an inquiry in hand. Finally, I come back to the matter of terminology. In his Motion, the noble Earl called for "an intra-governmental study". The noble Lord, Lord Trefgarne, and, I think, the noble Lord, Lord Gladwyn, took this to be an inter-governmental study. But "intra" means "within". I was puzzled by the use of the prefix, but that is what it means and presumably what the noble Earl meant. But why a study within the Government? I would support the idea of a Government-supported open investigation by a carefully chosen group of scientists and technologists with some funds at their disposal; but a study within Government would seem to smack of a secret probe, which would be no good at all.
I have no objection to a House of Lords study group, but they could scarcely perform in the way that a public organisation supported, say, by the learned societies and the engineering institutions could perform. It is something of that kind that I should like to see brought into being under Government or with Government support: a group of dispassionate people with the power, the money and staff on a modest scale to investigate. Perhaps in his reply later this evening the noble Lord, Lord Strabolgi, will comment on the suggestion.
9.4 p.m.
Lord RANKEILLOUR: My Lords, first, I must thank the noble Earl, Lord Clancarty, for this debate, the subject of which has long needed an airing; and, although the noble Viscount, Lord Oxfuird, is not in his seat, nevertheless I congratulate him on his speech. The UFO saga is deep and complex and there are no known experts to keep us up to date with everything to do with it including its mechanics. However, scientists throughout the world have been drawn into an ever-increasing discussion as to what
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UFOs are and where they come from, so far with little enough results except to wonder why the bounds of natural physics seem to be broken on all sides. Most Western Governments say that UFOs do not exist, but I think that the French Minister of Defence, M. Robert Galley, in February, 1974, said that they do; that his Government takes them seriously and that they have been studied secretly by a special department for over 20 years. Indeed, France leads the world in UFO research. It has followed up sightings with police teams, scientists and scholars and, since 1950, the Deuxieme Burèau of the Army.
Oddly, in that same year, a remarkable report came from Farmington, New Mexico, on 18th March, when the inhabitants of that town were treated to a display of flying saucers that literally filled the sky above them. Every important American newspaper told the story. With few exceptions, the entire township of 5,000 people, including the mayor, newspapermen and members of the Highway Patrol, breathlessly watched an air show to end them all, a fantastic air circus. Countless saucers performed aerial acrobatics at speeds of 1,000 m.p.h. showing incredible handling, acute control in split-second timing by their ability to avoid collisions. My Lords, that was hardly a weather balloon convention.
Is it not curious that we of the 20th century, with a vast knowledge of science behind us, should be blind to further wonders in the skies above? Men throughout the world have been branded as mad or mistaken when they have reported having seen strange sights in the heavens. Many men have seen these sights and have not been mistaken. Who are we to doubt their word? Who are Governments that dare to ridicule the honest? Not long ago the Loch Ness monster was regarded as a fable, but now our leading naturalist says that it (or they, possibly) probably exists. Why, then, should unidentified flying objects be any harder to believe, especially as they have been seen far more frequently? My Lords, of course they exist. Only a few weeks ago a Palermo policeman photographed one, and four Italian Navy officers aboard a light patrol boat in the Adriatic, in the early hours of the morning, saw a 300-yard long fiery craft rising from the sea and disappearing into the sky. Odd, strange, frightening, but apparently quite true. Indeed, why

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should these men of law enforcement and defence lie? Of course, they did not lie. Why should they; especially as in this case their sighting was backed up by men from a nearby radar station who saw it, too.
Each year there are many sightings of UFOs throughout the world. Some of them are very close at hand, while others are not, but always the effect upon those who see them is one of concern; and yet this very point is ignored and ridiculed by most Governments right around the globe. In the United Kingdom's case, those who report seeing UFOs are taken to be misinformed, misguided and rather below par in intelligence. If this is so, why has some of my information on this subject been given to me by the Ministry of Technology? Why should this Ministry waste its time gathering false information? Of course, it is not false information: it is data reported by civil and Air Force pilots, policemen, sailors and members of the general public who have all had personal experience which has intrigued and/or frightened them.
My Lords, what are UFOs? I do not know; and nor, seemingly, do some Governments: but these machines do exist in one form or another, abstract or solid, and they do travel at stunning speeds which seem to defy proved natural physics. Let the United Kingdom be told by Her Majesty's Government the real details on UFOs so far as they know them, for by continued silence the position only becomes worse. Only a few weeks ago a UFO was seen near Kingussie, in the Highlands, and a few acres of Ashdown Forest were burned by another one. Is it safe to go on ignoring these appearances? Who is to know where they come from? But come they have. If we accept, then, that UFOs exist, we must next wonder how they operate. Their motive power would be of huge help to our transport and industrial life, for they apparently fly without wings at varying speeds from dead-slow to incredible ones, and even hover silently. This kind of information is above price, and therefore we as a country should make every effort to collect every scrap of information that we can. I therefore ask this Government to make the study of UFOs respectable by setting up a bureau that can be approached by all and sundry without any red tape or opposition, in an attempt to clear the air.
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Every sighting and landing must be thoroughly investigated by the bureau, in co-operation with the police, the Royal Air Force, the radar people and the British-based UFO investigators.
The noble Lord, Lord Strabolgi, who is to wind up this debate, is no doubt sympathetic to the reasons for these speeches, for it has become patently obvious to a great many people that this subject has got to the point when Governmental explanations must be forthcoming. A greater measure of open government is long overdue, and bringing the UFO saga into the realm of respectability would be one way of achieving this, in part. I suspect that the British Government do have a Department studying UFO sightings, for why else should they bother to go to such trouble to debunk publicly reported ones if they are of no interest to them? Quite apart from the fact that the Government have not admitted to the existence of UFOs, these machines are potentially dangerous. They give off blinding light, crippling rays and sometimes beams that immobilise humans; they start forest fires, eradicate crops and cause great distress to animals. If the British population was aware of this, they could sometimes take precautions. UFOs have been with us for many generations, so is it not about time that we officially recognised their existence and treated reports as less of a hot potato than hitherto?
Before the noble Earl, Lord Halsbury, takes me to task once again on the subject of sonic booms, I have one suggested answer to the question why these highspeed UFOs do not produce sonic booms. It is thought that these craft can produce a near vacuum envelope around themselves, which in turn would allow them virtually unlimited speed because they would thus be free of nearly all normal resistance, as they would be flying within it. Not being a scientist, I cannot enlarge upon this explanation, but I hope it is of some assistance to the noble Earl.
9.14 p.m.
Lord GAINFORD: My Lords, first may I add my congratulations to my noble friend Lord Oxfuird for his brilliant maiden speech. I hope that we are going to hear him many times again because it is quite obvious from what we have heard from him this evening that he is going to

