Sitting of 16 December 1980

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
MESSAGES FROM THE QUEEN

  ST. LUCIA (GIFT OF A CLOCK AND GAVEL SET)
  The Vice-Chamberlain of the Household The Vice-Chamberlain of the Household reported Her Majesty's Answer to the Address, as follows:
  I have recieved your Address praying that I will give directions that there be presented on behalf of your House a gift of a clock and gavel set to the Parliament of St. Lucia, and assuring me that your House will make good the expenses attending the same.
  It gave me great pleasure to learn that your House desires to make such a presentation and I will gladly give directions for carrying your proposal into effect.

  DOMINICA (GIFT OF A SPEAKER'S CHAIR)
  The Vice-Chamberlain of the Household The Vice-Chamberlain of the Household reported Her Majesty's Answer to the Address, as follows:
  I have received your Address praying that I will give directions that there be presented on behalf of your House a gift of a Speaker's Chair to the House of Assembly of Dominica and assuring me that your House will make good the expenses attending the same.
  It gives me great pleasure to learn that your House desires to make such a presentation and I will gladly give directions for carrying your proposal into effect.

  INCOME TAX
  The Vice-Chamberlain of the Household The Vice-Chamberlain of the Household reported Her Majesty's Answer to the Addresses, as follows:
  I have received your Addresses praying that the Double Taxation Relief (Taxes on Income) (Netherlands) Order 1980, the Double Taxation Relief (Taxes on Income) (The Gambia) Order 1980, the Double Taxation Relief (Taxes on Income) (Norway) (No. 3) Order 1980, and the Double Taxation Relief (Taxes on Income) (Denmark) Order 1980 be made in the form of the drafts laid before your House.
  I will comply with your request.

Royal Assent
Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Act:
Anguilla Act 1980.

PRIVATE BUSINESS

  BRITISH RAILWAYS BILL (By Order)
  Order for consideration, as amended, read
  To be considered upon Thursday.

  BRITISH RAILWAYS BILL (By Order)

    BEARSDEN AND MILNGAVIE DISTRICT COUNCIL ORDER CONFIRMATION BILL.
    CUMNOCK AND DOON VALLEY DISTRICT COUNCIL ORDER CONFIRMATION BILL.
    DUNFERMLINE DISTRICT COUNCIL ORDER CONFIRMATION BILL.
    CHURCHES AND UNIVERSITIES (SCOTLAND) WIDOWS' AND ORPHANS' FUND (AMENDMENT) ORDER CONFIRMATION BILL.
    PETERHEAD HARBOURS ORDER CONFIRMATION BILL.
    Considered; to be read the Third time tomorrow.

Oral Answers to Questions
  Social Services

    Special Blind Allowance
    Sir David Priceasked the Secretary of State for Social Services what reply he has given to the representations which he has received that all registered blind persons should receive a special blind allowance comparable to non-contributory invalidity benefit.
    The Minister for Social Security (Mr. Reg Prentice): I have made it clear that, although the Government have the greatest sympathy for blind people and the problems they face, resources are not available at present to finance new benefits.
    Sir David Price: Would not my right hon. Friend agree that, whereas great progress has been made in the past 12 years in regard to financial help to the disabled, the blind have not done very well? Would he agree that the top priority for future progress is the blind? Is he aware, from the answers that he gave me yesterday, that it would cost less than half of 1 per cent. of his Department's expenditure on social security—which lies well within the margin of error in the Department's estimates—to give the NCIP to the registered blind?
    Mr. Prentice: Yes, although another way of interpreting the replies that I gave yesterday is that if the benefit were of the same order as mobility allowance it would cost nearly£100 million a year, and if it were equal to non-contributory invalid benefit it would be more than£100 million a year. In present circumstances, it is not possible to make progress towards an objective that we would all like to achieve.
    Mr. Dempsey: Why does the Minister state that he is unable to give a blind allowance? Could he not at least realise that optical charges are costly for blind persons? Would he not agree to relieve registered blind persons of such optical charges, thus encouraging them to believe that Government Departments and Parliament are interested in their welfare?
    Mr. Prentice: Again, there would be a public expenditure implication. As to optical charges, the hon. Gentleman will recognise that there is already help with charges for people on low incomes whether or not they are blind.
    Mr. Alfred Morris: Speaking recently in Eastbourne as Minister with responsibility for the disabled, the right hon. Gentleman said that if he had to apologise for anything it was for cutting too little and too late. How does he reconcile that statement with his right hon. Friend's sympathy for a blindness allowance, and how can it possibly be reconciled with the right hon. Gentleman's reported statement that there is now an unanswerable case for such an allowance?
    Mr. Prentice: The statement that I made in Eastbourne applied to public expenditure in general, and I stand by it. I recognise—I am sure that hon. Members on both sides of the House do—that there is a strong case for a blind allowance, because, apart from the handicap of blindness,
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    identifiable extra costs also arise from blindness. We would all like to provide such an allowance if the resources were available, but at present they simply are not.

    Retirement Pensions
    Mr. Canavanasked the Secretary of State for Social Services what representations he has received about his decision to stop index-linking of retirement pensions.
    The Secretary of State for Social Services (Mr. Patrick Jenkin): No such decision has been made.
    Mr. Canavan: Why, then, is the Secretary of State hell-bent on trying to make pensioners the scapegoats for the failure of Tory economic dogma, first by stealing two weeks' pension increase from them and, secondly, by reducing the real value of the retirement pension by refusing to keep it in line with the rate of inflation? Is the right hon. Gentleman proud to be cast in the role of a Tory bovver boy who specialises in mugging defenceless old men and women?
    Mr. Jenkin: The only bovver boys in this game are the people who consistently misrepresent the Government's policy.
    Mr. Paul Dean: Will my right hon. Friend confirm that the 16½per cent. pensions increase which came into effect on 24 November more than compensated for price rises, and that my right hon. Friend the Prime Minister said that the Government intend
    "to compensate fully for price increases over the lifetime of a Parliament"?—[Official Report, 25 November 1980; Vol. 994, c. 488.]
    If that is correct, should not the Opposition be ashamed of their blatant use of pensioners as political footballs?
    Mr. Jenkin: I entirely agree with what my hon. Friend has said.
    Mr. Buchan: Does not the Secretary of State agree that the decision to remove the indexing by cutting it by 1 per cent. below the level is just about the meanest and pettiest act of this mean and petty-minded Government? Is it really worth it to clobber the 8 million or 9 million old people in this country to save £60 million, which the Treasury could easily have achieved by a minor cut in the taxation handout to the rich?
    Mr. Jenkin: The hon. Gentleman will know that we gave an undertaking that pensions would remain in line with prices. As my hon. Friend the Member for Somerset, North (Mr. Dean) said, the Prime Minister confirmed that from the Dispatch Box only a few weeks ago. This year we have overshot, probably by about 1 per cent., but, of course, we shall not know that until the detailed figures are published. It is entirely consistent with the pledge which the Government have given that the adjustment should be made next year to take account of that.

    Health and Social Services
    Mr. Stephen Rossasked the Secretary of State for Social Services whether, having regard to the Northern Ireland experience, any consideration is being given to the merging of the health and social services in other parts of the United Kingdom.
    Mr. Patrick Jenkin: No, Sir.
    Mr. Ross: In a Department which, admittedly, is looking for savings, is not that an area in which some

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    savings might be achieved and also one in which a more efficient service might be provided? Is the right hon. Gentleman aware that there are parts of the country—I suggest that my constituency is one—which would benefit from a merger of these services?
    Mr. Jenkin: I am surprised that the hon. Gentleman does his constituents such a disservice. After all, it was only a month or two ago that I presented a prize to the chairman of the hon. Gentleman's area health authority for its admirable collaboration with the local authority in relation to social services. But perhaps the hon. Gentleman did not notice that.
    Mr. Wigley: Does the right hon. Gentleman accept that a reason against any merging would be that co-operation was working satisfactorily? Does he also accept that the actuality is different from area to area throughout Britain and that in many areas there is a failure to reach the objective that was set out in the Health Services Act of close co-operation between health and social services? Unless that is achieved, surely there will be a need to look at these matters again.
    Mr. Jenkin: The point made by the hon. Gentleman was well made by the Royal Commission when it said that successful collaboration between health and local authorities depended far more on the willingness to collaborate than on any institutional arrangements. I hope that all authorities will achieve the record of the best—of which the Isle of Wight is certainly one—in regard to effective collaboration for the benefit of patients and clients.
    Mrs. Dunwoody: Does not the Minister agree that the professionalism of members of the social services has demonstrated that they are capable of doing an extremely good job? What will be his attitude towards their belonging to trade union organisations, in view of the fact that he appears to be suggesting in personnel circulars that there may be some way in which health authorities can get round the Employment Protection Act? That is hardly a way to promote either professionalism or good standards in the social services or the NHS.
    Mr. Jenkin: I offer my congratulations to the hon. Lady on her appearance at the Dispatch Box as a health spokesman, and I hope that she will soon make the Shadow Cabinet as well.
    The hon. Lady's question seems to have strayed a little from the original question. All I am doing is taking the view that people in the Health Service who wish to be active trade unionists must decide whether they will take the lead as a chairman of a branch of COHSE or whether they will be managers if they hold senior management positions. I would have thought that the hon. Lady would agree that there is a conflict here which cannot be reconciled by a person doing both.

    Sickness Benefit
    Mr. Cookasked the Secretary of State for Social Services how many employee organisations or unions have welcomed the proposals in his Green Paper on sickness benefit.
    Mr. Prentice: Approximately 30 trade unions and other organisations representing employees have commented on the Green Paper "Income During Initial Sickness: A New Strategy". None has expressed support for the proposals.
    Mr. Cook: I am grateful to the Minister for that answer, which confirms that the overwhelming opinion among unions and other employee organisations is to condemn a proposal which will at the same time increase the burden on industry and cut the benefit to the sick. Will he confirm that the effect of the abolition of earnings-related supplement and the introduction of a flat-rate sickness benefit will be to cut in half the maximum benefit available to a married man with two children? Does he admit that if any private insurance company were to renege on its obligations to policyholders in the way that he is reneging on his obligations to national insurance contributors, it would end up before the courts?
    Mr. Prentice: The phasing out of earnings-related supplement is an entirely separate issue, which was part of an Act of Parliament that went through all its stages during the previous Session. The Green Paper proposes financial provision for people during the first eight weeks of sickness which, taking employees in this country as a whole, is equal in value to the existing provision under the national insurance scheme.
    Mr. McCrindle: Why should trade unions or anyone else oppose proposals when one of the aims is to treat income for taxation purposes equally whether it is earned in employment or during sickness? Could not that be said to be a basis of equality that should appeal to the trade unions?
    Mr. Prentice: When I met a deputation from the TUC about a fortnight ago to discuss these matters, I tried, with my usual tact and gentleness, to explain that I thought its attitude was a bit stick-in-the-mud. Trade unions have worked over many years to extend the rights of workers to receive sick pay from their employers. Between 80 per cent. and 90 per cent. of people at work in this country are covered by employers' sick pay arrangements. I would have thought that the TUC would welcome a statutory provision which ensures that remaining workers are covered. If it took an adventurous view of the future and was not so stick-in-the-mud, it would regard this as a basis for negotiating in better times more favourable arrangements than those laid down as the statutory minimum.
    Mr. Rooker: if none of the 30 employees' organisations with which the Minister has had meetings has agreed the proposals, what proportion of employers' organisations supports the proposals?
    Mr. Prentice: We received a great many representations from both employers' and employees' organisations. [HON. MEMBERS: "Answer the question."] I shall come to the main question. Because it was a consultative document, we have benefited from many detailed suggestions made by both trade unions and employers' organisations. The final shape of the scheme will take note of many of their points. In general, I agree that there is too much conservatism on the part of employers' organisations and trade unions.

    Kidney Donors
    Mr. Gwilym Robertsasked the Secretary of State for Social Services whether, in the light of the recent fall-off in the number of kidney donor cardholders, he will now provide the revised figures for the introduction of a computerised donor system; and if he will take steps to introduce such a system.
    The Minister for Health (Dr.Gerard Vaughan): No, Sir. A computer register would cost about £4·5 million initially and about£340,000 a year to run. We do not think that it would increase the number of kidneys donated. My hon. Friend the Under-Secretary of State put this in his letter to the hon. Gentleman on 29 September, and I shall circulate a full text in the Official Report.
    Mr. Roberts: Does not the hon. Gentleman agree that it is farcical to distribute kidney donor cards on what appears to be a haphazard basis when there is no return to any sort of central bank? Does he not agree that the figures which have been given for providing a computerised system seem to fall regularly, although provided by his right hon. Friend? They have gone down as time passes. Is he aware that computer systems experts believe that the cost would be only a fraction of the latest figure?
    Dr. Vaughan: I cannot accept that it would be an improvement on the present system. I remind the hon. Gentleman that it was a Conservative Government who introduced donor cards in 1972. Since then, 30 million cards have been issued, 16 million since May last year. That shows the way in which the Government have extended the range of contact between possible donors and kidney transplants.
    Mr. Michael McNair-Wilson: Has there been any recovery in the number of kidney donors coming forward?
    Dr. Vaughan: Yes. There has been a small recovery. I hope that this will continue.
    Mr. Ashley: I appreciate the Minister's personal concern with this problem. Is he aware that if he is not prepared to adopt a computerised system, which he ought to do, despite the cost, he should introduce the opting-out system, which is the only realistic way to ensure that enough kidney donors are brought forward?
    Dr. Vaughan: I am surprised that the right hon. Gentleman should raise that matter. He knows, like the Government, that the majority of people who have been asked about the matter would prefer not to have an opting-out system. They would prefer to continue the present system. We think that the present system should be extended.
    Mr. Farr: Will my hon. Friend say how the national multi-organ donor card system is progressing, on the lines of that pioneered so successfully by the south-west Leicester community health council?
    Dr. Vaughan: The take-up of multi-donor cards is increasing satisfactorily. A most important advance is that the Post Office, having previously refused, has now agreed to distribute cards. From January next year, the Post Office will be distributing 5 million cards, 2·5 million of them kidney donor cards and 2·5 million the new part-kidney, part multi-donor card. We shall also be introducing next year a multi-donor card—a green and white card—in its own right to replace the present cards.
    Several Hon. Members rose—
    Mr. Speaker: Order. This matter comes up again on Question 7.
    Dr. Vaughan: Following is the letter:
    "Dear Gwilym,
    I am now able to reply fully to your letter of 26 July to Patrick Jenkin on the question of cost estimates for a computerised system for kidney and other organ donation, with which you also enclosed the correspondence (attached) from S. P. Jones, Triad Computing Systems Limited. I am sorry for the delay in replying.
    The estimates for a kidney donor register previously quoted to you were made in 1978 and were based on an "opting-in" register of 21/25 million records and about three million subsequent amendments per annum. The costs were based on the procurement of a large computer, its accommodation, setting up the register and the maintenance of computer equipment, software and keeping the register up-to-date.
    As Mr. Jones mentions in his letter, due to changing technology a kidney donor register could now be held on a smaller computer with reduced equipment and maintenance costs. However, staff costs, which form a large part of the expense of setting up the register and keeping it up to date, have continued to increase.
    We estimate that the initial cost of such a register would still be about £4·5 million comprising: mini-computer £50,000, disc and tape equipment, £140,000, 30 visual display units £37,000 and setting up costs (@20p per record) £4·2 million. Running costs might, however, now be only £340,000 per annum.
    As regards the suggestion made by Mr. Jones for a Scrapbook System, we have no evidence that this would be the most appropriate system for a kidney donor register, but should it be decided sometime in the future to go ahead with such a register, then TRIAD would of course be free to respond to a competitive tender.
    Yours sincerely,
    Sir George Young."

    Geriatric and Psychogeriatric Provision
    Mr. Newensasked the Secretary of State for Social Services what steps he is taking to ensure that additional funds are made available to provide geriatric and psychogeriatric hospital beds in areas in which the numbers of elderly people are increasing at a significant rate.
    The Under-Secretary of State for Health and Social Security (Sir George Young): My right hon. and learned Friend the Chancellor of the Exchequer announced on 24 November our plans for increased spending on the NHS in 1981–82. These take account of population changes nationally, in particular the rising number of elderly people—factors which are also taken into account in allocating resources to health authorities. It is for regional and area authorities to decide how much to spend on individual services in accordance with local needs and priorities.
    Mr. Newens: Is the hon. Gentleman aware that the number of cases of old people in desperate need of a hospital bed who are now being refused admittance is growing steadily in many parts of the country? Is he further aware that the Harlow area needs immediately at least 60 more psychogeriatric beds and 80 more geriatric beds to meet the need? Is it not a disgrace if old, sick people are refused admittance to hospital and left at home to die?
    Sir George Young: I estimate that about 0·7 per cent. growth is required each year in the Health Service budget to cater for demographic changes, including the needs of the elderly. Next year we are planning to spend a 1¼per cent. increase. With regard to the specific problems in Harlow, I understand that a start is being made by the area health authority to tackle these needs and that at Honey Lane hospital, Waltham Abbey, work on upgrading a ward is nearly completed. The area health authority has

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    identified three other schemes which are required and which, if implemented, would make a start on tackling the needs which the hon. Gentleman describes.
    Sir David Price: Does my hon. Friend agree that there is clearly a growing problem with an ageing population? Does he agree that an important role is played by joint funding between the NHS and the local authority in ensuring that more people on the margin of hospitalisation remain in the community? It is important to make progress in this sphere.
    Sir George Young: I endorse what my hon. Friend says. That is why we have increased by 16 per cent. in real terms the budget for joint funding this year.
    Mr. Ennals: Does not the hon. Gentleman recognise that, as a result of the cuts in the social services and especially the domiciliary services and part III accommodation for elderly people, the pressure created by elderly people on the National Health Service will inevitably grow? Will he give some help, in terms of either additional funds or additional beds, to cope with this serious problem that concerns my constitutency and, I believe, every constituency?
    Sir George Young: I do not accept the premise from which the right hon. Gentleman started. All our information from local government indicates that expenditure on social services this year is higher than last year.
    Mr. Carter-Jones: Will the hon. Gentleman consider another aspect of the problem? Will he consider providing more resources for geriatric rehabilitation? Will he encourage doctors to take up this area of study and bring the elderly hack into the community to make better use of existing resources?
    Sir George Young: I hope that this is one of the subjects that might be mentioned in the White Paper on the elderly that we hope to publish early next year.

    Kidney Transplants
    Mr. Dalyellasked the Secretary of State for Social Services what figures he has for the number of kidney transplants performed for any convenient four-week period after the "Panorama" programme on 13 October, with any convenient period before 13 October.
    Dr. Vaughan: We know of 59 transplants in the four weeks immediately before the "Panorama" programme and of 44 in the four weeks following. This shows a small fall. I am glad to say, however, that there was some increase in the four weeks up to 8 December, with 56 transplants notified.
    Mr. Dalyell: I should like to put a question of which I have given notice to the Minister's office. What is his reply to Professor Roy Calne, who says that one-third of the organs expected are being received? What does he say to those who expect dialysis but cannot obtain it due to the limited facilities.
    Dr. Vaughan: I think that the "Panorama" programme was an absolute tragedy. I am personally very aware of the 1,800 people who are waiting and whose lives would be saved or transformed if a kidney was made available to them. It has always been our view that the BBC owes it
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    to the public to try to repair the damage. I am glad that the BBC announced yesterday that there will be a full studio debate in February on BBC1. This is to be welcomed.
    Mr. Paul Dean: Will my hon. Friend confirm that the BBC at long last intends to get off its high horse to try to repair some of the damage that it has done to critically ill patients who could benefit from transplants where donors are available?
    Dr. Vaughan: Yes. I am glad that the BBC has agreed on the programme and that there will be full medical co-operation. It has emerged that the programme was misleading and that there was no opportunity for the British medical profession to tell the public what went on. There will now be a possibility of that happening through the next programme.
    Mr. Terry Davis: I agree with the Minister about the tragic effects of the television programme in question. Will he tell the House whether the figures have been affected by the letter that he sent to the special kidney unit at the Dulwich hospital telling it that it should send bills to health authorities in the areas where their patients live? What is the cost of employing civil servants to send and receive these internal invoices? What happens if a health authority refuses to pay? Is the patient merely allowed to die?
    Dr. Vaughan: May I welcome the hon. Gentleman to his new position and hope that he will occupy it for many years to come?
    It was in special circumstances that the Dulwich unit ran out of the funds that had been made available to it. Negotiations are taking place to ascertain whether more funds can be made available. A part of the decision was to ask—not to insist—various authorities referring patients to contribute towards the cost of treating those patients.

    Retirement Pensioners (Supplementary Pension)
    Mr. Rookerasked the Secretary of State for Social Services what is his estimate of the number of retirement pensioners who have ceased to draw supplementary pension since the change in capital limits operative from 24 November.
    The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker): Actual figures of the number of pensioners ceasing to draw supplementary pension on account of the new capital rule are not yet available, but on the basis of November 1979 information it is expected that 6,000 supplementary pensioners will have lost title to benefit.
    Mr. Rooker: Is the hon. Lady still happy that the capital limit now includes the surrender value of insurance policies? What action has been taken since the promise of 10 October to the Tory conference that this harsh and unfair rule would be investigated?
    Mrs. Chalker: Only beneficiaries with life policies with a surrender value of more than £2,000 will have to encash them. There are no statistical details yet available, but I understand that few beneficiaries have policies with surrender values exceeding £2,000. If people wish to spend their capital so as to obtain supplementary benefit, that must largely be a matter for them. I am guided by the resources regulations. The interpretation of the regulations is for the independent adjudicating authorities. I said in

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    October that the matter would be considered. It must be remembered that we are not changing anything. The former Supplementary Benefits Commission used a practice similar to that embodied in regulation 6(1)(c).
    Mr. Bowden: Does my hon. Friend agree that it is unsatisfactory that up to half a million pensioners who could receive a supplementary pension do not do so? Will she instigate yet a further campaign to try to bring in these people and ensure that they receive their rights?
    Mrs. Chalker: I sympathise fully with what my hon. Friend has said. When considering the future computerisation of the Department, we hope that it will be possible for those with an entitlement to supplementary benefit but who do not now claim it automatically to be brought in.
    Mr. Andrew F. Bennett: Will the hon. Lady confirm that if two elderly pensioners who are both in receipt of supplementary benefit and with savings of slightly more than £1,000 each get married, they will lose their entitlement to supplementary benefit because their savings when aggregated will be over £2,000?
    Mrs. Chalker: The hon. Gentleman is right to say that two persons married or living together, each with savings in excess of £1,000, would have those savings aggregated as an assessment unit in the calculation of the capital cut-off point. It has happened before that persons with savings slightly over the limit spend that money in the course of natural spending and quickly become entitled to supplementary benefit. That is reasonable, but it is important that people should not abuse the system. In trying to make the system simpler, we need to have a single cut-off point.

    Supplementary Benefit Regulations
    Mr. Tilleyasked the Secretary of State for Social Services whether he is satisfied with the operation of the new supplementary benefit regulations.
    Mr. Prentice: Bearing in mind that the regulations have been in force for less than a month, yes, Sir.
    Mr. Tilley: Is the right hon. Gentleman aware that many social security officers believe that if a single parent asks for help on the ground that the children do not have shoes in which to go to school, under the new regulations they have to say that no help is available and that the only advice that can be given is that the children should be kept at home? Do the officers have it right? Is that what the Minister intended?
    Mr. Prentice: Provision for normal clothing, including shoes, is covered by the scale rates. There are additional regulations that enable additional payments to be made for clothing in certain circumstances. The hon. Gentleman has mentioned one-parent families. He will be aware that families with children, including one-parent families, are among the main gainers in the changes that we introduced in November.
    Mr. Foster: Is the right hon. Gentleman aware that severe penalties are imposed upon school leavers who are eligible to leave school at Easter and who decide to return to take examinations? Are they not likely to lose as much as £10·50 a week? Is it not remarkable that the National Association of Head Teachers—not the most radical body—is now saying that the regulation may well be disastrous for those who decide to take examinations? Will he estimate the effect that this provision will have on examination results?
    Mr. Prentice: This issue was fully argued in an Adjournment debate last week. I do not think that I can add to what was said on that occasion.
    Mr. Buchan: Are we to take it from the Minister's answer that he has no intention of trying to deal with the problem? Is not this one of the many regulations that have been introduced over the past few months which, more and more, extend the ethics of the workhouse into our society? Is the Minister aware that the doubling effect of family unit assessment plus increasing unemployment and the clobbering of redundancy payments is making the bonds ever tighter around those caught in the developing poverty trap?
    Mr. Prentice: I think that the hon. Gentleman has it entirely wrong. One of the main differences between the old system and the new system is that the new system depends less upon discretion and more upon entitlement as a matter of law. Surely, that is getting further away from the atmosphere of the workhouse.

    Prescription Charges
    Mr. John Evansasked the Secretary of State for Social Services if he has any plans to increase prescription charges.
    Dr. Vaughan: The prescription charge was increased from 70 pence to £1 per item on 1 December 1980. My right hon. Friend has no plans at present for any further increases.
    Mr. Evans: I am grateful for the last part of the Minister's answer. Is he aware that a considerable number of items being prescribed cost less per article than the prescripton charge? Will he consider giving a directive to chemists that, when that occurs, they should inform the customer, who could pay the price of the article and save the £1 prescription charge?
    Dr. Vaughan: May I suggest that we wait a little while to judge the effect of the new £1 charge and the effect that it has on the take-up of prescriptions? There are already changes in the pattern of prescribing.
    Mr. Thompson: What is the proportion of those who are given prescriptions who pay the £1 charge?
    Dr. Vaughan: Those who are exempted from prescription charges amount to 64 per cent. of those receiving prescriptions. A further 5 per cent. are on season ticket arrangements.
    Mr. Park: Will the Minister confirm that the income from the sale of six-month and 12-month prepayment certificates was taken into account halfway through the financial year, resulting in a deduction of £10 million nationwide? Does he accept that that was not conveyed formally to area health authorities and that the authorities had to pick it up from an appendix to a financial report?
    Dr. Vaughan: I do not accept the hon. Gentleman's implied criticism. There is always a delay between a change in the charge and the recovery of charges. Overall, the new £1 charge will raise an extra £30 million, which can only be of benefit to the National Health Service.
    Mr. McCrindle: What is my hon. Friend's reaction to the provocative posters appearing in chemists' premises under the heading "Tax on Health"?
    Dr. Vaughan: I am glad that my hon. Friend raised that matter. I deplore the wording of the posters, which is misleading. The charge is not a tax. It is a reasonable contribution by a user, when he is able to afford it, to the cost of the National Health Sevice.
    Mrs. Dunwoody: Is it not true that pharmacists are reporting more and more cases of patients asking them to decide which items they do not need on a prescription? Is it not also true that there has been a disastrous and frightening drop in the number of prescriptions being issued—about 19 million down on the figure before the £1 increase? How does the Minister explain that?
    Dr. Vaughan: The hon. Lady is trying to put an alarmist side to the matter. Supposing that there is a small decrease in the number of prescriptions, we cannot have it both ways. We cannot ask people to take fewer drugs and then complain when they have fewer prescriptions.

    Maternity Allowance
    Mr. Madelasked the Secretary of State for Social Services whether he is satisfied with the present contribution conditions for the weekly maternity alllowance, in view of the length of time that elapses between the contribution year and the birth of the baby; and if he will make a statement.
    Mr. Prentice: The arrangement of contribution years and benefit years means that a particular tax year determines title to benefit for periods of interruption of employment commencing from nine months to 21 months after the tax year has ended.
    I would not claim this as the ideal relationship between tax year and benefit year for short-term benefits. It does, however, represent a compromise between, on the one hand, the desirability of relating title to a recent contribution record and, on the other, the demands of economic administration and the need to allow sufficient time for contribution information to be linked to individuals' records.
    Mr. Madel: Will my right hon. Friend consider making an alteration that would provide a fairer system whereby, provided that a woman has paid full contributions for two years before she stops work to have a baby, she should be able to receive full maternity allowance? Would that not be a fairer system and, in due course, easier to administer?
    Mr. Prentice: The present arrangements have stood the test of time since 1975. I shall consider my hon. Friend's point.
    Mr. Nicholas Winterton: In order to impress upon the House the Government's determination to see open government, will my right hon. Friend agree to consider sympathetically the recommendations of a Select Committee report that is likely to be published in the near
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    future? Will he urge the Secretary of State to bring forward a debate on this matter so that the issue, and the emotive issues that lie behind it, can be aired by the House and a favourable and fair position established?
    Mr. Prentice: As the Select Committee report has not yet been produced, it might be premature to comment. I shall give it full attention when it appears.

    Ambulance Services
    Mr. Moateasked the Secretary of State for Social Services when he expects to publish his final proposals for the structure of the ambulance services in the context of reorganisation of the Health Service.
    Sir George Young: We must await the recommendations of the Health Service working party on patient transport services, which, I understand, hopes to report early next summer.
    Mr. Moate: Is my hon. Friend aware of the rumours that the Government favour dividing the service between the emergency service and the social transport service? Will he confirm that the Government are open-minded about the matter? Will he, then, do the obviously right thing and keep a unified service, based essentially and generally on the new districts?
    Sir George Young: The rumours mentioned by my hon. Friend are unfounded. The Government are awaiting the report to which I referred. I recall my hon. Friend's spirited speech on the subject on 27 October. At this stage, we are not ruling out any solution to the problem.

    National Health Service (Insurance Payments)
    Mr. Kenneth Lewisasked the Secretary of State for Social Services when he expects to issue his Green Paper on possible changes in insurance payments for the National Health Service.
    Mr. Patrick Jenkin: We are examining the strengths and weaknesses of our present system of health care financing and those of other countries. It is too soon to say when and in what form consultative proposals will appear. In the meantime, I welcome debate on this important subject.
    Mr. Lewis: Is my right hon. Friend aware that the Health Service needs an increase in resources which it cannot, and should not, get from the Government? Does he agree that there is much to be said for amalgamating the private sector into the present Health Service so that they may work together? When my right hon. Friend publishes a White Paper, will he ensure that action arises from it as soon as possible?
    Mr. Jenkin: I must make it clear both to my hon. Friend and to the House that I do not think that a White Paper or a consultative document will appear in the near future. We have a great deal of work to do before we can put forward any proposals for consultation. On the question of collaboration with the private sector, I am glad that my hon. Friend supports the arrangements that we are trying to make in the Health Service to have much closer collaboration between it and the private sector for the benefit, above all, of National Health Service patients.
    Mr. Ennals: Quite apart from the principles at stake, about which most of us on the Labour side feel strongly,

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    is not the Secretary of State aware from all his studies that insurance-based health provision is much more expensive and bureaucratic than the present system under the National Health Service?
    Mr. Jenkin: I do not necessarily accept the right hon. Gentleman's remarks. The distinguishing feature of health services financed by insurance is that they do not have waiting lists anything like the size of ours. That seems to be a target worth shooting at.

    Prime Minister (Engagements)
    Ql. Mr. Gwilym Robertsasked the Prime Minister if she will list her official engagements for 16 December.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I held meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Roberts: During the course of her day, will the Prime Minister take a few minutes to consider the millions of people who will have a bleak Christmas because they are unemployed or on short-time working? Will she also consider the scores of elderly people who will die this winter from hypothermia or malnutrition directly as a result of her Government's policies, especially the public expenditure cuts? What will she do about it?
    The Prime Minister: On the hon. Gentleman's latter point, he will be the first to be aware that retirement pensions have recently risen by 16½per cent., which is in excess of price increases. He will know also that an extra fuel provision, costing £200 million, is directed towards those who most need the extra heat. The Government have already taken that action.
    Dr. Mawhinney: Is my right hon. Friend aware that people in Britain and the United States have noted that the Taoiseach has not unequivocally said in public that hunger strikers should not be given political status? Is she further aware that that statement was not included in the communiqué from Dublin? Will she say whether the Taoiseach told her that hunger strikers should not be given political status?
    The Prime Minister: I cannot answer specifically for the Taoiseach. I have not been requested to give the hunger strikers political status by anyone except the hunger strikers themselves. There is no question, either now or at all, of giving them political status.
    Mr. Faulds: Will the Prime Minister today give time to the consideration that, although I was approached—[HON. MEMBERS: "Reading".]
    Mr. Nicholas Winterton: Learn your lines.
    Mr. Speaker: Order. Most unusually, the House requires me to protect the hon. Member for Warley, East (Mr. Faulds).
    Mr. Faulds: As I do not wish to waste the time of the House, I shall sit down.
    Mr. Hordern: While reflecting on recent discussions with the Irish Prime Minister, will my right hon. Friend confirm that there is no question but that the people of Northern Ireland should remain a part of the United
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    Kingdom for as long as they wish? Does she agree that there is no reason why the obstacles that may stand between ourselves and the Republic of Ireland should not be carefully examined? Will she say whether any suggestion was made during the discussions that an Anglo-Irish council might be formed to consider the question more carefully?
    The Prime Minister: With regard to the future of the people of Northern Ireland, it remains as I have frequently said—they stay with the United Kingdom until they express the wish to do the contrary and that wish is confirmed by this House of Commons and the Upper House. With regard to an Anglo-Irish council, I am not quite certain what my hon. Friend means. We were not considering any specific constitutional measure. We were considering measures of closer consultation between the United Kingdom and the Republic of Ireland, but very much between the United Kingdom and the Republic of Ireland and not between Northern Ireland and the Republic of Ireland.
    Mr. Tilleyasked the Prime Minister if she will list her official engagements for Tuesday 16 December.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave a few moments ago.
    Mr. Tilley: Has the Prime Minister had the time to see the calculation that, if manufacturing output continues to decline by the annual amount announced yesterday, in about three years' time it will be about half of what it was in May 1979? Does the right hon. Lady intend to go into the next general election, assuming that she is still Leader of the Conservative Party, on a promise to squeeze production entirely out of the economy during the next five years?
    The Prime Minister: In this House very few of us go in for direct extrapolation of that kind, knowing full well that it is likely to be wholly wrong.
    Mr. Ian Lloyd: Has the Prime Minister yet had an opportunity to consider the exceptionally important speech made by the retiring president of the Royal Society, Lord Todd, in which he argued most persuasively for a more vigorous and direct representation of the interests of science and technology at the highest levels of Government?
    Mr. John Home Robertson: We have Tam Dalyell.
    Mr. Lloyd: In the light particularly of the OECD's recent revelations that the West as a whole has been spending much less on research and development throughout the system than it should be, does not my right hon. Friend consider that Lord Todd's representations are most important?
    The Prime Minister: I am always prepared to give very close consideration to Lord Todd's representations. As my hon. Friend knows, in this country we do have science and technology represented at the highest level of Government.
    Mr. Kenneth Carlisle: Does my right hon. Friend agree that the proposed recruitment of 1,000 extra workers by BL for extra production of the Mini Metro shows that jobs will be created if we use modern machinery as productively as possible to create and manufacture the goods that people want to buy?
    The Prime Minister: Yes. The Mini Metro production line is manned by far fewer people than the previous Mini line. It is, therefore, very much more efficient, which is one factor, together with the excellent design, which will contribute to higher sales. If more people are being taken on to produce those cars because the demand is there, I am delighted.
    Mr. Allan Roberts: Will the Prime Minister take time today to sack the Secretary of State for the Environment, if for no other reason than that of self-interest, since he is destroying the Conservative Party's interests in local government? Is the right hon. Lady aware that this afternoon he will destroy what is left of local democracy by his block grant allocations, that he has already destroyed Conservative councils' housing programmes and he has even turned the building industry, which has many contributors to the Tory Party and CABIN, against that party, so that its criticism is becoming as virulent as the CBI's?
    The Prime Minister: I can well understand why the hon. Gentleman would like me to dismiss my right hon. Friend the Secretary of State for the Environment. The simple reason is that he gives better than he gets from the Opposition.
    Mr. Foot: Would the right hon. Lady care to tell us what increase in unemployment she believes will be produced by the combined statements of the Secretary of State for the Environment and the Secretary of State for Wales? How much extra unemployment in those areas that are so badly hit is likely to be produced by the effects of her policy on local government?
    The Prime Minister: When the right hon. Gentleman was Secretary of State for Employment, he never gave forecasts for unemployment. They are wholly unreliable. I do not intend to give them either.
    Mr. Foot: Does the right hon. Lady mean to tell us that, when the Cabinet discusses the allocation of the amounts for local government and the services that will thereby be injured—and if she does not know that services will be injured, she must be the only person in the country who does not know—it does not discuss the effect on unemployment of cuts imposed on local authorities?
    The Prime Minister: The right hon. Gentleman is first advocating direct forecasting, which he never followed, and I shall follow his practice and not his preaching. Secondly, he is undoubtedly advocating that any economies in public spending—and, after all, the Government of which he was a member had to make far more severe economies than I have made—should come from current expenditure, so that there is plenty of expenditure for capital. Unfortunately, he has not followed that advice by supporting economies in current spending.
    Mr. Foot: Is the right hon. Lady aware that what I am advocating is that she should answer the questions that we put to her? Will she take into account that the whole country has a right to answers to those questions, particularly because 1980, under her direct supervision, has been the worst year in British history since 1945 for employment of our people, and almost every announcement made by her Ministers from the Dispatch Box adds to the figures? Is she further aware that that is what the country is concerned about, even if she is not?
    The Prime Minister: No. Announcements from this Dispatch Box do not add to the figures. Announcements from this Box are designed to try to release more resources for the private sector. The right hon. Gentleman is attempting to take away resources from the private sector, which will increase unemployment, as he did when he was Secretary of State for Employment, when unemployment rose by 100 per cent.
    Mr. Forman: Will my right hon. Friend also confirm that the facts show that the proportion of world trade that this country has is larger than it was a year ago? Will she further confirm to the House that, if we are to maintain that very satisfactory position, it is vitally important that we do not emulate last year's figures, when we paid ourselves 22 per cent. more for 3 per cent. less production?
    The Prime Minister: I am happy to confirm that, thanks to the success of British exporters, we now have a bigger share of world trade than we had at this time last year. Both management and work force deserve congratulation on that.
    Mr. Barry Jonesasked the Prime Minister what are her official engagements for 16 December.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some time ago.
    Mr. Jones: Does the right hon. Lady understand that yesterday's ministerial statement was very disappointing for the textile industry? Will she instruct her Ministers to take a much tougher line against subsidised American man-made fibre imports, which are taking away our home market? Has she noted the large loss of jobs in the Courtaulds group?
    The Prime Minister: I do not agree with the hon. Gentleman's summing up of the textile statement yesterday. As he is well aware, the interests of different parts of the textile industry vary, and it was necessary not to continue the limitations on imports for polyester yarn because we were under threat of retaliation being taken against Yorkshire worsted. That was a factor we had to take into account. The hon. Gentleman will be aware that my hon. Friend pointed out that the European Commission will take up vigorously with the United States the underpricing of oil and gas resources, which are directly in point with textiles based on chemicals.
    Mr. Body: If my right hon. Friend is considering economic statistics today, will she pay heed to the remarkable surplus in our current account and balance of payments and make a statement paying tribute to British industry—and to the policies that made this possible?
    The Prime Minister: Yes. I am delighted to respond to my hon. Friend's invitation. The volume of exports last month held up extremely well. It was more than 7 per cent. over the volume for the previous month at a time when oil exports were down. That is a very good record and shows that people who have the right design, marketing techniques and vigorous approach can sell abroad in the world at the present exchange rate.
    Mr. Heffer: If the right hon. Lady's Government are making resources available for private enterprise, why are all the small business people in Liverpool, particularly small building construction people, writing to tell me that they are going out of business?
    The Prime Minister: One of the reasons might well be that we have taken too high a proportion of resources for public spending. That is exactly what I am trying to bring down.
    Mr. Nicholas Winterton: Does my right hon. Friend agree that one of the reasons for our improvement in trade is the export of North Sea oil? Will she consider introducing some system under which the benefits of North Sea oil will be used not only for balancing the national economy but more positively for aiding British industry? As my right hon. Friend said, our manufacturing base can generate the genuine prosperity upon which the future success of the country depends.
    The Prime Minister: The income from North Sea oil into the Exchequer this financial year will be about £4 billion. The output from the Exchequer to nationalised industries alone will be 75 per cent. of that, and extra is already going to support industry in the regions. One could say that the proceeds of North Sea oil are already supporting British industry. However, unfortunately, nationalised industries do not provide as good a service to the British people as does the private sector.
    Later—
    Mr. Faulds: On a point of order, Mr. Speaker. You may have noticed my untypical and unusual—indeed, one might say practically unnatural—modesty in yielding my place at Prime Minister's Question Time. This is a serious matter. We now have increasing pressure at Prime Minister's Question Time because many more hon. Members want to get in in those two periods of 15 minutes a week. Today, we had 52 questions for Prime Minister's Question Time. I must make the point that the sort of mindless chiacking, the sort of gagging by decibel, that we had today not only wastes the time—those 15 minutes twice a week—but keeps additional Members from getting in on questions. I resumed my seat as a protest against such tactics.
    Mr. Speaker: I must say that I have some sympathy with the hon. Gentleman. I often think that the continued noise during Prime Minister's questions cuts out another hon. Member, if only the House realised that.

Rate Support Grant (England)
The Secretary of State for the Environment (Mr. Michael Heseltine): Local government is responsible for about one-quarter of public expenditure and employs more than 2·5 million people. Its financial decisions are an integral part of the national economy. The rate support grant settlement must reflect this.
The settlement is the first for England under the provisions of the Local Government, Planning and Land (No. 2) Act 1980 and I therefore thought it right, exceptionally, to make a statement to the House. Documents relevant to my statement to the Local Government Consultative Council are being placed in the Vote Office. I am also laying before the House this afternoon copies of the RSG reports and orders, which will be debated in the House in the normal way. My right hon. Friends will make separate statements about Wales today and about Scotland tomorrow.
As part of our policy on public expenditure, the volume of local government current expenditure for RSG purposes will be 3·1 per cent. below the figure for 1980–81. The cash limit on grant will provide for increases of 6 per cent. in earnings from annual pay settlements in this round after 1 November 1980 and provisionally for the next pay round beginning on 1 August 1980. It contains an allowance for price increases of an average of 11 per cent. between 1980–81 and 1981–82. The grant percentage for England and Wales will be reduced from 61 per cent. to 60 per cent. At 61 per cent., the effective grant for England is 60·1 per cent. The effective grant for England in 1981–82 will be 59·1 per cent.
The aggregate Exchequer grant for England will be £10,895 million at estimated outturn prices. Specific grants are estimated at £1,447 million. Transport supplementary grant will be £416·5 million. A copy of my right hon. Friend's statement to the consultative council is being placed in the Library.
National parks supplementary grant will be £4·5 million. The remaining amount available for the rate support grant is, therefore, £9,027 million.
There are two new features of the grant distribution this year. First, the new system is based on a new method of assessing the needs of authorities which relies on service-by-service appraisal of the factors which affect local authority expenditure. The system is fair, rational and open to scrutiny. The change leads to some significant alterations to the entitlements of some local authorities in the first year.
The second feature is the introduction of block grant, which will replace the old system, with its inbuilt bias towards authorities that increase their spending at the expense of more prudent authorities. These changes are both moderated by safety nets. Authorities retain exactly the same freedom to reach their own expenditure decisions as at present, but block grant ensures that a greater weight of the consequences of high spending is borne locally and not at the expense of other authorities. For the first time, there is a fair and consistent incentive not to overspend. In particular, the recent drift of grant to London at the expense of the provinces is reversed.
The House will remember that pending the introduction of the new system next year I took transitional powers, for this year only, to limit Government support to high spending authorities. Of the original 23 authorities liable
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to penalty, 14 have qualified under the waivers which I set out in my statement of 18 September. There remain only nine authorities liable to abatement of their grant. The House will shortly be invited to approve the appropriate order. Authorities have only a limited time, therefore, to make the necessary reductions in their expenditure if they are to qualify for exemption and thus avoid imposing this unnecessary extra burden on their ratepayers.
I have repeatedly stressed the essential part that local authority manpower levels have to play in meeting our public expenditure targets. The joint manpower watch figures for the year ending September are published today and announced to the House in a written answer to my hon. Friend the Member for Reading, North (Mr. Durant). These figures show a seasonally adjusted reduction over the last quarter of 15,446, making a total for the year of 36,500 on a full-time basis.
Local government manpower is now back to its lowest level since the manpower watch began in 1975. But, although the annual and quarterly reductions are the highest ever achieved, the fall is still only 2 per cent. from the all-time record level when we came to power. I reaffirm today that the volume of current expenditure, particularly manpower levels, must continue to drop.
I turn now to the question of rates. The local authority current expenditure volume target is 5·6 per cent. below the spending in 1978–79. If local authorities plan for that target and budget in line with the cash limit assumptions, increases for ratepayers should be contained within reasonable levels and be much lower than this year. I shall be talking to the associations shortly about action to secure that the expenditure targets are met.
The announcement that I have made this afternoon represents a significant contribution to the Government's public expenditure policies. It is a major challenge to distribute £9 billion to 413 authorities administering over 20 major national services. The new system that I have announced today achieves this through a system that is fairer, more visible and more comprehensible. This is particularly important when the lower volume of expenditure and the reduction in grant percentage will in any case present local government next year with a major challenge.
Mr. David Alton: On a point of order, Mr. Speaker. Is it in order for the Secretary of State for the Environment to make a statement in the House this afternoon before undertaking the consultation procedures with local government which are laid down in section 5 of the Local Government, Planning and Land (No. 2) Act 1980?
Mr. Speaker: Order. I can save the hon. Gentleman going further. The statement is in order. I called the Secretary of State to make it, and he has made it.
Mr. Gerald Kaufman: This is a black day for local government. [HON. MEMBERS: "Hear, hear."] The Secretary of State has made a cover-up statement, which will leave local authorities, ratepayers and borough treasurers in the dark about their rates for next year. No ratepayer, council or borough treasurer has any idea of the effect that this will have on the rates for next year. If the Secretary of State denies that, will he give examples of rates for next year as a result of his statement?
The Secretary of State said in his statement that local authorities retain exactly the same freedom to reach their

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own expenditure decisions as at present. Is he aware that grant is no longer assessed on the basis of past spending patterns but on arbitrary spending patterns for local authorities laid down by the Secretary of State, regardless of real life in the areas that are affected? The Secretary of State has constructed a theoretical model to which he expects local authorities to conform, regardless of their obligations and problems. He assumes that every child is white, healthy, well-housed and living with both parents and that both parents are in work. He assumes that pay and inflation will fit into his pattern, and so much the worse for local authorities if they do not.
Will the Secretary of State, who has built into his grant announcement a 6 per cent. pay increase and an 11 per cent. inflation forecast, compensate local authorities if the 6 per cent. pay increase and the 11 per cent. inflation forecast are not met? Is he aware that his statement attacks all cities that are suffering from deprivation? He said in his statement that the recent drift of grant to London will be reversed. Is he aware that by doing that he is striking at the heart of inner London, whose problems are worse than elsewhere and will now be made even worse? He has appointed himself as commissar of local government. His edict for local government is higher rates than ever and fewer jobs and worse services than ever. His statement today is a recipe for social injustice and urban decay.
Mr. Heseltine: I shall try to answer some of the questions put by the right hon. Member for Manchester, Ardwick (Mr. Kaufman). He asked me to give examples of the rates that will be set by individual authorities. As I have constantly pointed out to him, local authorities have to decide their individual expenditure levels. Until they have fixed those levels, I cannot know what rate levels they will fix to meet them. However, I can tell the House that from the documents that are published today and are available to local authorities throughout the country, they will be able to calculate what they will receive in grant, depending on the level of expenditure and the rates that they decide to achieve. They have a certainty as far as we in the Government are concerned. As a result of the documents that have been published today, they can make their calculations.
The second charge that the right hon. Gentleman made was that somehow or other the system and the concepts with which we are dealing in respect of the new arrangements are decided behind closed doors. When he has a chance to go to the Vote Office and to the Library, he will find there a detailed and comprehensive explanation of how we have achieved a service-by-service breakdown of the allocation of £9 billion in taxpayers' support. That contrasts markedly with the practice of the previous Government in reaching decisions behind closed doors, with an arbitrary selection of factors that had little to do with the real service provided by local government and much more to do with the political objectives of the party in power.
As to the question whether the 6 per cent. or the 11 per cent. components of the cash limits will be enhanced if there is an increase in those figures on the outturn, the answer is "No". If I were to say anything else, it would prejudice the ability of local government to calculate entitlements under the grant system. I am intrigued to listen to the right hon. Gentleman talk about the hardship
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that will arise in local government as a result of the changes that are taking place. I happened to look up the figures for local authority employment when the right hon. Gentleman served in the Department of the Environment. He will be pleased to hear that there are 16,000 more people in social services today than when he was in the Department. In recreation and parks there are 2,000 extra people; in housing there are 7,000 extra people, and in town and country planning there are 400 extra people. I do not see how he can describe that as a social disaster.
Mr. Kenneth Lewis: My right hon. Friend will appreciate that until we see the effect of this announcement on our individual councils we are not sure what the result will be. Will he, therefore, assure me that councils that have not overspent in the past but have taken full account of the need for economy will not be unduly hit? If some councils are hit, regardless of the fact that they have not been overspenders, will my right hon. Friend arrange for some of the obligations that have been placed on them by this Parliament to be relieved for some time in order to help them through the coming year?
Mr. Heseltine: I fully understand that all hon. Members will want to look at the precise effect on their constituencies and the authorities within them. That is why the rate support grant is not normally the subject of an oral statement, because right hon. and hon. Members want to see it before the traditional debate takes place.
I have tried to protect the worst effects of the conclusions underlying this year's grants with safety nets at two stages in the calculations. I have also introduced the most comprehensive attempts to measure the needs of individual authorities, and I have set out for the House and for local government at large the way in which that is being done. For many local authorities, this is the first time that any real attempt has been made to measure independently the realistic levels of spending that they should achieve. I believe that when the House considers the details it will find that this is a helpful advance.
Several hon. Members rose—
Mr. Speaker: Order. I remind the House that the main business of the day is Supply and that the subject for debate is steel. It was indicated clearly in exchanges last week that the Opposition lay great stress on this debate. There is another statement to follow this one. I therefore propose to allow questions on this statement to continue until 4.15 pm, which is a reasonable run. I cannot call every hon. Member who wishes to speak. Afterwards, we shall return to the Welsh statement.
Mr. Alton: Will the Secretary of State please explain how he intends to discharge the responsibilities that are laid upon him by the Local Government, Planning and Land (No. 2) Act to consult local authorities before making these orders and before making a statement on the block grant settlement? Further, will he tell hon. Members what advice he has for ratepayers in Liverpool who, as a result of this statement, will have a further £2 million reduction in their rate support grant settlement? Is he aware that it will mean more rate increases, more unemployment among local authority workers and bankruptcy for small firms, which will not be able to pay the massive increases in rates?
Mr. Heseltine: The hon. Gentleman might want to study the documents that are available. He will remember

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that a 1 per cent. reduction in the grant available means 2.6p for ratepayers at large. The hon. Gentleman will want to take that into account in relation to both his area and the country as a whole. It is demanded that I should have consultations with local authorities. Although controversial, there have been the widest consultations. I shall meet the local authority associations immediately after this debate. I have two difficult obligations: to consult the House and to consult local government. In these circumstances, it seemed appropriate to make a statement to the House first and to have a formal meeting with local government representatives immediately afterwards.
Mr. Kenneth Baker: Is my right hon. Friend aware that the Opposition spokesman for the environment is one of my constituents? Is my right hon. Friend further aware that as a resident of Westminster the right hon. Gentleman will not fare too badly as a result of this rate settlement? He is the resident of a borough which, despite considerable pockets of poverty, has conducted its affairs for the past few years both prudently and responsibly.
Mr. Heseltine: In some ways I sympathise with my hon. Friend. Apparently, we share the right hon. Gentleman. My hon. Friend will he aware that during the past few years there has been a significant shift of resources away from the urban and the rural provinces and towards London. In present circumstances, the broad effect is that about £300 million has been shifted to London. There is bound to be an effect when a system is introduced that depends on independent measurement rather than on the arbitrary decisions of politicians
Mr. Guy Barnett: Does not the right hon. Gentleman realise that previous Governments, both Labour and Conservative, have used the rate support grant mechanism as a means of compensating inner city areas for their massive social and environmental problems? Does not the right hon. Gentleman's statement demonstrate that he has thrown the White Paper entitled "Policy for the Inner Cities", which was issued by the Labour Government, straight into the dustbin?
Mr. Heseltine: I am glad to tell the hon. Gentleman that the total amount available for inner city policy under the urban development corporation and next year's urban programmes will be significantly higher than ever before. He will know that the programme has been significantly bent towards urban areas as a result of the housing investment programme allocation. He will also realise that the shift to London is not only towards inner London but on a significant scale towards outer London. I have had to consider whether one should take note of the result of measuring independent factors affecting the services provided by local government rather than the judgments made about where real need lies. The House will be able to judge for itself that once one starts to measure all the factors that underlie the specific services dealt with by local authorities one realises that a powerful argument can be made for distributing along those lines rather than in accordance with the judgments that the hon. Gentleman mentioned.
Mr. Peter Emery: Does not my right hon. Friend's statement mean that local authorities that have been economical will not have to see spendthrift councils receive a larger percentage grant than they were able to
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obtain? In addition, does not the statement mean that many of the county areas, which have been most unfairly treated during the past seven or eight years, will begin to see a balance between themeselves and the cities?
Mr. Heseltine: My hon. Friend is quite correct. As we examined the factors in detail, we realised the needs that county authorities often have to meet. It is important to proceed with the new system as a matter of urgency, because I have to cope with the fact that, as a result of their overspending patterns, a relatively small number of authorities persist in pre-empting an increasing share of the grant. In particular, this year I have had to claw back £200 million indiscriminately from the whole of local government in order to compensate for that overspending. I need new weapons to ensure that if there is an overspend next year I shall be able to allocate the penalties more specifically and not direct them at the whole of local government. Indeed, the bulk of local government tries to achieve the Government's objectives.
Mr. Ernest Armstrong: Does not the Secretary of State recognise that there is genuine concern throughout local government? Does he not accept that he is using his new weapons to transfer accountability away from the electorate and to his Department? That is where the decisions will be made. What advice can the right hon. Gentleman give areas such as Durham, where unemployment runs at 20 per cent. in some district council areas? Does he not realise that the district council has become the main employer? Are district councils to suffer further redundancies in order to meet his targets?
Mr. Heseltine: The right hon. Gentleman will want to consider the underlying assumptions for those areas. The House must realise that there is a relationship between the level of local authority consumption and the community's ability to provide the capital investment on which so many new jobs are bound to depend. Perhaps the most serious indictment of the Labour Party's record is that although it increased local government current expenditure by about £1 billion in constant money terms it reduced local government capital expenditure by half in the same period.
Mr. Tony Durant: Does my right hon. Friend accept that we welcome his statement despite the pained look of the hon. Member for Liverpool, Edge Hill (Mr. Alton)? It is right that the House should have a statement on this matter. Will my right hon. Friend bear in mind that industry feels that it has played its share and that it is time that local government considered its excessive payments and accepted some curbs on its expenditure?
Mr. Heseltine: My hon. Friend is absolutely right. This year particularly needed an oral statement to the House. However, hon. Members will realise that this is not the best subject for presentation in this form, because right hon. and hon. Members want to see the details before a debate. Local authority manpower has fallen by 2 per cent. since the Conservative Party came to power. The private sector, which has to pay the rates and taxes in order to finance local government, is suffering incomparably harder pressure as a result of our economic difficulties. There must be a balance in these things, and local authorities should recognise that.
Mr. Bruce Douglas-Mann (Mitcham and Morden): Do the calculations on which the right hon. Gentleman's

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statement is based have the backing of his Department, or are they like those contained in the White Paper reply to the report of the Select Committee on the environment, as alleged by this morning's issue of The Guardian? The Guardian alleges that the calculations about the effect of council house sales, repeated in the White Paper, are no longer accepted by the Department and that they had no adequate authority. Does the right hon. Gentleman accept that if the calculations on which Government statements are based no longer have the support of the relevant Department, the right hon. Gentleman's reputation in the House will decline even further?
Mr. Heseltine: The hon. Gentleman will be aware that I employ 47,000 people in the Department of the Environment. It is ridiculous to think that I can canvass the views of individuals in order to discover what a person thinks. My job is to take the advice provided by officials, to make a judgment on it and to account to the House. It is a most novel concept that the views of officials should be superior to those of Ministers.
Mr. Eldon Griffiths: Does my right hon. Friend agree that in addition to urban deprivation something called rural deprivation exists? Will he confirm that the new block grant formula will go some way towards redressing the balance? Rapidly expanding rural councils, whose authorities have sought to hold down expenditure, have been penalised because of excessive expenditure in urban areas that in some cases have had lesser needs?
Mr. Heseltine: My hon. Friend is correct, but he does not go as far as the realities of the case. Not only have those areas been penalised as a result of keeping down their expenditure; they have been penalised as a deliberate political act of the party in power. It is because our new system shows what the factors are, explains the route by which we allocate money and does so in public that it is a far greater protection for local government than anything that it has had before.
Mr. Kenneth Marks: Is it not true that the authorities likely to be hardest hit are the metropolitan districts, such as Tameside and Rochdale, which have the highest rate of increase of unemployment? Does the right hon. Gentleman agree that increasing unemployment means additional expenditure for councils, and has he used unemployment as one of his criteria?
Mr. Heseltine: Until we know the final allocation, which depends on the level of rates and expenditure chosen by local government, I do not want to give precise percentage figures. However, I take the hon. Gentleman's question as seriously as it deserves to be taken. The evidence is that, broadly, the distribution to the large towns and cities outside London will be in line with what it is today in percentage terms.
Sir William Elliott: Following the remarks of the right hon. Members for Manchester, Ardwick (Mr. Kaufman) and for Durham, North-West (Mr. Armstrong), does my right hon. Friend agree that in areas such as the North-East there are some authorities that have grossly overspent and some that have not? Will he confirm that his new criteria on heads of
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expenditure will apply equally and fairly over England as a whole, North and South, and to Conservative and Labour authorities?
Mr. Heseltine: I know how much my hon. Friend cares about and understands these problems. The methods that we have chosen and the factors, which are available to the House, are general rules, which will apply across the country and to all authorities. It will not be possible for a politician to change those factors without accounting in public for what he intends to do. My view is that there will be the widest and most profound debate about the scale and quality of services provided by local government that we have ever had. It will focus not on the assertions of individual authorities about how well they have done or about their need but on the facts of the services that they have to provide. That will be extremely helpful.
Mr. John Grant: Why does the right hon. Gentleman not admit that today's statement and the one that he made yesterday add up to the murder of inner city policy, particularly in respect of inner London? How does he equate that with the sort of statements that were made by Conservative Members in Opposition, particularly by the present Minister of Agriculture, Fisheries and Food? In addition, how does he equate it with the Prime Minister's statements about labour mobility? How will the right hon. Gentleman's statements help labour mobility?
Mr. Heseltine: I was interested to hear the questioning of my right hon. Friend the Prime Minister when I was waiting to make my statement. She explained the consequences of the economic policy that we inherited. I repeat that the Labour Government halved the level of capital expenditure by local government. That was a direct consequence of their incapacity to contain consumption. Until we get a better balance between consumption and investment, we shall go on with an ailing economy, which will never provide the wealth that alone can support the enhanced services that we want.
Sir David Price: Will my right hon. Friend accept that he has the unanimous support of the Government side of the House for his strategic aims but that many of us will have to remain agnostic until we see the details of what he calls his service-by-service appraisal? Will he ensure an opportunity for the House to discuss in detail the criteria upon which, it seems, everything will depend?
Mr. Heseltine: My hon. Friend is right to ask about the factors. They are available in the Vote Office and the library for consideration. I have always made it clear that in trying to move from the incomprehensible system that has hitherto governed the distribution of the rate support grant there were bound to be areas of controversy about the factors that we chose. My view is that we have made a considerable advance. In the course of the next 12 months, there will be a wide debate and we can see whether we have got each factor and each weighting right, in order to make such adjustments as seem appropriate next year.
Mr. David Watkins: What, if anything, does the Secretary of State propose to do to make good the loss of rate revenue caused to local authorities by massive industrial closures in, for example, County Durham?
Mr. Heseltine: I am aware of that problem. The Government are considering it and discussing it with, for example, the British Steel Corporation, although the difficulty is that, whereas there may be a particular concentrated problem of closures, it is an argument that spreads more widely when one faces industrial closures. We had that problem under the previous Government, just as we have it today. We are considering the matter. We do not think that the solution lies in the RSG system, but it is something that we want to look at.
Mr. David Mellor: My right hon. Friend will know that those of his hon. Friends who represent inner city areas appreciate the pressure on him to readjust Government support to local government, following years of partisan manipulation by the previous Government in favour of spendthrift Socialist authorities. However, can he reassure those of us from inner London that he has taken account of the problems facing local authorities such as Wandsworth, which was once run by profligate Socialist councillors but which for the past two years has been prudently and sensibly run and faces considerable financial problems in coming to terms with some of the announcements that have been made?
Mr. Heseltine: I sympathise with my hon. Friend. I realise that there is a 1 per cent. reduction in the grant and that I am adjusting backwards some of the massive shift to London that has taken place over recent years. That is hound to have certain consequences. I entirely agree with my hon. Friend that the fundamental assumption of so many inner city authorities that if they increase expenditure and rates they will improve the local environment does not stand up to examination. In fact, they drive more and more people and firms out of the area, thus aggravating the problems that they are trying to cure.
Mr. Jim Marshall: The Secretary of State said that the settlement announced today would permit rate increases of reasonable orders of magnitude. If that is the case, can he share with the House and local authorities his understanding of the words "reasonable rate increases"?
Mr. Heseltine: I considered the possibility of announcing an average figure and discussed it with local authorities, which are deeply concerned in the matter. The House will understand the problems. Last year, rate increases varied between 6 per cent. and 60 per cent. There is nothing gained in announcing an average figure between those two. All, that one does is sometimes to put some authorities with particular difficulties in an embarrassing situation, because they are likely to have to be above the average, and those which are minded to be below the average feel a pressure to trade up to it. It is more responsible to leave individual authorities to fix their own rate levels in the light of the judgments that I have announced. Of course, I must repeat what they have heard me say before, namely, that there is a direct connection between those rate levels and the overriding need to beat inflation.
Mr. Anthony Steen: Does my right hon. Friend agree that the Government side of the House is as deeply concerned about the plight of urban areas as are the Opposition? Does he agree that the real problem in our cities is no longer the inner areas but the middle and outer areas, where the people live?
Mr. Heseltine: My hon. Friend has made a study of these matters and I understand his concern on this issue. It is because we are trying to get away from the arbitrary allocation of money on the basis of expenditure and to move to an allocation on the basis of factors that can be measured that I believe that we are doing something that will be broadly acceptable to my hon. Friend.
Mr. Leslie Spriggs: Is the right hon. Gentleman aware that the St. Helens borough council area is having to meet increasing social and environmental needs coming in from other parts of the Merseyside area day by day? Why does he refuse to meet a deputation from the local authority, which wishes to discuss the matter with him?
Mr. Heseltine: I am sorry that I should appear to have overlooked the opportunity to meet the leaders of St. Helens for the third time since I took office. I have been to St. Helens to look and consider two questions—the Enterprise Trust, for which I have the greatest admiration, and the wish of the Countryside Commission to improve environmentally the outlying area. So I have had a very close relationship with the St. Helens authority and would have every wish, if possible, to maintain that.
Mr. Fred Silvester: Does my right hon. Friend agree that the new formula takes account of the special needs of urban areas? In particular, will he confirm that under the new system the city of Manchester will have the highest qualification for grant of any metropolitan district?
Mr. Heseltine: I think that my hon. Friend will want to look at the details, because it could be misleading for me to answer the question only in terms of the grant-related expenditure assessments that have been made. Related to that are the levels of expenditure, which may be significantly above the levels of the grant-related expenditure. Both sides of the coin have to be balanced before reaching a judgment about the performance of individual authorities.
Mr. Christopher Price: The right hon. Gentleman mentioned earlier the indiscriminate grant that has hitherto existed as between outer and inner London. Will he tell us of one thing in his statement that is calculated to benefit the very real inner urban needs of inner London? Will he further tell us whether his new arrangements for funding the Inner London Education Authority—which he might care to explain to the House—will mean a 14 per cent. cut in that authority's expenditure?
Mr. Heseltine: The precise implication of the education changes will be a matter for my right hon. and learned Friend the Secretary of State for Education and Science.
With regard to the hon. Gentleman's first and very relevant question about the needs of inner city authorities in London, I can think of nothing more likely to galvanise and change the prospects for those areas than an announcement by them that they intended to pursue a low rate increase policy. They would then attract back the jobs and people that they are losing in very substantial numbers.
Mr. John Farr: Although at the moment it is very difficult to assess the impact of what my right hon. Friend said, may I ask him to assure the House that

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he has respected the position of local authorities whose affairs have been economically and frugally conducted in the past, in the best interests of their ratepayers, and that they are not being disadvantaged by what he has told us today?
Mr. Heseltine: I think that my hon. Friend will want to look at the work that we have done. The difficulty with which we were faced in considering this task was that no one could make an objective assessment about the way in which individual authorities had been run, because there were no objective measurements for the needs of the individual authorities. This was particularly true at the shire district level. We have had to put forward for our own decision—and ultimately for the House to consider—a method of assessing the independent needs of each authority. The transitional period through which we are now going reflects the need to reconcile this independent measurement with the past levels of expenditure.
Mr. Stanley Cohen: During the course of his statement, the Minister indicated that a number of local authorities—if my recollection is correct, it was nine—are, because of their failure to comply with Government policy, likely to be subject to penalties. Will he extend to the House the courtesy of indicating which local authorities he had in mind?
Mr. Heseltine: I shall be very pleased to do that. They are Southwark, Haringey, Swansea, Newham, Manchester, Doncaster, Wandsworth and Merthyr Tydfil. Those were the original authorities—[Interruption.] May I give the answer to the question in my own way? Those were the authorities that were allowed out under the waiver about conforming to the—[Interruption.] I shall answer the whole question, if I may. Those were the authorities that qualified for the waiver that came from keeping their levels of expenditure more closely in line with the Government's budgets.
Islington, Newcastle-upon-Tyne, Hammersmith and Fulham, Afan and Sheffield then reduced the levels of their expenditure in order to qualify for the second waiver.
There are then nine authorities, the names of which I shall now give the House, which have so far not qualified for any waiver and thus are volunteering to pay the penalties provided by the legislation. Those authorities are
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Greenwich, Hounslow, Waltham Forest, Brent, Lewisham, Hackney, Lambeth, Tower Hamlets and Camden.
In case the House should have any doubts about what goes on in those authorities, I happen to have here a quotation from what was said by the local newspaper when the director of housing in Camden resigned. This is what it said as to why he and others were quitting:
"They have voiced blistering criticisms of council leaders and chief officers for running away from the need to cut Camden's overstaffed bureaucracy, whilst allowing services to decay."
Mr. Albert Booth: Will the Secretary of State accept that in view of the crisis facing very large areas of public transport it would have been much more appropriate if his right hon. Friend the Minister of Transport had made a separate statement to the House on the transport supplementary grant?
Is the Secretary of State aware that the figure that he gave for the transport supplementary grant contains within it a cut of 25 per cent. in the revenue support for South Yorkshire, and that this will be seen by many of us on the Labour Benches as a vicious, doctrinaire attack on the democratic right of that metropolitan authority to protect its own public transport services?
Does the Secretary of State realise that the figure that he has quoted also involves a cut of 10 per cent. in the revenue support grant for West Midlands, where passengers and public transport workers are already desperately worried about the prospective cuts in their services?
Finally, will the Secretary of State tell the House when we shall have an opportunity to debate both the rate support grant that he has announced today and the transport supplementay grant?
Mr. Heseltine: The right hon. Member knows full well that there is a debate on the orders. It will be arranged by my right hon. Friend the Leader of the House after Christmas, in the normal period. I imagine that if my right hon. Friend were to consult me I would suggest that there is a need to proceed quickly, so that local authorities have the certainty to which they are entitled. But there is a statutory provision about the number of days that have to elapse before these things can be dealt with in that way. I shall see that my right hon. Friend the Minister of Transport is made aware of the right hon. Member's views, but I remind him that I cannot remember a Minister responsible for transport in the last Government making a statement in the House on transport supplementary grants.