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receive every possible encouragement to take part in many debates in the future. My main contribution to this debate is to assure the noble Earl, Lord Clancarty, of any support that I can give. If we are going to have a study group in your Lordships' House I shall be glad to be a volunteer to take part whenever I have the opportunity. I also thank him and others for initiating this debate, and for the pleasure of having such a refreshing subject to discuss in the midst of the present period of crises and strikes.
I am the 10th person to speak in this debate. I have noticed that so far none of your Lordships have actually reported a sighting, so here goes! I am going to stick my neck out, open my big mouth and trust I am not going to put my foot in it! I saw a UFO a little while ago. It was on 31st December about 8 p.m. All right, my Lords, have a good laugh, it was Hogmanay! Up in Argyll it was a New Year's Eve party and somebody said there was something funny flying across the sky. Fifteen of us came out to have a look, including some children. They had been drinking soft drinks anyway! The object was like a bright white ball with a touch of red followed by a white cone. In fact the whole object had the appearance of a small comet. It was heading eastwards and seemed rather low in the sky, passing over the hills between Loch Sweyne and Loch Fyne. The position from which we viewed it was outside the village of Tay-vallich in Argyllshire on the West coast of Scotland about the same latitude as Glasgow.
As the ball disappeared into the distance it seemed to divide into two parts. It may have been a comet or a meteorite, but I should like to know what it really was. It would have been very beneficial if there had been some sort of centre to which I could write or telephone to report such an incident. No doubt setting up such an organisation would be an invitation to pranks, but for starting such a centre I suggest that volunteers could readily be found from the ranks of the former Civil Defence Service and/or the Royal Observer Corps. The Royal Observer Corps still exists but it has literally, if not metaphorically, gone underground where it is preparing to report and advise on nuclear fallout in the case of war. But there are many who used to serve it
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and who have not yet disappeared from the scene who could make valuable use of their past experience in establishing centres in various districts throughout the country—and I do not suggest that we start opening up the old observer posts in the countryside—to receive and analyse any reported sightings from the public. Such people with a sense of responsibility could, with a little experience, sift the genuine reports from the false.
Suggesting that such an organisation be set up, particularly at times like these, can naturally give rise to a protest about the waste of public money; but volunteers who might be willing to work for a few hours are quite prepared to do it for very small remuneration, if any at all. I have mentioned the Civil Defence Service, and I did not know whether or not I should declare an interest, but I was a member of it during the 'sixties and I was one of many who were bitterly disappointed when it had to go into abeyance. I recall particularly the comradeship and the sense that we were doing a useful job for the community.
If I had the time and opportunity, I should enjoy volunteering for working in a UFO information centre, if that might be a suggested name for the organisation that would be required. I shall be interested to hear the summings up in this debate. I can give no explanation why there should be these phenomena concentrated within particularly the past 32 years as was confirmed by the nob!e Earl, Lord Clancarty, and these flying saucers in the year 1947 when the phrase was coined; but I would just accentuate what has been said before and add that if they are man-made or some astronomical feature, and provided there is no risk of any security breach, then the public have a right to know about them.
9.20 p.m.
The Earl of HALSBURY: My Lords, in common with everyone else who has spoken, I should like to thank the noble Earl, Lord Clancarty, for giving us an opportunity to have, as it were, a scamper over the course and exchange views on this very interesting and controversial topic. At the same time, I should like to congratulate the noble Viscount on his maiden speech, which was obviously a very well thought out and well assembled

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set of considerations, which augurs well for his future in your Lordships' House, where I know he is already welcome.
At the risk of capping the stories of the noble Lord, Lord Gainford, I should like to tell your Lordships about some of the sightings I have seen. I will order them in terms of my curriculum vitae, beginning at the age of six, when I saw an angel. I do not know whether it was the noble Lord, Lord Davies of Leek, who mentioned angels, or whether it was the noble Lord, Lord Trefgarne, or the noble Earl, Lord Kimberley; but it is perfectly true that there was my guardian angel sitting on the edge of my bed. Naturally, with the imagination of a child, I clothed this presence in human form with a large pair of feathery wings. This presence proceeded to rebuke me for initiating a practice which it said would get me into trouble if I persisted in it. Having remembered the rebuke all my life and acted upon it, I am not prepared to deny the reality of the presence that was there with me. This should be a sufficient answer to the noble Earl—I see I have put him to flight—who thinks that if scientists come across something they cannot explain they are afflicted with a kind of vertigo. On the contrary, we welcome something we cannot explain because it is a new phenomenon which, as it were, stretches our capacities and brings out something in us.
The next item came along in year two of World War I. I was about eight years old, and the next thing that I sighted were Zeppelins. I used to go out after dark into the garden of the house where we lived and come back reporting the number of Zeppelins I had seen. What I had seen, in my interpretation, was a Zeppelin—it was a large illuminated cigar-shaped object. In fact what I was looking at was the lenticular shape that the perspective of a searchlight thrown on to a cloud-base makes, and I was interpreting it as a Zeppelin and I was telling my parents how many Zeppelins I had seen.
The next one is sundogs and this fits very closely with what the noble Lord, Lord Davies of Leek, was saying about Macbeth's dagger and the laser holeo-graphic reconstruction of things which really are not there. What sort of an interpretation would somebody who had
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never read about these or heard about them put upon sundogs? Most people have not seen them or read about them. I was fortunate enough to have read about them and to have known the explanation before I saw the first.
When you look at a cloud with drops of water, you are looking at a diffuse reflection of the sun but if instead of there being drops of water in the cloud there are drops of ice, and if they were formed under meteorological conditions where all the facets of the crystals happen to be parallel as they fall through a rising stream so that they are remaining roughly stationary, the effect is of a rather dilute mirror, if one can so describe it. If the sun is up there, you see it actually reflected in this imaginary mirror down through the cloud, and one does not expect to see the sun looking down in this direction. Still less does one expect to perceive it travelling along beside one. Furthermore, one is not accustomed to focusing one's eyes on infinity in that particular direction. The only times it would be appropriate to do so would be if you were standing on top of a skyscraper where the vanishing point would be down here instead of over there, and it makes you rather dizzy.
Seeing a sky dog is a rather uncanny sort of phenomenon. You cannot focus on it properly; it does not seem to be anywhere in particular. It is flying along beside you—and what sort of terms would a person, who had never seen it before or read about it, report it in? I think that they would be rather bewildered. They might report it just as a child would report the vision of an angel as having human form and feathery wings. So it might easily be reported as anything that they had read about.
I now come to the green flash. I was about 20 and a student, and there was a controversy in the pages of The Times and in the correspondence columns of Nature about the green flash. What is it? Under certain rather rare atmospheric conditions, the last glim of the setting sun suddenly flashes brilliant emerald green. When I was a student 50 years ago, this phenomenon was not really established. It was possible to have a controversy as to whether there was such a phenomenon. People wrote to The Times saying that they had seen it. I remember one man who said that he

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had seen it when sitting by the shore off Bombay. It was eventually photographed during the International Geophysical Year some years ago.
However, before that I saw it myself in rather odd circumstances, after having read about it. I was bird watching in the far North-West of Scotland, by a sea loch called Loch Glencoul, near a little village called Drumbeg, where there is a cliff path. On that cliff path, there is a bench for the convenience of people who want to sit down and admire the view. Another traveller, a visitor to the district, was sitting upon the bench when I sat down and, by a chance coincidence, we were both using the same type of Hensholt binoculars and we got talking about our binoculars. There was a spectacular sunset, and when the sun was very low and it was safe to look at it through binoculars, I said to my fellow traveller, "Let us see if we can watch the green flash". So we trained our binoculars and this very rare meteorological phenomenon actually happened when I had just said to a fellow bird watcher, "Let us have a look to see if it happens". What would that person have made of it if I had not been there, just by chance, to tell him what the green flash was about?
Lastly, I come to ball lightning. I have never seen ball lightning, but the description one reads of it is so coherent, so similar in all cases, that one must accept it as a phenomenon which occurs regularly in nature, though we cannot reproduce it in nature and attempts to reproduce it in the laboratory are, to my mind, unconvincing. There is no theory of it. It appears to take the form of a football-shaped mass of glowing gas which hops around or, if it has a chance, gets on to a conductor such as the rail in the gallery here and migrates along the conductor until it finally disappears with a bang. It has never been satisfactorily photographed, to my knowledge. If it has been, then the photograph must be a fairly recent one, and, as I say, it has not been reproduced. But this, again, should assure the noble Earl, Lord Kimberley, that, faced with an unknown phenomenon which I cannot explain, I do not get vertigo. I should be delighted to go ball lightning watching, as I go bird watching.
Lord DAVIES of LEEK: My Lords, may I ask the noble Earl one question? Has he ever seen a mirage? That is easily explicable, and one can also see it easily.
The Earl of HALSBURY: Yes, my Lords, and one can reproduce a mirage in the laboratory. You have a long tray of sand with bunsen burners underneath it, and you look at it from one end. It is quite a reproducible kind of phenomenon. Science deals with material objects—things such as atoms and molecules; material processes—things such as the emission and absoption of radiation; and material forces—things such as the force fields which couple the objects to the processes. But if things are not material, then science has nothing to say. If you want to know what is the consciousness of a mind, I do not think science can either answer the question, on the one hand, or say whether it is a proper question, on the other hand. Therefore, from the scientific point of view, I can deal only with the assumption that these are material objects, and, if they are material objects, then, if they travel at the kind of speeds that are alleged, why do they not make supersonic bangs when travelling above Mach 1? The noble Lord, Lord Davies of Leek, made this point, and the noble Lord, Lord Rankeillour, also made it. I should like to go into the point in a little more depth.
We customarily express the speeds of fast moving objects in terms of Mach numbers. Mach 1 is the speed of sound appropriate to temperature and pressure where the sound is being propagated. In terms of miles per hour, it is not a constant figure, but the advantage of using it as a parameter is that no matter what the temperature and pressure may be, Mach 1 is the speed at which the kinetic energy of a moving object—that is, the power to pack punch—is equal to its thermal energy. This is an unstable condition. The least disturbance to these unstable conditions entails the converison of kinetic energy into thermal energy with a bang, and this is what is called the shock wave. If one takes a cross section through a shock wave, there is a rise in pressure, temperature and entropy. There is complete discontinuity. That must happen when a material object is moving at Mach 1 or above through any medium.

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The answer to the question put by the noble Lord, Lord Rankeillour—I have not had very long to think it out because he sprung it on me as a bit of a surprise—is this. If you were to create a vacuum, what would happen to the air you had displaced? Would you pull it in in front and push it out behind? If that is your means of travelling through the medium, you are merely moving some air backwards at the speed of sound, and it would create a supersonic bang just the same. Customarily, very often we hear two bangs because there is a bow wave and a stern wave from the moving object. Sometimes the bang degenerates into a rumble, just as a thunderclap degenerates into a rumble. Any noble Lords who have been uncomfortably close to a lightning bolt are aware that it makes a very pronounced bang as the spark flies through the air.
If these are material objects and if they are moving at the speeds alleged, I cannot see them doing other than making a bang, so either they are not material objects or they are not moving at the speeds alleged, in which case the speeds are some kind of optical illusion. This throws doubt upon the rest of the reports that we received upon them.
In this week's New Scientist, published today, there is a report from New Zealand, and I should like to read to your Lordships a passage from it:
"Classic conditions for false reflections of radar beams"—
this tunes in very much with what the noble Lord, Lord Trefgarne, said—
"existed in the atmosphere over New Zealand on the nights that the UFOs were spotted at the end of December, Christchurch meteorologist, Dr. Neil Cherry, has reported. UFOs were both spotted on radar and seen by an airline pilot, and a brilliant light was subsequently filmed by an airborne TV crew".
There is nothing in that report to suggest whether the optical sightings and the radar sightings came from the same point, or on the same alignment, or at the same time. We shall have to wait until the details become available.
I was much impressed by everything that the right reverend Prelate the Bishop of Norwich had to say on this matter and by some of the things which the noble Lord, Lord Davies of Leek, had to say, too. I do not think that anybody who reads the C. S. Lewis trilogy of space
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fiction, Out of the Silent Planet, Perelandra, and That Hideous Strength, will ever have his faith disturbed by doing so. C. S. Lewis, who was a profoundly Christian apologist, wrote the most marvellous space fiction of a complex universe, in which some of the created species were tempted and fallen, like ourselves; others were tempted and unfallen; and others were untempted. And they all had to live together in the same universe. I have always regarded the deeps of space and the immense time that it would take to travel from one inhabited world to another as being a kind of divine quarantine to prevent created beings from interfering with one another's cultures until they are civilised enough and mature enough to reach the point when they no longer want to do so. Too much of our science fiction is taken up with the supposition that vastly superior beings to ourselves are motivated by the same rather unworthy commercial motives as ours, and that they want to steal our coal mines or our water or set up imperialisms.
The little piece of fiction that I have always enjoyed most concerned a flying saucer which was hovering slowly in a circle round Central Park in New York and all the security forces turned out in order to do something about it. As it went round, it became more and more clear that it was going round in a spiral and not a circle and as the spiral grew smaller so the flying saucer grew smaller until it was very little more than the size of a waistcoat button going round the head of a maiden in New York Central Park. All the security forces converged on her because it was clear from the expression on her face that she was receiving a message, at which she smiled. Finally, the waistcoat button fell on to the path and was picked up and proved to be a waistcoat button and the security forces converged upon the maiden and bullied her into telling them—and she did not want to—what the flying saucer had told her. She said "I don't want to, because it will spoil it all." They said "Never mind, it may be very important for the security of the United States". She said "Well, all it said was 'Don't be unhappy; you are not the only lonely object in the universe'." I think that is a much more comforting thought with which to approach the subject of flying saucers than to suppose that they are engaged in some kind of imperialism.