Rate Support Grant and Housing (Wales)
The Secretary of State for Wales (Mr. Nicholas Edwards): With permission, I wish to make a statement about the Welsh rate support grant settlement for next year and about housing finance.
This is the first time that there has been a separate RSG settlement for Wales. At the same time, this year's settlement sees the introduction of the new block grant system. My right hon. Friend the Secretary of State for the Environment and I have therefore thought it right exceptionally to announce to the House our decisions by way of oral statements on this occasion before I meet the Welsh Consultative Council later this afternoon.
The Government's decisions—in accordance with the policies already announced to the House by my right hon. and learned Friend the Chancellor of the Exchequer—have to take account of the essential economic requirements to reduce public spending, of which local government spending forms such a large part.
The most important factor in determining the total amount of Exchequer grant is the volume of local authority spending we are prepared to accept for grant purposes, which is termed relevant expenditure. Until now there has been no separate determination of the amounts of relevant expenditure and grant for England and Wales, and in the preparations leading up to this settlement we have had to establish separate relevant expenditure shares. This has involved a comprehensive review of expenditure programmes with other Government Departments, and I am satisfied that the results provide a fair basis for the start of the separate Welsh RSG system.
In deciding the amount of aggregate Exchequer grant for Wales, we have taken into account the average level of grant received by Welsh local authorities as a whole in recent years.
I announce first our decisions about housing rent subsidies and housing capital programmes. For rate support grant purposes, I am setting the increase in the local contribution for the purposes of housing subsidy at £2·95. In addition, local authorities have to meet housing costs which fall outside the subsidy system and on average these may require rent income of a further 30p per dwelling. The total resources available within my block for housing next year will be £158·6 million at 1980 survey prices—that is, in effect, November 1979 prices—of which £23 million will be available to the Housing Corporation and £87·4 million will be earmarked for local authorities. I am holding back from distribution £14 million to cover any possible overspend and to enable underspenders to have a further allocation when this year's final figures are known, provided that this year's cash limit is not breached. The reserve also covers pump priming for improvements for sales schemes. I am announcing today the housing capital allocations for individual local authorities at outturn prices, and the figures have been placed in the Library of the House.
Turning to the RSG settlement, I have decided to accept a total, at 1981–82 outturn prices, of £1,187 million for relevant expenditure. This figure is consistent with the level of expenditure set out in the last public expenditure White Paper as modified by the expenditure reductions announced by my right hon. and learned Friend the Chancellor of the Exchequer last month. It therefore
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provides for a volume of current expenditure which is broadly 3 per cent. below the level that local authorities were asked to achieve in 1980–81.
The second decision that I have to make is the grant percentage. As my right hon. Friend said earlier, the grant percentage, taking England and Wales together, is being reduced by 1 per cent. from the 61 per cent. level last year. In terms of grant for Wales next year, this works out at 73·4 per cent. The higher percentage of Government grant for Wales reflects the substantially lower rateable values in the Principality.
The aggregate Exchequer grant will therefore be £871 million at 1981–82 outturn prices. In calculating the cash limit within this figure, allowance has been made for a 6 per cent. increase in earnings on due settlement dates from 1 November 1980 and provisionally for the pay round starting in August next year. For non-pay items, allowance has been made for an increase of 11 per cent. between the average levels for 1980–81 and 1981–82. Within the aggregate Exchequer grant, specific grants are estimated at £85·14 million, the transport supplementary grant at £40 million and the national parks supplementary grant at £1·36 million. This leaves £744·5 million for the rate support grant itself, including the domestic rate relief grant.
For 1981–82, I have decided that for the first year of the new block grant system it would be sensible to maintain the domestic rate relief at its present level—36p in the pound.
I turn now to the amount of money to be distributed to local authorities in Wales through the block grant—£696·7 million. I do not propose to go into any great detail about the new block grant system itself since hon. Members are familiar with the basic principles involved and can study the details from the Welsh rate support grant report that I am laying today.
The principles underlying block grant are, of course, the same in both England and Wales, although there are some differences in the detailed arrangements for Wales to take account of our particular circumstances and of views expressed to me by the Welsh local authority associations. The new system will ensure that authorities that increase their expenditure do not just do so at the expense of others but that the consequences of the decisions are in large part borne locally.
There will be some substantial changes arising from the move to the new system based on a current assessment of need rather than on a system based on the past patterns of expenditure, and I have decided to moderate these by applying safety nets and a ceiling on grant gains to provide protection for individual authorities and ratepayers. I must make it clear, however, that the safety net will not provide protection against the expenditure decisions of individual authorities. Expenditure decisions remain the responsibility of individual local authorities, which, in setting their rates, must consider the effect on ratepayers at large, including, of course, industry and commerce.
I have confidence that local authorities will continue to respond to Government targets as they have in the past. The efforts already made by local authorities in Wales to reduce their manpower and expenditure are encouraging, as the Manpower Watch figures published today, showing an annual reduction for general services of 3·8 per cent. with a 1·5 per cent reduction in the last quarter, prove. Nevertheless, sustained efforts will continue to be required if expenditure is to be brought down to our targets. I urge

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every local authority, every councillor, to ensure that the Government's volume reductions are achieved and that rate increases are kept to the absolute minimum.
Mr. Alan Williams: Does the Secretary of State accept that those who represent Welsh constituencies feel cheated that he has chosen today to make three major devastating policy announcements in one statement—massive rate increases, enormous rent increases and crippling council house building cuts—when even the Secretary of State for the Environment, who has an unenviable record for seeking to evade the scrutiny of the House, had the decency to break them down into two separate statements? Is he aware that in confining Welsh Back Benchers to one supplementary question on these three major policy decisions he will be seen in Wales as running away from parliamentary scrutiny and criticism?
Does the right hon. Gentleman realise that his statement inevitably means brutal increases in council rents and rates and that the further £19 million cut on top of already vicious cuts in house building in Wales will mean less or even no hope for those on already extended council house waiting lists? Will he confirm that the £3·25 council house rent increase is purely rent and does not fully measure the increase that the council tenant will face, because he will have to face the rate increase in addition? Therefore, the council tenant is being singled out for double misery today.
Does the right hon. Gentleman admit that rebates to those on lower incomes will at best only partially ameliorate the impact of these increases and that part of the cost of these rate and rent rebates will add to the local rate increases that will be required?
Will the Secretary of State explain how it is realistic to ask tenants or house owners to accept the 6 per cent. pay rise to cover increased national insurance charges, increased rates by possibly up to 30 per cent. and the increase of £3·25 in council house rents, plus a full year's inflation?
Is there no limit to the humiliation and misery that the Secretary of State feels must be imposed on Wales in the name of Tory dogma? Is not the destruction of our industry enough for him? Why must we lose more Government money?
Will the right hon. Gentleman confirm that the 3 per cent. cut envisaged in the statement, when added to the revised 3 per cent. for this year, will mean a cut of about 6·8 per cent. in councils' programmes? What great Tory purpose is being served by cutting services to the elderly, the disabled and the young?
Will the right hon. Gentleman confirm that if Welsh authorities try to make up the cuts from Government grants they will need a 3 per cent. increase in the domestic rate for each 1 per cent. cut in Government grant and that that will therefore mean a 10 per cent. increase in domestic rates—higher than would be required in England?
Because of the extra costs imposed by the Government on social services departments by unemployment, on education by youngsters staying on for higher education and the rate and rent rebates, will not local authorities need an extra £30 million and not a cut? Will the right hon. Gentleman confirm that the 6 per cent. cash limit alone will mean the cutting of 1,000 teaching jobs in Wales?
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Will the right hon. Gentleman frankly admit that this whole package boils down to administering another twist in the monetarist deflation of an already collapsing Welsh economy? Finally, will he confirm that this can only mean more unemployment and that it therefore gives the lie to the Secretary of State for Employment, who, in an interview on radio today, blamed the fact that unemployment will continue to rise on everyone but the Government?
Mr. Edwards: It is a bit cool for the right hon. Gentleman to criticise me for making too few statements on this subject in the House when his Government never came to the House and made a statement about the RSG. As my right hon. Friend the Secretary of State for the Environmnet had to deal with three other major items in housing statements, I think that that explains why it was felt that an extra statement was needed.
The right hon. Gentleman talks about crippling cuts in house building. He knows about crippling cuts in house building programmes because the previous Government, in the four years that they were in power, cut capital programmes on housing in Wales by £110 million. The cuts in our first three years amount to £44 million. He is not one to talk about cuts in capital programmes.
The right hon. Gentleman talks about rent increases. We debated the issue of rent increases in full last week in the Welsh Grand Committee. I have no need to add to what I said then, except that it was the deliberate policy of the right hon. Gentleman's Government to switch resources into consumption and into subsiding rents, and to remove them from capital programmes and the maintenance of our derelict housing stock in Wales. That seems to me to be a totally false sense of priority, particularly when one takes account of the fact that 46 per cent. of local authority tenants in Wales will receive rent rebates of one kind or another, that about 25 per cent. will pay no increase at all and that almost as many will have some 60 per cent. of the increased burden carried for them.
I confirm that a percentage cut across the board has a higher poundage effect in Wales—5·5p as against 3p—for the obvious reason that Wales gets a very much higher level of grant support to meet its expenditure than does England.
The right hon. Gentleman's final point concerned the effect on unemployment and industry. I well understand that it is the policy of the Opposition Benches to seek to add to the burdens of industry by adding to public expenditure and by urging local authorities to increase rates. I hope that local authorities will have a greater sense of responsibility and will realise that the greatest contribution that they can make to industry in their areas is to cut their expenditure and to reduce their rate bills.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to allow questions on this statement to run until 10 minutes to five in order that we can get on to the main debate.
Mr. Geraint Howells: Today's statement is another setback to the Welsh economy. Will the Secretary of State clarify two matters? Will his statement affect the rural housing programme in any way? If those in the public sector will not accept a 6 per cent. pay rise, where will the excess money come from?
Mr. Edwards: As we have indicated, the housing programme is being reduced. That will affect housing

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programmes right across Wales. Individual local authorities will have to decide on the exact level of their programmes within the total allocations that I am making.
As to the 6 per cent. figure, we have made it clear that this is a cash limit. If any individual claim exceeds that limit, local authorities will have a choice between reducing the manning levels or services and increasing rates. I hope that if they consider the latter option they will realise the damaging effect that that has on industry. I hope that they will continue the encouraging progress to reducing the record manning levels which we inherited when we came into office and that they will concentrate on that rather than on reductions in services or increases in rates.
Sir Raymond Gower: Is it not a fact that the conclusions reached by the right hon. Member for Swansea, West (Mr. Williams) are not to be substantiated in advance of decisions to be reached after mature consideration of all the factors by local authority members and their officers? Therefore, is it not hasty to reach such conclusions at this early moment?
Secondly, in the context of an industrial-economic world which is in such terrible trouble, in which even the Communist countries are now facing economic crises of some magnitude, and in which the Arab States are now contemplating yet another very large increase in oil prices, is it not a fact that not only must our industry be much more effective and efficient, but that our local government must become much more efficient, too?
Mr. Edwards: My hon. Friend's point about efficiency will be well understood by most ratepayers and those who receive local authority services, because they all know perfectly well that there is room for substantial improvement in the efficiency of many local authorities. I confirm what my hon. Friend says—that the decisions about expenditure and about rating levels rest with the local authorities. Therefore, it is ludicrous to make general forecasts about rating levels until we have given them a chance to consider those decisions. But there is absolutely no reason to think that the general rise in rates will be up to last year's level.
Mr. D. E. Thomas: Will not the Secretary of State understand that those of us who represent Welsh constituencies, and certainly Welsh local authorities, are certain that the aggregate Exchequer grant which he has obtained for Wales is totally inadequate to meet the needs of Wales by any social indicators—housing, education, personal social services or the incidence of low income in Wales? Does not the right hon. Gentleman accept that it is intolerable for tenants of local authority housing in Wales to be subjected to exactly the same rent increase as those in England, when the level of personal wealth and the level of supplementary benefit and social security take-up in Wales is 20 per cent. higher and the level of income is that much lower?
Will the right hon. Gentleman confirm that his figures for the percentage of persons receiving rent and rates rebates in Wales who might qualify are potential take-up figures rather than actual take-up figures? Of those persons who would be eligible, how many qualify and take up these benefits? Will he understand that there is a substantial gap between those who are eligible for these
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benefits and those who take them up? Does he accept, therefore, that by placing emphasis on this matter he is increasing the deprivation of rentpayers in Wales?
As regards the housing allocation, will the Secretary of State admit that our debate on housing in the Welsh Grand Committee last Wednesday was a charade? He must have known these figures and that he would be coming to the House to ensure a cut to the lowest possible estimate, the lowest option, of the Housing Corporation grant, and he is also holding back £14 million—
Mr. Speaker: Order. The hon. Gentleman is continuing for so long that he has already cut out one other hon. Member. He might come to a conclusion.
Mr. Thomas: Will the Secretary of State accept that the £14 million which he is now holding back on Welsh housing will induce local authorities to underspend?
Mr. Edwards: I note what the hon. Gentleman says about the aggregate Exchequer grant, but I also note that the United Kingdom authorities are protesting to my right hon. Friend the Secretary of State for the Environment that the aggregate Exchequer grant given to Wales is excessive. I suspect that, if the attack comes from both sides, the Government may have got the balance about right. I am satisfied that on any criterion of past spending and, indeed, on the detailed reassessment of individual programmes that we have done, which takes account of recent factors and not just recent average receipts, we have dealt very fairly by Wales.
The hon. Gentleman talks about people on social security. As I have said, 46 per cent. of tenants in Wales will receive rent rebates of one kind or another, and, as I pointed out to the Welsh Grand Committee last week, the average industrial wage in Wales is £110. I do not believe that the rents about which we are talking are excessive for people at that level. If the hon. Gentleman says that not everyone is taking up the benefits to which people are entitled, clearly, if they are entitled to them, they have every right to take them up.
The reason why I am holding back the £14 million at present is that I wish the underspending authorities this year not to be penalised but to have the opportunity to spend this programme, which we are carrying over into the next year, so long as the cash limit is not broken. If and when I am satisfied that they are within the cash limit, and the total has been spent, I shall make the money available to the underspenders in Wales, and they will have every opportunity to spend it in the coming year.
Sir Anthony Meyer: Is my right hon. Friend aware that there will be gratitude in Wales for the way in which he has managed in the Cabinet to shield Wales from the worst consequences of the cuts that have necessarily been imposed on us by the economic situation? Is it not now clear that it is up to the local authorities to shield their ratepayers from the worst impact of the necessary economies by ensuring that they fall on administration and personnel rather than on services?
Mr. Edwards: I thank my hon. Friend for his remarks. My right hon. Friend the Secretary of State for the Environment said that the cut amounted to 3·1 per cent. in England. There is a smaller cut —2·6 per cent.—in Wales. That shows that we have taken special account of Welsh problems. The cut in Wales of total Government finance for housing has been less than that for England.

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My hon. Friend is right to urge the local authorities to improve their efficiency and prune their administration rather than cut services or increase rates.
Mr. Ioan Evans: Since Wales has suffered more than any other part of Britain from increasing unemployment, should not the right hon. Gentleman have argued to exempt it from cuts in local authority services and housing? Will he inform Wales that it is he who is responsible for those cuts, not the local councillors? What special regard will he have for the authorities which have lost in their areas factories and companies which have closed directly because of Government policies? What can he offer them to make up for the consequential loss of rateable value?
Mr. Edwards: As a result of the changes we have introduced, there will be a far quicker response to the changes in rateable values. Hitherto, local authorities have had to wait for up to two years for those changes to be taken into account. I am basing rateable values on the November period, which means that the adjustment will be made in the course of the financial year. The authorities will therefore receive grant and make their decisions on the basis of a current assessment of rateable value, taking account of the closing and opening of plants, not of a calculation that is many months out of date. I know that local authorities will welcome that change.
Mr. Keith Best: Is my hon. Friend aware that his maintenance of the domestic rate relief of 36p is to be welcomed? Will he make it clear that local authorities can substantially ameliorate their financial position by increased sales of council houses? We appreciate that one of the inequities of the previous rate support grant system was that wasteful authorities could use their expenditure as a base for future central Government grant. Is my right hon. Friend optimistic, however, that that will not be the case in the future? Will he make sure that never again will local authorities be able to criticise the Government for not listening closely enough to the needs of local government in taking account of individual factors in those local authority areas which are directly responsible for providing criteria for Government subsidy?
Mr. Edwards: I can confirm that all the factors have been arrived at after careful consultation with the local authority associations. It was right in this first year to maintain the 36p domestic relief. It is within the power of the local authorities to augment their receipts by the sale of council houses, and I hope that those which are doing so will continue to do so and that those which are not will begin. I also confirm that the old system meant that those that were wasteful or extravagant penalised the prudent. That can still happen during the transitional period while we are applying the safety nets. By protecting the high spenders against sharp changes, we clearly do not provide the same benefits to the prudent as we should in the absence of safety nets. However, as we move to a position in which there is not full protection, those prudent local authorities will be better provided for than they have been in the past.
Mr. Donald Coleman: Is it not clear from today's exchanges that the Conservatives are unaware of
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the dismay that will be felt in Wales by those who are affected by local government services at what the Secretary of State announced? That applies especially to housing and transport, particularly transport for those who live in the remoter parts. Will not the continuing attack on local authority housing mean that many people in Wales will be not only jobless but homeless?
Mr. Edwards: The hon. Gentleman speaks of dismay. I believe that there will be pleasure that we have taken a fair share of the total England and Wales division this year and that we have suffered a smaller cut than has been imposed on England. There will be pleasure that I have been able largely to protect the spending programme of, for example, the Housing Corporation and that I have been able to maintain the 36p domestic relief. All these points will be matters for congratulation, not condemnation.
Mr. Delwyn Williams: Does my right hon. Friend agree that the new block system will militate against rural areas just as much as the old system did? Will he give an assurance that he will liaise with the local authorities and revise this pernicious system as soon as possible?
Mr. Edwards: The detailed assessment of the factors of need which have been discussed with the local authorities has produced a result in my hon. Friend's part of Wales—in Powys—broadly similar to the old system. It has not produced any dramatic changes. That may go to show that the old system was not as far out as some people have argued. However, the local authorities feel that there may be room for further refinement to deal with the particular problems of Powys, and they have asked us to examine the whole matter again during the coming year. We shall be consulting the local authorities generally about Powys then.
Mr. James Callaghan: On the deteriorating housing situation, did the Secretary of State watch that tragic programme last Friday on BBC television introduced by Vincent Kane which showed the appalling housing conditions in Beresford Road and Moorland Road in Cardiff which have come about partly as a result of an ill-fated road widening scheme that was never proceeded with? Did he hear, and if he did not will he check, that the chairman of the housing committee, Councillor Herbert, said that he had £500,000 available for improving these conditions but that the Secretary of State for Wales was denying him permission to use it?
As that programme must have awakened the consciences of many people who did not know the circumstances in which these awful housing conditions were being perpetrated, will the right hon. Gentleman give immediate consent for the money to be spent and the plight of these miserable people improved?
Mr. Edwards: Of course, I shall look at the point made by the right hon. Gentleman and carefully examine his representations. If the conditions are generally as he describes them, one wonders why his Government cut £110 million off capital programmes over the four years and why they wasted so much money subsidising council tenants who did not require the subsidies instead of concentrating it on the real areas of need such as the right hon. Gentleman has just described.
Mr. James Callaghan: Does not the right hon. Gentleman realise that, although these party points can be

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made across the Floor of the House, the simple truth is that the chairman of the housing committee says that he has £500,000 available now? He is seekinng only the permission of the Secretary of State. We can have the party debate afterwards, but I ask the right hon. Gentleman please to get on and improve the houses.
Mr. Edwards: I have told the right hon. Gentleman that I shall look at the specific point that he has made. But, as he has given a vivid description, it is perfectly fair—and I do not apologise for it—for me to indicate that responsibility for the condition of the housing stock in Wales is shared with the previous Government.
Mr. Barry Jones: In the Minister's depressing statement today, are not the cuts in the council house building programmes and the large increases in rents and rates likely to put an even greater strain on the social fabric in Wales? Will they not make it more difficult to weather the storm of rising unemployment in Wales? Should not the right hon. Gentleman be ashamed of his statement?
Mr. Edwards: In order to ride the storm of rising unemployment, we must switch resources into productive industry and help to create jobs. By arguing for the maintenance of high spending on consumption, the hon. Gentleman is actually damaging the economic recovery for which he pleads.

Business of the House
Motion made and Question proposed,
That, at this day's sitting, if proceedings on the Motions in the name of Mr. Nigel Lawson relating to Civil and Defence Estimates have not been disposed of by Ten o'clock, Mr. Speaker shall proceed, notwithstanding the provisions of paragraph (2)(c) of Standing Order No. 18 (Business of Supply), to put forthwith any Questions necessary to dispose of the said Motions.—[Mr. Jopling.]
Mr. John Bruce-Gardyne: I understand, Mr. Speaker, that the motion is debatable.
Mr. Speaker: And I have proposed the Question. The Question is the business motion.
Mr. Bruce-Gardyne: I am most grateful, Mr. Speaker. I shall not delay the House for many minutes, probably not much longer than the right hon. Member for Swansea, West (Mr. Williams) with his supplementary question on the statement of my right hon. Friend the Secretary of State for Wales.
As I have said before, I believe that we should not take with great equanimity our procedure for voting these enormous Supplementary Estimates on the nod, which is the prospect that we face once again tonight. I hasten to say, Mr. Speaker, that there is not a word of criticism of the Chair in my remarks, because I realise perfectly well that you have no choice in these matters, but the House needs to look hard at this procedure. I understand that tonight, once again, we shall be asked to vote £2¼billion of winter Supplementaries which for the most part have never been debated or explained in any shape or form. I do not think that that is at all satisfactory.
Among other items in the Supplementaries is provision for yet another overspend on cash limits by the Ministry of Defence. That is a particularly large item. We were told the other day by my right hon. Friend the Secretary of State for Defence that cash limits were not an appropriate discipline for the Ministry of Defence. That may be true, but I submit to the House that, it would be much more satisfactory if, before we had to vote these massive sums of Supply, we had an opportunity to hear from my right hon. Friend the Secretary of State for Defence what alternative discipline on the housekeeping of the Ministry of Defence would be more suitable. It would be entirely germane to hear from the Ministry on the subject of the Supplementary Estimate that is before us tonight.
My right hon. Friend the Leader of the House responded most considerately to the pressures which I and other hon. Members have put with regard to the way in which we vote Supply by announcing his intention to establish a Procedure Committee to look into the way in which we handle Votes on Supply. That is eminently satisfactory, but I am bound to say that one would be interested to know what exactly has happened to it. We were promised that new Procedure Committee during the summer. We are now back to the winter Supplementary Estimates, and it has still not been set up.
I fear, therefore, that we face the prospect of being asked tonight to vote this enormous sum on the nod, and when the spring Supplementaries come round in three or four months it looks to me alarmingly as though we shall also be invited to vote them on the nod. That is not good enough.
From what my right hon. Friend the Leader of the House said last week—no doubt he will correct me if I am wrong—I formed the impression that it is the Opposition,

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who, God knows, have other problems on their hands, of which we are all aware, who have been so dilatory as to delay the establishment of the Committee. That is deplorable. We have lingered on with this procedure for far too long. The House does not subject these enormous sums of public expenditure to proper scrutiny. We need to set up the Committee right away so that it can work quickly. As the Leader of the Opposition is here, I am bound to say to him that he might be better employed in helping urgently to establish the Committee than in some of the rather ludicrous activities in which he is at present engaged in the manipulation of his Front Bench.
The House must come to a decision on these matters soon. I for one—and I should like to hope that others, too—am not prepared indefinitely to accept the proposition that we should agree to motions to allow this business to proceed without any scrutiny at all. Unless we have made progress by the time this issue next comes forward, I shall certainly seek to divide the House against the business motion.
The Chancellor of the Duchy of Lancaster, Leader of the House of Commons and Minister for the Arts (Mr. Norman St. John-Stevas): I am grateful to my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) for raising this matter in his usual trenchant way. I congratulate him on his persistence in pursuing a matter which is of vital importance to the House of Commons. It was as a result of his activities and those of a number of other hon. Members that I announced that it was the Government's intention to appoint a Procedure Committee to consider this matter urgently and to make a report to the House so that we could act speedily, consider the proposals and see what could be done to improve our procedures.
I have been nagging—I think that that is the right word—Opposition Members to get the Committee appointed and names put forward. I fully realise that the Opposition have been in difficulties because of Shadow Cabinet elections and also because they have had to appoint other Front Bench spokesmen. Therefore, there has been some delay. But that election, for good or ill, has now been accomplished, and the second rank of "shadowy Ministers" has also been appointed. Therefore, there is no reason why we should not go ahead, and, provided that the usual channels act with even more than their usual expedition, I hope that we shall be able to put down a motion to appoint the Committee later this week.
Mr. Michael Foot: I am quite happy that the Committee should be appointed. We hope that it will proceed with its work with considerable speed. The hon. Member for Knutsford (Mr. Bruce-Gardyne) was fully entitled to raise this matter, just as many of my hon. Friends have raised it on previous occasions. I hope that the House will be able to secure a satisfactory settlement.
Question put and agreed to.
Ordered,
That, at this day's sitting, if proceedings on the Motions in the name of Mr. Nigel Lawson relating to Civil and Defence Estimates have not been disposed of by Ten o'clock, Mr. Speaker shall proceed, notwithstanding the provisions of paragraph (2)(c) of Standing Order No. 18 (Business of Supply), to put forthwith any Questions necessary to dispose of the said Motions.

Orders of the Day
  SUPPLY
  [2ND ALLOTTED DAY]—considered

Steel Industry
Mr. Deputy Speaker (Mr. Bernard Weatherill): I should inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.
4.59 pm
Mr. Stanley Orme: I beg to move,
That this House, appalled by the indifference of Her Majesty's Government to the rapid decline in the United Kingdom's manufacturing base and aware that a strong national steel industry is essential to the United Kingdom's industrial recovery, calls upon Her Majesty's Government to provide the resources necessary for an expanded programme to stop an immediate heavy loss of jobs and a highly damaging reduction in capacity.
Once again, the House is debating the crucial issue of the British steel industry. The future of that industry and its survival and well-being are essential for the whole British economy. We shall want to look in more detail at the Government's general approach and their failure to tackle the dramatically reduced industrial base and increasing unemployment, all of which are based on theories which, when put into practice, have failed. We must ask—I put it to the Government—whether we want a viable steel industry. If the answer is "Yes"—and we say that it is—the monetarist and free market policies of the Government have not worked, are not working and will not work.
The corporate plan was presented to the Government by the British Steel Corporation last Friday. We make no apology for wanting to debate this issue at an early date before the Government come to any decisions and present the House with a fait accompli. Mr. MacGregor's corporate plan calls for
"A cut in the Corporation's manned liquid steelmaking capacity from 15 million tonnes to 14·4 million tonnes a year. A further reduction in personnel of at least 20,000."
Those proposals have been interpreted in some quarters as moderate and not as drastic as forecast. But what does 20,000 redundancies mean on top of the 47,000 jobs that have been lost in 1980? What does it mean to the areas that are earmarked for closure and rundown? An argument that the Secretary of State might understand is that the loss in financial terms alone arising out of 20,000 unemployed people will be nearly £100 million on the public sector borrowing requirement in one year, quite apart from the human misery which such umemployment creates.
What are we faced with in the corporate plan? Normanby Park will be closed. Appleby-Frodingham No. 1 rod mill will be closed. There will be more closures at Ebbw Vale and Templeborough. Coking capacity will be reduced by closing ovens at Shotton and Hartlepool. Many other cuts and closures are forecast in the corporate plan. Yet that corporate plan is only phase 1. There is no guarantee that further cuts will not take place. In fact, in the proposals that I have received—incidentally, not from the Secretary of State—there are other forecasts. Let me quote directly from the corporate plan itself. It says:
"Further closure options were considered, particularly in Strip. However, it was decided that they should not be implemented,

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at least for the time being, in an effort to determine whether planned costs and market objectives could be achieved with the co-operation of employees".
That is a direct threat that further closures will probably take place.
Is the corporate plan as proposed by the BSC the answer to the current crisis in the steel industry? A cutback to 14·4 million tonnes, will leave a gap in capacity of 7 million tonnes which will be needed when industry returns to normal production. What will fill that 7 million tonnes gap? It will be filled by imports.
The Secretary of State for Industry (Sir Keith Joseph): Will the right hon. Gentleman explain from where he got the figure of 22 million tonnes? I do not know whether I missed it in the earlier part of his speech.
Mr. Orme: The 7 million tonnes represents the gap between the 14·4 million tonnes, as forecast by the BSC, and the forecast of 21 to 22 million tonnes which will be needed when there is an upturn in the economy and we have full employment. That is the figure which I have been given, having discussed the matter with the industry. Perhaps the Secretary of State will comment on it further.
Several Hon. Members rose—
Mr. Orme: I must continue at this stage, but I may give way later.
The present situation in Britain must be seen against the current economic situation that is affecting many of our international competitors. No steel industry is having an easy time, but the situation is worse in Britain than it is in any other advanced country because of the Government's policies. That is the reality. We must also face the fact that some of our competitors are receiving substantial subsidies, be it in terms of transport, energy, coking coal or reconstruction support. It is worth noting that Germany subsidises coking coal to the tune of £135 million. As the corporate plan states, the loss to the corporation in energy charges, which puts it at a disadvantage in relation to other European competitors, is between £50 million and £70 million. Perhaps the Secretary of State will say something about the representations in that regard which Mr. MacGregor has made to him.
Therefore, the British steel industry must be protected. If we allow market forces to operate in isolation against this industry, we shall end up with no major British steel component and we shall be solely dependent upon imports.
I should like to quote from the letter which Mr. MacGregor this week sent to all BSC employees. He makes three crucial points. First:
"Reduce capital investment on essential items. This is not something we want to do or would do if the situation were not drastic, but we have no choice".
He adds:
"High interest charges on our heavy borrowings help to make our prices uncompetitive".
He also makes this point:
"There are more than 2 million unemployed in Britain, and as a result, the demand for our steel in our own home market is down because industries are not using as much steel. Some of our best customers—British Leyland and British Shipbuilders for example—are in serious trouble and needing much reduced tonnages of steel "
That is not the view of the Labour Party. It is Mr. MacGregor talking. In effect, he is condemning the Government's policies. The inference is that each industry
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in this country is being regarded separately by the Government. There is no industrial strategy. They do not regard the basic industries of coal, mining and railways as an entity, which they should do in the present economic circumstances.
The steel industry has already been dramatically slimmed. Out-of-date and unproductive areas have gone. It is a crime to make further cuts in areas where there is new plant and high productivity. What happened at Consett, in my opinion, should never have been allowed.
Mr. David Watkins: I appreciate the point that my right hon. Friend makes. I reiterate what I have said in many previous debates in the House. The act of shutting Consett was an act of industrial vandalism. It was not an old-fashioned and unproductive works. It was a works which, with the full co-operation of the work force, had been made profitable and highly productive. That work force was betrayed.
Mr. Orme: I thank my hon. Friend for underlining the point I was making.
We recognise that some slimming took place under a Labour Government, but no redundancies were created without consultation and without agreement and without the Labour Government having preparations already on the floor. That is true of Ebbw Vale and many other areas. What preparations is the Secretary of State making in the light of the 20,000 or 47,000 jobs that have gone this year?
I want to turn to the effect of the 13-week steel strike, which has some bearing on the proposals that Mr. MacGregor has made. The effects of that strike included a financial loss of over £200 million, increased imports to the value of £300 million, an export loss of £100 million in the first quarter of 1980, a loss of the United Kingdom market share, which fell from 54 per cent. to 48 per cent., and embittered industrial relations.
The result of that strike and the consequences lie firmly at the door of the Secretary of State for Industry and the Prime Minister. The Secretary of State must accept the major responsibility. As the Granada "World in Action" programme showed, he intervened directly with a proposal that there should be a zero increase. That came out in the "World in Action" programme. The right hon. Gentleman has not condemned it publicly. He told the House day after day that he was not intervening or interfering in the steel dispute. My hon. Friends representing the steel areas who are present in the Chamber today pressed the right hon. Gentleman and the Prime Minister week after week on this issue and never got a straight answer. In consequence, the Secretary of State must bear a heavy responsibility.
That situation cannot be divorced from the present position, the current wage claim and the threatened six-month freeze on salaries and wages. I put this question directly to the Secretary of State. What proposals are contained in the corporate plan, or what assessment has been made for wages in 1981? There must be an assessment. The corporation cannot come to any fiscal or economic judgment without taking into account the pressure that would come from a wage increase.
Is the Secretary of State aware that the proposed further redundancies, the proposed wage freeze and the Government's lack of confidence in the industry will have a disastrous effect on the morale of the workers within BSC? Is he aware that industrial relations are at their lowest ebb in the industry, which had not had a strike for

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53 years and which previously had good industrial relations? It is no good Mr. MacGregor saying in his statement:
"The Plan makes it clear that its success depends on critical factors: The co-operation and dedication of BSC's entire workforce including the management."
It is obvious that without the co-operation of workpeople at all levels the success needed cannot be achieved.
I can tell the Secretary of State that the unions are extremely angry at the manner in which they were informed of the BSC's proposals last week. It was supposed to be consultation but was nothing of the sort. The Iron and Steel Act 1975 contains an obligation to consult, not to tell, the trade unions. Before this corporate plan was presented to the Government, there should have been a full discussion involving the Government, BSC management and workers in the industry. There should have been an attempt to hear all views and not to submit a fait accompli and hope that the workers would co-operate.
The Secretary of State is probably aware that Mr. Bill Sirs' union is taking legal action against the corporation because of its failure to carry out the terms of the 1975 Act. It is not a very good indication of improving industrial relations when bad faith is created both by the Government and, in my opinion, in this case, by the management of the BSC.
I remind the Secretary of State that the trade unions in the basic industries have come together in the form of a trade union triple alliance. It is composed of the miners, the railwaymen and the steelworkers. It constitutes a positive and constructive proposal. An editorial in the Sunday Mirror this week stated:
"The three unions are combining their efforts and resources to press the case for a national plan to beat the dreadful plague of unemployment.
The Triple Alliance's main proposal is a major programme of re-equipping the railways."
That is long overdue in the current economic situation.
The editorial adds:
"The unions believe Britain should return instead to the wise ideas of John Maynard Keynes, the British economist who, 50 years ago, urged governments to intervene to prevent large-scale unemployment."
Here we have unions coming together—Conservative Members may not like it—to defend our basic industries and to ensure that they are not attacked and destroyed in the manner in which the Government are at present attacking them. The Secretary of State should listen closely to what they have to say.
The Government's currency and budgetary policies have contributed directly to the BSC's loss of markets. I say openly that it is essential to support and help the British steel industry with public money. The Secretary of State has already done a major U-turn on cash limits. The right hon. Gentleman will remember saying "Not a penny over £350 million." That has now been raised to over £700 million. The right hon. Gentleman has to listen again. I say to taxpayers and people living outside the steel areas that the prosperity of the nation in the ultimate depends on the base of our manufacturing sector. We cannot increase our prosperity or maintain our present standard of living unless we have a prosperous manufacturing base. Part of that base is the steel industry.
The Secretary of State stands back, wrings his hands and says "It is nothing to do with me. Let firms go to the
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wall." His policy is to let whole industries run down at a time when, in the opinion of the Opposition, they should be supported. We are talking of investment for the future. The future of people living in other parts of the country is tied to great State industries such as the British Steel Corporation. It is tied to the future of British Leyland, the shipbuilding industry and the mechanical engineering industry.
The Secretary of State should take the following steps. He should treat the British steel industry in the same way as this industry is treated in many other countries by giving specific support in energy costs, coking coal and transport.
Mr. Stan Crowther: And research and development.
Mr. Orme: I accept what my hon. Friend says. Conservative Members are laughing. We are talking about men's jobs. Surely, there is nothing more important than that. We are talking also about the survival of British industry as we understand it. For a large part of my life, I worked in manufacturing industry in the private sector. I know the importance of that industry. If the Government turn their back upon the manufacturing sector, Britain will be in trouble.
The Government should take further steps to reduce the interest rate. They should cut prices and take action to reduce the strength of the pound. It is interesting—this is stated in the corporate plan—that EEC prices have dropped by 20 per cent. since 1978–79 as a result of the strengthening of the pound. Mr. MacGregor wrote:
"Reduce BSC interest burden by converting debt to equity. (a) BSC interest cost per tonne is two or three times higher than that of U.S. or German producers because of a combination of high gearing and high interest rates."
We want an early and radical capital reconstruction. In the short term, we need to protect the industry. If necessary, we should use selective import controls. Last but not least, we need a genuine corporate plan that involves management, workers and the Government.
Last week I visited Jarrow in the North-East of England, a town that suffered bitterly at the hands of the economic crisis of the 1920s and 1930s. Steel played a part in that crisis. Jarrow suffered over 70 per cent. male unemployment. If we do not take action now, entire communities will be decimated by uncaring economic theories. There will be a minimum of 20,000 redundancies in areas that are already suffering high unemployment. That is a terrible price to pay for the failure of economic policies.
We are faced with a man-made crisis. It is not an act of God. The crisis can, and must, be resolved by man. It must be resolved by alternative policies. The Secretary of State bears a heavy responsibility, and it will be no good if years later he says, as he did after his term of office as Secretary of State for Social Services, "I was wrong and I made a mistake." If he says that, the damage that will have been done will take a generation for the industry and our industrial base to repair and recover from.
We are talking about investment for the future. The steel industry was brought under public ownership because it lacked investment. There was no money in the industry and it needed modernisation and regeneration. We know what the 1973 Government, of whom the right hon. Gentleman was a member, stated in their 10-year plan. We have moved on from those days.
Sir Anthony Meyer rose—
Mr. Orme: We must examine the industrial base in its entirety. That examination must be based upon the dependent industries—for example, the steel, mechanical engineering and shipbuilding industries. If public subsidy is needed, we must be prepared to advocate that funding. If public money is needed to save basic industries, we must ensure that that money is made available. We are debating a corporate plan that has not been presented properly. It has been rushed through. It will bring redundancies, further closures and no guarantee that additional closures will not take place in 1981. The Opposition are defending British industry, and they will continue to do so.
5.25 pm
The Secretary of State for Industry (Sir Keith Joseph): I beg to move, in line 1, to leave out from "That" to the end of the Question and to add instead thereof:
"this House believes that it is important to the United Kingdom's manufacturing industry to have available good quality steel at internationally competitive prices; notes that the British Steel Corporation has just adopted a corporate plan to enable the Corporation profitably to supply United Kingdom and overseas markets; and asks the Government to give the plan careful consideration."
My right hon. and hon. Friends welcome the right hon. Member for Salford, West (Mr. Orme) to the Opposition Front Bench in his new capacity. We expect to have many debates with him. I am sure that he and I will disagree on many subjects. However, I hope that we can find some common ground from time to time, at least in the prosperity and fuller employment that we both desire.
I must quarrel with one of the statements with which the right hon. Gentleman ended his speech. He said that we are debating the BSC plan. However, the Opposition have chosen legitimately to debate a plan that has not been published. We are debating a plan that has not been studied by the Government and on which the Government have made no decision. We are, in effect, debating a press release that was distributed by the corporation.
I make no complaint of that. However, it would be wrong to imagine that the Government have yet had time to study the plan, which they received only at the end of last week, or that they have come to any decision. The task of my colleagues and myself will be to listen to the debate—we shall do so carefully—and to take into account the arguments that are advanced, including those of right hon. Member for Salford, West, as we study the plan.
What I can do usefully and not necessarily at length—
Dr. Jeremy Bray: Does the right hon. Gentleman assert that the Government should reach a decision before hearing the view of the House?
Sir Keith Joseph: I said that I do not quarrel with the legitimacy of the debate. I was saying that the right hon. Gentleman spoke from time to time as if the Government had approved the plan and that the plan was, therefore, official Government policy. I am not in a position to defend the plan or to reject it. The plan has not been published. However, I am in a position to listen. I shall try to explain the background.
Mr. Orme: On a point of clarity. Is the right hon. Gentleman aware that I have seen more than the press statement detailing some of the items within the corporate plan? The right hon. Gentleman could have helped the House. Why should the document be secret? He could have published it before the debate.
Sir Keith Joseph: The right hon. Gentleman assumes that it could have been published. It is not the habit of either party when in Government to publish confidential material that is embodied in the plan of a nationalised industry or a company largely owned by the taxpayer—for example, British Leyland. That has not been the habit of Governments, and there is no precedent to which the right hon. Gentleman can appeal. The plan contains confidential information which it would not be sensible to publish.
The overwhelming fact that I shall develop in various ways is that the steel industries of the European Economic Community have, after allowing for exports at the rate at which they have been moving for the past five years, about 20 million tonnes to 25 million tonnes of over-capacity. The growth prospects for steel demand in the EEC, including the United Kingdom, are relatively poor. As the House knows, there is intensely increasing competition from outside the EEC, both for sales within the EEC—I shall come to that point later—and for markets within our potential export market. We live in an intensely competitive steel world. World demand for steel in 1979 was not much higher than it was in 1974. Since 1974 has been introduced a great deal of additional steel production capacity all over the world. There is certainly no prospect of any shortage of steel in the world during the next five years. There is great over-capacity both in Europe and in the world.
Opposition Members argue that in those circumstances there should be some restraint on imports into the EEC. There is restraint upon imports, which was introduced by the EEC and from which Britain's steel industry benefits to some extent. I ask the House, and especially the right hon. Member for Salford, West and his hon. Friends, to accept that there is no prospect in the immediate future of a return to the high, rapidly growing demand of the early 1970s, either in Britain or in Europe. The right hon. Gentleman spoke as if it were the fault of the Government that some of the main steel users in Britain are now demanding less steel. Sadly, they are demanding less. The prime users of British steel—the car industry, shipbuilding industry, construction industry, mechanical engineering industry and the machine tool industry—are taking very much less steel, alas, than they used to do.
Mr. Russell Kerr: The Government have run down those industries.
Sir Keith Joseph: The hon. Member for Feltham and Heston (Mr. Kerr), who interrupts from a sedentary position, was the Chairman of the Select Committee which four years ago, when the Labour Government were in office, pointed out precisely the same phenomenon—namely, that the steel-using industries in Britain were demanding far less steel. Even at that time, the demand from the car, shipbuilding and mechanical engineering industries was falling.
Mr. Russell Kerr: Does the Secretary of State admit that when we wrote that report we were not in contemplation of the lunatic monetarist views that are a characteristic of this Government?
Sir Keith Joseph: The hon. Gentleman may not have realised it, but he voted regularly for a monetarist Chancellor, who is now the Shadow Foreign Secretary. It is not ony that British steel users were demanding, and are