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Personally I have always believed, with the noble Lord, Lord Davies of Leek, in the Loch Ness monster. He is not the only person to believe in it. He was anticipated by Keats and I am quite sure that, when the poet wrote the line,
"Thou still unravished bride of Quiet-ness",
he must have had the monster in mind. Of course he did not go into it in great detail; he did not tell us whether the monster was viviparous or oviparous. It may, of course, lay eggs, but if unravished, then infertile, and that is perhaps why there is only one of it. I have always thought that just as mother, when baking bread, leaves a little of the dough over in order that the children may make funny little men with raisins for tummy buttons and put them into ovens and bake them alongside the bread or the cake for the day, so possibly on the day of creation a little of the Divine creative power was left in reserve for the lesser cherubim and seraphim to use and they were allowed to make funny little objects like the Abominable Snowman and the Loch Ness monster, and therefore by the grace of God since this is an orderly universe and a home is provided for everything, so the snows of Tibet were created for the benefit of the Yeti and Loch Ness was created for the monster.
9.37 p.m.
Lord HEWLETT: My Lords, I join other noble Lords in congratulating the noble Viscount, Lord Oxfuird, upon his maiden speech but I run the terrible risk of being accused by the noble Lord, Lord Davies of Leek, of being an anthropological arrogant specimen. I am not quite sure what that means, and I am not quite sure that he knows what it means.
Lord DAYIES of LEEK: Oh!
Lord HEWLETT: All right, I am prepared to stand by it. I am only sorry to appear to be a veritable Daniel in a lions' den of UFO believers and to spoil the fun, and I have no doubt that today's flights of—dare I say it?—fancy will command far more attention than our debate yesterday upon British industry, which scarcely made today's Press at all. More's the pity. Of course, there is a danger in terminology and in gross assumptions. Many noble Lords have spoken as though UFOs were actually
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something, but of course we are precisely saying that if they are unidentified flying objects, we do not know what they are. So I quite agree, let us dismiss the concept of flying saucer equals UFO to start with. Let us try to take a slightly more scientific approach.
I would not dream of speaking in this debate had I not asked my very good friend and neighbour in the Cheshire village of Swettenham, Sir Bernard Lovell, Fellow of the Royal Society and Nuffield Professor of Radio Astronomy, to be good enough to brief me at Manchester University Department of Radio Astronomy at Jodrell Bank, of which he is the Director. I went there two days ago and what I am about to say to your Lordships is based entirely upon that round table meeting with Sir Bernard and the members of his senior staff at Jodrell Bank. Of all the thousands of reports of sightings that have been made, whenever it has been possible to make an investigation they have been found to be natural phenomena, or in some instances, I regret to say, pure myth. Over the United Kingdom, Jodrell Bank's radio telescope, the first and still one of the most powerful in the world, has observed thousands of possible subjects for identification as UFOs. but not a single one has proved other than natural phenomena. I would ask the noble Earl, Lord Kimberley, to take the point on board. If UFOs, as he suggested, defy human knowledge, how do we really know by what possible means or possible background they even exist at all?
Let us get matters into perspective, my Lords, I beg you. At least 10,000 pieces of broken up rockets of American and Russian origin are known to exist in space and maybe there are many thousands more, and occasionally they do plough back into the atmosphere and burn up. Those must account, I think your Lordships would agree, for at least some of the so-called sightings of UFOs. Nature does provide fireballs, yes, meteorites, which bombard the earth at a rate of half a ton a day. Just take a tiny country like Holland. One hundred rocks the size of your fist come through the atmosphere and hit that country in one year. Consider Holland in relation to the size of the whole of the world's surface and you must surely realise that we are under constant bombardment, not with UFOs but with meteorites. A detailed study

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on the Canadian prairies has displayed how great is this bombardment which I have just described over a wide area. Even more staggering is the fact that it is estimated that 8,000 million pieces of stone and metal come to earth annually, many of these burning up on arrival and these give cause for these reports of unidentified flying objects.
What is noticeable is the close correlation between the position of the planet Venus and the reports of UFOs, for when Venus is low and bright in the sky and when it is shining through thick mist or thin cloud it does much more resemble something other than our next door planet of the solar system. Why, indeed, we are told even the great President Carter has spotted one, but it is a pity we did not read the rest of the subsequent report. It was later discovered that that was Venus precisely in those conditions I have described. If the great President of the United States can be wrong, it is just possible the few noble Lords remaining in this House tonight might be, too. Let us face it, we all would love to escape from the miseries and frustrations of our world, and particularly in these recent past days. By all means go and see "Star Wars" or "Jaws" or any other myth, but do not confuse that with very serious scientific study. That is carrying romance a little too far. We must make sure we do not make your Lordships' House a laughing stock by doing so.
One of the most advanced experimental stations at Jodrell Bank—just take these statistics on board please, my Lords—has been on watch 24 hours a day for 30 years. Do you not think it reasonable for me to suggest that if there were UFOs at least one claim would have been made, but every single thing that has been seen and observed by radio astronomy has been identified as natural phenomena and as occurring from the universe itself as we know it—I do not say from the solar system; I say from our universe. If there were something in it—and the noble Earl, Lord Halsbury, is so right—of course the scientists would have been delighted to come forward with an announcement to that effect. After all, it was Jodrell Bank that managed to locate the Sputnik when the Russians, who so cleverly launched it, lost track of it in the atmosphere. So do not think that this is some denigrating comment by the
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scientific lobby and some nasty, cheap debunking exercise. No, my Lords. We must take a serious scientific view of the actual surveys and of what has been discovered.
Lord DAVIES of LEEK: My Lords, I am delighted to hear what the noble Lord says. However, I beg the noble Lord to remember that there are other scientists who say that of course we know that there are meteorites—there have been for the whole of time—but there are some factors outside that range which justify (and this is all we ask) an attempt at identification. There is no difficulty in identifying meteorites. We are not asking for that: we are asking for the identification of other types of phenomena.
Lord HEWLETT: My Lords, that promptly begs the question. That is precisely what I am saying. The identifications that have been made are not necessarily of individual meteorites: they are of endemic portions of rockets and so on. During 30 years study and a constant watch for 24 hours a day there has been not a single sighting of any description which could possibly or remotely be considered worthy of serious study as a UFO. Every single thing has been explicable. With all respect, it is no use noble Lords saying that this is not a convenient answer: we must find some things that are not explicable. I am telling your Lordships and it is perfectly fair. Your Lordships may say "Scientists". I am quoting one of the leading world radio astronomers—indeed, probably the leading world radio astronomer. Frankly, scientists can be anything from a B.Sc. London University, passed yesterday. However, I am talking about 30 years' experience of radio astronomy and a professorship of the highest standing and order in the whole world. Both the United States and the Soviet Union come to Sir Bernard at Jodrell Bank for assistance.
Lord DAVIES of LEEK: My Lords, nobody is denigrating what the noble Lord is saying, but he is off" beat here. All we are saying is that some of these phenomena need investigation—that is all.
Lord HEWLETT: My Lords, perhaps the noble Lord could show me just one

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phenomenon which requires——I have given way a good number of times and I should be grateful if the noble Lord would let me finish my sentence. I am saying that Jodrell Bank, which covers the whole of the United Kingdom, has been on watch for 30 years. It is probably the most powerful radio telescope in the world. With great respect, if it has found nothing whatsoever to report in a positive way then, for the noble Lord, Lord Davies of Leek, to throw at me, "some scientists think that…" is not good enough.
Lord DAVIES of LEEK: My Lords, we must not take more time.
Lord HEWLETT: No, my Lords, we must not, so I fear that the noble Lord must give way to the argument. I shall give way to the noble Earl, Lord Kimberley. I knew that I should have a rough time!
The Earl of KIMBERLEY: My Lords, does the noble Lord not think it conceivable that Jodrell Bank says that there are no UFOs because that is what it has been told to say?
Lord HEWLETT: I certainly think it inconceivable—absolutely and completely inconceivable. I have known this scientist personally for more than 30 years. I would not dream of going along for a briefing, so to speak, on the estimation that he was to con me or that I was some tool of the CIA to kid your Lordships. Please do not let us carry this fantasy too far. I shall deal with one or two other aspects of the noble Earl's speech and then he shall see some correlation to the whole of my argument.
Let us turn to the defence interests of the Pentagon and other Western defence establishments. When they have been challenged they have refused to say that UFOs do not exist. Nor have they said that UFOs do exist. They are not committed. We are all men of the world and frankly there are advantages in making an international over-estimate of the possible potential strength of one's potential enemy and his ability to combat one in sectors in which one cannot adequately reply. I think that it would be most unwise of any defence establishment to make a categorical denial of UFOs, and equally foolish of me to do so. I am not
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trying to prove the existence of nothing or that something does not exist. I am saying that in the scientific evidence so far—and I can deal only in detail with the United Kingdom—there is no evidence whatever from the greatest radio telescope of a single UFO. I think that the attitudes of defence establishments worldwide, even including the Soviet Union, are probably wise; they must display the antithesis of over-confidence and complacency, lest there should perchance be some new arm of warfare that they have not adequately explored or even entered. Particularly did this attitude apply in the first decade after the Second World War when, frankly, the start of the "cold war" and the intense fear of the Soviet Union's possible aggression against the West when we were the sole possessors of atomic weapons, must have provoked such a degree of intense interest in the possibility of a new arm of warfare.
I am sorry that the right reverend Prelate the Bishop of Norwich is not here, but I am glad that the noble Lord, Lord Trefgarne, is on the Opposition Front Bench. I quote from Sir Bernard:
"Whether we are the only people in the universe is entirely another matter. That is a subject of very serious importance and is being investigated".
But there is no direct connection between the possibility of other persons occupying other bodies, either within or outside our own solar system. However, one thing is quite clear: there is an infinitesimal chance that there exist other people who could be within our time-frame—and I refer of course to the statements made by the noble Lord, Lord Gladwyn, and the noble Earl, Lord Halsbury—who would be able to spend perhaps ten or hundreds of light years getting here and who would have survived that length of time in those atrocious conditions and entered our earth atmosphere assuming that they are some sort of humanity and have some form of flying saucer, or whatever our friends proclaim it is. How could they possibly meet us in those circumstances? Let us take the million-to-one possibility that they could. Do your Lordships mean to tell me that they could get so close to us as to be sighted, but be incapable of any form of communication or identification whatever? No, I am sorry.
I have listened most carefully to everything that has been said. The noble

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Earls, Lord Clancarty and Lord Kimberley, have claimed sightings from times before Christ, through the Middle Ages up to the present day. Those noble Earls know full well that the amount of scientific knowledge in the Middle Ages, and particularly before the times of Christ, simply did not allow a tenable theory that they had that degree of knowledge to be able to understand any of the phenomena that we know today. Indeed, in the last 30 years there has been a dramatic change in the sum total of knowledge in this field. No doubt that is why Jodrell Bank can proclaim that they have had no evidence of sightings of any description which are not perfectly explicable as natural phenomena within our own universe.
I am sorry, the existence of UFOs is even more fanciful than Gilbert and Sullivan's Iolanthe—charming indeed, but I am afraid a joke upon your Lordships' House. I am afraid that some of my noble friends join the flat-earthers, who will make the best playmates for this particular lobby. We have a duty to the country to explode the myth. Tonight we have been carried away in realms of fascination and delight, but they have precious little to do with the facts. I suggest that the myth must be exploded. We must return to work in this dreary old world and the difficulties we are in. But I beg your Lordships, and in particular the noble Lord, Lord Strabolgi, for heavens' sake, no more Government Department inquiries. That alone we should be spared as the result of this excellent debate.
9.55 p.m.
The Earl of CORK and ORRERY: My Lords, I hope that the noble Earl, Lord Clancarty, will not be cast down by the speech to which he has just listened. I myself must confess that I know remarkably little about unidentified flying objects. I know a few things about them. I know quite a bit, and I have learned more since the beginning of this debate, about attitudes towards them. They are almost as interesting in some ways. There is one type of attitude towards them that I view with respect, and that is the attitude represented by people who call themselves, or perhaps to be fair are called by others, "ufologists". I do not know whether the noble Earl will accept that word. I rather hope he would not.
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I admit the charm, the satisfaction, and the neatness of UFO as—this is the word the noble Lord, Lord Davies of Leek, is so good at—an acronym, coming from "unidentified flying object". But it unfortunately leads to a word which to disrespectful persons, and there are some about, might be suspected as originating somewhere between illiteracy and the purely silly; rather as though a keen student of the affairs of the United Nations should describe himself as a "Unologist", and his interest "Unology". That would have been severely distressing to my late lamented friend Lord Conesford, and indeed to me.
If there is an agency set up for collecting and correlation of information, as I hope there will be, I suppose it could be called "Ufo info", which would have a certain elfin charm. But I am admittedly being absurd, and being so on purpose. I am doing it for defensive reasons, and I hope that the noble Earl will not think that I am being offensive. I am not. I hope that somebody will think of a better word. There is in fact a Greek word "téras", meaning a portent in the sense of a marvel or wonder, which would generate quite nicely a teratologist, or teratology. In fact I am not sure that teratology is not in the dictionary as the study of monsters. It is not a word that is widely used. It is not on everyone's lips very often, and it would not really matter if it were taken over to refer to portents. There is a precedent for this kind of thing, in television. As noble Lords will know, television originally meant, before it meant what it means now in the familiar sense as we understand it, clairvoyance, and nobody finds any confusion now. Whatever it may be known as, let us proceed and not waste time.
I must make a remark—nobody has done so so far, I suspect rather to his surprise—about the speech of my noble friend Lord Trefgarne. If he had been speaking as a private Back-Bencher I would probably have not said anything, but he was speaking from the Dispatch Box. Therefore, he presumably represents the views of the Party to which I belong. It is a view I wish to disown entirely, because if a Party of any magnitude cannot produce better views than that on a serious subject, I confess I am ashamed