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demanding, less steel than in the past, but, alas, the quality, punctuality and price of BSC's steel has not always been such as to attract or hold customers. Some customers bought abroad because they could not get the quality, punctuality and competitive price that they wanted. With world over-capacity, Western European over-capacity and British over-capacity, the premium must be upon being competitive. After all, that is what successive Governments—and the right hon. Gentleman served in a Government who had the same purpose—have sought, against all the obstacles imposed by nationalisation, and by the assumption—which has now gone—that the customer does not matter. Against that background, the 13-week strike did desperate damage. It lost the market share. It taught large numbers of British steel users to look abroad. I am glad to say that some custom is now being recovered. It was a sad and tragic decision to strike.
I had not previously heard that I was accused of having intervened to propose or impose a 2 per cent. pay increase. The suggestion is preposterous and untrue. I reject it altogether. Now that I have heard it and contradicted it, I hope that the right hon. Gentleman will not repeat it.
Mr. Allen McKay: Is it not true that Sir Charles Villiers approached the Secretary of State months before the strike and told him that to give a new increase at a time of closures would lead to industrial action? That was related to the Secretary of State many months before the strike. Had he taken action at that time and not created the monetary policies and tight monetary control in the steel industry, the strike would not have occurred.
Sir Keith Joseph: Sir Charles Villiers may have talked about various options months before the strike, but he never expected any comment from me about what he and his board should propose in terms of pay. I would not have ventured to suggest any such thing to him. I both believe in and adhere to the philosophy that Ministers appoint chairmen to carry out the management function.
Immediately after the strike ended, it so happened that what had been a fairly stable high world demand for steel fell precipitously away. That happened about six, seven or eight months ago. It is against the background of intensely competitive steel over-capacity and the damage done by the strike that Mr. MacGregor was appointed. He has duly come forward with his plan, which the Government are studying and on which decisions will be made some time before the end of January.
From the press release and from the reports of the press conference associated with the plan, one thing has become clear. Mr. MacGregor, with the help of all concerned at British Steel, is dead set to try to win a larger share of the fallen and highly competitive steel market. He is dead set to try to achieve a profitable, larger market share. I am sure that the House will say "Good luck" to him. Mr. MacGregor's approach, as indicated in his press release and at his press conference—it is not my job to defend it as the Government have not yet had time to study, let alone make a decision about the plan—was to call for the most vigorous marketing, management and productive effort, associated with some closures and some reduction of manpower, and a great deal of reduction of the remaining restrictive labour practices, in order to become
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internationally competitive. He is placing all his hopes on winning back a larger share of the home market and on winning a substantial export market.
Almost since he arrived in Britain, Mr. MacGregor has said that British Steel would be enormously benefited by lower energy prices. He made that case to the Government. He was accompanied by the British Independent Steel Producers Association and a number of other industries. The Government are studying that case. It is not going by default. I take on board the point made by the right hon. Gentleman. It is true that Mr. MacGregor has said yearningly that it would be nice if British Steel did not have to pay so much in interest rates. The Government announced at the beginning of the year that there would be—we hoped, at a time when the BSC would not be making a loss—a capital reconstruction. There is likely to be a Bill before the House in due course which will propose such a capital reconstruction. [HON. MEMBERS: "When?"] I cannot say this year, only this Session. I hope from that that Mr. MacGregor may achieve some of his purpose under that head. That is the background against which we have to judge the plan.
The over-capacity with which British Steel has been plagued has to be blamed on both parties. Both parties when in Government approved a plan that in the circumstances proved too large. We were not competitive enough. One can blame management and the work force. The work force was stubbornly obstinate in protecting restrictive labour practices and overmanning, but management should have overridden even that obstinancy and managed to achieve the higher productivity that we still need.
The whole House has to remember that the object must be not only to catch up on our overseas competitors in productivity and efficiency in quality, services and price. We know their productivity and effectiveness this year, but, by the time that we have caught up next year or the year after, our competitors—wicked devils—will have improved their performance yet again. We are pursuing a moving target. I presume, as a layman, that the task of the BSC is possible, but it will call for superb management and superb co-operation by a comprehending work force, which now, I believe more than ever before, realises that competitiveness is desperately in its own interest. Salvation lies in increased competitiveness.
The right hon. Member for Salford, West in his speech, which was not particularly long or particularly short either, did not once mention the cost that British Steel Corporation has imposed on the taxpayers of this country. That cost cannot be ignored. It is levied in taxation or borrowing, which puts up interest rates, or in printing money, which puts up inflation. That cost, be it in taxation, higher interest rates than otherwise or inflation higher than otherwise, in turn spreads pervasively throughout the economy, destroying jobs.
It is true that jobs are not destroyed in as concentrated and dramatic a form as results in some cases from the closure of plants that have been the life of a particular town. We well understand that. But let not Opposition Members imagine that it is humane to use all the money that they take for granted to allow steel to continue being uncompetitive but not humane to try to save those other parts of the economy by reducing the money that steel demands and by insisting that steel becomes competitive so that it does not remain a burden on the taxpayer.

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I am sure that the average steel worker does not want to be a burden on the taxpayer but deeply wants to be internationally competitive and profitable. That way, at least, to put it at its lowest, his job is more likely to be secure. However, I am sure from such meetings as I have had with steel workers that they want to have the pride of being independent of Government decisions.
Of course, the right hon. Gentleman is right in asserting that steel is needed in this country, but it does not follow from that that anyone should assume that the production of steel must be for ever loss-making. Steel can pay its way.
Sir Anthony Meyer: Would my right hon. Friend care to reflect on the consequences of the delays in the proposed rundown at Shotton? Those delays were for the best possible motives, but the end result is that Shotton is closed down at a time when there is very little chance of bringing in other employment, whereas, had the phasing out gone ahead as originally planned, it would have been a great deal easier to get other employment into the area.
Sir Keith Joseph: I agree. I do not see how anyone can deny what my hon. Friend says. The Labour Government deferred a number of closures, which they ultimately and regretfully made. At a time when there was more employment available, they closed plants for the same reason as we have presided over the closure of plants under the previous chairman and will, no doubt, preside over the closure of plants under the present chairman.
I must make plain to the House that the chairman and board of British Steel do not need Government authority to reduce manpower or to close plants. No doubt they will make headway with the proposals embodied in the press release of their plan. The Government will be making decisions on the strategy involved in the plan as soon as we can—before the end of January, I hope—but some of the proposals embodied in the plan are within the corporation's power, and, no doubt, it will get on with them.
Mr. Leo Abse: If the Secretary of State is correct in his assumption that the sacrifice that the steel worker would make—a traumatic experience, as he emphasises, in particular areas—has to be in order to avoid trouble for the whole of the rest of the community, who otherwise will be suffering because of the problems and lack of productivity, why does he not take the point that that means that the whole community has to take the burden of the alternative work which has to become available in those regions? Why does he not accept the fact that, rather than the burden falling on Wales or another region, he has the responsibility so to organise affairs that there is public investment and money drawn from the wider community to the very areas which otherwise must endure those traumatic experiences?
Sir Keith Joseph: The hon. Gentleman, whom I have known for very many years, is admirable at making a rhetorical point. He knows very well that in a free society Governments cannot command jobs to come into existence. He supported a Government who presided over a doubling of unemployment and who would, had they had the power, have created jobs for every person thrown out of work. However, it just is not practical, so Governments, including this Government, come as near as we can to it.
We have, because we consider it right, allowed the BSC to spend a great deal of taxpayers' money in
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redundancy payments. We have put in large sums of money,particularly for Wales, to enable advance factories to be built and sites to be prepared. I am glad to say that, despite all the gloom, there is great interest in taking advance factories in Wales. However, despite the strong speech that we have heard and those that we shall hear this afternoon, there is a great deal of common ground.
Mr. Orme: In the period during which the right hon. Gentleman will consider the corporate plan, and bearing in mind the offhand manner in which the trade unions have been dealt with by the BSC, may I ask whether the right hon. Gentleman is prepared to discuss with the trade unions the Government's thinking and have proper consultation with the workers in the industry? He talks of the workers accepting responsibility. Is he aware that they are not being consulted properly and that it is about time they were?
Sir Keith Joseph: I should very much like to agree with propositions put to me by the right hon. Gentleman, but I cannot agree to that. It is for the management to have whatever discussions it considers fit. The law on that subject was introduced by a Labour Government. It is for the corporation to decide its performance under the law and to take such other action in relation to trade unions as it judges fit.
Mr. Michael Foot: I am sure that the Secretary of State appreciates that this is a matter of the utmost seriousness to many of the communities that will be hit, including my constituency. The British Steel Corporation's proposals will have a catastrophic effect on Ebbw Vale. They will set back all the efforts that we have made to rebuild our community. That also applies to other places. Even under the so-called moderate proposals, many areas will be hit hard.
If the Secretary of State intends to accept anything like the BSC proposals which involve a rundown on a massive scale, he must make proposals for Ebbw Vale, Swansea, Consett and Corby and other places at least equal in scale to those which the Labour Government made. He must match our proposals for helping industry with advance factories, rate support relief and in other ways. Will he examine what we did to try to meet the rundown? Will he guarantee that the Government, if they accept the BSC proposals, will come forward with comparable proposals of assistance?
Sir Keith Joseph: I can come near to accepting the right hon. Gentleman's intervention without going quite as far as he wants. In South Wales, North Wales, Corby and Consett, the Government have reacted to severe changes in the employment and economic situation as a result of steel closures. I can assure the House that we shall continue to do that.
Mr. Foot: These are important matters. Right hon. Members on the Government Benches might not worry about them, but our people do. We are determined to press the matter. That is why we forced the debate today. The Secretary of State's remarks are inadequate. He must understand that his Government's proposals to deal with the rundown at Llanwern and Port Talbot, for example, are inadequate. I am asking the right hon. Gentleman to examine in detail what we did in Ebbw Vale, for example. Will he guarantee that assistance will be given which is

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comparable in scale to that provided by the previous Government? I ask the same for every area affected by the proposed rundowns.
Sir Keith Joseph: I shall not ask the right hon. Gentleman to excuse me, because I perhaps should have briefed myself on the subject. I am not equipped today to compare that which we have done in the four places which I mentioned with that which the right hon. Gentleman's Government did in his time. I shall study the comparison and bear in mind his suggestion.
Mr. D. N. Campbell-Savours: Perhaps the Under-Secretary will deal with it in his reply.
Sir Keith Joseph: I do not undertake that, but I shall see whether it is possible.
I shall finish by trying to establish some common ground. We have been through this in part before. I accept that the Ebbw Vale steelworks must have been closed reluctantly. The right hon. Member for Ebbw Vale (Mr. Foot) deserves respect for taking a decision which must have been repugnant to him. However, I shall quote what he said because his words apply today. In the South Wales Argus in 1978, the right hon. Gentleman said:
"All of us had to face the fact that to keep steel-making at Ebbw Vale would cost the nation tens of millions of pounds more, to add to the hundreds of millions loss of the BSC in 1978. There was not a chance, not a cat in hell's chance, that the Cabinet or Parliament would agree with the proposition."
I rest my case. I hope that my right hon. and hon. Friends will reject the motion and accept the amendment.
5.56 pm
Mr. Frederick Mulley: I thank the Secretary of State for his courtesy to hon. Members from Sheffield and South Yorkshire when he received us this afternoon and listened to our deep concern about the future of the steel industry. However, listening to him today confirms my view that we did not make much of an impression on his philosophy in the short time that we spent with him. If necessary, we shall go to see him again.
I want to make a short speech, because many of my hon. Friends wish to take part in the debate. The right hon. Gentleman will find it difficult to justify to history, let alone to my right hon. and hon. Friends, that it was right for a Secretary of State to sit through a 13-week strike, believing that he had no responsibility for the damage that he knew was being done to the industry for which he was responsible. There are real philosophical differences between us, but I ask the Secretary of State to recognise the wider context of his responsibility for the industries for which he accounts to the House and to the nation.
The well-being of my constituency depends upon a prosperous steel industry. One cannot talk about steel without thinking of Sheffield. Certainly, Sheffield would not be the city that it is without the steel industry. Already the city has lost many jobs in both the public and private sectors. A number of firms have closed. Our intermediate area status has been removed. There is no doubt that the proposals for rate support grant will present the city with still further problems—although I have not studied them in detail. About 3,000 jobs in the Sheffield and Rotherham area will be lost as a result of plan. Probably still further jobs will be lost.
The fundamental question is that posed by my right hon. Friend the Member for Salford, West (Mr. Orme),
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whom I welcome on this his first appearance in his new capacity as spokesman for industry. In addition to common sense, he has a personal background that involves manufacturing industry. He asked "Are we to have a steel industry in the future?" Clearly, we shall not have a steel industry to take advantage of the upturn that we hope will come unless the State provides funds to keep the essential elements of the industry going. A viable steel industry is an essential element of our national infrastructure.
It is difficult to envisage the mothballing of manufacturing industry. The idea of mothballing essential parts of the steel industry is appalling. The skills and equipment, particualrly those involved in special steels in Sheffield, cannot be put aside for several years and picked up when circumstances permit a bigger production of steel. As a nation, we are in grave danger of losing our manufacturing industry.
The Secretary of State quoted my right hon. Friend the Member for Ebbw Vale (Mr. Foot). This week The Sunday Times, in the context of the railways, quoted the late Sir Winston Churchill, who said:
"Letting everything smash into bankruptcy and unemployment in order that reconstruction can be built upon the ruins is neither sound economics nor wise policy."
The Secretary of State should study that quotation, along with that by my right hon. Friend the Member for Ebbw Vale. The Sunday Times did not say so, but 50 years ago Sir Winston was speaking from personal experience as an orthodox monetarist, having taken us back to the gold standard too soon and at too high a parity.
The high value of the pound is one of the problems that besets the steel industry and manufacturing industry generally. There is talk about productivity in this country—the number of man hours it takes to produce a tonne of steel and so on—compared with that in other countries, but little account is taken of capital investment in the competing industries in other countries.
We are glad to learn that the Secretary of State is considering assisting our industry in the matter of energy costs. Gas, electricity and coking coal are provided to our competitors at a lower cost than they are here, and in a number of other countries there are favourable freight terms on the railways. That makes it extremely difficult to compare our industry with that of other countries, because we are not comparing like with like.
It seems clear from the OPEC conference that the price of oil is to be raised again, which, in the sense of revenues from North Sea oil, is advantageous. However, it will probably make the value of the pound rise still further, giving an additional handicap to companies seeking to export and favourable prices to our competitors for their goods. An additional problem will be posed by the seeming improvement in the value of our North Sea oil. Labour Members believe that our good fortune in having North Sea oil and gas should be used for the regeneration and preservation of our industry as an absolute priority, so that when the oil and gas supplies are exhausted we shall have a viable manufacturing base from which we can continue to prosper.
I hope that in his reply to the debate the Minister will deal with some of the questions that have arisen from the written answer that the Under-Secretary of State gave to the hon. Member for Bedford (Mr. Skeet). The Under-Secretary of State spoke about the
"considerable overlap between the operations of the British Steel Corporation and some private sector companies in billet, bar and rod".

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He added that his right hon. Friend had
"made it clear to BSC and to the private sector companies concerned in this area that the Government will consider urgently viable propositions for joint companies in which the private sector would have a majority holding ".—[Official Report, 11 December 1980; Vol. 996, c. 737.]
Obviously, we all wish to maximise the productive capacity in Sheffield and to maintain as many jobs as possible, but there is grave suspicion that that proposition is directed more to dismantling the BSC than to assisting with a short-run over-capacity in the special steel sector. I hope that the Minister will be able to give us some information about what is meant by the overlap, which private sector firms are overlapping with the BSC, and what form such arrangements will take.
The full co-operation of the trade unions is essential to secure the recovery of the industry that we all desire, but it will not take place in an atmosphere of grave suspicion that this is a political rather than an economic proposal. I should also like an assurance that the Secretary of State will receive members from the city of Sheffield to discuss these matters—I gather that he has only authorised the talks—and that there will be full consultation between the BSC, the private sector companies and their trade unions before any agreements are submitted for approval.
6.6 pm
Mr. Patrick McNair-Wilson: I declare an interest in the debate, in that I am involved with a company that manufactures graphite electrodes. I remind the House that the subject of my maiden speech in 1964 was the steel industry. I was then fresh from the Iron and Steel Trades Confederation. The right hon. Member for Salford, West (Mr. Orme) followed me on that occasion with his maiden speech, and he referred to the same subject. Some hon. Members have been discussing the future and the past of this industry for many years. Regrettably, in the years during which I have been a Member the arguments have depended to some extent upon which side of the House one was sitting. That is not good.
The tragedy of the industry is that it has been a political football since the end of the last war. That has not helped to improve its fortunes. The announcement that we are debating today means in a sense—now that the industry is in public hands—that this is probably one of the last chances that the industry will have to continue in anything like its present shape.
There are those—I am not one of them—who question the validity of bulk steelmaking in this country. They argue that all the main losses flow from that part of the corporation's activities. That is indisputable. There are also those who say that we should import and re-roll here. I reject that argument, for strategic as well as social reasons. To put ourselves into the hands of what would appear to be the cheapest suppliers would also be to put ourselves into the hands of what could be extremely unstable countries which, when the need arose, might let us down. I believe that it is in everyone's interest—I think that this is common ground across the House—to see that this industry becomes successful.
It is a tragedy that the plan that we are discussing today predicts a production capacity that is little more than half of what was produced in the year that I left the Iron and Steel Trades Confederation—14·4 million tonnes; but, regrettably, that figure is realistic in the present
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circumstances. How many hon. Members who have been discussing this subject for many years have looked to the day when the British steel industry would be equipped with modern efficient plants?
As a result of changes that have taken place over the years those plants exist, but if we are to get the most value out of those plants we must load them as near to capacity as possible. Regrettably, they were designed to break even at about 70 per cent. of capacity—an enormously high figure. None of them has ever worked at anything like those tolerances. That has led to the tragedy of Consett and of Ebbw Vale and to the situation in the constituency of the former Prime Minister, the right hon. Member for Cardiff, South-East (Mr. Callaghan). Those were older plants that were ultimately being phased out to make room for the newer ones.
There is no alternative to that policy. As I have said before, the policy can succeed only if the industry buys back the jobs of those in the older plants. The fabric of the corporation would be weakened if steel were made in plants that were not competitive in the world context. To that extent, the plan put forward by the chairman of the BSC cannot be short-circuited.
The right hon. Member for Sheffield, Park (Mr. Mulley) made a most interesting speech and referred to the need to reduce the value of sterling if we wish to improve our sales performance. In recent years, the deutschemark and the yen have been dominant, but that has not altered the fact that goods from Germany and Japan have come flooding into the country.
Sir Frederick Burden: When sterling was at its lowest point, the yen rose by about 50 per cent. and Japanese production increased by 60 per cent. During that period our production increased by only 1 per cent.
Mr. McNair-Wilson: I am grateful to my hon. Friend for that observation. He has underscored the point that I was making—namely, that the low level of production is worrying. If we use the new plants—
Mr. Mulley: I think that the hon. Gentleman has misunderstood the observation that I made. I said that the strength of the pound was due to one factor—namely, North Sea oil. That does not apply to the deutschemark and the yen. I agree that if the strength of the currency were due to a flourishing and efficient industry, that would be another matter. However, the Government have done nothing to help industry to reach that end.
Mr. McNair-Wilson: I do not wish to cross swords with the right hon. Gentleman. He is an expert on such matters, and he will know that the Canadian dollar—which could be described as a petro-currency—does not enjoy such inbuilt strength. Although oil plays a part, we should not take chances with sterling. If the level of sterling were to fall, it would be virtually impossible to win the battle against inflation. Right hon. and hon. Members will no doubt recall that fact.
The steel industry is made up of two distinct groups: the public sector and the private sector. The private sector does not have the same opportunity as does the public sector to visit the Secretary of State and to argue its case for large extra tranches of taxpayers' money. It must survive on a more meagre diet. In recent years, the private sector has been through an extremely difficult time. Some people want the public sector to be greatly reduced. I

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should like the public sector to stand on its own feet. However, it must be borne in mind that the public sector is a frequent customer of the private sector. I am involved with a business that makes melting electrodes. If the BSC were to disappear, a substantial part of our business would disappear, too. The two sectors of the economy are interdependent, not independent.
Although I should like the steel industry to be prosperous and successful, it is important to recognise that if one part of the animal is killed the other part will die willy nilly. That would be damaging. Over the past 12 months, the BSC's performance has been very worrying. Predictions about the loss of business that would result from the stoppage earlier in the year and the other difficulties faced by the BSC have led to a fall in sales of approximately 30 per cent. That cannot go on.
Many of the BSC's European competitors enjoy energy advantages. I pointed out to the Minister that the melting electrode industry has a plant in Calais which makes an identical product to that made in Sheffield. However, there is a difference in electricity charges of about 30 per cent. I urge my right hon. Friend to fight for us when he talks to his right hon. Friend the Secretary of State for Energy. The Government have in their hands a card that could transform the future of businesses that use substantial quantities of energy. I urge my right hon. Friend to look sympathetically at the figures that have been presented.
What is the future? Morale in the industry is low, because one hammer blow is followed almost immediately by another. That is why I began my speech by saying that this was almost our last chance. I do not say that in a threatening way, but the industry's fibre is being undermined by its record of unhappiness and, some might say, failure.
We must recognise that the BSC will achieve viability and strength only if it pleases the customer. Over the past 12 months, customers have drifted away and there has been a 30 per cent. drop in sales, but British Steel must still offer a wonderful bargain to the British customer. It is a secure source of supply. When one takes into account the costs of freight and so on, it must be advantageous to buy from a British mill. We must capitalise on that, and the industry should hold the strongest sales drive that it has seen since nationalisation.
I cannot believe that a country that produced Bessemer and which, in a sense, invented steel can exist without a viable steel industry. Let us hope that the tide turns at its lowest point. I believe that it can turn, and I welcome the plan.
6.17 pm
Dr. Ifor Davies: In his opening remarks, the hon. Member for New Forest (Mr. McNair-Wilson) declared an interest. I, too, declare my interest as the parliamentary representative of 1,500 people who face possible redundancy as a result of the proposed plan.
The Secretary of State began his speech by stating that the House was debating a subject that the Government—and the right hon. Gentleman in particular—had not even considered. I welcome the right hon. Gentleman's remarks. That is the very reason for the debate. It will allow us to underline some important points beforehand. I hope that the hon. Member for New Forest will forgive me if I do not take up some of his remarks,
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but I wish to follow the example set by my right hon. Friend the Member for Sheffield, Park (Mr. Mulley) and to be as brief as possible.
I shall therefore concentrate my remarks on the Principality, my constituency and the tinplate industry of Velindre, which will be greatly affected. In recent years, the House has frequently debated industry. Throughout those debates we have emphasised the problems of Llanwern and Port Talbot. Those works are not affected by the proposed closures, and in that respect it is so far so good.
However, the proposals have introduced a new threat to the tinplate industry. Because the announcement concerning Velindre was totally unexpected—my right hon. Friend the Member for Salford, West (Mr. Orme) rightly said that there was no consultation with the trade uniions, and there was certainly no consultation with the work force—the proposal was all the more shattering. The Under-Secretary has visited the plant. It is threatened with the redundancy of about two-thirds of the work force—about 1,500 people.
When I met the works council at the weekend, I found that workers were not only angry and frustrated but stunned by a feeling of incredulity. That feeling was created because no suggestion had ever been made that such an act of industrial vandalism awaited them. It has been claimed that the tinplate proposals were drawn up by the local management team, but no discussions took place with the work force and there is now a strong demand that a full investigation must be made into the basis of the proposals.
It must be remembered that tinplate has been produced in Wales for more than 200 years. Wales is the home of the industry. Technological changes and new methods of making tinplate had a catastrophic effect on the old-type hand mills and resulted in a massive loss of jobs. The Secretary of State said how necessary it was to have co-operation from the work force, and no one can deny that throughout the years the work force in the tinplate industry has co-operated to the full with all the demands of technological changes.
In spite of the serious social upheaval that was created, the general feeling was that it had to be done to ensure the survival of the industry. "Survival" is not a new word in the vocabulary of Welsh tinplate workers. That attitude persisted throughout the years, but the present feeling is that the area has made its sacrifices and now deserves the support of the Government—I ask the Minister to underline that—to maintain its industry as one of the leading tinplate producers in the world. It is an industry of which we can be proud.
It is well understood that the industry faces fierce competition from overseas producers such as the Dutch, the Germans, the French, the Japanese and the Americans. In addition, other countries that were previous importers of tinplate produce at least part of their own needs. They include South Africa, Australia, Brazil and Spain. There are also alternative products, such as aluminium, glass, plastics and even cardboard competing for the tinplate market. It is fully realised that tinplate users are demanding better quality and closer tolerances and that the industry must meet those demands.
The Under-Secretary can confirm that Velindre is meeting such demands. At the very moment that I was meeting the works council, a fully automated mill, including speed and guage control, was being introduced.

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It establishes Velindre as one of the few works with automatic roll changes and one of the most up-to-date automatic mills in the industry.
The need for all the technological changes is well understood, but it is not understood and it makes no sense that our tinplate industry, which is recognised as one of the foremost in the world, should be placed in jeopardy because of a self-inflicted attack on our manufacturing base.
The dominant queston is: what possible grounds can there be on which the BSC arrived at the Velindre proposal? It cannot be because of poor industrial relations—they have been first-class. It cannot be because of inefficiency—production records have been outstanding. Above all, it cannot be because of financial losses—the plant has been operating with consistent surpluses for a lengthy period.
If the only other reason can be the state of the market, I must emphasise on behalf of my constituents that they have no desire to place one plant against another within the Welsh tinplate industry, but there is a strong and powerful desire that there should be equity of treatment within the industry and that an alternative strategy of work sharing, at least, should be considered when trade is at a low ebb.
That was the method adopted in earlier years by the old Welsh Tinplate Association when facing trade recessions. By that method, plants were kept at the ready and available to spring into production again when the upturn in trade took place. I am confident that such an upturn will occur again, and that is why the Opposition motion calls on the Government to provide the resources necessary for an expanding programme.
I accept what the Secretary of State said about the BSC's having authority without recourse to the Government to proceed with the proposals in its plan, but the Government have a responsibility to consider the social consequences of that plan, and I urge them, before they accept the BSC proposals affecting Velindra, to consider an alternative strategy of work sharing between existing plants in the tinplate industry. That would ensure the continuity of a modern tinplate industry and would avoid the serious social consequences of 1,500 redundancies.
I also ask the Government to ensure that we get all the financial benefits from the EEC regional fund for which we qualify in connection with the steel industry. On 18 November, the European Parliament recommended that further aid should be made available to help redundant steel workers. The Council of Ministers is meeting today to consider the matter, and I hope that the British Minister will be there to give his full support.
6.29 pm
Sir Anthony Meyer: The hon. Member for Gower (Dr. Davies) commands the respect, admiration and affection of both sides of the House, and when he pleads so movingly for his constituents he must command the respect of everyone who listens to him. While the hon. Gentleman was speaking, his hon. Friend the Member for Consett (Mr. Watkins) must have listened with a wry smile on his face because there, too, a plant with an admirable record of labour relations and with a good production record has none the less found itself swept away in the storm that threatens the steel industry, not only in this
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country but in the whole industrialised world. It serves no purpose to pretend that this storm is not blowing, and blowing with a terrifying fury.
As my hon. Friend the Member for New Forest (Mr. McNair-Wilson) said, party politics have ruined a great industry. Blame does not attach solely to one party. Uncertainty has lain like a black cloud over this industry at every critical point in its history, causing bad decisions to be taken and good decisions to be deferred.
The right hon. Member for Salford, West (Mr. Orme), who opened the debate from the Opposition Benches, has clearly not yet worked himself into his job, because it was difficult to detect any positive content in his speech or any contribution such as those we have already had and no doubt will have from the Back Benches containing constructive suggestions going well beyond the ding-dung of party warfare.
Mr. Ian MacGregor—whose appointment was bitterly criticised by almost all Opposition Members, and, I am bound to say, was received with some doubts on the Conservative Benches—has to my mind triumphantly vindicated his appointment.
Dr. John Cunningham: I do not want that comment to go on the record without challenge. It was not Mr. MacGregor who was criticised. No one made any judgments about Mr. MacGregor. It was the manner and circumstances of the appointment that were criticised.
Sir Anthony Meyer: Mr. MacGregor's appointment was criticised by Opposition Members. However, I shall not pursue that matter. I very much doubt whether there were many Opposition Members who spoke in support of a man whose accomplishments are already beginning to prove themselves. Above all, he has brought to this daunting task a sanguine and optimistic temperament. He is not prepared simply to preside over the steady liquidation of this great industry. Mr. MacGregor has produced a plan which, of course, includes proposals that will be very difficult for many Members of the House to swallow on constituency grounds.
The hon. Member for Gower is placed in an almost intolerable situation by the plan. My hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown), who may be present shortly, likewise finds himself placed in an extremely awkward position. The hon. Member for Flint, East (Mr. Jones) and I are also in a very uncomfortable position, because Shotton, which we thought had already had the worst, is now faced with a further 900 redundancies. As constituency Members, we are bound to complain bitterly about what has been done to our constituencies. None the less, there is a duty on each of us to try to see the industry as a whole and to recognise, in what has been proposed, a plan that could produce a viable and profitable steel industry in this country and build it up from there.
The outlook may not be quite as grim as we are sometimes liable to fear. Last February—admittedly that is now 10 months ago—the OECD held a symposium on the future of steel in the Western world. The symposium took a somewhat rosier view of the developments. It reckoned that the world's steel market would rise by an average of 3 per cent. a year from 1980 to 1985 and that part of that increase, 2½per cent., would be in OECD countries. If that is true, OECD steel producers might again be producing at 90 to 95 per cent. of effective

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capacity by the end of that period. Unfortunately, a lot of water has flowed under the bridge since February, and a good deal of water came gushing under the bridge only yesterday with the OPEC announcement of another savage increase in oil prices, so those forecasts may have to be corrected downwards.
It is, however, a mistake to look at the steel situation solely in terms of raw steel or even of finished steel. What matters is the uses to which the steel is put. The OECD report said that
"simple exports of steel bars, sections or plates are not the real story of steel trade. The trade that will count more and more will be in goods made of steel. Much steel goes round the world as small boxes known as cars, or big ones called ships".
In that connection, it is instructive to look at page 17 of today's issue of The Times, which has three interesting headlines. Column 1 is headed:
"Talks to start on plan for steel survival,"
and it gives a brief account of Mr. MacGregor's discussions with senior Ministers. The next two columns paint a very gloomy picture under the heading:
"Manufacturing output slumps to lowest level for 13 years"
—a story that no doubt the Labour Party will exploit to the full.
The next two columns tell a much more interesting story about British Leyland, which is
"to recruit 1,000 more Metro workers".
The 1,000 extra workers for the Metro and the increased production of that model necessarily involve more steel. That, surely, is a hopeful indication. It suggests that if Mr. MacGregor can make his plan stick there is a real possibility of a viable, profitable steel industry that has turned the corner and is already beginning to recover, on condition that success is the criterion and that the Government and the community back success and do not seek in vain to stem the tide. However socially desirable it may be to ensure jobs for people in areas threatened by closure, that is not the way to tackle the situation.
Much as I was attracted by what the hon. Member for Gower said about work sharing, I could not help reflecting that what he said was in direct conflict with what the steel unions set out to achieve when they embarked upon their strike. At that stage they made a deliberate choice. Work sharing necessarily involves lower wages and incomes. By deliberately setting out—at any rate, at the beginning of the strike—to demand a higher settlement from an industry that the steel unions knew to be already bankrupt, they were, in effect, giving the thumbs down to work sharing. Perhaps in the long-term interest of the industry they were right. It is better to have a smaller and better-paid work force. But the unions' choice was the exact opposite of the choice that the hon. Member for Gower suggested.
The plan has turned out to be much less catastrophic for Wales than many of us had feared. In particular, it offers the prospect of continued operation of the two great integrated steel works at Port Talbot and Llanwern. Everything depends now on what happens in the next six months. I make this appeal to the Government. Let us not suggest that steel workers are being threatened that if they go on strike they will forfeit the chance of saving their jobs. They are not being threatened at all. They can see the chance that now opens before them of securing their future. Provided that the Labour Party does not seek to stir up discontent, and provided that Conservative Members refrain from presenting this as a great triumph over the
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unions, I believe that there really is a chance of saving the steel industry in Wales and in the whole United Kingdom and of providing a decent, assured future for our steel workers.
6.39 pm
Mr. Stan Crowther: I am sure that no one will pretend that Mr. MacGregor and his board were faced with an easy task when they set about producing their plan or that there are any quick solutions to the problems of the industry, but I find it extremely difficult to follow the logic of what is now being proposed, especially in regard to the Rotherham works of the corporation.
I hope that I shall not appear to say too much that is the same as was said by my hon. Friend the Member for Gower (Dr. Davies), but the fact is that the stories appear to be rather similar. In Rotherham we have lost 11,000 jobs in the steel industry since the early 1960s. They have not come in large, dramatic closures of the sort that hit the headlines. We have not had the sudden closure of one big plant—as happened in Consett, Corby or Shotton—that hits the headlines, but we have lost these jobs nevertheless, and the damage to the social fabric has still happened. The sacrifice was accepted by the trade union movement and by the community because they understood this to be part of the price that had to be paid for making the Rotherham works a highly efficient and productive plant.
When the Secretary of State speaks—as he did earlier in the debate—about the need for a comprehending work force, I assure him that there has never been a more comprehending work force than that in the steel industry at Rotherham. It has adopted what it thought was a very responsible attitude and has negotiated its way through 11,000 job losses. It has done that to build an extremely productive and efficient plant, which has equalled and then beaten the performance of its competitors throughout the world.
My hon. Friend the Member for Rother Valley (Mr. Hardy)—who is not able to be present for the debate—and I have several times drawn the attention of the House to the production records set up at the Rotherham works, in department after department, including the Templeborough melting shop, which is now to be the scene of further cutbacks and, apparently, a loss of another 1,800 jobs. There are anger, frustration and deep disillusionment in my constituency.
Rotherham people are now saying, at the end of these 11,000 job losses, "Was it really all worth while? For what purpose was this sacrifice made? What more do we have to do to save Rotherham works and to save our jobs? Are world records not enough? What more is wanted?" That is what my people are asking, and these are the questions to which we are entitled to have some very good answers.
The Secretary of State says that he does not think that the average steel worker has any wish to be other than competitive. Of course, he is right, and the Rotherham steel workers have proved themselves over and over again to be competitive, but the reward for that is another 1,800 jobs down the drain.
Ironically, it was in the Templeborough melting shop in 1961 that the cutdown in manpower in the steel industry in Rotherham first began, in the days when it was part of United Steel Companies Limited. It was in that very shop that we lost our first 1,100 jobs, when 14 open hearth furnaces there, plus seven others, were replaced by six