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of it. If this represents all that the Conservative Party can produce in the way of thinking on what is undoubtedly a serious subject, whatever your opinion about it may be, then this is deplorable.
If the noble Lord really thinks that there is no serious interest or belief taken nowadays in witchcraft, perhaps he does not read the right newspapers, but I can assure him that this is far from true. He is not a believer in unidentified flying objects. "I am no believer in UFOs", he said. I do not know how you can not believe in UFOs. You can take it for granted, if your mind takes a leap ahead, that by an unidentified flying object something is intended that is supposed to have originated in outer space, and you can say you do not believe in that. But I do not know what it implies to say that you do not believe in an unidentified flying object. You do not believe in the object? You do not believe in its flying? You do not believe it is unidentified? There are things that are unidentified. Perhaps we are not trying. I do not think it is reasonable to say that they do not exist. Nobody, except my noble friend Lord Hewlett, has seriously contended that they do not exist. The question is, what are they?
Lord TREFGARNE: I am pleased my noble friend has allowed me to intervene, my Lords, because he has been very caustic about what I had to say. I do not deny the existence of unidentified flying objects. I simply say that most of them are identifiable, that some are not objects at all but simply a trick of the light or a meteorological phenonemon—I think that is so in many cases—and that I agree one cannot deny the existence of unidentified flying objects. It is simply a question of how we identify them.
The Earl of CORK and ORRERY: My Lords, I take my noble friend's point. I am anxious not to misquote him, but he also said that ufologists—it is difficult not to use that word—referred to unexplained sightings which would be explained if only we had better evidence; that was the gist of one part of my noble friend's argument. In other words, if we had better evidence we should be able to explain those sightings. That is the sole point on which the noble Earl initiated
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this debate. That is what he is asking for: he wishes evidence to be collected, collated, examined, evaluated and reported on as to what these things are, and it is notable that he himself did not say what he thought they were. Other noble Lords have spoken as though he had said they were fairies or I do not know what, when in fact he said no such thing. I believe he is a leading authority on these matters—certainly he has studied them more closely than anyone else of whom I have heard—and he must have exercised very great restraint in this matter, and he is to be congratulated on that as well as on initiating the whole debate.
I once had an ancestor—I still have him in a sense, in that he is still my ancestor although he is dead—called Robert Boyle who founded a society called the Royal Society. I feel that if he returned to the rooms of that enormously prestigious society now and found that the present Royal Society contained Fellows of such erudition and charm as the noble Earl, Lord Halsbury, he would feel entirely at home; a man of the most agreeable and totally non-sceptical nature, even if he did write a book called The Sceptical Chemist.
The noble Earl has done a service by displaying before our very eyes the scientist-philosopher who knows precisely the limits of science and makes no effort to go beyond them. Nor does he point the finger of scorn at anyone else. He must know, as others know, that it is impossible to prove anything by negative evidence. If you wish to prove that something is not so you can do it only in logic—by proving the existence of something that is so that makes that first premise impossible. Thus, vou cannot prove that any particular type of flying object does not exist, and with respect to my noble friend, the fact that the Jodrell Bank telescope has not seen something not only does not prove, but is not even particularly good evidence, that it was not there. I am prepared to accept, if told, that the Jodrell Bank telescope has been operating on a frequency suited to the observation of UFOs of one kind or another for the last 30 years, but, until I am told that, I shall be sceptical in that matter.
Lord HEWLETT: Let me be quite clear about this, my Lords. I did not say other than that Jodrell Bank had made

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many thousands of sightings but had been able adequately to explain them away as natural phenomena from our own universe.
The Earl of CORK and ORRERY: I thought that I had my noble friend right, my Lords; in other words, the telescope has not seen anything that was inexplicable. But I do not think that that is really an argument that something does not exist. The question is: what kind of thing can it be? I hope that my noble friend does not think that I am going on about him—I no longer am. How is it possible to maintain more than a certain degree of doubt in 1979?
I remember, as may some other noble Lords, one or two of whom may be present in the Chamber, my predecessor who sat in this House. He was born in the year 1873. When he was born there were no motor-bicycles or gramophones, fountain pens, safety razors or electric trains. Messrs. Daimler and Benz in Germany were just putting the first petrol-driven car on to the road, and Einstein, I think, was eight years old. My noble and gallant kinsman, when he finally left the active list of the Navy at a very advanced age, had lived into the age of the nuclear submarine, having begun his first sea-going voyage under sail. That was the band of progress represented technologically in the lifetime of one serving naval officer. What would he have said had he been told that in my lieftime—and I am not even all that near the end of it, either—I should see men on the moon; or computer technology carried to the pitch that it has reached; or that there would be such an outbreak of wisdom following Einstein and men like Schrodinger, Heisenberg and others; or the astonishing ascent of knowledge into the atomic world?
This has all happened in the lifetime of many of us, and yet we sit here, some of us, and say that marvels which have been postulated by some, and which indeed are less in magnitude than most of those would have been to my uncle, are impossible. We are not all saying that—perhaps nobody is saying that—but the argument is quite untenable. I have no wish to express any view on what a UFO may be. What I wish to say is that there is no knowing what it is not. It may be a product of some kind of psi faculty, as the noble Earl, Lord Kimberley, mentioned. It may be mechanical. It may
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be purely terrestrial. I doubt if it is angels. But I believe that, for the clearing up of mystery, for the removal of doubt, for even the eliminating of some of the dangers which may exist and to which the right reverend Prelate referred, some kind of an open inquiry ought to be set up. I am rather inclined to agree with the noble Lord—I think that it was the noble Lord, Lord Kings Norton—who said that probably it should not be an intra-governmental inquiry. I think it should be someting rather more open than that, but it ought to take place. If a group is set up within this House, as suggested by the noble Earl himself, that would be excellent. I should myelf be entirely in favour of it. In any case, let us get this matter cleared up and into the open, and by all means let us take it seriously, because this is a serious subject. Far too many people are taking it seriously for it not to be a serious subject.
Finally, I wish to voice my most sincere congratulations to my noble friend who made his maiden speech this afternoon. It is very impertinent of me to congratulte him upon it, but I should like to say how much I enjoyed it. I have not yet said anything complimentary about the noble Earl who initiated the debate. I have left this to the end on purpose because I think it may not be entirely realised what a service he has done. This is the first such debate that has occurred in any society such as this particular one; and this society, by which I mean this noble House of Parliament, is probably the only legislative assembly in the world in which it could happen. I hope that it will have repercussions which will spread far beyond this Chamber. What the outcome will be I do not know, but, in initiating the ripples which I hope will spread all over the surface of the mill-pond, the noble Earl has done a most valuable service.
10.10 p.m.
Lord STRABOLGI: My Lords, I should like to join with the noble Earl, Lord Cork and Orrery, in saying how grateful we are to the noble Earl, Lord Clancarty, for initiating this debate on UFOs. Of course, the subject has been of considerable interest in this country, and I hope our discussions, which, as the noble Earl rightly said, have been the first that we have had in your Lordships'

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House, will help to increase public understanding. But before I reply in detail to the debate—and I think it has been a most interesting one—I should like to join with my noble friend Lord Davies of Leek in congratulating the noble Viscount, Lord Oxfuird, on his maiden speech. We were very glad to hear from him, if I may say so, and I hope we shall hear from him again on many other occasions. I shall be referring to some of the detail of his speech later, but at this stage I should like to offer him my warmest congratulations.
There are undoubtedly many strange phenomena in the skies, and it can be readily accepted that most UFO reports are made by calm and responsible people. However, there are generally straightforward explanations to account for the phenomena, as I think was said by the noble Lord, Lord Trefgarne, speaking for the Opposition—and I must say that I welcomed his constructive speech. There is nothing to convince the Government that there has ever been a single visit by an alien space craft, let alone the numbers of visits which the noble Earl, Lord Clancarty, claims are increasing all the time. As has been said today, we live in a huge universe. I find as awe-inspiring as Pascal did the contemplation of infinite space. There are some 100,000 million stars in our galaxy alone, which it would take 100,000 years to cross at the speed of light. Beyond our own galaxy, the distances become even more daunting. The light year, as your Lordships know, is about 6 million million miles. The Andromeda galaxy is over 2 million light years away, and that is in our own local group of galaxies! There are, of course, other groups as well.
The evidence suggests that there is no intelligent life on the other planets of our own solar system, as the noble Viscount said. There are, of course, different views about whether there might be life elsewhere in the universe, but certainly there is no serious positive evidence to show that there is. If there were an advanced civilisation elsewhere in the universe, as my noble friend Lord Davies of Leek supposed, with the technology to traverse these colossal distances, there are many questions to be answered. What is the point of this alleged huge number of visits to our planet, over three decades
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or more, to no apparent purpose? There seem to be internal inconsistencies in the idea. To put it simply, if these alleged aliens prefer to keep out of the way, the number of reported sightings would surely be only a tiny portion of the actual UFO movements, which would run into many millions. If they do not prefer to pass unnoticed, we could surely expect unmistakable appearances.
Why have they never tried to communicate with us? Why has there been no evidence on radio of attempts at communication? And would not such a large number of movements be picked up by our defence radar system? Why has not a single artefact been found? Assuming that each visit does not represent a journey from a distant star, where are these alien space craft supposed to be hiding? Now that the idea of such bases on the moon or on another planet in our solar system is barely tenable, ufologists have had to claim that the aliens are based in the depths of the sea or in a great hole in the earth, or even that they come from invisible universes and other space-time continua. Anyone who accepts the hypothesis of large numbers of alien visitations seems forced towards explanations that are ever more fantastic, and incapable of either proof or disproof.
As I have said, there really are many remarkable things to see in the sky; and most UFO reports relate to actual phenomena reported by sensible people. But, my Lords, let us consider the phenomena themselves—and the noble Lord, Lord Trefgarne, mentioned some of these. Huge quantities of space debris enter our atmosphere, and are often seen as meteors, and fireballs; bright planets and even the moon or stars have been reported as UFOs, in unusual atmospheric conditions, as the noble Lord, Lord Hewlett, said; there are tricks of light on cloud, and particular cloud structures; there is Aurora Borealis, St. Elmo's Fire and ball lightning which was referred to by the noble Earl, Lord Halsbury, which has been known to drift along telephone or power lines. There are some 5,000 man-made objects in orbit, satellites and debris, some of which can be seen by the naked eye, some through binoculars. About 600 such man-made objects re-enter the atmosphere every year, as the noble Lord, Lord Hewlett, reminded us. The quantity is far less than natural space

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debris, but, my Lords, the phenomena can be astonishing.
Last April the Ministry of Defence received reports of a large piece of debris re-entering across the South of England. Most reports were factual, but one spoke of an
"… oval thing with a white cockpit which hovered for a while then shot off at great speed".
My Lords, we cannot prove that this was not a UFO, but it occurred at the same time and place as known re-entry of debris.
Many reports relate to aircraft seen in unusual conditions at unusual angles. One recent UFO was confidently reported on local radio. Again, my Lords, we cannot prove that it was not a UFO, but we do know that an RAF Vulcan bomber on a low-flying mission passed the same spot at the same time and on the same course as the reported UFO. Aircraft lights have led to UFO reports; as have distant aircraft with landing lights on—I have seen them myself—flares from aircraft, short condensation trails lit by the sun after dusk and light reflected from aircraft. Other phenomena include meteorological balloons. The Meteorological Office alone releases 50 such balloons every day, which expand to 40 ft. in diameter and rise to 100,000 ft. and can be lit by the sun after dark. Many other organisations, such as universities, use balloons, some much larger. Meteorological searchlights shine on clouds: the beam itself cannot be seen; only a point of light in the sky. There are hot air balloons and kites; even birds have been reported as UFOs; lights on distant towers; car headlights on distant hills; dust devils; and airborne debris carried by the wind.
All these phenomena can be misinterpreted by the most sensible observers, particularly when seen unexpectedly and briefly and in unusual atmospheric conditions. This is what opponents of the natural explanations forget. With distortions of light, and mirages, the most commonplace things can be so changed as to be barely recognisable. For instance, I am told that the US Air Force attributed the 1947 sighting by Arnold described by the noble Earl, Lord Clancarty, to a mirage effect.
Phenomena seen through glass are suspect. There are phenomena generated within the eyeball and there are optical
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illusions to which the noble Earl, Lord Halsbury, referred. One scientist, whose task includes watching satellites, describes how, when observing stars near moving clouds, he finds it difficult to escape the illusion that the stars are flying past stationary clouds. The noble Earl, Lord Halsbury, referred to the green flash. I used to see it myself in Alexandria when on leave. It was one of our evening pastimes to sit on the promenade and watch it go down over the sea.
My Lords, in 1968, the United States Air Force commissioned the University of Colorado to carry out an independent study into UFO phenomena. Their report, which was published in 1969, was very substantial and detailed and it covered some 50 examples of such phenomena, but added that it was impossible and potentially misleading to try to tabulate all of the possible causes of UFO perception: there are simply too many. The report's main conclusion was, and I quote:
"Nothing has come from the study of UFOs in the past 21 years that has added to scientific knowledge".
The findings of this report were endorsed by a panel of the National Academy of Sciences.
There really are tens of thousands of strange things to be seen. It is the custom to call such phenomena "UFOs", and to transpose this easily into "alien space craft". Often the appearance is too fleeting and the description too imprecise for a particular cause to be attributed. What we can say is that there is a great variety of plain explanations. There is no need, I suggest, for the far-fetched hypothesis of alien space craft.
To genuine sightings we must, however, add hallucinations; the excited tales of the gullible; and the embellishments of the born romantic. There are also indications that ufologists accept reports of UFOs somewhat uncritically. The noble Earl, Lord Qancarty, referred to a papyrus found among the papers of a Professor Tulli recording flying saucers during the reign of Thutmose III. The Colorado Report, which I mentioned earlier, inquired into this story. The alleged papyrus could not be traced, but internal evidence in the translation suggested a fake; inquiries with the Vatican Museum