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electric arc furnaces. That entailed the loss of the 1,100 jobs and created in the Templeborough melting shop the largest electric arc steel making plant in Europe, pioneering bulk special steel production. Some time ago, by internal reorganisation, those six arc furnaces were reduced to four, but now, according to press reports, that once great melting shop is to be reduced to a one-furnace operation, with possibly one other furnace which may he brought back into production at some time in the future, if we are lucky.
This in an absolute tragedy. The one furnace that will be left is the one that is to be linked to the continuous casting machine, which is to be commissioned in February and which would have been there years ago if the BSC had not dilly-dallied for so long about whether to go in for continuous casting. The corporation ought to have done that a long time back, not only in Rotherham but throughout the country.
There is deep despair in my constituency. Enormous damage is being done to the morale of the industry, as the hon. Member for New Forest (Mr. McNair-Wilson) said. He is right about that, not only because people are being put out of work, and not only because there is a terrible shortage of jobs for school leavers, but because people are conscious of the appalling waste of skill and experience that all these redundancies entail. Skill, one of the great assets of the country, is being poured down the drain.
I must say a word or two about the role of the Government in all this. I shall not say very much, because my right hon. Friend the Member for Salford, West (Mr. Orme), who opened the debate, covered the points extremely well in what seemed to me to be a splendid speech. We all know, of course, that there is a world recession, and we do not need to be told repeatedly from the Government Front Bench about steel industries throughout the world having too much capacity. We know all about that.
We are entitled to ask why, of all the developed nations, this country's industry is suffering most. The answer, of course, lies in the Government's dogmatic ideological refusal to do anything to support their own industry. Every other developed country in the world has a Government who are prepared to do something to support their industry, but that is not the case in Britain. That is why we are now in such appalling difficulty. Mr. MacGregor's ambition, apparently, is to restore the BSC's share of the home market to 54 per cent.—a modest ambition indeed, especially in a market that is fast contracting anyway.
I was very pleased to see that Mr. MacGregor intends to adopt a more aggressive attitude to exports, which his predecessor was not prepared to do, but I do not know what Mr. MacGregor has been saying to the Government about all the matters to which my right hon. Friend referred in his opening speech—the many ways in which the BSC's competitors are being assisted by their Governments, in Germany, Japan, Italy, America and all over the world. I wonder what Mr. MacGregor is saying about that.
I am well aware of the splendid document that the BSC and the British Independent Steel Producers Association jointly produced on energy prices. I was glad to hear that the Secretary of State was studying it. I hope that he does not keep on studying it while more and more damage is being done. What is needed now is some action. Many people think that it is crazy that industry, in a country that
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is essentially an island of coal, surrounded by oil and gas, should be paying more for energy than industry in other countries, which do not have these natural resources, is paying. I, too, think that that is crazy.
What Mr. MacGregor is saying to the Government about these things, or how strongly he is saying it, I am not sure, but he is in a stronger position to say it than is anybody else. He is in a much stronger position than is any other nationalised industry chairman, because the BSC dare not sack him, having paid £2 million for him. If I were in Mr. MacGregor's shoes, I should not be pleading with the Government or going to them cap in hand; I should be presenting demands. I hope that that is what Mr. MacGregor is doing, because unless the Government are prepared to take a more realistic attitude to British manufacturing industry and to do more to support it—not to give it subsidies, but at least to let it compete on equal terms, which is all it is asking—all the cutting and pruning in the world will not make the BSC competitive.
Mr. MacGregor may find himself, at the end of the day, in the position of the surgeon who said "The operation was a complete success, but, unfortunately, the patient died."
6.48 pm
Mr. Michael Brown: This is for me perhaps the most sombre debate in which I have spoken since I was elected to the House, because the burdens of the present cutbacks which are being proposed in the MacGregor plan fall upon my constituency, and particularly upon the Normanby Park steelworks.
Normanby Park is one of the older parts of the Scunthorpe complex. It is a steelworks employing 2,750 people, and along with the No. 1 rod mill and the slimming down which the MacGregor plan proposes there is a burden which my constituency is expected to bear, under the MacGregor proposals, to the tune of about 4,100 redundancies.
The Normanby Park steelworks originally was the core of steelmaking in Scunthorpe. It is part of the complex that forms the skyline that one first sees when going into that town. Thus, I appreciate with great sadness and understanding the feeling among the steel workers last Friday when the announcement was made that the BSC proposes, under the MacGregor plan, to close steelmaking there.
However, I have to ask myself and my constituents what is in the best long-term interest for the future of steelmaking in my constituency. I believe that every steel worker in Brigg and Scunthorpe has always recognised that the Normanby Park steelworks was at risk. We all held our breath in the days when, for a temporary period, reality dictated the actions of the right hon. Member for Chesterfield (Mr. Varley), the then Secretary of State for Industry. Last year, we again held our breath.
The Scunthorpe steelworks is similar in style to Consett. At a time of great excess capacity, one wondered for how long it could continue. There has been some investment in Normanby Park in recent years, but it is the smallest of the integrated works left in this country. For how long can we justify the retention of that steelworks when its retention may continue excess capacity to the extent that it jeopardises the security of modern works, such as Llanwern, Port Talbot and the Anchor steelworks in my constituency? [Interruption.] Does the hon. Member for Workington (Mr. Campbell-Savours) wish to intervene?

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Perhaps I should develop that point. Should I represent the interests of my constituency for the purposes of tonight's or tomorrow's headline, or should I be more concerned with the long-term interests of my constituency?
Against the background of my political philosophy, it would be easy to say that the country does not owe the British Steel Corporation a living. I have championed the policies of the Government, who, quite rightly, are seeking to reduce public spending and borrowing. But the real test of a Member's political beliefs lies in what happens when important decisions face his constituency. It would be easy for me at the end of this debate to say that we must keep Normanby Park steelworks open and to join the hon. Member for Workington and his colleagues in the Division Lobby tonight. Heaven knows, the Patronage Secretary knows that if I am not satisfied with the views of my Government I am not prepared to walk through the Lobby in support of them.
However, can I in all honesty say to my constituents that I have salved my conscience by joining the Opposition in the Division Lobby in defence of the Normanby Park steelworks when I do not believe that the proposals and sentiments expressed by the right hon. Member for Salford, West (Mr. Orme) will guarantee the future of steelmaking in this country?
If the Opposition could show me that fighting to keep open the Normanby Park steelworks, would guarantee the long-term future of the steel industry, it would be the easiest thing in the world to go through the Lobby with them. I might be able to get some cheap, short-term publicity in the local press, but I cannot deceive myself, and, in all honesty, I am not in the business of trying to deceive the steel workers whom I represent in Brigg and Scunthorpe.
My constituency is being asked to bear a considerable burden because of the MacGregor plan's effects upon the Normanby Park steelworks. However, I believe that there is no viable alternative to the MacGregor plan. It is the last chance for the British Steel Corporation. I must have regard for the long-term future of steelmaking in my constituency. The MacGregor plan recognises the massive investment that has been put into Scunthorpe, particularly in the Anchor project, by the Governments of both parties. The Anchor project has been left intact, and that is the way I want it to stay.
If the MacGregor plan does not go through with the necessary retrenchment that it proposes, we may find ourselves—as Mr. MacGregor said at his press conference last week—asking for how much longer we can continue to have steelmaking in big plants such as Port Talbot, Llanwern, Teesside, Ravenscraig and Scunthorpe.
Like my right hon. Friend the Secretary of State, I looked back at the history of steel closures when the Opposition were in power. My right hon. Friend quoted from the Leader of the Opposition, who, like me, represents a steelworks, Ebbw Vale, which was closed in 1978 with the loss of approximately 2,000 jobs. The words which my right hon. Friend read out, published in the South Wales Argus, can be applied to my constituency, but for "Ebbw Vale" read "Normanby Park", for "Michael Foot" read "Michael Brown" and for "1978" read "1980". The right hon. Gentleman is reported as having said:
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"All of us had to face the fact that to keep steel-making at Ebbw Vale would have cost the nation tens of millions of pounds more, to add to the hundreds of millions loss of the BSC in 1978. There was not a chance, not a cat in hell's chance, that the Cabinet or Parliament would agree with the proposition."
That was the Labour Cabinet and Government in those days. So much for the Labour Party being prepared at that time to defend the interests of steelmaking in Ebbw Vale. That fact ought to be taken into consideration.
The MacGregor plan is important because it gives the BSC this last chance. The Government and the unions have a responsibility to support that plan. It is worth paying tribute to the reaction of the unions to the plan. There has been a temptation to look back at the past. Let us be honest. I cannot forget that not my right hon. Friend but the ISTC closed down the steel industry earlier this year for three months. One cannot ignore the fact that that was bound to have a consequence.
Mr. Campbell-Savours: Having made his statement, will the hon. Gentleman clarify what he means? Is he saying that he supports the closure of a steel plant in his constituency? If so, let him say it categorically.
Mr. Brown: I thought that I had made that clear to the hon. Gentleman. I see no alternative for the security of steelmaking in Scunthorpe and of the Anchor project if we retain plants which I cannot justify to myself or to my constituents, or to the Opposition for that matter. At the end of the day, like every other hon. Member, I have to persuade the taxpayer that his investment—
Mr. Bill Homewood: I wish to make a point about the steel strike. Is the hon. Gentleman genuinely arguing that he believes that it was realistic for any employer to propose a 2 per cent. increase in earnings for a body of people at the time?
Mr. Brown: At the beginning of my speech, I said en passant that I did not want to cover old ground as regards the steel strike. However, the hon. Gentleman has tempted me.
The overwhelming majority of steel workers in my constituency knew at that time, as I warned them, that sooner or later that strike would result in steelmaking capacity in the steel industry being less rather than more. It has come sooner than some Opposition Members expected. If steel workers in Corby, Scunthorpe and elsewhere could have their time over again and could see what was to happen to the steel industry, they might have felt that the 2 per cent. increase that they were being offered was a small price to pay for the retrenchment proposed by the BSC.
I cannot continue to say that the rest of the country owes Scunthorpe or anywhere else a living. I derive no pleasure from representing a steel constituency which has to rely on the Oliver Twist begging bowl approach to the taxpayer. I consider my constituents to be the most important people in the United Kingdom. They are unique because they sent me to Westminster.
Mr. James Hamilton: They should send the hon. Gentleman back again.
Mr. Brown: It is for my constituents at the appropriate time to consider whether the points that I put to them are correct. They will decide in their own way.
It may be that in 1983–84, if the unions and the Government co-operate with the MacGregor plan, we shall have a secure future for steelmaking. However, I do not

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want to go to my constituents in 1984 on the basis that I tried to keep open marginal plants which were threatening the survival of the BSC in the long term. I should prefer to go to my constituents in 1984 and be able to say that at least I supported a proposal that was in my constituency's long-term interests rather than in my short-term electoral interests.
Mr. Roger Moate: I suggest that my hon. Friend's constituents are more likely to return him to the House when he makes courageous speeches of the kind that he is making rather than taking the easy option suggested by the hon. Member for Workington (Mr. Campbell-Savours). If the hon. Member for Workington insists on making the self-righteous and obviously partisan point that he was making—
Mr. Campbell-Savours: Not partisan.
Mr. Moate: —is he not condemning not only my hon. Friend but the Leader of the Opposition, the right hon. Member for Ebbw Vale (Mr. Foot), who, faced with the closure of steelmaking at Ebbw Vale, had to say to his constituents on behalf of the Labour Government that their steelmaking capacity had to close? If we are to achieve a secure future for the steel industry, should not Opposition Members such as the hon. Member for Workington accept and understand that point?
Mr. Brown: I agree entirely with my hon. Friend. The steel industry has suffered too often in the past 10 to 20 years from politicians who have meddled and deceived the steel workers in my constituency and elsewhere.
Dr. Bray: Will the hon. Gentleman give way?
Mr. Brown: I should like to proceed. In fairness to Opposition Members, I have a duty to bring my remarks to a conclusion, and I have other points to bring to the attention of my hon. Friend the Minister.
Dr. Bray rose—
Mr. Brown: I should like to continue.
Dr. Bray rose—
Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. The hon. Member for Brigg and Scunthorpe (Mr. Brown) has made it clear that he is not giving way. About eight hon. Members still wish to catch my eye. Each will get in if we do not have too many interventions.
Mr. Brown: As I said, my constituents are the most important people in the country. However, I cannot justify to the rest of the country that unending subsidies are the God-given right of the electors of Scunthorpe. I am sure that that goes for everywhere else:
I want our steel industry to defend itself on the ground of the MacGregor proposals by selling its steel in the market place. At long last, we have a chairman of the British Steel Corporation who is looking at the matter from the customer's point of view. I think that hon. Members should also consider it from the customer's point of view. At the end of the day, job security in the steel and car industries or anywhere else depends on the ability to supply a product which is in demand at the cheapest competitive price. Full utilisation of the modern capacity at the Anchor steelworks is the best guarantee of a competitive steel industry and, therefore, of Sconthorpe's future rather than the Oliver Twist begging bowl approach.
I am impressed by the attitude, understanding and realistic approach that many members of the Iron and Steel
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Trades Confederation appear to be adopting in my constituency. Obviously, one or two hotheads have a vested interest in the demise of the steel industry for their own political purposes. But, provided that there is good will on all sides, I believe that the steel unions and the Government recognise that co-operation with the MacGregor plan is the only hope for the long-term security of the steel industry. Mr. MacGregor means what he says. In my view, he has convinced the unions that there is no alternative. If the unions are honest with themselves and with their members, they will recognise that there is no alternative. They have a vested interest in the success of the plan.
It is not as though the survival plan will not cost money. Opposition Members, when chiding the MacGregor plan, may forget that together with that plan that is on my right hon. Friend's desk there may be a request for a substantial sum of money. The Opposition should bear in mind that the Government may yet go down in history as the Government who gave more public funds to support the steel industry than any of their predecessors.
The redundancies in my constituency come hard on the heels of the slimming-down proposals that were announced towards the end of last year, when about 2,800 jobs were lost. Over a three-year period, 9,000 people will have left the steel industry in Scunthorpe. But Scunthorpe will still, sadly, remain a one-industry town. I say "sadly" because a one-industry town is not a healthy town.
Before the Normanby Park closure I had discussions with my right hon. Friend about new industry, and he responded by granting my constituency development area status. But there is now a new and even grimmer situation. My right hon. Friends the Prime Minister and the Secretary of State have rightly repeated that areas affected by steel closures will be assisted. I think that further assistance will be required under the terms set by the Prime Minister and the Secretary of State earlier in the year. We are now looking to the Department of Industry for special development area status to help us in the short term so that we are on a par with Shotton and Port Talbot, which already have such status.
I understand that discussions may be taking place between the Department of Industry, the Department of the Environment and the Scunthorpe borough coouncil relating to an enterprise zone covering a site in the closure area in Scunthorpe. I hope that the Government will seriously consider that idea.
Both the Scunthorpe and Glanford borough councils have played a constructive role during the past few months. The Scunthorpe borough council is of a different political colour from mine. However, all of us in Scunthorpe have sat down together and considered the future. I hope that I can continue to work with those authorities in persuading the Government to let us take advantage of the assistance that they proposed earlier in the year.
The Scunthorpe borough council will lose about £250,000 from rates which it currently gets from Normanby Park. This is at a time when it wants to provide the infrastructure to attract private investment. Therefore, I hope that the Department of the Environment will consider the borough council's request for sanction to undertake this necessary work.
I apologise for speaking slightly longer than I intended, but I was interrupted on one or two occasions. The MacGregor plan bears considerably on my constituency.

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However, I welcome it wholeheartedly because I have to consider the long-term interests of my constituency. As I said earlier, one can try to deceive one's constituents only to a certain point. Those who entered the House with any kind of political conviction will recognise that they cannot deceive themselves, and I do not believe in deceiving my constituents.
The MacGregor plan is a corporate plan not for the death of the steel industry but for its survival. I shall support that plan because it is the last hope for the British Steel Corporation and for the survival of steelmaking in my constituency. I welcome it, and I hope that the Government will support it.
7.9 pm
Mr. David Penhaligon: We have heard a brave speech from the hon. Member for Brigg and Scunthorpe (Mr. Brown). Only time will tell whether his supposition about his constituency's future is right or wrong. I follow the boundary reviews rather closely. I note that there is, perhaps, a constituency to which the hon. Gentleman could move, which is not so desperately far away but which is just outside the area of the steel plant.
All I say to the hon. Gentleman is that I sometimes take the view that an MP's job here is to help his constituents, right or wrong. Perhaps not all the way, but he is the one whom his constituents have to put their views. There is a case for the hon. Gentleman to argue for his area just because it is his area. I leave that to him. Only the longer term will tell.
We are an industrial nation, as I have said on a number of occasions in the House. Steel is the lifeblood of an industrial nation. I cannot imagine how a country can call itself an industrial nation and have a substantial industrial sector without a considerable ability to manufacture the blood of that industry in its own community. Clearly, the blood of that industry is steel.
Whatever it may be, Britain's long-term economic future must revolve around manufacturing. Today we are discussing the kernel of that manufacturing ability—the ability of our nation to produce the raw material on which all other industries depend—whether it be in my part of the world, which must be further from steel manufacturing than any other part of Britain, or in the middle of Scunthorpe, Consett or wherever. If we are manufacturing, someone must be producing the steel.
The problem is not new. In the previous Parliament I occasionally listened to steel debates. I could not help but develop the feeling that the previous Government knew they had problems on their hands with the steel industry but were putting off some rather unpleasant decisions because they could not stand the political anguish that they would cause. That impression was gained by many who were neutral in that Parliament. The problems are not new.
There is no point in the present Government denying that the problems have been savagely increased during the last 12 to 18 months because of current economic problems. The main problem is the value of the pound. Instead of having all these debates on unemployment, industry, steel and so on, perhaps we ought to have a debate on the value of the pound. I cannot help but return to that as being central to all the problems we are discussing.
Sir Frederick Burden: Does the hon. Member recall that in 1976 the right hon. Member for Cardiff, South-West (Mr. Callaghan), who was Prime Minister until last year, stated that it was very difficult to manipulate the pound to the state that one wanted in exchanges and that if one attempted to do that it would lead to greater inflation and greater unemployment? The right hon. Member repeated that at great length in the House when he was Prime Minister in 1978.
Mr. Penhaligon: The House of Commons was not short of debates about economic issues in the previous Parliament. What I recollect—I draw the hon. Gentleman's attention to it strongly—is that during the period when the Liberal Party co-operated with the then Government the pound was very low in value. Whatever happened and whatever was intended, the pound was very low in value. That was the only period in the last eight years when there was an increase in output in our factories and a reduction of unemployment. The possibility was frittered away, particularly towards the end of 1978, when, clearly, the Government's pay policy did not have overwhelming support, and we were back on the silly old merry-go-round on which we have been for so long.
When the pound had that low value, there was a period during which our industry was very competitive and was doing quite well. From my own consituency I know that labour was being taken on, unemployment was beginning to fall off and there was some progress back towards sanity, even if it was not maintained for very long.
I continue on the subject of the pound. Only two reasons are ever offered for its holding its current value—either the current Government's interest rate policy or the fact that we are self-sufficient in oil. How much we allocate to those two sources the current value of the pound depends on whom one listens to. I believe that competitive interest rates have a substantial role to play in the international value of the pound, but the fact that we are the only major industrial country in the Western world that is self-sufficient in oil must also be of considerable influence.
If the cause of the pound's high value is only interest rates, it is within the Government's power to do something about that matter. They could introduce tomorrow a statutory prices and incomes policy, which the Liberal Bench would support. Given that, they would have more control over the money supply than they have now and, given that, they could halve interest rates the day after. If all that we are told is right, the pound would come down to a more sensible value within a very short period after that.
However, I suspect that it is as much, if not more, to do with the fact that we are self-sufficient in energy as it is to do with interest rates. The simple fact is that the world looks upon us as being immune from OPEC decisions because of our self-sufficiency in fuel. Given that, I do not understand why it is so widely accepted in the House, and in the media and all the so-called responsible organs of opinion that, if OPEC meetings decide that the international value of OPEC oil is to rise by 10, 15, or 25 per cent., automatically and immediately the energy costs to our industry must rise by the same amount at the same time.
We are in an extraordinarily fortunate position. The coal that we have is our coal. Our oil is our oil, and our gas is our gas. Why cannot we use the single thing that is

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running for us, as an industrial nation, to our singular advantage? No one complains about Third world countries using the fact that they have low labour costs to their advantage. That is something that they have going for them. Therefore, why cannot this House change its current attitudes towards energy and allow this great fortune that we have in energy to be used for our economic advantage? If I have a single criticism of the way in which we have run our steel industry during the last 18 months, it concerns the enormous energy costs that we have pushed on to it. That is the most ludicrous single folly of all.
I have tried to get a copy of the recent report, but I did not realise, until someone told me that he had had one given to him by someone in the know, that copies were not widely available. Perhaps that is why I could not get one. But, even if I had read it, I doubt whether my opinions as a politician would be of enormous value.
The idea that British Steel can be run by debates across the Floor of the House is one of the most ludicrous situations into which British politics has managed to get itself. The whole industry is too big. It should be run in smaller units. A tremendous attempt should be made to give people in their own plants responsibility for their own affairs, through a system of co-operatives and such like. That is a personal opinion, which may or may not apply to the British steel industry, but the idea that MPs can make vital decisions about plants in Scunthorpe, Ebbw Vale or anywhere else is farcically funny. Perhaps I can say that more easily than most because I do not have a steelworks within about 300 miles of my constituency.
If the report or something like it is implemented, what will the Government do for the areas that are so dramatically affected? I am told that unemplyment in Consett and Shotton will be 50 per cent. with full implementation of the current proposals. It is not good enough for the Government to hand out the redundancy pay and then wash their hands and disappear. Communities cannot be left like that. The last Labour Government closed the Falmouth docks overnight, with serious effects on the economy of my area. There were no crocodile tears then about keeping Britain's docks going. Falmouth still suffers from 30 per cent. male unemployment, and Parliament is not doing enough for the good people of Falmouth to enable them to recover from that economic death blow.
The reason why I feel so strongly on that issue is that, as a Cornishman, I am only too well aware of what happened in my county when its economic base—the mining indstry—was swept away overnight. In Cornwall 60 or 80 years ago, virtually everyone was unemployed and there was no economic alternative. The county has never recovered from that blow and its current economic problems still relate back to it.
If the report contains the correct solution—and I do not see why I as a Member of Parliament should be the judge of that—the Government must considerably increase their attempts to care for the communities that will be economically destroyed because of it. We cannot just wash our hands of areas that will be left with 30, 40 or. 50 per cent. unemployment. That is not good enough.
7.21 pm
Mr. Allan Stewart: I agree with some of the things that the hon. Member for Truro (Mr. Penhaligon) said, in particular his tribute to the courage of my hon. Friend the Member for Brigg and Scunthorpe
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(Mr. Brown) for his speech. Labour Members may disagree with him and may doubt his instinct for political survival, but no hon. Member could doubt his courage. I am sure that, as my hon. Friend said, political honesty gets its reward more often than we think.
The hon. Member for Truro went on at length about the exchange rate. I do not want to follow him down that path because, while it is an important issue, it is not central to the debate. The Government have limited powers to influence the exchange rate. When they try to influence the exchange rate, they generally get it wrong and, whatever the level of the exchange rate, somebody will complain. When it was low people were complaining about the effect of inflation and so forth.
There is a substantial surplus on current account and our trade has held up remarkably well despite the exchange rate. That is a tribute to the work forces and managements of many companies.
I wish to speak principally about the implications of the BSC proposals for Scotland not because steel is of historic importance to Scotland, but because of its importance for employment, because of the massive investment which has been poured into Ravenscraig and Hunterston and because of the links between steel and other industries in Scotland.
My right hon. Friend the Secretary of State was visited yesterday by a delegation of hon. Members, including myself, representing constituencies which contain or are near to factories of the Talbot company. Mr. MacGregor's decision to maintain Gartcosh is of the greatest importance to Talbot at Linwood, because without that plant the steel that is necessary for Linwood would have to come from further afield and that would add to the cost. The proposals for Scotland envisage the loss of 640 jobs. No one suggests that that will be easy, but the reaction in Scotland to the proposals will be constructive and positive. The Scottish work force realises that tough choices have to be made. I pay tribute to the constructive way that productivity has been improved in the Scottish steel industry.
We have had our bad patches, too. In the past two years, we have had Scotland's greatest shame, with the closure of the Hunterston ore terminal for six months due merely to an inter-union dispute. Generally, however, the record has been good.
It has been suggested that plants in Scotland have been maintained in the MacGregor plan as a result of political pressures and because the BSC recognises the problems and political sensitivities of the area. I hope that my hon. Friend the Under-Secretary will assure the House that that is not so. That is not because I do not want the plants, because I do want them. I want the steel industry in Scotland to be maintained because the BSC believes that it is viable, and has an economic future and not because it is scared of the effect on votes. That has been the problem all too often for nationalised industries in the past. They have been subjected to political pressures, with a hit of arm-twisting here and there. The result has been to delay essential decisions. That has never done anyone any good in the long run.
My right hon. Friend referred to the emphasis on marketing in the proposals. That is central, for we have to sell the steel. There has, to be a purchaser, and the Government can help. From some of the comments made by Opposition Members, one would imagine that the Government are not helping. Some of their speeches gave the impression that the BSC is somehow surviving on its own resources. The external financing limit this year is

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£1,000 million. The BSC is losing between £50 million and £100 million a month. We may argue about the scale, but let us not forget the immense cash drain that the BSC is facing and what the Government are doing and have done to keep going a corporation which, by any rational standard, is bankrupt but has a strategic value.
Last month, the BSC gained what I thought was an important order worth £5·8 million to supply 45 miles of 24-in. diameter pipeline for BP's West Sole gas field. That was important because many people have felt that the BSC took too long to get into the North Sea market. The order was a considerable breakthrough. I am sure that hon. Members on both sides will hope that that breakthrough is continued and that the BSC will be given the order for 340 miles of 36-in. pipeline for the proposed North Sea gas-gathering network. That order will help to establish the BSC as a natural supplier to the offshore industry in the North Sea and internationally.
A couple of years ago, the then Secretary of State for Industry, the right hon. Member for Chesterfield (Mr. Varley), said that the present world surplus of steel would last for many years. He said:
"the sales opportunities for BSC, both at home and overseas, on which the ten-year development strategy of February 1973 was based, are no longer realistic, even on the most optimistic assumptions. In present market conditions, the Corporation has substantial over-capacity …neither the Corporation nor the country can afford the cost of the mounting over-capacity that would result from unchanged policies."—[Official Report, 22 March 1978; Vol. 946, c. 1512.]
That was facing reality then as we have to face reality now. I hope that whoever replies for the Opposition will spell out precisely what they are saying about the capacity of the BSC. Either they are saying that they do not have the expertise to give a figure, which is a perfectly credible position to take—certainly, it is a position that I would take—or, as I understand the motion, they are saying that there is a specific increased level of capacity which is somehow desirable.
In opening the debate, the right hon. Member for Salford, West (Mr. Orme) mentioned a figure of 22 million tonnes. I did not quite understand what that figure was or whether he was suggesting that the capacity of the BSC should be increased to that figure at the present time.
Mr. Orme: I was referring to the gap between the BSC's forecast of 14·4 million tonnes and what would be needed if we returned to normal production. That would take the figure to just over 21 million tonnes. Obviously, some of that capacity would be met by imports. We are saying that that gap should be closed by BSC production and that we should not become increasingly dependent on the import penetration which is at present taking place.
Mr. Stewart: I am grateful to the right hon. Gentleman, and I apologise to him for not understanding that point the first time he made it.
If the Opposition are saying that the capacity of the BSC ought to be increased substantially, that seems to fly in the face of economic reality. It also flies in the face of the figures given by my right hon. Friend about over-capacity worldwide, in Europe and in the British market. The situation is grave and difficult. The MacGregor plan is imaginative. It faces reality and it gives BSC employees
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a chance. The BSC is living not only on borrowed money but on borrowed time. Let us hope that in the next few months that time will be used constructively.
7·33 pm
Mr. Roy Hughes: The crunch question which seems to be posed, both in the debate and outside, is whether Britain needs a steel industry at all. No so long ago, that would have been a ridiculous question. However, we know that today influential bodies and organisations would answer "No" to that question—in other words, we no longer need a steel industry.
In recent years, I have supported the British steel industry throughout its trials and tribulations. I am glad to note that we are now receiving the support of none other than Sir Terence Beckett, the director-general of the CBI, who recently described steel as a sector of the economy which should have further Government financial support. He is absolutely right, because steel is a basic industry, and without it we should have no future as a manufacturing industrial nation.
When the upturn in the economy comes—at times it seems like waiting for Godot—if our steel industry has been run down too far we will be held to ransom by foreign competitors in relation to both prices and delivery dates. We also know of the massive adverse effect which such large imports of steel will have on our balance of payments.
Once the principle that Britain needs a steel industry is accepted, it is the Government's job to encourage and sustain it. I appreciate that it is no good minimising the extent of the large financial losses that have been made by the BSC. One cannot turn a blind eye to those losses. But we must ask why the BSC is at present in such a parlous state.
As has already been said, part of the reason is the value of the pound. I know that there are counter-arguments, but that has a detrimental effect on British steel exports.
We also know that in certain sections of the home economy the demand for steel has collapsed. That has been due partly to the Government's policies and partly to high interest rates. We also know that imports are penetrating our market. Prices of British steel are alleged to be 10 per cent. higher than those of our foreign competitors. For a long time, I have been in favour of import controls. One would have thought that Government action was needed in regard to steel imports.
There seems to be common ground on both sides of the House about energy costs. Many hon. Members would agree that preferential treatment should be given to our industrial concerns. We have natural gas in abundance. Likewise, we have reserves of coal that will last for 300 years. The hon. Member for New Forest (Mr. McNair-Wilson) gave a graphic example of the firm with which he is connected, which has a similar establishment in Calais. He pointed out that energy prices in Calais were 30 per cent. less than those in the United Kingdom.
We in South Wales have often heard the argument about the price of coking coal to the steel industry. We know of the huge subsidy given by West Germany in that respect. I feel that the Government should do something about that aspect of energy costs, which have such a detrimental effect not only on British steel but on other sections of British industry. Such measures are surely better and more profitable than the millions of pounds that we at present pay out in social security benefits, let alone

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the loss in taxation from people who should be in work. Likewise, a tremendous amount of rateable value is lost to our local authorities.
This debate comes shortly after the publication of the MacGregor report. We know that the capacity of the industry is to be reduced from 15 million tonnes to 14·4 million tonnes and that 20,000 people are to be made redundant. It is worth pointing out that only 112,000 workers are left. In manpower terms, the British steel industry is becoming very small indeed. What particularly concerns me about those 20,000 people who are to be made redundant is the fact that 5,000 of them come from Wales. Our difficulties are now becoming on a par with the tragic circumstances of the 1930s.
I speak as one who comes from the Monmouthshire valleys. I cannot ignore the tragic plight of Ebbw Vale. I know all too well what a wonderful community it is. Ebbw Vale has great sporting and cultural traditions. Above all, it is bedded in those basic industries of coal and steel, with all the traditional skills that go with them. These basic industries, certainly in Ebbw Vale, have been drastically run down. This little beleaguered valley town needs Government help on an unprecedented scale if it is to survive. I believe that the Government should heed this call and come to its aid.
We in Newport were pleased about the outcome of the MacGregor report in relation to Llanwern. It is now being described as the miracle of the British steel industry. It has emerged successfully from the slimline operation. Its industrial relations are, and have been for some time, excellent. Its manning levels now compare with those of any of its competitors throughout Europe. Is it any wonder that Mr. MacGregor should describe it as one of the great integrated plant's of Europe? Llanwern is now outstripping its competitors. Optimism is in the ascendency. I notice that the works committee at Llanwern is calling for the relining of the major No. 37 blast furnace. It is also calling for further investment in the continuous casting plant. It says that a suitable site is availaable. The men believe that this would be a worthwhile investment. In view of the esteem in which Mr. MacGregor now holds the works, I feel that the project will receive his full backing.
British Steel can and must be saved. The ball is firmly in the Government's court. We recall the high drama of the debate in the House on the Queen's Speech and the intervention of two ex-Prime Ministers. The right hon. Member for Sidcup (Mr. Heath) was concerned about the policies of his own Govenment and that the Conservative Party should not once again be labelled as the party of unemployment. He urged a change of course on the Government.
The right hon. Gentleman's message was reinforced by my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan). He pointed to the social tensions that are developing in South Wales as a result of the heavy unemployment, which is now on a par with that of the 1930s. He called for massive public expenditure. I endorse that proposal. One thinks of the houses, schools, roads and hospitals that are needed in our community. Almost all the necessary materials are home-produced and the pound is riding high. Such investment could be used to stimulate the economy. This would lead to a dramatic drop in unemployment, which should be our highest priority. A way must be found to take our people out of the dole queues.
7·45 pm
Mr. Bill Homewood: I recall that about 12 months ago the House was discussing the closure of Corby. I warned the Secretary of State on that occasion that there would be no gain to the public sector borrowing requirement from the closure of the steelworks. It has been said that giving aid to steel areas is important. The unemployment level in Corby is now 19·8 per cent. Corby has been described by the Minister of State for Industry, the noble Lord in the other place, as having the highest unemployment rate in a travel-to-work area in this country. The town is showing the ravages of that situation. The noble Lord, when visiting the area last Friday, talked of the desirability of maintaining an image of the town that would attract new industry. What image of a town can be sustained that will attract new industry when the unemployment level is 19·8 per cent.?
When the Secretary of State talks about the aids that should be given to steel towns, it has to be pointed out that no community that has suffered the devastation that Corby, Consett and Shotton have suffered can realistically view recovery taking place in less than four to five years. By the end of January next year, 1,300 firm jobs will have been created in Corby. In that same period, owing to the recession, 800 jobs in small works will have disappeared.
I shall come to what I believe should be done about the steel industry. In passing, on behalf of my constituency I should say that I believe that it is nonsense that Corby has had its application for special development area status turned down.
Mr. Orme: Shame.
Mr. Homewood: I urge the Minister to reconsider that situation. If the Department of Health and Social Security wishes to carry out a realistic investigation of the link between social evils, social deprivation and unemployment, it can be found in Corby, though on the Government's record of steel closures Corby's record of having the highest unemployment record in a travel-to-work area will probably soon go to someone else. It could have been argued, I suppose, that Corby was running out of time as a steelworks, but, as some of my hon. Friends have said, we now have the situation that it is not only the old-fashioned steel plants that are going to the wall. Modern steel plants are also affected. Mention has been made of Templeborough furnace and Velindre tinplate mills going to the wall. Their productivity is probably comparable with that of anywhere in the world, as was Consett's. How can it be argued, therefore, that a rational policy is being devised by the current chairman? It has been mentioned on the Conservative Benches that there was a suspicion of Government interference in that plant.
I am not levelling that complaint. Indeed, I could not possibly support it. However, in the quest for viability there is no logic in 14,400,000 tonnes. That figure must have been plucked out of the air. It may have been urged on certain people in the BSC that it was undesirable to close down large plants in sensitive areas.
We do not have a devastating slump in demand for steel throughout the world. The United States, using the trigger, mechanism on prices, has some plants that are producing more steel than they were 12 months ago. Japan has definitely increased its production. Production in the EEC is down by about 5·3 per cent., yet in the United Kingdom there has been a reduction of about 48 per cent.