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also suggested that Tulli, an amateur Egyptologist, had been taken in by a fake.
There is a category of UFO cases which are difficult to explain because the description is too vague or the evidence too remote, coupled perhaps with a coincidence of different phenomena and with exceptional conditions. If one accepts that there are natural explanations that could account for most sightings, it is an enormous and irrational jump to claim that the residue of difficult cases constitute alien space craft when there is no positive evidence that they do constitute alien space craft.
I should mention the famous UFO reported over the United Kingdom in December 1978, on New Year's Eve in fact. This was the one probably seen by the noble Lord, Lord Gainford, to which he referred. The phenomenon was probably the re-entry of a launcher associated with the Russian space satellite COSMOS 1068, launched on 26th December. Of over 100 reports reaching the Ministry of Defence, nearly all were factual and consistent with the re-entry of satellite debris.
The recent sightings in New Zealand referred to by the noble Lord, Lord Kings Norton, attracted worldwide publicity, and we understand that the New Zealand Government may make an announcement when the facts have been assembled and appraised. Preliminary advice from our High Commission in New Zealand shows confident expectation that the sightings will prove to be due to natural phenomena, as I think the noble Lord, Lord Trefgarne, and the noble Earl, Lord Halsbury, implied.
My Lords, the noble Earl who initiated this debate referred to the attitude of other Governments to UFOs. It is not for me to speak in this House for other Governments. I have however already made mention of the United States study in 1968 and I understand that nothing has happened since that time to cause the United States authorities to change their views or to warrant further official investigations of UFOs.
The noble Earl also referred to an interview which the then French Minister of Defence, M. Robert Galley gave in 1974 on the subject of UFOs. The noble
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Earl suggested that M. Galley had said that UFOs were real but that he, the Minister, did not know where they came from. I have read the transcript of M. Galley's broadcast and I also took the trouble to check it in the original French. The essence of what the Minister said was that the phenomena were genuine and were reported by responsible people, but that there were aspects that were difficult to explain. Nowhere did the Minister say that UFOs were real in the sense that they represent alien spacecraft, as suggested by the noble Lord, Lord Rankeillour.
The noble Earl, Lord Kimberley, also said that these had been seen by astronauts. These reports by astronauts were examined in the Colorado Study. The astronauts were required, of course, to report anything unusual perceived on their missions; and indeed many strange phenomena were noted. All the phenomena except three were explained. There was nothing at all to suggest that the unexplained sightings were alien spacecraft, and the limited visibility from the small and smeared windows of a spacecraft did not make visual observation easy.
It has been suggested in this debate that our Government are involved in an alleged conspiracy of silence. I can assure your Lordships that the Government are not engaged in any such conspiracy. In view of what the noble Lord, Lord Gainford, said, I must emphasise that the Ministry of Defence examines any UFO reports received to establish whether they reveal anything of defence interest, but nothing in the reports examined has ever given cause to believe that they represent alien spacecraft. There is nothing to have a conspiracy of silence about. What is more, a visitor from outer space would be one of the great events in history. It would certainly be an event of stupendous importance, but I hesitate to say the greatest event of all in the presence of my old friend the right reverend Prelate the Bishop of Norwich, whose moving speech we listened to with much interest.
As the noble Earl, Lord Halsbury, said, scientists are rightly inquisitive people. If there was anything in the stories of UFOs, we would expect the scientific community as a whole to be devoting much offort to studying or to making contact with the supposed aliens;

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but the idea of a conspiracy of silence by this and other Governments belongs, I suggest, to the world of James Bond.
Then the noble Earl, Lord Kimberley, implied that there was some kind of cover-up. There is no cover-up and no security ban. It is true that when people ask to see the Ministry of Defence UFO files they are told that the papers must remain confidential, but there is a very mundane reason for that. The files contain voluminous correspondence from people, and we cannot divulge the identity of the correspondents. It follows that the files must remain closed under the rules laid down in the Public Record Acts, passed by Parliament, which at present preclude disclosure until 30 years have elapsed since the date of the particular correspondence. The earliest reports the Ministry of Defence hold are dated 1962.
The noble Earl, Lord Clancarty, mentioned the possibility of an intra-governmental study of UFOs. At the United Nations recently, representatives of Grenada made statements about UFOs and proposals for a study. A compromise decision was taken, wherein the General Assembly invited "interested member states" to co-ordinate research "on a national level" and to inform the Secretary-General of their findings. The Secretary-General was requested to transmit the Grenadan statements and other relevant reports to the Committee on the Peaceful Uses of Outer Space. This is not an inter-governmental study, in the sense that the noble Earl, Lord Clancarty, is seeking, but he may be content that Grenada, and perhaps some other countries, may be reporting in an international forum.
Lord KINGS NORTON: My Lords, the word was "intra", not "inter".
Lord STRABOLGI: My Lords, I take note of what the noble Lord said. Then it has been suggested, too, in this debate that Her Majesty's Government should set up a study group. I am glad to say that the noble Lord, Lord Trefgarne, and the noble Lord, Lord Gladwyn, both speaking from the Front Benches for the Opposition Parties, did not support this proposal, and certainly Her Majesty's Government do not consider that there is any justification for the expenditure of public money on such a study.
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I repeat that I am grateful to the noble Earl, Lord Clancarty, for raising the subject of UFOs, and I am particularly grateful to him for informing me in advance of the points which he proposed to make to your Lordships. However, from all I have said, I am sure that your Lordships will agree that there is no reason for my right honourable friend the Secretary of State for Defence to make a broadcast interview about UFOs, as the noble Earl, Lord Clancarty, suggested. As for telling the public the truth about UFOs, the truth is simple. There really are many strange phenomena in the sky, and these are invariably reported by rational people. But there is a wide range of natural explanations to account for such phenomena. There is nothing to suggest to Her Majesty's Government that such phenomena are alien space craft.
Viscount BARRINGTON: My Lords, may I ask a question? I did rise to ask it when the noble Lord, Lord Strabolgi, rose. I was going to ask it of the noble Earl, Lord Halsbury, but I think it would be more courteous to ask it of the noble Lord, Lord Strabolgi. The subject of this debate is "objects", and in the expert speech—with almost all of which I agreed—of the noble Earl, Lord Halsbury, he mentioned that scientists, as scientists, are dealing only with material objects. I have to be careful here, as a non-scientist who minds his p's and q's, and who hardly knows a quasar from a pulsar, but is a black hole a material object?
Lord STRABOLGI: My Lords, I should not at all like to follow the noble Viscount down that avenue. I do not think that even scientists or astronomers know what black holes are. I may say that, in a way, I think it is a pity that the noble Viscount did not take part in the debate.
10.34 p.m.
The Earl of CLANCARTY: My Lords, I should like to thank the noble Lord, Lord Strabolgi, for his assurances and for the information which he has given us. I am sorry that we are not to be able to listen to, or see, his right honourable friend the Secretary of State for Defence giving a television interview about UFOs. There are just one or two very small points, before I end this debate. We

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have talked about the umpteen light years that some of these planets and stars are away from us. But we are looking at it from our own standpoint, because we started to fly only in 1903, when the Wright brothers took off. Now we have got Concorde, so we consider ourselves to be rather good. But we say that we cannot go right out into space because of all this distance in light years. Let us suppose, however, as has been suggested, that there are billions of planets with civilisations thousands of years old. Is it not possible that they could come here, after all that time, almost instantaneously? It is just a thought.
A propos of that, I should like to bring to the attention of your Lordships a famous scientist and astronomer, our own Sir Fred Hoyle. Some years ago he wrote a book called Of Men and Galaxies. He wrote a passage in that book which I was allowed to quote in one of mine. It read:
"You are all familiar with an ordinary telephone directory. If you want to speak to someone, you look up his number and you dial the appropriate code. My speculation"—
this is Sir Fred Hoyle speaking—
"is that a similar situation exists and has existed for billions of years in the galaxy. My speculation is that an interchange of messages is going on on a vast scale all the time and that we are as unaware of it as a pygmy in the African forests is unaware of the radio messages that flash at the speed of light round the earth. My guess is that there might be a million or more subscribers to the galactic directory. Our problem is to get our name into that directory".
I think that noble Lords will agree that there is a man of vision. Nothing is impossible in this world or in this universe. It is just that the seemingly impossible takes a little time to come about.
My Lords, we have had an interesting discussion this evening. I should like to thank the right reverend Prelate the Bishop of Norwich and all noble Lords who have taken part in this debate for their wonderful contributions. I should also like to congratulate the noble Viscount, Lord Oxfuird, upon his splendid maiden speech. May I also thank all other noble Lords for their rapt and
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riveted attention. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

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