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I know that the steel strike could not possibly have helped the steel industry, despite my questioning of the hon. Member for Brigg and Scunthorpe (Mr. Brown). However, we must not kid ourselves that a fall in the share of the home market from 54 to 48 per cent. represents a reduction of 48 per cent. in the total output in Britain over 12 months. The figures do not add up, and, therefore, we must look for other reasons.
By the end of the year, under the new programme the BSC will have lost about 64,000 jobs in 16 months. There will have been a reduction from 166,000 jobs to 102,000. No other country has approached even 50 per cent. of those losses. The British iron and steel worker is the lowest-paid worker in that category throughout the industrialised Western world. Our workers receive 60 per cent. of the German workers' pay. There must be a substantial cost advantage. To my knowledge, no one has engaged in the exercise of establishing productivity on the basis of the cost of wages. British Steel must be competitive with the rest of the EEC's steel industries. If it is not, the BSC must be squandering what should be a natural advantage.
The corporation is not known for its aggressive selling, and the unions have been highly critical of that aspect of its activities. I do not believe that it is responsible to a large extent for the situation in which it finds itself. It is the victim of three main factors. Interest charges bear on the corporation to an inordinate degree. The credibility of the statistics that it publishes about its financial position is immediately undermined, in the minds of both politicians and the public, by that factor.
Energy costs have been mentioned almost ad infinitum throughout the debate. They must be given serious consideration. It is no good the Secretary of State saying that he will do that in the new Session. Ian MacGregor is promising to close the BSC if it is not viable within six months. The corporation cannot wait indefinitely for consideration of its energy problems or of its financial reconstruction in the new Session. Unless we can put matters right, nothing that the work force or the unions can do will do any good for the BSC.
The corporation plans to produce 14,400,000 tonnes on a competitive basis. It is now producing only 11 million tonnes. It will not sell the extra production. It will not be able to sell what it is producing now unless certain things are put right.
The third factor, which is more important, is domestic economic policy. I am pleased to note that it appears that Professor Friedman has been made redundant. Surely, he and his policies are more the reason for the corporation's present position than any other factor. We are in not a supply crisis but a demand crisis. If we were in a supply crisis, imports would be rising catastrophically for the balance of payments, because they are so much cheaper than our own products. However, demand is not present for goods in general, leaving aside import penetration in Britain.
Much of the fault for that lies in the Government's attitude to public expenditure. Demand must be created, and Conservatives have no recourse but to turn to Keynes. I love the way in which the Secretary of State for Employment brings Keynes down to one sentence. I love the expression "throwing money at unemployment". However, if we do not do that, how are we to overcome
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unemployment? It is the only long-term prospect for the steel industry. We can bandy about levels of production from now until kingdom come, but that has no relevance unless the Government are prepared to do a U-turn to bolster the durable consumer industries on which a modern economy depends and on which the steel industry depends.
7.58 pm
Sir Frederick Burden: I had no intention of intervening in the debate when I arrived in the House this afternoon. I have no steel interest in my constituency, but I feel impelled to intervene because in many instances we are in a rather unrealistic world. I hope that the hon. Member for Kettering (Mr. Homewood) will excuse me if I do not take up his remarks in any great degree.
The hon. Member for Kettering said that our steel workers are much less well paid than German steel workers. However, within a few minutes he also said that we should be facing a flood of cheap steel imports unless we erected barriers. Either British steel workers, who are less well paid than the Germans, are producing far less per man or else the German steel workers work harder and are far better equipped than ours and thus produce much more cheaply.
The hon. Member for Newport (Mr. Hughes) appealed for import controls. If we impose import controls on raw materials, we shall find that overseas customers will impose restrictions and controls on our finished goods. The hon. Gentleman said that the steel industry should be subsidised. What, other than subsidies, are the many million of pounds of taxpayers' money that have been poured into the steel industry for many years—a practice which this Government are continuing? If that is not subsidy, I do not know what is. The Government have been pouring millions of pounds into the steel industry. That is subsidy. When Opposition Members talk about additional subsidies, what on earth do they mean? What further subsidies—
Mr. Homewood: The hon. Gentleman should remember that most of the large sums that have been poured into the steel industry are to pay for redundancy payments. Much of the money that was poured in in the past was to pay for exorbitant interest charges on capital borrowing. The hon. Gentleman must address himself to the fact that other steel industries receive substantial subsidies in the form of energy, transport costs and so on.
Sir Frederick Burden: With respect to the hon. Gentleman, that is not the case. The subsidies were being paid long before the interest rate was at any height. The subsidies have been paid for many years under Labour Governments. The hon. Gentleman mentioned energy costs. Unless the Opposition can show that the energy costs are enormous in the countries that undercut us, such costs cannot have anything but a fractional effect on the ultimate price.
Subsidising coking coal so that British Steel could obtain it at a cheaper price has been mentioned. One of the unfortunate features of British Steel during recent years was that it was able to import coking coal from America and Australia at between £10 and £20 a tonne cheaper than it could buy it from Britain, where it lies in enormous quantities under the land. There is something seriously wrong with that.

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There is no doubt that as a result of the Industrial Revolution Britain became the steelmakers of the world. We also controlled a great deal of the world through our imperial powers. We created competitors in the steel markets. We installed machinery for them and we gave them our expertise. They are now competing with us and will continue to do so. In many instances they have improved on the machinery that we installed.
For example, let us consider Japan. Before and immediately after the war, we looked upon the Japanese and their production in a derisory fashion. We called them copyists. Japan is now one of the most powerful industrial countries in the world. I read only recently that it is producing a type of steel for its motor industy that we have not yet matched and which is highly thought of. The Japanese are as good as we are in terms of quality. I say that reluctantly, but we must face those facts.
We must accept that our steel must be competitive both in quality and in price, if for no other reason than that a considerable amount of the finished goods that we export are made of steel. Above all, I want to see an effective, competitive and long-standing steel industry. It must be the base of any industrial country. The falling off in our ability to compete in the world steel industry has not happened during the past 18 months. It has been happening for the past 13 years under Labour Governments. They talked blandly about rationialisation and said that the British steel industry needed changes. They did not face the fact that that would mean redundancies and drastic surgery. Surely any Government, with Ministers in close contact with the nationalised corporation, must have known the position: into which British Steel was drifting. Yet nothing urgent was done.
I deeply regret unemployment. I have lived long enough to see and to know the tragedy that unemployment can impose on people. Thank God, the effects today are not nearly as bad as they were in the 1930s. Nevertheless, unemployment destroys pride and ambition and often breaks up families. It imposes financial hardship upon them, even today. The mental reaction is often worse than the physical reaction because of the change in people's lives.
Neither recrimination nor exhortation or rhetoric will change the position in the British steel industry. Rather than trying to blame the Conservative Party for the present position, Opposition Members, and we on the Conservative side of the House, would do well to realise that the circumstances that have arisen were inescapable because the industry was left drifting for far too many years. The Oppposition accepted that rationalisation was necessary. What did they mean by "rationalisation" if they did not mean some closures and some cuts in the number of people employed? Are they now saying that the steel industry should have continued to produce steel, with everybody in all the steel mills fully employed producing steel that we could not sell? What could be done with that steel? It is the shortest way to bankruptcy for any industry to produce in great quantities goods that it cannot sell.
The difficulties of the British steel industry have been exaggerated by the failure of some of the users of steel in this country. I am talking about the car industry and British Shipbuilders, both bulk users of steel. It has not happened in the past 18 months. Those industries have mechanised, with considerable resistance from a great many of the unions. We have to go still further, and I hope that it will be with greater union appreciation and agreement than in
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the past. Robots will largely replace mechanisation as we know it today. We must lead in that sphere if we are to ensure that our steel and other industries can compete in world markets.
Let us not forget that for many years we in this little island controlled markets throughout the world. We could determine the conditions under which others competed with us in those countries. We could adjust the markets so that we always had preference. With the break-up of the Empire, those days have gone. We are now in the market place on similar terms with practically every other industrial country in the world. The only way to ensure our economic future is to make sure that our goods are competitive in every possible way and that our delivery and design and the type of goods manufactured are right. We still have the ingenuity and character to face our difficulties and once again take advantage of modern technology.
I believe that the real facts of the steel industry are shown by Mr. MacGregor saying that he hopes to get back only 54 per cent. of the home demand for steel next year. That indicates that we have not been competitive. We have not been able to hold our own markets—and we are the original steelmakers of the world—with factories that we say are up to date. That is an indictment of someone in Britain. Is it management or unions?
I have listened carefully today to Opposition Members who criticise and say that the unemployment in the industry is a tragedy. On almost every occasion, they oppose closures. Will they now come into the open and tell us exactly what they propose for the British steel industry? Do they propose to employ all the men who are now engaged in the steel industry and return to work in the steel industry those who have lost their jobs? What will they do with the steel if we cannot sell it? Will they still retain those men? How much more money do they propose should be poured into the steel industry if the MacGregor plan fails? It is easy for the Opposition to criticise when they have been out of Government for 18 months, but much of what is happening is a legacy of what they have left behind. It is now up to them to tell us what they would do in the circumstances.
8.14 pm
Mr. D. N. Campbell-Savours: The hon. Member for Brigg and Scunthorpe (Mr. Brown) made a powerful and courageous speech, but it was also a speech of grand and gross betrayal. Even had he accepted the recommendations in the MacGregor report, had he been truly representing his constituents, he should have asked the Secretary of State for Industry to evaluate the findings in the report and not state his unequivocal support for the recommendations.
Tired, despairing and shattered last weekend, I returned to my constituency. Exhausted, I opened my mail to find an announcement from the BSC that under the proposals in the corporate plan 430 people in my constituency were to lose their jobs. Those job losses are in addition to the 250 people who lost their jobs at Bekermit, in the constituency of my hon. Friend the Member for Whitehaven (Dr. Cunningham), the 500 redundancies announced on 1 March as demanning exercises and the 826 redundancies announced one and a half months ago in Workington. In total, 2,000 jobs have been lost in West Cumbria in the current recession. There is also short-time working at Ogden and Lawson and Cumbria Engineering

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and single-shift and short-time working on the pig iron section of the BSC plant in Moss Bay. In addition, there is recession in the rolling mill, which, although it manages to work full-time, desperately needs the contracts that stem from the investment in British Rail. Because of the starvation in Government expenditure, those orders are not being brought forward.
I have not yet referred to one sector of the steel industry in West Cumbria—the Distington foundry, which was refurbished at a cost of £10,769,000 only 38 weeks ago. had it not been for the industrial dispute, the Queen would have opened that plant in Workington on 1 March. It is capable of producing 146,100 tonnes of ingot moulds and bottom plates for the internal consumption of the BSC and consumers outside. The propaganda put out by the BSC when the foundry was opened in March is noteworthy:
"Distington foundry (a part of BSC Cumbria) is now one of the largest foundries in the world. It not only has the most modern melting facilities, it incorporates the most advanced foundry technology to date, maintaining a consistency of high-quality standard in metal composition, temperature control and dimensional accuracy of product."
That new complex, that Aladdin's cave of British technology, human resourcefulness and West Cumbrian skill, is to close under the recommendations of the corporate plan. The sense of anger that permeates Workington and the sense of betrayal of the steel workers who believed that their future was secure with the £10½million investment are indescribable. They are further incensed by the rumour that forges, foundries and engineering managers, forced to compete since reorganisation of the corporation with BSC Cumbria, have deliberately doctored statistics to destroy Distington. I hope that Mr. MacGregor will accept that, following the doctoring of the statistics, the British Steel Corporation is required to put back into the melting pot the whole question of the end to Distington's operations for further evaluation and reconsideration.
Why is the corporation set on a course for disaster? Why has it lurched from crisis to crisis? The Secretary of State for the Environment fronted for the then Opposition in 1976. During a debate on the Iron and Steel (Amendment) Bill, he said:
"It is a classic example of why the debate about industrial policy is so artificial. How can one expect to attract any sympathy from the men working on the shop floor in the steel industry, who are expected to bear the brunt of the social and human change, when they are not told the whole story?"—[Official Report, Standing Committee G, 26 April 1976; col. 48.]
That is at the heart of the BSC problem.
Over the years, industrial relations have been poor. Industrial relations are measured not only on the basis of the number of strike days lost or by industrial disputes; they are measured by gauging the relationship between people on the shop floor and management. In few industries are industrial relations so divisive. Nationalisation has been undermined by a new aspirant managerial class which is committed not to public ownership but to old-style managerial techniques. As a result, a deep and seething contempt for large numbers of people involved in management has developed amongst many members of the work force in the British Steel Corporation. People who are not committed to the industry
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should get out. They have caused what is happening today. Their lack of decision-making has led to the problem that confronts the industry.
Their position has been further consolidated by the apathy of the corporation and by the corporation's failure to set a clear objective for the social control of the industry. This whole shabby spectacle has been underpinned by two simple processes—the maintenance of differentials in access to information, and the creation of a social industrial order inside the corporation based on awards of concessions and privilege in working conditions. Each in its own nasty, petty little way has divided the steel communities.
The problem is not confined to the place of work. It transcends the perimeter of the workplace. It spills over into the local communities. It reinforces political and social sensitivity. The BSC will lurch from crisis to crisis until it is stopped.
I can refer to the social conflict only as the "maladie Anglaise". Yet the people who determine the original principles of public ownership never foresaw such a conflict. They saw public ownership as a partnership in industry between all people in industry. That was their objective. I have seen good men promoted. They have not changed. The industrial socio-managerial conflict in the industy is destroying them—promotion one day, rejection the next.
The problem was brought home to me most forcefully at a meeting four weeks ago, when I invited the trade unions in Workington to meet me to formulate our policy on objecting to and obstructing the corporation's policy on redundancies. The union representatives said that they had tried to gain information but had been refused. I also tried to get information from the BSC. I was never given the written statements necessary to ensure that trade unions and politicians have the information that they require to battle against and question the corporation's economic strategy. It seems that the remarks by the right hon. Member for Henley (Mr. Heseltine) in 1976 were correct.
That is why, when Mr. MacGregor was appointed chairman of the BSC, I did not attack the appointment. His record in America at Jones and Lockwood makes it clear that he brought trade unions into the corporation's management and turned the company into a profitable concern. I thought that he would be able to do that in Britain. That is the real challenge facing Mr. MacGregor. He must turn aside the socio-industrial influences of the past. That is the real corporate challenge. We await the corporate plan.
The BSC has two alternatives. It can pursue a policy of partnership, access to information by all the trade unions, an understanding of the people on the shop floor and their problems and an end to the industrial conflict. Alternatively, it can invite conflict, inefficiency, the retention of the few restrictive practices that remain, the retention of the conflict and the formation of increasing numbers of tripartite alliances such as that formed recently in South Wales between rail, steel and coal workers.
The solution also requires much consideration by the trade unions. It is wrong that the BSC should have to negotiate with a great number of unions in its annual negotiations. The time has come for the Iron and Steel Trades Confederation, the blastfurnacemen's union and the National Craft Co-ordinating Committee to gather round the table and take a clear decision. They must decide on a one-union industry. With such an industry, we could

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go forward with changes in line with those which I have outlined, and we could look forward to the construction of a real and meaningful corporation that could play its part in the commercial affairs of the economy.
8.27 pm
Mr. John H. Osborn: I wish to talk about the strategy that Mr. MacGregor, the Conservative Government and others who are interested in the future of steel and our basic industries must consider. Steel workers, managers, metallurgists, skilled rollers and melters live in my constituency. It might be churlish to say that I do not wish to speak about the destiny of the steel industry today or before Christmas. I cannot honestly say that I have yet had time to understand the detailed discussions that Mr. MacGregor has had with the BSC management. Detailed consultations are still to take place.
I do not claim to be another managing director of the British Steel Corporation. I am a Member of Parliament who will take the opportunity of looking after the interests of those who work in the steel industry, particularly the steel industry of Sheffield. Of course, I have had a communication from John Pennington, who has responsibility for British Steel's activities in Sheffield. Of course, Ian MacGregor attended a parliamentary Industry Committee a week ago, but he could not speak about his plan because his lips were sealed. He could do no more than outline the factors that he had to take into consideration.
The hon. Member for Workington (Mr. Campbell-Savours) spoke about Ian MacGregor's record in the United States, particularly with the AMAX corporation. I have heard his predecessors, Lord Melchett, Sir Monty Finniston and Sir Charles Villiers, outlining how they would tackle their respective plans for capital investment and expansion, but I have been impressed by Ian MacGregor's presentation to Parliament and on television. I hope that he has given confidence to those who work in the steel industry that he is a man who knows what he is talking about from a lifetime of real experience of finance and the detailed metallurgy and infrastructure of the steel industry.
In my constituency there are directors, managers and skilled worker; in the private sector of the steel industry, many of whom have grumbled about the tax levy on their activities. The levy has been raised by successive Governments, including the previous Conservative Government. In general, State industries are monopolies and they do riot respond rapidly to market forces and pressure. That is particularly so of British Steel, which after a series of huge subsidies or capital investment programmes—which we supported in this House—has perhaps at the end of the day squandered not only those interim subsidies but the capital investment, because the ground on which it has had to operate has changed.
I was mildly surprised that Mr. MacGregor's plans mean only a cutback from 15 million tonnes to 14½million tonnes. I recall that 15 years ago, when we first talked about the things that a wonderful nationalised steel industry would do—the right hon. Member for Sheffield, Park (Mr. Mulley) and I discussed the subject—after the Benson report, we were talking in terms of 33 million and 38 million tonnes of steel out of Britain. We talked of the wonders that our State enterprise would do. But what a catastrophe a Conservative Government now have to face. An analysis of the figures for the British Steel Corporation
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for the late 1970s shows the great losses on its current activities. Therefore, I am impressed by Ian MacGregor's realism, and I am impressed by the team around him in the BSC. I should like to give his proposals more thought, and I hope that my right hon. Friend the Secretary of State for Industry will also give them more thought.
Let us have no doubt that the situation in Sheffield, Scunthorpe, Wales and Normanby particularly is shocking for all those who thought that they were secure in the British Steel Corporation. The shock has caught on in steel and engineering throughout Great Britain and the world, and the private and State sectors in Sheffield have the same problem. We have spoken about Rotherham and Templeborough. I visited the open hearth furnaces in Templeborough as an undergraduate nearly 40 years ago, and I was impressed by the difficulty of the work there. Together with a number of Labour Members, I was instrumental in obtaining a presentation in Westminster Hall of Operation Spear in which the collaboration and exchange between management and shop floor in bringing in the electric arc furnaces, which were causing problems, went through smoothly.
There are two factors that I have been considering. Why did the steel industry come to Sheffield and Scunthorpe? About 33 years ago, I had occasion to visit the Forest of Dean and Coleford to find out how Mushet, who was associated with my family about a century ago, had acquired the specification for a cutting steel that would cut other steels. He had worked closely with Bessemer, as is well known within the Metals Society now, and the Iron and Steel Institute at the time, but perhaps the fact that Bessemer had found the solution to blowing steel in a converter by using manganese oxide, and that Mushet provided the answer without a patent, was the reason for his secrecy later. The Forest of Dean had coal, and iron was always nearby. Just over a century ago Sheffield had water power, it was known that there was iron ore nearby, it had coal, and nearby there was fluorspar and limestone. It was the availability of materials that brought steel to Sheffield and Scunthorpe and Corby developed the iron ore fields of Great Britain, but by international standards the iron content is low. In a high-cost energy era, a low iron content makes smelting expensive.
In the early 1960s, the Duke of Edinburgh study conference on human relations within industry in the Commonwealth went to Canada. In 1956 I attended the first conference. Management and trade unions were appalled when they visited a mining area in Canada. They found that men had had to leave their homes because there were no other opportunities once the mineral reserves had been exploited. Recently, I have seen Ballarat and other such areas. The key factor is that wealth is where wealth is.
Another factor is productivity. It can be increased by manual skills and the right equipment. However, on a larger scale the Japanese have tankers with a capacity of 150,000 tonnes for coal and iron ore. Other than at Hunterston on the Clyde, Britain cannot use such ships. Productivity goes with scale. Some years ago I visited the Nippon steelworks. Mr. MacGregor has reminded us of his recent visits to Japan. In Japan, one or two steelworks can produce the equivalent to all the steel that we produce in our steelworks. Mr. MacGregor faces an immense challenge in terms of productivity. This country must be honest and recognise that challenge.

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Those who have the raw materials are at an advantage. About 25 to 30 years ago, I was making speeches about the fact that wealth is where wealth is. I little realised how relevant that would be to the 1980s. The operation of electric arc furnaces depends on the cost of electricity. Because we believe in having secure electricity, the industry is 60 to 70 per cent. dependent on British coal. By international standards, it is high-cost coal.
In coal debates, Labour Members have argued that the prosperous pits of Yorkshire, Derbyshire and Nottinghamshire should support the more costly pits of Wales and Scotland. They did so when the Labour Party was in power and have done so with the Conservative Party in power. That policy has been supported by both sides. However, the steel industry has had to pay the price. It has been buying its coal at one of the most expensive rates in the world.
Why did we have a fuel oil surcharge? We did so to protect our coal industry. In a steel debate, will Labour Members advocate that we should import coal? Will they change their minds again as soon as the House has a coal debate? The country faces a dilemma.
This Session, I have been absent from the House because I have been in Australia with the Commonwealth Parliamentary Association. I spoke to India's new Minister for Energy. He told me about the huge potential of the Himalayas for producing cheap hydroelectricity for Indian steelworks and other factories. In Australia, I visited my old friends Broken Hill Proprietary. That company started with iron ore in one place and coal in another, and exchanged ship loads between Wyala, Newcastle and Port Kembla. Although the company made heavy losses on steel, it recouped its losses on gas, oil and petrochemical activities.
This House will deal with a constitutional crisis in Canada. I went to British Columbia and learnt not only of its huge coalfields and cheap coal—similar to that found in Queensland—but that Alberta objects to federal control of oil pricing. Alberta oil and gas, and, to a certain extent, British Columbia gas, are exported to the United States at a fairly high price. The United States is not now buying those products in the quantities that it ought, but the high export price means that gas and oil can be sold cheaply in Canada. The producers want bigger returns and perhaps they could go into shale oil. Other nations also have problems with energy for their basic industries, including steel. Of course, Canada also has hydroelectricity.
Britain has the energy. We have the coal, but, alas, it is costly. We have oil and gas, but they have to be extracted in perhaps 300 ft., 500 ft. or 1,000 ft. of water, and long gathering pipelines are required. The cost of extraction is about 10 times the normal cost in the Middle East. Britain has no hydroelectricity. France has that and nuclear electricity. I am glad that our Select Committee is looking at the complaints of the CBI and the difficulties facing our steel industry.
A Social Democrat in the Western European Union, Mr. Flamig, with whom I have worked on the EEC energy and research committee, pointed out recently the importance of security of energy supplies. Italy, Austria and Switzerland obtain gas and oil through pipelines across the Mediterranean and from the East. Germany gets 17 per cent.—it could become 30 per cent.—of its gas
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from Warsaw Pact countries. At what price? What advantage do those countries have that we do not have—and at the expense of security of supply?
There are many difficulties facing the steel industry, of which energy is one. The House has to look at the matter coldly and coolly. It is important that industry improves its productivity and that we move our industrial energies into informatics, communications and perhaps the pharmaceutical chemical industries, where our skills can be used and where there are markets for our products.
The House must deal with steel in the light of other factors. I hope that the House will forgive me for having aired some of my thoughts, but I have done so in the hope that my hon. Friend the Minister will find them helpful.
8.42 pm
Dr. Jeremy Bray: No one can doubt the commitment of the hon. Member for Sheffield, Hallam (Mr. Osborn) to the steel industry. He speaks with knowledge of the industry, and believes in its future. He wants a changed steel industry, certainly, but I wish that he could convince the Secretary of State of the importance of the industry's future.
There have been announcements of plant closures and demanning, but the general reaction has been that the steps were not as severe as had been generally expected. We certainly had our fears in Scotland. Like hon. Members from other parts of the country, Scottish Members have met Ministers and the chairman of the BSC to make the case for the continuation of what is left as a hard core of the Scottish steel industry.
Mr. MacGregor said that if anything happened to Ravenscraig the next step would be the liquidation of the BSC. That is a modernised plant, but it is not viable on its own. To have a viable steelmaking plant, one needs viable finishing mills. If anything had happened to Gartcosh, there would have been a threat not only to British Leyland at Bathgate, to Talbot at Linwood and to Hoover but to the possibility of attracting many new firms that we need in the Scottish engineering industry to replace the jobs that we have lost.
If we did not maintain both the Dalziel and Clydebridge plate works, the BSC would not be able to supply the new markets that it is tackling. Mention has been made of the BP Sole order. That is an important order, but it is only a start. We have to get the order for the North Sea gas-gathering pipeline, which must be made of X65 steel, which the BSC said previously it was not able to make. It says now that with the new plant available at Ravenscraig it can supply such steel. It can get the quality of steel from the plate mills and the 44-in. pipe from the mill at West Hartlepool.
The Craigneuk works has a medium steel foundry and is totally modernised, manned to international standards and highly competitive. The bar mill is suitable for meeting small orders for products that the Dryburgh mill is not able to supply economically.
At Clydesdale we have another works that is vital for the North Sea oil industry, with its supply of tubes for oil wells. At Glengarnock the steel industry owes a debt of honour to maintain the small mills remaining in that devastated area.
We entirely accept within Scotland the need to continue to raise efficiency. We have lost many thousands of jobs—4,000 in my own constituency. The corporation lost 52,000 jobs last year. We are losing a further 650 jobs at

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Ravenscraig and Gartcosh alone as a result of the corporate plan. These are jobs spread right across the work force; they are not just production jobs but craft and staff jobs as well.
I was glad to learn this morning in the Financial Times that the Llanwern plant, according to the BSC, has achieved some of the tightest manning levels in Europe. Bully for Llanwern. I am sure that it has.
At Ravenscraig, on the ore terminal at Hunterston, in the stock handling yard, in the sinter plant and in the BOS vessels we have levels of manning which, from the very start of those new plants, have been fully competitive with international manning standards. They started up only on that understanding.
Ian MacGregor said the other day, after a visit to Japan, that one could fire a gun through the middle of a steelworks there and the chances of hitting anyone would be virtually nil. We are not in the habit of firing guns at Ravenscraig, but there are vast areas of the works where one can stand with machinery all round one and not a man in sight, never mind shooting one with a random shot from a gun. The same is true at Hunterston and in the stock yards, the sinter plant and so on.
With these developments that have taken place, I really cannot recognise the industry that some hon. Members have described, with no rationalisation and so on. We have completely got rid of all the open hearth furnaces. We have international standards in new plants. We have a kind of steel worker who did not exist before in the running of highly automated plants. It is a different industry.
But against that background there is certainly a need to maintain continuing pressure in order to achieve more competitive costs. Mr. Jake Stewart, the managing director of the strip products division, told us this week that Port Talbot and Llanwern have highly competitive costs. I am glad to hear it. I am sure that they have. Our standard costs in Scotland are lower and progress towards meeting those costs has been substantial in the past year. It is continuing and needs to continue further.
We can meet these international standards of competitiveness, measured by any technical standards—blast furnace efficiencies and so on. These are measured in fractions of 1 per cent. The cycle times on BOS vessels are watched avidly by the steel workers involved. Maybe they need to be better integrated into payment schemes. Maybe there is a need to spread the incentive payments up higher into the management levels, so that not only the steel workers but the plant managers and the technicians get the production bonuses. Maybe those incentive levels need to spread right up to the very top levels elsewhere in the corporation—not to the chairman, because he seems already to have taken ample care of that aspect himself.
We shall not achieve that unified commitment to maintaining output in an industry which constantly depends on people being quick and accurate in their reactions if we maintain the semi-feudal structure that still remains in the industry. My hon. Friend the Member for Workington (Mr. Campbell-Savours) was entirely right to point to the need for an integrated, unified staff grade structure within the industry. On the pattern of union representation, he made a courageous point. It is widely agreed in the industry that there is a need for rationalisation of negotiating procedures.
The Secretary of State was on a wholly legitimate point when he reminded us of the cost of the British Steel
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Corporation to the taxpayer. But the first representative of the taxpayer is the House of Commons. The right hon. Gentleman is wrong if he thinks that the House of Commons will allow him to get away without accounting not only for the BSC's recommendations in the corporate plan but for the assumptions about the economic future of this country that the corporation had to snatch out of the air because the Department of Industry refused to provide it with a single figure as to what would happen.
I am puzzled by the figures, such as we have been given. I do not think that the hon. Member for Hallam grasped the point. The BSC is talking about manned capacity in the industry—14·4 million tonnes—not the technical capacity of the works but the number of shifts and the level of output that can be achieved in each shift. Taking the October figure, the manned capacity seems to be about 11·4 million tonnes for the whole of the United Kingdom. Of course, one has to take the private sector off that. If that is 64 per cent., the 90 per cent. capacity that the BSC wants to reach in 1982 is 18·75 million tonnes.
No one that I know supposes that by 1982 output will have recovered anywhere near to a 90 per cent. level in manufacturing industry as a whole. Will the steel industry achieve 90 per cent. output when manufacturing industry is still far below its established capacity? Does that mean that we shall have the same old story—that as soon as manufacturing industry begins to get going we shall have shortages of capacity, lengthening delivery dates and increased imports? We shall then get into the cycle of remanning, lack of skills, complaints about there being no trained craftsmen and insufficient apprentices coming from the training schools. Is all that neglected by the BSC?
What is the Department doing about the economic assumptions that Mr. MacGregor has had to make? I know that the Under-Secretary of State takes the industry seriously. Has the Department of Industry provided any assumption about the future of the economy as a basis for the corporate plan? My information, from the highest levels in the BSC, is that it has not. Will the hon. Gentleman deny or confirm that?
The industry has had enough abuse in the House and in the press about its prospects. Its level of efficiency is as great as that not only of manufacturing and service industries but of the City of London, Fleet Street and the Press Gallery. If we go on attacking the steel industry, the workers or management, as some Conservative Members have done, we shall deserve the miserable performance that the Government are giving, spread across the economy. But we shall not get it, because they will not last long. The Government will be out before the worst damage can be wrought in the steel industry. I am clear that the steel industry is serving Britain well and that it will continue to do so.
8.54 pm
Mr. Roger Moate: I am sorry that the hon. Member for Workington (Mr. Campbell-Savours) has left the Chamber, because I wished specifically to refer to his speech. It was in direct contrast to the speech that we have just heard from the hon. Member for Motherwell and Wishaw (Dr. Bray). If the hon. Member for Motherwell and Wishaw thinks back, he will recall that the only person who has directly and violently attacked the BSC management is his hon. Friend the Member for Workington, and I thought that he did so in destructive and very unhelpful terms.

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Every hon. Member understands the anger, despair and frustration that are felt when one has major closures of works of any kind in one's constituency. But in conveying that anger to the House the hon. Member for Workington made a speech that reflected the worst aspect of this debate, whereas the speech of the hon. Member for Motherwell and Wishaw was typically challenging, constructive and probing. One does not accept all that the hon. Member put forward, but he got more to the point than did his hon. Friend. I objected particularly to the speech of the hon. Member for Workington because of his quite unwarranted attack on the courageous speech made by my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown).
The reason why I emphasise that is that it seems to me that the whole essence and overwhelming impression of this debate to any objective observer must be how extremely difficult it is for this nation to carry through any major industrial reform, no matter how much fundamental agreement there is about the necessity for that reform and the objectives. I suspect that virtually every hon. Member and every responsible trade union leader knows fairly well in his own mind what sort of steel industry we need for the future.
This is not something that has suddenly been invented by a Conservative Government or by Mr. MacGregor, because the Labour Government were carrying through broadly the same strategy. One has only to look back at statements by the previous Secretary of State for Industry and by many Government spokesmen of the time to find them asserting the need for a viable industry, the end of subsidies and a reduced capacity and, of course, supporting a whole range of closures throughout their period of office. That was not easy for them, but they were carrying through that strategy. The present Government are endeavouring to do the same.
Underlying all the party argument, which I am not decrying, one senses that there is a broad understanding that we are all aimimg for an unsubsidised industry, one that can stand on its own two feet, one which is rather smaller than it has been in the past—certainly much smaller than was ever dreamt of in the early 1970s—and one that is very competitive indeed and, therefore, requires a streamlined work force even smaller than it has today. But how difficult it is to overcome the enormous political obstacles that are put in the way of change of this kind.
The classic example is the objection that comes from every one of us in our constituencies when we see the threat to jobs and factories in them. That is fully understandable. I do not attack any hon. Member for trying to prevent closures in his own area. But I say to my hon. Friend the Member for Brigg and Scunthorpe that it is surely right to look, as he has done, to the long-term security of the jobs rather than to the immediate short-term popularity of defending every job, no matter how easy that might seem at the time. There is, surely, broad agreement in the House that we want to see the long-term survival of an efficient steel industry. That has been the objective of successive Governments. That is surely more important than the rather partisan speeches that we have heard from Opposition Members tonight.
I shall not use terms such as "hypocrisy", because it is fully understandable that Opposition Members in their present position should attack the Government for steel
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closures. But it is only 18 months since they were the Government and were pursuing almost exactly the same strategy. Surely, there is much more of a consistent theme underlying successive policies.
The Opposition have constantly been attacking the present Government for in some way failing the steel industry. The essence of the Opposition's complaint seems to be twofold: first, that the Government are not supporting the steel industry financially; and, secondly, that in some way it is the Conservative Government who have destroyed the demand for steel, undermined the market and made the position of the BSC even worse.
On the first point, even had we had—perish the thought—a Labour Government today, I cannot imagine that they would have been supporting the BSC to a greater extent than the support that is being given by my right hon. Friend the Secretary of State for Industry. A sum of £1 billion of taxpayers' money is going in to support the British Steel Corporatiom this year. It is extremely odd for the Opposition to say that more and more should be put in. Perhaps they will spell out precisely what they mean.
I shall deal next with the more serious charge by the Opposition that in the past 18 months Conservative policies have so transformed the situation as to undermine the position of steel and other industries. I am one of those who do not believe that Governments have that much effect on economies within that time scale. Had we had the misfortune of the election of a Labour Government in 1979, the situation today would not look terribly different.
Mrs. Elaine Kellett-Bowman: It would. It would be much worse.
Mr. Moate: I was being charitable. Unemployment would be roughly at the same level. Interest rates would be as high, if not higher, because the one thing that would be greater would be the borrowing requirement. There would be a higher level of public expenditure. However, very little more money would be going into supporting the nationalised industries.
The one point to which the Opposition persist in returning is the strength of sterling. They seem bemused by the idea that by a reduction in interest rates the value of the pound would fall and everything would be much easier for British industry. It is not really important to convince the Opposition otherwise just for the sake of some superficial economic debate.
It is important that British industry should not be led to believe that somehow, when interest rates fall, as they will, it will be much easier for British industry to succeed. Sterling is high largely because of North Sea oil, not because of interest rates. People must not believe otherwise. Interest rates are not the sole determining factor. As interest rates fall and we get inflation even more under control, sterling will become stronger. If one wants evidence that interest rates are not the most important factor in currency levels, one has only to consider the Swiss example. At one time the Swiss introduced even negative interest rates for overseas depositors in order to deter them, yet their currency remained as high as ever.
The whole country must understand that we are the only manufacturing nation of any size that has to live by exporting its goods while becoming a petro-currency economy. I do not think that any other nation has had to grope with that problem in a short time scale. We deceive ourselves, as the Opposition will deceive the country, with

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the argument that lower interest rates will reduce the value of sterling and make life easier for British industry generally or for the British Steel Corporation. It will not be like that. North Sea oil is an immense asset, but it makes the challenge of productivity and competitiveness even greater.
I was particularly anxious to speak in the debate to correct a misapprehension, which is that we in the South-East of England have very little connection with the steel industry. There are two facts about my constituency that may surprise hon. Members who may regard the South-East as a Conservative paradise. First, unemployment in a large part of it is running at 14 per cent. Secondly, it has a private steel mill that is producing, on current figures, about 5 per cent. of our total national output of steel.
I do not refer to it in any way to make invidious comparisions. Its circumstances are different from those of the BSC. One can create a new green field enterprise that will encounter problems that beset the BSC. The private mill was established only a few years ago. Many of the managers and workers are former BSC employees. It exports over 50 per cent. of its production, mostly to areas outside the EEC. Surely, that demonstrates that, given the right opportunity, good management and the right investment, British steel workers can beat the world.
They can succeed, they are succeeding and they will continue to succeed, given half a chance. This demonstrates the point that if one can have smaller units—I do not wish to deal with the question of ownership—marketing competitively in the world, whether it be the BSC or private steel operators, we can win through to that viable, unsubsidised, self-supporting, highly competitive steel industry which I hope and believe is the one that Mr. Ian MacGregor is portraying and putting forward in his new corporate plan. I say "I hope" because I have not read it. I have only read what the newspapers say.
One point concerns me. I feel sure that within the BSC there are viable and profitable units that can compete without subsidy, just as some—a limited and diminishing number, I am afraid—private steel mills can. There is talk of rationalisation between certain areas of the private sector and the BSC. That is fine. What we must not allow to happen is that the subsidies at present going to the BSC are simply allowed to apply to the private sector as well. The important thing is to segregate those highly profitable units, whether privately or publicly owned, allow them to compete in the market, because that is the only long-term guarantee of job security for their work force, and cut them off from subsidy. I hope that the plan does not mean the creation of new centres that will allow large amounts of subsidy to go through to the private sector, which admittedly is in great difficulties at present.
Our objective must be to get out of the recession and to end up with a profitable, competitive, unsubsidised industry. I do not think that anyone, even on the Labour Benches, would quarrel with that as an objective. The important thing is to plan how we are to get out of the recession and subsidies and to ensure that the structure is absolutely right in that respect.
I wish to deal with one point in the context of the whole European scene. If one thing is clear, it is that we are in a world recession. That is the major determining factor. Virtually every other European country has unemployment figures as high as ours and faces similar problems with
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regard to steel. We now have the Davignon proposals, which are forcing quota cuts right across the steel industry in Europe.
I wonder why so much has been made of those proposals when they are due to expire next June. That is a very short time in the lifetime of the steel industry, and I gather that there is little prospect of their being renewed thereafter. I therefore ask my right hon. Friend what is the point of that. Secondly, will he continue to use his endeavours to ensure that those quotas are not applied to export production from some of our mills? It seems to me to be the height of folly deliberately to cut back on British steel being manufactured here and sold even outside the Community and outside Europe. I hope that my right hon. Friend will continue to use his endeavours to ensure that if the quota system is to be retained for any length of time it will be modified and applied in a sensible fashion.
I conclude by reasserting my belief that the Government are doing everything that any Government could do to help to secure the viable industry which, I believe, is the united objective of both sides of the House.
9.9 pm
Dr. John Cunningham: I should begin by declaring that I am sponsored as a Member of Parliament by the General and Municipal Workers Union, which represents a number of employees in the British steel industry. Like many of my right hon. and hon. Friends and, indeed, many Conservative Members, I have sat through a very well-informed debate. We are discussing a major national asset. I was very pleased that towards the end of the debate my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) made that point. One of the pleasant surprises to the Opposition has been the almost total absence of any denigration of the steel industry from the Government Back Benches. Indeed, in the main we have heard a number of restrained and moderate speeches almost totally in support of the proposals contained in the British Steel corporate plan. I assume, like almost every other hon. Member who has spoken, that both sides of the House want to secure a viable, efficient British steel industry of which the BSC is an integral and major part.
The Shadow Cabinet's decision to hold this debate has been justified by the importance of the plan, not only to the industry but to the thousands of workers in it, their families and the communities in which they live. It has also been justified by the large national interest which is vested in a successful steel industry.
The Government must now be in something of a dilemma. They have not left themselves an alternative. There has been wholehearted support from Conservative Members—not from Labour Members, I should emphasise—for what Mr. MacGregor and his colleagues have proposed. As it was the Secretary of State who appointed Mr. MacGregor in conditions of some disbelief, he will be greatly exercised to reject the proposals which Mr. MacGregor has now put to the Cabinet. Mr. MacGregor comes with a formidable reputation and track record. We acknowledge that, but that is not to say that we accept his proposals.
The Government face a conflict. It is well known and acknowledged on all sides that the recession is likely to continue. However, the Government are now faced with a corporate set of proposals for the steel industry which, in essence, will virtually maintain all the existing modern

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capacity. It will be difficult for the Government to make those two things add up. At present, capacity is under-utilised. Capacity utilisation at a greater level means a bigger share in the existing markets both at home and abroad or greater demand at home, or both together. Certainly, the Opposition would urge Mr. MacGregor, first, to go for a bigger share of the existing markets and, secondly, to impress upon the Government the need to stimulate demand in the British market for BSC products.
The steel industry is not half as had as many Conservative Members in previous debates have tried to lead the country to believe. There is no doubt—particularly now, with the modern capacity that remains—that by international comparisons British Steel is beginning to do very well. My hon. Friends the Members for Motherwell and Wishaw and for Kettering (Mr. Homewood) both made that point, and I endorse what they said
Indeed, the large losses which the Secretary of State refers to so frequently are relatively recent in the history of the industry. As recently as 1977, the corporation was the fourth or fifth largest exporter in Britain. It had an excellent export record until comparatively recently—3 million tonnes as recently as 1978–79, which was worth about £650 million to the British economy. Those figures come from the corporation's own annual report. What of the proposals contained in Mr. MacGregor's plan? They talk about further closures and reductions in capacity. We reject that aspect of the proposals. They talk about the need to increase capacity utilisation. They talk about the need to increase exports. We would agree with both those points. They talk about the overriding need to have the wholehearted support of the work force in the industry. They also raise questions about energy costs to the industry—an issue on which views are widely shared these days by manufacturing industrialists in the private sector even more than in the public sector.
In respect of the proposed reductions in capacity and closure, there is no guarantee that cutting labour costs, although it reduces the total costs to the industry, will necessarily have an advantageous impact on unit costs of production. On the other hand, reducing capacity even further at present will bring the corporation back to a small number of very large, albeit modern plants. This will reduce its flexibility in some circumstances and possibly reduce its range of products and risk even the existing share of the market which the corporation enjoys. I think that all hon. Members are agreed that the share of the market is too small.
We are bound also to make the point that the unions, Opposition Members like my hon Friend the Member for Gower (Dr. Davies) and, indeed, the hon. Member for Brigg and Scunthorpe (Mr. Brown) have said that they will accept that some reductions should take place if a closure will save the rest of the corporation. Now, for the second time, and in some cases the third time, communities like Ebbw Vale, Workington, Shotton and Scunthorpe are being asked again to make the same sacrifice, given that the previous guarantees have been literally not worth the paper they were written on. That is the reality of the requests now being made. The case that more closures will save the corporation, that this is its last chance and that the closures will ensure viability is at best not proven and at worst discredited by the experience of the last two or three
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years in the view of these communities and their unions. We shall take a great deal of convincing that we should accept the proposed closures in Mr. MacGregor's plan.
We are told that the situation is serious and continues to deteriorate. That is not borne out by the world figures for steel production last year. These went up again in 1979 over 1978. Someone somewhere is buying this steel. It is true that British Steel's share of the market has slipped. We want to reverse that situation. It is not true to say that there has been any dramatic collapse in steel utilisation worldwide. That is not true. The figures show it not to be true.
The Minister of State, Department of Industry (Mr. Adam Butler): There is a manifest crisis in the European steel industry.
Dr. Cunningham: There is manifest crisis in the Community, as the Minister of State says. I will come to that point in a moment.
The real problem which we face is mainly imports from steel produced in other EEC member countries. That is the reality of the problem. This may be due to reasons of productivity and price. It is not for any reason of dramatic collapse in the market for steel products.
We have to take into account—we are told that Mr. MacGregor is seeing the Secretary of State about at least some of these matters—that that steel is coming from countries such as the Federal Republic of Germany, where there is massive support for coking coal and massive support for transport schemes to aid coal and steel industries as well as significant support for energy costs in other areas. Apart from those factors, interest costs do not bear heavily on the price of their products.
One of the worst aspects of Mr. MacGregor's proposals for the Secretary of State is that all the key indicators in the economy lead us to conclude that the situation is likely to deteriorate for British Steel. Output has been contracting in the economy since the beginning of the year. The Treasury forecast a 3 per cent. fall for the year as a whole, the largest fall in output in one year in Britain since 1939. Already industrial production has slumped by 9 per cent., with manufacturing output down by 11 per cent. in the past year. Half a million jobs have been lost in manufacturing industry since the Government came to power.
The Government estimate a fall of £2,650 million in stocks over the past year. There is a serious rundown of stock that makes the situation even worse. There is no recovery in sight. If the position is to be improved, the catastrophic indicators must be changed. The CBI, the National Federation of Self Employed and Small Businesses Ltd., the Chemical Industries Association, the Offshore Operators' Association, construction industry employers and the Engineering Employers' Federation have all criticised in some measure the economic and industrial policies that have led us to the present situation.
Against that background, how can it be that Mr. MacGregor will secure the improvements in capacity, utilisation and productivity that he seeks? I shall quote from the report of the iron and steel sector working party that was published earlier this year. It draws attention to the productivity improvement in British Steel since 1978. It improved again in 1979. It states that the
"United Kingdom has a higher capacity utilisation than its EEC competitors. This is certainly true in steel making but it is below average in blast furnace operations."

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How is the greater utilisation of capacity envisaged in the plan to be made effective against that background?
We are told that in the past few months there has been a 64 per cent. capacity utilisation in the corporation. If that is to be increased to between 80 per cent. and 90 per cent. as is proposed, where will the steel that is produced go? That is the question that the Government must answer. They can answer that only by changing the underlying economic situation and producing the demand in motor manufacture. It is rather ironic for Sir Terence Beckett of the CBI to chastise the Government for not giving enough support to British industry when the Ford Motor Company has the worst record of all of using British steel to make its products in Britain.
We want to see a change in attitude to shipbuilding. We have recently seen about £200 million worth of orders for shipbuilding and offshore rigs—a massive utilisation of steel—going to the Far East. The Government stood idly by and did little or nothing about that.
A crisis faces British Rail. People in London and the South-East are desperate about the cuts in rail services and the ramshackle rolling stock in which they are expected to ride. Why cannot more public investment be made available? That would give a large boost to the market for steel. We are in no doubt that that measure is essential if our steel industry is to make the necessary improvements.
The most up-to-date figures that I have were produced by the British Independent Steel Producers Association. It says that British steel production in 1980 amounted to about 9 million tonnes in the first 10 months and will be less than 11 million tonnes for the year as a whole. [HON. MEMBERS: "What about the dispute?"] There was a dispute for which the Government were largely responsible. BISPA claims that British consumption for 1980 will be about 17 per cent. below the 1979 level that is—about 17·3 million tonnes. That means that we shall have to import 6·5 million tonnes of steel simply to satisfy home demand. That will be a rise of 50 per cent. on the previous highest import tonnage of steel into the British economy. How can Conservative Members say that they are interested in sustaining the steel industry when, at the same time, they support policies that result in that position? Where will the imports come from?
In response to an intervention from the Minister, I said that the problem was largely European. Steel imports increased by 32 per cent. between 1969 and 1979. Imports from the EEC increased by 132 per cent. in the same period, rising from 36 per cent. to 62 per cent. of total imports. There is no doubt where the problem of penetration of our steel market lies. Of that increase, the Federal Republic of Germany's share increased fourfold. The Government should devote a great deal of attention to that problem.
The Minister referred to the state of manifest crisis declared by the EEC. I understand that one of the first results of any action in that area is supposed to be to do with the exports of member States. If we are to see a reduction in the appalling figures for steel exports from Europe into the British economy, that should provide a big opportunity for the BSC to increase its market share.
We are aware of the Government's proposed capital reconstruction for British Steel. We welcome that proposal. Indeed, we have pressed such an idea on the Secretary of State. I am sorry to see that he has fallen asleep. Perhaps the problems of the steel industry bore
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him. It may be that my speech bores him. Perhaps he does not want to hear the painful truth about the impact of his policies.
However, whether or not there is unanimity on the Government Benches about the proposed capital reconstruction, the Secretary of State should grasp the opportunity to write off the corporation's debts as part of a new start. He is fond of telling us that the BSC should be liquidated, as though that is an easy way out for the Government and the taxpayer. That would cost, on conservative estimates, about £1,000 million. It is no cheap and easy option for the British taxpayer or for anyone.
Mr. MacGregor wants action on energy costs. So do we. It is nonsense, as several of my right hon. and hon. Friends have said, for us, the only Western industrial nation self-sufficient in energy, to have converted that into a problem and not an asset in our industrial development.
Perhaps our biggest difference with Mr. MacGregor is when he seeks the co-operation and dedication of the entire work force. He has got off to a very bad start indeed. He is addressing communities in Wales, Scotland and the North of England. What is their recent history in relation to the industry? At Shotton, promises have been swept aside. The commitment at Consett—that if the works could get itself into the black it would be saved—has been swept aside, The commitments at Ebbw Vale after the first rundown have been betrayed in the recent proposals. As my hon. Friend the Member for Rotherham (Mr. Crowther) reminded us, the same has happened in South Yorkshire. People were assured that if they accepted redundancies their future employment prospects would he secure. Mr. MacGregor has an uphill battle.
In Wales unemployment already stands at about 124,000, in Scotland it is more than ¼ million and in the Northern region of England it is 168,000. In West Cumbria, where my constituency is situated, more than 80 men are chasing every vacancy. Will those communities easily accept proposals for further major job losses? Of course not, particularly when approached in such a ham-handed fashion. Only yesterday, The Guardian stated that 1980 has been the blackest year on record in British history, with 800,000 jobs lost. That is a measure of what has happened under this Government.
It is intolerable for the Secretary of State and his friends to suggest that we on the Labour Benches or any of the unions in the steel industry should easily accept further major lay-offs of around 20,000 as my right hon. Friend the Member for Salford, West (Mr. Orme) said.
The hon. Member for Brigg and Scunthorpe, by common consent, made a brave speech. He said that he would accept the judgment of the electors. That judgment in his area will be based not only on his speech but on the fact that unemployment in the area in November reached 10·2 per cent.—an increase of almost 100 per cent.—under the Government that he supports. That is before there are any more closures.
Mr. Michael Brown: I fully understand the point that the hon. Gentleman is seeking to make, but I would point out that unemployment also went up by 100 per cent. under the previous Government.
Dr. Cunningham: We hear much about unemployment under the Labour Government, but during the whole of the Labour Government, although unemployment rose

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considerably—by 729,000—only 45,000 resulted from people being thrown out of work. That is the difference. Government Members laugh. Of course, the Labour Government did not keep pace with the numbers coming on to the job market, but they did not willy-nilly throw 800,000 people out of work in 18 months.
The unions have not been properly consulted in the last 10 years about the British Steel Corporation Section 5(2) of the Iron and Steel Act 1975 states:
"Before reaching conclusions in consequence of a review undertaken in pursuance of subsection (1) above the Corporation shall seek consultation with organisations appearing to them to represent substantial proportions of the persons employed by the Corporation or the publicly-owned companies or of any class of such persons."
Mr. MacGregor cannot claim to have done any such thing. Since 1979 the unions have been insulted and ignored. I have mentioned Consett, Shotton, Corby and the rest. When Consett closed, we were told that the work would go to Normanby Park in Scunthorpe. Before the orders are given, that plant is to be closed.
In a speech to the Press Gallery Mr. MacGregor said, without consulting the unions "No, we are not going to consult you. We shall not involve you. I am your man. Although you are not involved in the decisions, survival is up to you."
There is no case for further closures. The industrial position is so bad that it moves leader writers in The Times to write:
"The recent history of Britain's industrial policy is a shambles so side-splitting for our competitors that pantomime writers might usefully contact Sir Keith Joseph for ideas."
That is what many people think about the Government and their performance. We have no confidence in their policies or in their approach to the steel industry. That is why we shall oppose the MacGregor plan.
9.38 pm
The Under-Secretary of State for Industry (Mr. Michael Marshall): The debate has been fascinating. I welcome the right hon. Member for Salford, West (Mr. Orme) to the Opposition Front Bench to speak on this subject. His speech was a slightly sketchy exercise. However, I sympathise with him in transferring to this subject. No doubt we shall challenge each other in detail in future weeks. I also welcome the hon. Member for Whitehaven (Dr. Cunningham).
Between the speeches of the right hon. Member for Salford, West and that of the hon. Member for Whitehaven, only the hon. Member for Workington (Mr. Campbell-Savours) attacked the BSC management. Only then did we hear a definitive rejection of much that is suggested in the BSC corporate plan. I shall make the Government's position plain. We must consider the corporate plan with the greatest care. I regret that the hon. Member for Whitehaven takes a shoot-from-the-hip attitude.
Let us look at a number of the points that have been raised in a very constructive debate. Many of the speakers whom we have heard today fall into the steel club that many hon. Members have known for a few years. Their speeches fall into two categories. First, there were speeches by hon. Members whose constituencies have been or would be affected by the proposals in the plan. The speeches of the hon. Members for Gower (Dr. Davies), for
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Rotherham (Mr. Crowther) and for Workington and the speech of my hon. Friend the Member for Flint, West (Sir A. Meyer) reflected natural constituency concern. On the other hand, we heard a number of speeches which reflected a concern for the general welfare and the serious, long-term interests of the steel industry that many hon. Members share. The speeches by my hon. Friends the Members for New Forest (Mr. McNair-Wilson), Renfrewshire, East (Mr. Stewart) and Sheffield, Hallam (Mr. Osborn) can be fairly said by any dispassionate observer who reads reports of this debate—as I hope many people will—to fall into that category.
The speech of my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) was, by common consent, a brave speech which took a long-term view, despite the immediate impact on and the problems for his constituency. That was the common view of all those who heard it, and I respect Labour Members who were good enough to pay tribute to my hon. Friend. I shall seek to answer a number of points that were raised by Labour Members, but it must be understood that with the corporate plan the greatest care must be taken in looking at the Goverment's response.
One basic theme came through in this debate again and again. There is widespread support for the notion that closures are a social and industrial tragedy and that they are justified only by the degree to which they are assumed to be part of a need to achieve a viable industry and the degree to which successive Governments have sought to assist with remedial action. They have to be part of the changes that we see all around us in our industry. I accept the view of the right hon. Member for Salford, West in that regard.
The question of energy prices was raised by many hon. Members, including the hon. Member for Truro (Mr. Penhaligon), my hon. Friend the Member for New Forest and others. We received a number of reports on energy prices, including the joint submission from the British Steel Corporation and BISPA, and, more recently, a submission from the Confederation of British Industry. Those reports are being studied with care, and there will be a full debate in the NEDC next month following the publication of the CBI study. My right hon. Friend the Secretary of State for Energy has been talking to the electricity supply industry about its bulk tariff charges for large users of electricity, and I am sure that steel businesses will follow up that approach.
One aspect of the corporate plan on which I am sure all hon. Members will agree is that Mr. MacGregor rightly has been looking for energy conservation as part of the way in which the corporation can put its house in order. The hon. Member for Motherwell and Wishaw (Dr. Bray) asked whether the Department of Industry provided any basis for BSC forecasts. There were discussions between my Department and BSC staff in those areas. The economic assumptions in the plan—for example, the forecast drop in gross domestic product of 1½per cent. in 1981—are part of the assumptions in the plan. In the longer term, the broad recovery that follows thereafter is implicit.
Dr. Bray: That is all published information. Were any information assumptions offered beyond those that have been published?
Mr. Marshall: The hon. Gentleman is tempting me to go too far down the road. I am sure that he will wish to

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pursue these matters separately. As he will appreciate, the matter has been discussed and I have sought to give him information on the basis of those conversations.
The right hon. Member for Salford, West raised a number of points of substance. His speech covered the subject rather sketchily because he largely ignored the market and the question of demand. However, that point was picked up later, and perhaps that is how the Labour Party planned to deal with this. One cannot debate the future of BSC, the viability of plants and possible opportunities without considering the market. The right hon. Gentleman covered the ground very lightly.
The right hon. Gentleman concentrated on a range of suggestions for further help. He moved quickly away from his old Government hat and did not attempt to give any idea of the cost involved. One cannot deny that the corporate plan will have a substantial price tag. The Government must take that into account. However, every suggestion that the right hon. Gentleman put forward, such as that of matching the Germans, would give rise to further increases in public expenditure. He argues that there should be import controls. He must realise that if the plan is accepted one of the key elements will be a very high export strategy. The interrelationship of the import-export trade, particularly within the Community, cannot be talked about lightly.
Mention was made of capital reconstruction. The Government are committed to legislating during this Session to provide for capital reconstruction of the corporation. The right hon. Gentleman seems to sweep aside the fact that that also has its price tag. The writing off of the substantial funds that have been injected into the BSC and non-remunerated public dividend capital are part of the price to be considered. Such matters cannot be considered in a light-hearted fashion.
Assistance given to the industry lies at the heart of the matter. My hon. Friend the Member for Faversham (Mr. Moate) made an impressive speech. He put this issue in a broad historical perspective. It is the height of folly for anyone to argue seriously that the BSC's problems can be put at the Government's door. Serious students of the British steel industry—there are many on both sides of the House—know that the decline of the BSC has always been closely related to the market. Any study will show that. The actions of successive Governments show that, in order to help the industry to become viable, massive public funds have been injected into the BSC.
I am not in the business of making extravagant claims about who has done most to help the corporation. I simply note that successive Governments have felt that the industry was of key importance to the economy. The figures bear that out. In five years under the previous Labour Government, £2,750 million was put into the corporation. The Conservative Government, since they took office 18 months ago, have advanced nearly £2,000 million.
Despite his constituency concerns, my hon. Friend the Member for Brigg and Scunthorpe was quick to remind me that we are moving at a staggering rate and on a larger scale than that of the previous Administration. Hon. Members should feel concerned about the rate of subsidy. Our concern is shared by Mr. MacGregor. I am sure that all hon. Members will have access to yesterday's issue of Steel News. Mr. MacGregor said that at the present rate the BSC was moving at a loss rate of well over £800 million per annum. He spoke of losing £30 every second of every
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hour of every day. He went on to say that no steel company in the world gets subsidies that would take care of such a loss. He said that we would not be able to find anyone to subsidise us to that extent. He said that neither the British Government nor the taxpayers would support it.
When the hon. Member for Whitehaven urges the case for additional subsidies beyond the substantial sums of which I have spoken, he must recognise the scale of the problem. In his experience of health and social service matters, he must have had to argue his corner time and again on how our national resources were to be allocated. I cannot believe that he is seriously advocating widespread expenditure in addition to the funds that I have spoken of without thinking of all the other socially desirable expenditure that any Government would wish to consider.
We have discussed the way in which the remedial measures will be brought into effect. Naturally, the Government will seek to help wherever they can. Whatever the outcome of our consideration of the plan, we shall look at the matter with the greatest care. I cannot give the blanket assurances that the Leader of the Opposition called for, but he will recognise that the Government have recently taken action to the tune of £48 million in Wales. I understand that the Opposition, like any Opposition, will cry "Not enough", but we have to look at the circumstances facing us, and any dispassionate observer of the figures that I have quoted would accept that the Government are committed not only to doing what they can to help the industry but, progressively, to looking at ways in which that sort of funding can be slimmed down, as it must be if we are to have any hope of the whole economy thriving as the country wishes.
A number of important matters in a wider context have been raised. The hon. Member for Whitehaven spent considerable time talking about the market. As my hon. Friend the Minister of State, who has just returned hot foot from defending our interests in Brussels, was quick to point out, in a state of manifest crisis the hon. Member must recognise that there is massive over-capacity in the European Coal and Steel Community. The figures that I have show that the effective steel capacity in the EEC has exceeded production by 40 million to 50 million tonnes since 1975 compared with an excess of 20 million tonnes in the previous five years. That excess capacity is not an idle concept. It represents social problems for many other countries. Serious students will note the way in which those countries have had to face many of the difficulties that we face.
In talking about productivity, the hon. Member for Whitehaven quoted the NEDC report of January. His use of selective statistics should not go unnoticed. Productivity improved in the two years that he quoted, but much remains to be done. The agreed NEDC report, involving all sections of the industry, including trade unions, shows that in the last full year for which information is available our productivity was about half the rate of that of the other EEC countries that are quoted in the report.
As usual, the hon. Member for Whitehaven made an interesting speech, and he gave us his usual economic knockabout. It would have been helpful if, when discussing imports, he had asked why the companies that he cited were importing foreign steel. He mentioned Ford and he could have mentioned British Leyland. Many hon. Members on both sides of the House who have been involved in discussions on these matters will know that for many years both Ford and British Leyland have sought to

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increase their offtake of BSC steel sheet. Alas, they have been unable to do so on the grounds of quality or delivery, or both.
The corporate plan shows clearly that there is a genuine opportunity to bridge a domestic demand. I join the hon. Gentleman if he is seeking to bridge the gap, but simply to ascribe all the problems to foreigners, as the hon. Gentleman did in a rather bland way, does not get to the heart of the matter. A number of general points were raised in assessing the BSC proposals, and the right hon. Gentleman was a little confused about the levels of output that we were discussing. I shall clarify the matter so that we have an agreed set of numbers. The figures he mentioned, in addition to the 14·4 million tonnes, had to include the private sector plus exports. Just to make the point absolutely clear, I think that the right hon. Gentleman did not mention the private sector.
Thus, there is an important interrelationship, touched on by the right hon. Member for Sheffield, Park (Mr. Mulley), between the public and private sectors. I cannot give a definitive view tonight. The right hon. Gentleman, who follows these matters closely, will know that serious and important conversations are taking place between the public and private sectors, between the British Steel Corporation and a number of private steelmakers.
Surely, the time has come for the House, if it is to be taken seriously in these matters, to weigh up what is best in terms of the numbers of jobs and the real prospects of any joint venture that emerges. That should be the acid test. It must get away from any discussion of whether the private or the public sector predominates. If we wish to argue the case for a private sector controlling interest, that is in part through the PSBR argument, but in the broader sense we should consider carefully the points I raised earlier.
In some ways, the debate has been an acid test of the Labour Party. The right hon. Member for Salford, West has come new to his task today. Many constructive views have been advanced from both sides of the House. It was noticeable that there was a real determination to look carefully at these matters, in an unhurried way, and not to respond in an immediate way. In that sense, we have had a quite remarkable debate. I think that hon. Gentlemen feel that the debate will have to be continued.
I do not object, nor does any hon. Member, to the knockabout of an Opposition motion, but this is a serious matter. The hon. Member for Truro was right when he said that over many years the people who work in the steel industry have resented deeply some of the idle badinage that goes on in the name of political discussion about this great industry.
I conclude on a somewhat personal note. I spent 20 years of my life working in the industry. During that time I resented the kind of nonsense that I heard from time to time in this place, and when I came here it was in the hope of trying to influence the House to move a little further towards realism. The hon. Member, whom I know well from earlier days, has from time to time played his part in this dialogue. Sometimes he covers up his good sense when he speaks in this Chamber, but I have seen him elsewhere when he has done a pretty solid job.
No one can tell me that I do not understand the problems. The hon. Member for Workington made a passionate speech, which I criticised earlier, but I
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understand what he said. I had the opportunity and privilege to provide jobs for people in his constituency and to see Distington ingot moulds go all round the world. It is a matter of deep regret to me if it has to disappear from the scene. But the judgment has to be made about what will be in the long-term interests of the industry and what will be the viable industry here.
In the list of the closures proposed in the plan, there are wide areas which are of great significance and importance to many hon. Members. But we have to make a judgment on the future of the industry. When Opposition Members seek to argue that all the ills of the industry—an industry which they, when in Government, had an opportunity to influence in eight out of the last 13 years—have arisen in the past 18 months, they debase the political coinage and the whole value and manner in which we discuss the industry. Moreover, they have a great responsibility to bear. They brought the industry together, comprising the 13 largest companies, without any conceptual basis. They have consistently dodged vital decisions or postponed them. Now, they want us to pull all the eggs out of the basket for them, and they criticise us when we try to do it.
We reject the motion, and I urge my hon. Friends to support the amendment.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 247, Noes 323.

Division No. 34]

[10 pm

AYES

Abse, Leo

Cunningham, G. (Islington S)

Adams, Allen

Cunningham, Dr J. (W'h'n)

Allaun, Frank

Dalyell, Tam

Anderson, Donald

Davidson, Arthur

Archer, Rt Hon Peter

Davis, Rt Hon Denzil (L'lli)

Armstrong, Rt Hon Ernest

Davies, Ifor (Gower)

Ashley, Rt Hon Jack

Davis, Clinton (Hackney C)

Ashton, Joe

Davis, T. (B'ham, Stechf'd)

Atkinson, N. (H'gey,)

Deakins, Eric

Bagier, Gordon A.T.

Dean, Joseph (Leeds West)

Barnett, Guy (Greenwich)

Dempsey, James

Barnett, Rt Hon Joel (H'wd)

Dewar, Donald

Benn, Rt Hon A. Wedgwood

Dixon, Donald

Bennett, Andrew (St'kp't N)

Dobson, Frank

Bidwell, Sydney

Dormand, Jack

Booth, Rt Hon Albert

Douglas, Dick

Boothroyd, Miss Betty

Douglas-Mann, Bruce

Bottomley, Rt Hon A. (M'b'ro)

Dubs, Alford

Bray, Dr Jeremy

Duffy, A. E. P.

Brown, Hugh D. (Provan)

Dunnett, Jack

Brown, R. C. (N'castle W)

Dunwoody, Hon Mrs. G.

Brown, Ron (E'burgh, Leith)

Eadie, Alex

Brown, Ronald W. (H'ckn'y S)

Eastham, Ken

Buchan, Norman

Ellis, R. (NE D'bysh're)

Callaghan, Rt Hon J.

Ellis, Tom (Wrexham)

Callaghan, Jim (Midd't'n & P)

English, Michale

Campbell, Ian

Eannals, Rt Hon David

Campell-Savours, Dale

Evans, Ioan (Aberdare)

Canavan, Dennis

Evans, John (Newton)

Cant, R. B.

Ewing, Harry

Carmichael, Neil

Faulds, Andrew

Carter-Jones, Lewis

Field, Frank

Cartwright, John

Fitch, Alan

Cocks, Rt Hon M. (B'stol S)

Flannery, Martin

Cohen, Stanley

Fletcher, Ted (Darlington)

Concannon, Rt Hon J. D.

Foot, Rt Hon Michael

Conlan, Bernard

Ford, Ben

Cook, Robin F.

Forrester, John

Cowans, Harry

Foster, Derek

Craigen, J. M.

Fraser, J. (Lamb'th, N'w'd)

Crowther, J. S.

Freeson, Rt Hon Reginald

Cryer, Bob

Garrett, John (Norwich S)

Cunliffe, Lawrence

Garrett, W. E. (Wallsend)

George, Bruce

Mulley, Rt Hon Frederick

Gilbert, Rt Hon Dr John

Newens, Stanley

Ginsburg, David

Oakes, Rt Hon Gordon

Golding, John

Ogden, Eric

Graham, Ted

O'Neill, Martin

Grant, George (Motpeth)

Orme, Rt Hon Stanley

Grant, John (Islington C)

Owen, Rt Hon Dr David

Greenway, Harry

Palmer, Arthur

Hamilton, W. W. (C'tral Fife)

Park, George

Harrison, Rt Hon Walter

Parry, Robert

Hart, Rt Hon Dame Judith

Pendry, Tom

Hattersley, Rt Hon Roy

Powell, Raymond (Ogmore)

Haynes, Frank

Prescott, John

Healey, Rt Hon Denis

Price, C. (Lewisham W)

Heffer, Eric S.

Race, Reg

Hogg, N. (E Dunb't'nshire)

Radice, Giles

Holland, S. (L'b'th, Vauxh'll)

Rees, Rt Hon M (Leeds S)

Home Robertson, John

Richardson, Jo

Homewood, William

Roberts, Albert (Normanton)

Hooley, Frank

Roberts, Allan (Bootle)

Horam, John

Roberts, Roberts, Ernest (Hackney N)

Howell, Rt Hon D. (G'Idf'd)

Roberts, Gwilym (Cannock)

Huckfield, Les

Roberts, Gwilym (Cannock)

Hudson Davies, Gwilym E.

Robinson, G. (Coventry NW)

Hughes, Mark (Durham)

Rodgers, Rt Hon William

Hughes, Robert (Aberdeen N)

Rooker, J. W.

Hughes, Roy (Newport)

Roper, John

Janner, Hon Greville

Ross, Ernest (Dundee West)

Jay, Rt Hon Douglas

Rowlands, Ted

John, Brynmor

Ryman, John

Johnson, James (Hull West)

Sandelson, Neville

Johnson, Walter (Derby S)

Sever, John

Jones, Barry (East Flint)

Sheldon, Rt Hon R.

Jones, Dan (Burnley)

Short, Mrs Renée

Kaufman, Rt Hon Gerald

Silkin, Rt Hon J. (Deptford)

Kerr, Russell

Silkin, Rt Hon S. C. (Dulwich)

Kilroy-Silk, Robert

Silverman, Julius

Lambie, David

Smith, Rt Hon J. (N Lanark)

Lamborn, Harry

Snape, Peter

Leadbitter, Ted

Soley, Clive

Leighton, Ronald

Spearing, Nigel

Lestor, Miss Joan

Spriggs, Leslie

Lewis, Arthur (N'harn NW)

Stallard, A. W.

Lewis, Ron (Carlisle)

Stewart, Rt Hon D. (W Isles)

Litherland, Robert

Stoddart, David

Lofthouse, Geoffrey

Stott, Roger

Lyon, Alexander (York)

Strang, Gavin

Lyons, Edward (Bradf'd W)

Straw, Jack

Mabon, Rt Hon Dr J. Dickson

Summerskill, Hon Dr Shirley

McCartney, Hugh

Taylor, Mrs Ann (Bolton W)

McDonald, Dr Oonagh

Thomas, Dafydd (Merioneth)

McElhone, Frank

Thomas, Jeffrey (Abertillery)

McKay, Allen (Penistone)

Thomas, Mike (Newcastle E)

McKelvey, William

Thomas, Dr. R. (Carmarthen)

MacKenzie, Rt Hon Gregor

Thorne, Stan (Preston South)

Maclennan, Robert

Tilley, John

McNally, Thomas

Tinn, James

McTaggart, Robert

Torney, Tom

McWilliam, John

Varley, Rt Hon Eric G.

Magee, Bryan

Wainwright, E. (Dearne V)

Marks, Kenneth

Walker, Rt Hon H.(D'caster)

Marshall, D (G'gow S'ton)

Watkins, David

Marshall, Dr Edmund (Goole)

Weetch, Ken

Marshall, Jim (Leicester S)

Welsh, Michael

Martin, M (G'gow S'burn)

White, Frank R.

Mason, Rt Hon Roy

White, J. (G'gow Pollok)

Maxton, John

Whitehead, Phillip

Maynard, Miss Joan

Whitlock, William

Meacher, Michael

Wigley, Dafydd

Mellish, Rt Hon Robert

Willey, Rt Hon Frederick

Mikardo, Ian

Williams, Rt Hon A. (S'sea W)

Millen, Rt Hon Bruce

Williams, Sir T. (W'ton)

Miller, Dr M. S. (E Kilhride)

Wilson, Gordon (Dundee E)

Mitchell, R. C. (Soton Itchen)

Wilson, Rt Hon Sir H. (H'ton)

Morris, Rt Hon A. (W'shawe)

Wilson, William (C'try SE)

Morris, Rt Hon C. (O'shaw)

Winnick, David

Morris, Rt Hon J. (Aberavon)

Woodall, Alec

Morton, George

Woolmer, Kenneth

Moyle, Rt Hon Roland

Wrigglesworth, Ian

230

Young, David (Bolton E)

Mr. James Hamilton and

Mr. Donald Coleman.

Tellers for the Ayes:

NOES

Adley, Robert

Durant, Tony

Aitken, Jonathan

Dykes, Hugh

Alexander, Richard

Eden, Rt Hon Sir John

Alison, Michael

Edwards, Rt Hon N. (P'broke)

Amery, Rt Hon Julian

Eggar, Tim

Ancram, Michael

Elliott, Sir William

Arnold, Tom

Emery, Peter

Aspinwall, Jack

Eyre, Reginald

Atkins, Robert(Preston N)

Fairbairn, Nicholas

Baker, Kenneth(St.M'bone)

Fairgrieve, Russell

Baker, Nicholas (N Dorset)

Faith, Mrs Sheila

Banks, Robert

Farr, John

Beaumont-Dark, Anthony

Fell, Anthony

Beith, A. J.

Fenner, Mrs Peggy

Bell. Sir Ronald

Finsberg, Geoffrey

Bendall, Vivian

Fisher, Sir Nigel

Benyon, Thomas (A'don)

Fletcher, A. (Ed'nb'gh N)

Ben yon, W. (Buckingham)

Fletcher-Cooke, Sir Charles

Best, Keith

Fookes, Miss Janet

Bevan, David Gilroy

Forman, Nigel

Biffen, Rt Hon John

Fowler, Rt Hon Norman

Biggs-Davison, John

Fox, Marcus

Blackburn, John

Fraser, Rt Hon Sir Hugh

Blaker, Peter

Fraser, Peter (South Angus)

Body, Richard

Freud, Clement

Bonsor, Sir Nicholas

Fry, Peter

Boscawen, Hon Robert

Galbraith, Hon T. G. D.

Bottomley, Peter (W'wich W)

Gardiner, George (Reigate)

Bowden, Andrew

Gardner, Edward (S Fylde)

Boyson, Dr Rhodes

Garel-Jones, Tristan

Braine, Sir Bernard

Glyn, Dr Alan

Bright, Graham

Goodhart, Phillip

Brinson, Tim

Goodhew, Victor

Britten, Leon

Goodlad, Alastair

Brocklebank-Fowler, C.

Gorst, John

Brooke, Hon Peter

Gow, Ian

Brotherton, Michael

Gower, Sir Raymond

Brown, M.(Brigg and Scun)

Grant, Anthony (Harrow C)

Browne, John (Winchester)

Gray, Hamish

Bruce-Gardyne, John

Greenway, Harry

Bryan, Sir Paul

Grieve, Percy

Buck, Antony

Griffiths, E.(B'y St. Edm'ds)

Budgen, Nick

Griffiths, Peter Portsm'th N)

Bulmer, Esmond

Grimond, Rt Hon J.

Burden, Sir Frederick

Grist, Ian

Butcher, John

Grylls, Michael

Butler, Hon Adam

Gummer, John Selwyn

Cadbury, Jocelyn

Hamilton, Hon A.

Carlisle, John (Luton West)

Hamilton, Michael (Salisbury)

Carlisle, Kenneth (Lincoln)

Hampson, Dr Keith

Carlisle, Rt Hon M. (R'c'n)

Hannam, John

Chalker, Mrs. Lynda

Haselhurst, Alan

Channon, Rt. Hon. Paul

Hastings, Stephen

Chapman, Sydney

Havers, Rt Hon Sir Michael

Churchill, W. S.

Hawksley, Warren

Clark, Hon A. (Plym'th, S'n)

Hayhoe, Barney

Clark, Sir W. (Croydon S)

Heath, Rt Hon Edward

Clarke, Kenneth (Rushcliffe)

Heddle, John

Clegg, Sir Walter

Henderson, Barry

Cockeram, Eric

Heseltine, Rt Hon Michael

Colvin, Michael

Hicks, Robert

Cope, John

Higgins, Rt Hon Terence L.

Cormack, Patrick

Hill, James

Corrie, John

Hogg, Hon Douglas (Gr'th'm)

Costain, Sir Albert

Holland, Phillip (Carlton)

Cranborne, Viscount

Hooson, Tom

Critchley, Julian

Hordern, Peter

Crouch, David

Howe, Rt Hon Sir Geoffrey

Dean, Paul (North Somerset)

Howell, Rt Hon D. (G'ld'd)

Dickens, Geoffrey

Howell, Ralph (N Norfolk)

Dorrell, Stephen

Howells, Geraint

Douglas-Hamilton, Lord J.

Hunt, David (Wirral)

Dover, Denshore

Hunt, John (Ravensbourne)

du Cann, Rt Hon Edward

Hurd, Hon Douglas

Dunn, Robert (Dartford)

Irving, Charles (Cheltenham)

Jenkin, Rt Hon Patrick

Penhaligon, David

Johnson Smith, Geoffrey

Peyton, Rt Hon John

Jopling, Rt Hon Michael

Pink, R. Bonner

Joseph, Rt Hon Sir Keith

Pollock, Alexander

Kaberry, Sir Donald

Porter, Barry

Kellett-Bowman, Mrs Elaine

Powell, Rt Hon J.E. (S Down)

Kershaw, Anthony

Prentice, Rt Hon Reg

Kilfedder, James A.

Price, Sir David (Eastleigh)

Kimball, Marcus

Prior, Rt Hon James

King, Rt Hon Tom

Proctor, K. Harvey

Kitson, Sir Timothy

Pym, Rt Hon Francis

Knight, Mrs Jill

Raison, Timothy

Lamont, Norman

Rathbone, Tim

Lang, Ian

Ress, Peter (Dover and Deal)

Langford-Holt, Sir John

Ress-Davies, W. R.

Latham, Michael

Renton, Tim

Lawrence, Ivan

Rhodes James, Robert

Lawson, Rt Hon Nigel

Rhys Williams, Sir Brandon

Lee, John

Ridley, Hon Nicholas

Lennox-Boyd, Hon Mark

Ridsdale, Julian

Lester Jim (Beeston)

Rifkind, Malcolm

Lewis, Kenneth (Rutland)

Roberts, M. (Cardiff NW)

Lloyd, Ian (Havant&W'loo)

Roberts, Wyn (Conway)

Lloyd, Peter (Fareham)

Ross, Stephen (Isle of Wight)

Loveridge, John

Ross, Wm. (Londonderry)

Luce, Richard

Rost, Peter

Lyell, Nicholas

Royle, Sir Anthony

McCrindle, Robert

Sainsbury, Hon Timothy

Macfarlane, Neil

St. John-Stevas, Rt Hon N.

MacGregor, John

Scott, Nicholas

MacKay, John (Argyll)

Shaw, Michael (Scarborough)

Macmillan, Rt Hon M.

Shelton, William (Streatham)

M. McNair-Wilson, M. (N'bury)

Shepherd, Colin (Hereford)

McNair-Wilson, P. (New F'st)

Shepherd, Richard

McQuarrie, Albert

Shersby, Michael

Madel, David

Silvester, Fred

Major, John

Sims, Roger

Marland, Paul

Skeet, T. H. H.

Marshall Michael (Arundel)

Smith, Dudley

Marten, Neil (Banbury)

Speller, Tony

Mates, Michael

Spence, John

Maude, Rt Hon Sir Angus

Spicer, Michael (S Worcs)

Mawby, Ray

Sproat, Ian

Mawhinney, Dr Brian

Squire, Robin

Maxwell-Hyslop, Robin

Seanbrook, Ivor

Mayhew, Patrick

Stanley, John

Mellor, David

Stell, Rt Hon David

Meyer, Sir Anthony

Steen, Anthony

Miller, Hal (B'grove)

Stevens, Martin

Mills, lain (Meriden)

Stewart, Ian (Hitchin)

Mills, Peter (West Devon)

Stewart, A. (E Renfrewshire)

Miscampbell, Noman

Stokes, John

Mitchell, David (Basingstoke)

Stradling Thomas, J.

Moate, Roger

Tapsell, Peter

Molyneaux, James

Taylor, Robert (Croydon NW)

Monro, Hector

Taylor, Teddy (S'end E)

Montgomery, Fergus

Tebbit, Norman

Moore, John

Temple-Morris, Peter

Morris, M. (N'hampton S)

Thatcher, Rt Hon Mrs M.

Morrison, Hon C. (Devizes)

Thomas, Rt Hon Peter

Mudd, David

Thompson, Donald

Murphy, Christopher

Thorne, Neil (Ilford South)

Myles, David

Thornton, Malcolm

Neale, Gerrard

Townend, John (Bridlington)

Needham, Richard

Townsend, Cyril D, (B'heath)

Nelson, Antony

Trippier, David

Neubert, Michael

Trotter, Neville

Newton, Tony

van Straubenzee, W. R.

Normanton, Tom

Vaughan, Dr Gerard

Nott, Rt Hon John

Viggers, Peter

Onslow, Cranley

Waddington, David

Oppenheim, Rt Hon Mrs S.

Wakeham, John

Osborn, John

Waldegrave, Hon William

Page, Rt Hon Sir G. (Crosby)

Walker, B. (Perth)

Page, Richard (SW Herts)

Walker-Smith, Rt Hon Sir D.

Parris, Matthew

Wall, Patrick

Patten, Christopher (Bath)

Waller, Gary

Patten, John (Oxford)

Walters, Dennis

Pattie, Geoffrey

Ward, John

Pawsey, James

Warren, Kenneth

Watson, John

Williams, D.(Montgomery)

Wells, John (Maidstone)

Winterton, Nicholas

Wells, Bowen

Wolfson, Mark

Wheeler, John

Younger, Rt Hon George

Whitelaw, Rt Hon William

Wickenden, Keith

Tellers for the Noes:

Wiggin, Jerry

Mr. Carol Mather and

Wilkinson, John

Mr. Anthony Berry.

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith pursuant to the Standing Order No. 32 (Questions on amendments) and agreed to.
MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to, pursuant to Standing Order No. 32 (Questions on amendments).
Resolved,
That this House believes that it is important to the United Kingdom's manufacturing industry to have available good quality steel at internationally competitive prices; notes that the British Steel Corporation has just adopted a corporate plan to enable the Corporation profitably to supply United Kingdom and overseas markets; and asks the Government to give the plan careful consideration.
It being after Ten o'clock, MR. SPEAKER proceeded, pursuant to the Order this day, to put forthwith the Questions necessary to dispose of proceedings on the motions relating to Civil and Defence Estimates.

DEFENCE ESTIMATES, 1981–82 (VOTE ON ACCOUNT)
Question,
That a sum, not exceeding £4,982,695,000, be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charges for Defence Services for the year ending on 31 March 1982, as set out in House of Commons Paper No. 9.
put and agreed to.

CIVIL ESTIMATES, 1981–82 (VOTE ON ACCOUNT)
Question,
That a sum not exceeding £24,777,893,700, be granted to Her Majesty out of the Consolidated Fund, on account, for or towards defraying the charges for Civil Services for the year ending on 31 March 1982, as set out in House of Commons Paper No. 10.
put and agreed to.

CIVIL ESTIMATES, (CLASS XIIIA) 1981–82 (VOTE ON ACCOUNT)
Question,
That a sum, not exceeding £5,055,000, be granted to tier Majesty out of the Consolidated Fund, on account, for or towards defraying the charges for House of Commons: Administration for the year ending on 31 March 1982, as set out in House of Commons Paper No. 11.
put and agreed to.

DEFENCE SUPPLEMENTARY ESTIMATES, 1980–81
Question put,
That a supplementary sum, not exceeding £277,501,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges for Defence Services which will come in course of payment during the year ending on 31 March 1981, as set out in House of Commons Paper No. 7.
The House proceeded to a Division—
Mr. Mather and Mr. Berry were appointed Tellers for the Ayes, but no Member being willing to Act as Teller for the Noes, MR. SPEAKER declared that the Ayes had it.
Question accordingly agreed to.

CIVIL SUPPLEMENTARY ESTIMATES, 1980–81
Question,
That a further supplementary sum, not exceeding £1,950,143,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges for Civil Services which will come in course of payment during the year ending on 31 March 1981, as set out in House of Commons Paper No. 8.
Put and agreed to.
Bill ordered to be brought in upon the foregoing Resolutions by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. John Biffen, Mr. Nigel Lawson and Mr. Peter Rees.

CONSOLIDATED FUND
Mr. Nigel Lawson accordingly presented a Bill to apply certain sums out of the Consolidated Fund to the service of the years ending on 31 March 1981 and 1982: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 16.]

European Community (Newsprint Quota)
10.18 pm
The Under-Secretary of State for Trade (Mr. Norman Tebbit): I beg to move,
That this House takes note of the draft proposal by the Commission of the European Communities for a Council Regulation opening, allocating and providing for the administration of a Community tariff quota for newsprint falling within the subheading 48.01A of the Common Customs Tariff (1981) and extending this quota to include certain other types of paper, as set out in the Department of Trade's unnumbered Explanatory Memoranda dated 28 November 1980 and 11 December 1980.
The second and fourth reports of the House of Commons Select Committee on European Legislation &c. recommended that the proposed regulation should be further considered by the House in view of the sensitivity of the question of paper imports and their effect on production capacity.
The proposed tariff quota for newsprint is a well-established arrangement which raises no new policy implications, and the House will note from the Select Committee's fourth report that it is not being opposed by representatives of the United Kingdom newsprint producers. But I fully understand the concern which led the Committee to recommend the matter for further consideration, and am pleased that time has been found for this debate.
Hon. Members will note that the proposal would, among other things, extend the quota to certain types of paper other than newsprint falling under the heading of 48.01A of the common customs tariff. I should not wish there to be any misunderstanding on this point; the other types of paper concerned are grades of newsprint without a watermark which, for technical and historical reasons, are classified elsewhere in the tariff. The proposal therefore relates exclusively to newsprint and has no direct effect on other parts of the paper and board industry.
The effect of the proposal would be to provide relief from customs duties on Community imports of newsprint within a quota of 2·5 million tonnes, from which the United Kingdom would receive an initial allocation of 946,580 tonnes. Duty relief on imports of newsprint is by no means a new development. At least as far back as 1932,
234
the Government of the day recognised newsprint as a key raw material for the country's press and exempted it from the 10 per cent. general ad valorem import duty introduced under the Import Duties Act 1932. This policy has been observed by successive Governments since then.
Up to the point at which we joined the European Community, imports of newsprint from our main suppliers remained free of customs duties under the Commonwealth preference system and free trade arrangements with our EFTA partners. This was not the case in the original six member States of the Community, but in the negotiations leading up to our accession certain modifications to the existing Community tariff regime for newsprint were secured and these are now enshrined in protocol 13 annexed to our Act of Accession. This provides for newspaper publishers to import newsprint duty-free when it has been established that all possibility of Community supply will be exhausted.
The duty-free import of this balance from third countries is now provided for by an annual Community duty-free quota. This has two elements. First, under agreements made when the Community was enlarged, there is an annual quota of 1·5 million tonnes bound in the GATT. On top of this, there is a further autonomous quota calculated each year to take account of the levels of production in member States and their estimated demand.
It is a point of fact that since the early 1970 production of newsprint in the United Kingdom has been sufficient to meet little more than one-quarter of the needs of the newspaper publishing industry. On latest estimates, it will meet about 12 per cent. of those needs in 1981. There is, therefore, a genuine need to import substantial quantities of newsprint, and it would be unrealistic to require the publishing industry, which is itself in financial difficulty, to pay customs duty on imports of such a key raw material in so far as it cannot be obtained from domestic sources. The tariff regime envisaged in protocol 13 does, however, have a protective element which is intended to ensure that the availability of supplies from Community producers is fully taken into account in determining the size of the tariff quota. The United Kingdom's share of the quota is determined on this basis, following consultations with representatives of the United Kingdom producers and users.
For 1981, the situation is somewhat uncertain. The Bowater newsprint mill at Ellesmere Port closed on 21 November and the closure of a newsprint machine at the Reed paper and board mill at Aylesford has been announced. Moreover, the publishers agree that it is difficult to make accurate estimates of demand for 1981. In these circumstances, it has been impractical to reach firm conclusions on the United Kingdom's import requirements for 1981.
On current estimates, it seems that the publishing industry could require up to 1·3 million tonnes of newsprint, of which 150,000 tonnes would be obtained from domestic producers. This would leave an import requirement of 1·15 million tonnes, but because of the uncertainties the Government feel that it would be prudent to seek a United Kingdom quota share somewhat below that level. It would then be necessary to review the figures with producers and users when the situation is clearer and, if necessary, to seek the agreement of other member States to a supplementary quota early in the new year.
Against this background, the initial quota allocation of 946,580 tonnes proposed for the United Kingdom would

235
be a satisfactory interim measure. It is likely that member States other than the United Kingdom will seek a slight increase in their quota shares, but it is generally accepted that the tariff quota should be established initially at a cautious level. All member States are expected to agree in any event that a supplementery quota should be introduced in the first half of 1981 if updated estimates show that the quota currently proposed would be insufficient to meet the import needs of the publishers. This would certainly be a prerequisite of the United Kingdom's acceptance of the proposal as it stands.
I very much sympathise with our newsprint producers, who face a particularly difficult combination of economic circumstances at present. I particularly regret that Bowater has closed its mill at Ellesmere Port with consequent redundancies, in spite of strenuous efforts by the Government, the Ellesmere Port borough council, the trade unions and certain hon. Members to find a means of averting the closure. This was ultimately a commercial decision for the company. I do not consider that withholding duty relief on imports of newsprint that cannot be obtained from domestic sources would begin to solve the problems of the United Kingdom newsprint industry. It would only serve to exacerbate the current severe difficulties of the newspaper publishers, and who would benefit from that?
Mr. Tony Marlow: Is there any significant degree of intra-Community trade in newsprint? If there is not, is there any reason why we should go through this rigmarole whereby we have to go back to Brussels for a supplementary quota? Would it not be easier if we dealt with it here?
Mr. Tebbit: As my hon. Friend knows, these matters were provided for in the Treaty of Accession. The import of such newsprint duty-free—that is, free of the duties which are agreed within the whole Community—is bound to be a matter that is conducted through the Community.
I shall take careful note of the views of hon. Members on the newsprint tariff quota. I am sure that the House will bear in mind that the proposals I have outlined tonight have been put to representatives of the consumers and producers, who have indicated their acceptance.
A number of hon. Members will want to say something about the problems of the newsprint industry generally. I shall do my best to deal with any points that are raised. I recommend that the House takes note of the draft proposal.
10.28 pm
Mr. John Smith: The House will be grateful to the Select Committee for having recommended that this instrument should be subject to debate in the House. It has issued two relevant reports. The second report indicated that it wished to take further evidence from the industry, and the fourth report says some interesting things about the present state of the newsprint production industry in this country.
The Under-Secretary of State, in introducing the motion, confined himself to a description of the instrument and said that he would answer questions at the end of the debate on the state of the industry. I imagine that many hon. Members, particularly those speaking for the newsprint industry and perhaps the paper and board industry more generally, will wish to address some
236
questions on Government policy towards the newsprint production industry. That is certainly my intention in my short contribution.
The fourth report of the Select Committee refers to recent developments in the newsprint production industry. The most significant figure in the report is that production recently of 385,000 tonnes of newsprint in this country has been reduced to 150,000 tonnes. The reasons are not hard to find, and the Under-Secretary of State referred to them. There has been the total closure of the Bowater plant at Ellesmere Port and the partial closure of the Reed Paper Group plant at Aylesford in Kent, which have meant a savage reduction in the newsprint production industry.
In its evidence to the Select Committee, the industry indicated that it did not wish to oppose the instrument. That is the view of the Opposition. However, the situation in the industry must give rise to grave concern. There has been a massive reduction in the production of newsprint. The paper and board industry is going through a crisis. Perhaps the most acute part of that crisis exists in the sector that we are discussing. The loss of jobs has been serious. Most dramatic of all has been the many jobs lost at the Bowater plant at Ellesmere Port.
The problems that the industry faces have been highlighted in a number of recent publications, one of which the Select Committee referred to in its fourth report—namely, the pamphlet produced by the Society of Graphical and Allied Trades entitled "Action Now". It highlighted the crisis over a wide area of the paper and board industry and concentrated in one of its sections on the newsprint industry. It was a highly researched and relevant document, of which the society should be proud. However, I am sure that it is not happy that it has had to describe such a serious situation in the industry in which its members work.
Some aspects of these issues have been discussed and set out in the sector working party report of the National Economic Development Council on energy and the paper and board industry. That is almost required reading for hon. Members who interest themselves in these matters. The Select Committee referred to some of the relevant issues.
The problem that the newsprint industry faces is simply and starkly one of rapid contraction. Perhaps a year from now the Government will be coming forward with a proposition different from the present one. We face the possible extinction of the newsprint production industry. I hope that the Minister will address himself to these matters when he replies. What will be the situation a year from now if the same factors as have led to a reduction from 385,000 tonnes to 150,000 tonnes continue to operate? It has been an annual exercise to agree the quotas.
I do not want to detain the House with details of the problems that the industry faces, with which hon. Members who have constituency interests are particularly acquainted. The problems are not dissimilar from those that a number of other industries face. The Government have no industrial policy. However, they have an economic policy of high interest rates and a high exchange rate, which they apply without regard to the industrial consequences that follow in its train. That applies to many industries but, I suspect, to few more acutely than the newsprint production industry.
One facet of Government policy is the tolerance of a high exchange rate, which affects the newsprint industry in a way that affects many other industries.
Mr. Marlow: What has this got to do with the debate?
Mr. Smith: If the hon. Gentleman will listen, he will understand.
Mr. Marlow: I shall be rather surprised.
Mr. Smith: I shall be surprised, too, if he understands it, but I think that the hon. Gentleman—
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The hon. Member for Northampton, North (Mr. Marlow) is well aware that he is not entitled to make sedentary observations.
Mr. Smith: I am well accustomed, Mr. Deputy Speaker, to post-dinner interruptions in debates of this sort. If the hon. Gentleman listens to what I have to say, he will learn a little. I do not put too high a bet on his capacity to appreciate my argument, but I hope that he will listen.
The fact that we have such a high exchange rate means that imports of Finnish paper and board products are at an advantage in Britain vis-a-vis domestic products. There is a particular feature of the industry that means that a high exchange rate bears especially heavily upon it—namely, the system of maintaining the price in sterling of supplies of imported pulp to the United Kingdom industry. The agreement that was reached when the relationship between the pound and the dollar was different from what it is now means that foreign competitors have an advantage over the domestic industry in Britain.
Perhaps the most serious aspect of the present problems faced by the industry is that of energy pricing. All British industry is suffering from the high cost of energy. Figures in the sector working party report of the National Economic Development Council indicate rather starkly the nature of the problem. In an appendix to the report, it indicates the price of fuel oil in Britain compared with that of some of our competitors. Heavy fuel oil in Canada, the United States, Sweden, Holland and West Germany is cheaper than it is in Britain. That complaint comes from many sectors of British industry. It especially affects the paper and board industry as a whole, of which the newsprint industry is only a part, because it is the sixth largest user of energy in Britain.
Gas prices are affected by the Government's financing policy towards the nationalised industries, which is causing another problem. The Government have turned the concept of market economies on its head. They are raising prices when demand is falling. That will mean lower profits for the industries and an even heavier requirement on the public sector borrowing requirement. The position with regard to oil is ironic. Britain is the only country in Western Europe, apart from Norway, that is self-sufficient in oil. It appears odd that we are charging our domestic industry more for oil than are the countries that are dependent on supplies from OPEC.
Mr. D. N. Campbell-Savours: Is my right hon. Friend aware that the Government are rejecting the argument about energy prices on the basis that there is a divergence of opinion among a number of organisations about the level of prices internationally? One senses that the Government are sowing the seed of confusion in establishing energy prices. Perhaps my right hon. Friend could indicate how we could establish an acceptable analysis for the Government on energy prices.
Mr. Smith: I am grateful to my hon. Friend for drawing attention to that point. For many months, industry has complained to the Government that our prices for oil are higher than those charged in many other countries in Western Europe which have to import their oil and do not have the benefit of North Sea oil.
Sir Anthony Meyer: In view of the right hon. Gentleman's speech, will it be in order for anyone speaking from the Back Benches to make a speech on any subject that he chooses to raise but which has nothing whatsoever to do with the motion?
Mr. Deputy Speaker: We are debating the question of newsprint. Provided that a point is relevant to newsprint, it is in order.
Mr. Smith: I am puzzled why Conservative Members do not wish to discuss the factors that are highly relevant to the preservation of the newsprint production industry in Britain. If Conservative Members understood what the industry was saying in its communications to hon. Members on both sides of the House, they would understand the relevance of my speech.
Mr. Marlow: Has the right hon. Gentleman read the document?
Mr. Smith: The hon. Member, who is making a fuss, has only a limited knowledge of the newsprint industry and the paper and board industry. I notice that some of his hon. Friends are nodding in agreement. I hope that he will take that as a suitable rebuke from them, even if he will not take it from me. Members with constituency interests will understand how crucial the price of energy is to the paper and board industry. It is right at the heart of the problems faced by the industry. Unless it receives some relief from the Government, it may face virtual extinction.
My hon. Friend the member for Workington (Mr. Campbell-Savours) asked what the Government would do. He was right to say that the Government's response to the energy problem was that they did not know the figures. They say that they are not persuaded that British industry pays higher prices than its European competitors. The Government should have established that on their own account. They should not have to wait for industry to prove it. When a problem like this arises, the Government, with their vast statistical services and international lines of communication, should be able to establish that for themselves.
What has happened? In the National Economic Development Council, when the matter was raised by the trade unions and by representatives of the Confederation of British Industry, it was eventually agreed that the CBI would set up an industrial energy consumers group that would seek to establish the facts. I understand that it has not yet reported. It was set up on 6 August. We are trove well into December. It does not appear to be a statistical exercise of enormous complexity. The facts could have been obtained, if the Government had wished, and put before both sides of industry and the House for consideration. The truth is that the Government are not prepared to face the fact that we in this country are charging higher energy prices than our competitors to such industries as the newsprint industry, and we are, therefore, at an industrial disadvantage.
Mr. K. Harvey Proctor: Perhaps one difficulty with the CBI's energy policy committee and the

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reason why it is not so persuasive on the issue is that it is stacked with nationalised industry energy concerns as well as private enterprise.
Mr. Deputy Speaker: Order. Perhaps the right hon. Gentleman will come back to the question of duty-free quotas and newsprint.
Mr. Smith: One reason why the subject was recommended for debate by the Select Committee was the general interest created by the situation in the newsprint industry.
Mr. Deputy Speaker: We are bound by the motion that is before the House.
Mr. Nigel Spearing: On a point of order, Mr. Deputy Speaker. Is it not true that the degree of protection that is or is not afforded by EEC regulations has great influence on the prosperity and perhaps even the existence of any industry in this country, and the paper and board industry is a case in point? The factors that my right hon. Friend is outlining are germane to that point.
Mr. Deputy Speaker: As long as we are talking about newsprint, the right hon. Gentleman is in order.
Mr. Smith: I was speaking of little else but newsprint and the effect that energy pricing has on the newsprint production industry in this country. If the newsprint industry in this country is not able to survive because of the high energy costs imposed on it relative to its competitors, it will cease to exist. That is what concerns most people who have concern for the future of the industry.
What should the Government do to assist the newsprint production industry over energy costs?
Mr. Marlow: What about quotas?
Mr. Smith: Behind the problem of quotas lies the survival of the industry. If the industry goes down, there will be a higher quota next year and the year after, and we may reach a situation where the whole matter becomes academic because there is no newsprint production industry in this country.
One matter that the Government should consider carefully is the excise duty on heavy fuel oil of £8 per tonne. We should examine the cost of oil in this country and the cost for some of our competitors. It is ironic that we should be oil producers yet charge our newsprint industry more than our competitors, who have to import their oil.
The importance of the debate is not only in the narrow question of quotas, which is the subject of the motion, but in the future health of the industry. We feel obliged to ask the Minister some questions about the future of the industry. Indeed, he invited us to do so in his closing remarks.
First, what is the Government's policy towards the newsprint production industry? Do they want such an industry to exist, or do they believe that we should allow it to die and import all the newsprint that we require from Scandinavia or North America? If so, they should say so so that the industry knows that it has no support from the Government in its very difficult battle to maintain economic existence.
Secondly, if the Government reach the view that there should be a newsprint production industry in this
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country—and I hope that they do, otherwise those who use newsprint will be subject to price rise exercises as soon as the domesic industry ceases to exist and will be at the mercy of those who supply us—what will they do to support it? What will they do about energy prices?
Mr. Roger Moate: What would the right hon. Gentleman do?
Mr. Smith: I have already suggested that the Government should revise the excise duty on heavy fuel oil.
Mr. Moate: What did the previous Government do? They did nothing. The trend has continued progressively under successive Govenments for many years.
Mr. Smith: The industry has been under pressure for many years. The acceleration is particularly acute this year. As the Select Committee said, a reduction from 385,000 tonnes to 150,000 tonnes is acute. In this year, when we are self-sufficient in oil production and are the beneficiaries to the tune of £4 billion a year from North Sea oil revenues, we should be able to take a more relaxed view of the excise duty on fuel oil. That is my short answer to the hon. Member for Faversham (Mr. Moate).
If the Government's policy is to preserve newsprint production, how will they do it? Some important questions must be asked about the exchange rate, but I should be out of order if I referred to that. The most important and acute problem faced by the industry is energy pricing. I hope that the Government will say something useful and helpful about energy pricing policy.
Unless there is a change of policy, the industry may disappear and thousands of jobs will be lost. Britain will lose yet another manufacturing capability. We seem to lose them month by month. The process must stop some time. I hope that the Government decide to take a determined stand to preserve newsprint production in Britain.
10.47 pm
Mr. Roger Moate: We are indebted to the Select Committee for recommending this subject for debate and for the manner in which it recommended it. The report states that the Committee
"nevertheless take the view that the whole question of paper imports and their effect on production capacity in the United Kingdom is currently of such sensitivity that the instrument should be further considered by the House."
That offers the House scope for a more helpful and wide-ranging debate than one might expect on such a document.
I have an interest in the newsprint industry. It is not financial but is based on my constituency. I suspect that the remaining 150,000 tonnes of newsprint is now produced in Kent and that more than half is produced in my constituency. I say with sadness that we are reduced to such pathetic amounts of newsprint production. It is a tragedy that the motion is before us.
However, the tragedy has not happened suddenly. Even the reduction from about 385,000 tonnes to 150,000 tonnes is no more precipitate a drop than that which has occurred in recent years. I do not have the precise figures, but not many years ago we produced between 600,000 and 700,000 tonnes of newsprint. As a proportion of our consumption of 1·3 million tonnes, our production has dropped dramatically. It is extraordinary that Britain, one of the largest consumers of newsprint, should be almost a total importer of newsprint.

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The point is made graphically by the closure at Ellesmere Port. We shall now export timber to Scandinavia, which will then manufacture newsprint from our timber and export it back to us. I always thought that one of the Scandinavian strengths was its resource of raw materials, but our raw materials will be used to produce our newsprint. It is a tragedy, but it has happened over a decade or more. That is why I do not blame my right hon. Friends.
The closure of Ellesmere Port is the direct reason for the quota proposal of a reduction to 150,000 tonnes. The right hon. Member for Lanarkshire, North (Mr. Smith) said that the Government have no industrial strategy. I should have thought that the efforts that were made by my right hon. Friends to try to avert that closure went far beyond anything that the previous Government did for any other industry. The fact that it was unsuccessful is a tragedy. As my hon. Friend the Under-Secretary of State said, that is a commercial decision for the industry. I am sure that the right hon. Gentleman has seen the figures. The offers of grants and loans were very impressive. My right hon. and hon. Friends made immense efforts to try to produce a package that would save Ellesmere Port, and I am deeply sorry that they failed. The cash flow situation was grave, and the losses in the interim period before we could get a new mill on stream were such that any industry would have had to think twice.
Mr. Barry Porter: As the hon. Member representing Ellesmere Port, perhaps I should explain what the Government offered. In terms of capital grant, they offered £14 million against a required capital investment of £36 million, with the balance to come from the European Investment Bank at "soft" interest rates. But, even though those grants were available, the Government were prepared to make, through various means such as the Forestry Commission, the National Coal Board and the Central Electricity Generating Board, not grants but subsidies towards the revenue commitments of Bowater of about £2½million on the Bowater figures, and possibly £3½to £4 million on the Government figures. No one appears to have appreciated that—
Mr. Deputy Speaker: Order. The hon. Gentleman is making an intervention in another hon. Member's speech. If he should decide to make a speech, he knows what to do.
Mr. Porter: I appreciate that, Mr. Deputy Speaker, and this is one of my shorter interventions. I shall do my best. The point is that Bowater is making so much money in North America for various reasons—I shall not go into them, because I am not making a speech—that it was in its commercial interest to close the Ellesmere Port plant. I regret that.
Mr. Moate: That was a long intervention, but it was effective and demonstrates the point. There are two matters that I should like to take up in that connection.
First, most of the grants that were offered were regional grants, and here I should like to put on record a tribute to my hon. Friend the Member for Bebington and Ellesmere Port (Mr. Porter), who worked tirelessly for weeks and months to try to avert the closure. As I said earlier, the current newsprint production is in Kent, and there is no scope for regional assistance there. That limits the
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opportunity for the Government to assist in the way that they were willing to assist in the case of Ellesmere Port. Secondly, part of that package was the encouragement by the Government to the Forestry Commission and to the National Coal Board to reduce the costs of the raw materials, energy and coal that they were supplying to Bowater.
The National Coal Board and the Forestry Commission should be as interested in the survival of other paper mills, and they should be actively encouraged by the Government to try to see whether it is in their commercial interests to reduce costs further. The answers that I have had so far from the Government suggest that that is a commercial matter for the National Coal Board and the Forestry Commission. But the Government have considerable influence with those bodies, and they can talk to them and encourage them to try to reduce costs as far as is humanly possible. I urge them to do that, otherwise we shall be back in a year's time with a nil production figure for British newsprint.
Mr. Campbell-Savours: Have the Government repudiated the insistence of the British Paper and Board Manufacturers Federation that the Forestry Commission's assets nationally were sold off?
Mr. Moate: That has nothing to do with it. It is still standing timber, whether it is publicly or privately owned, which will be sold for paper or other production. I hope that it will encourage forestry and ultimately reduce the cost of paper to the timber industry.
The manufacturers' federation has made clear that it raises no objection to the Commission's quota proposals, and, therefore, it would be foolish of us to oppose the plan, even though we may deeply regret that it has come forward in this form. The Select Committee document says:
"The Newspaper Raw Materials Committee"—
that is basically Fleet Street—
"for its part would feel very strongly about paying duty on imported newsprint at the best of times, let alone in a situation when newspapers are experiencing serious financial difficulties."
I have little sympathy for the newspapers. If they had taken a longer-term view, been more consistent purchasers of British newsprint and struck up longer-term relationships with the British paper industry, they could have kept in being a larger proportion of British newsprint production. That would have been in their long-term interests.
One reason why the newsprint industry is happy with the proposal is that it will allow slightly higher prices for our remaining newsprint production. If that goes, exporters to this country will get even higher prices. If we produce no newsprint—and we are not far off that position—the Scandinavians and Canadians will be able to name their own price and our newspapers will pay dearly for their shortsightedness.
The right hon. Member for Lanarkshire, North endeavoured to make his case on the strength of sterling penalising the paper industry. That has undoubtedly been the key factor, but the level of sterling is something with which the nation has to live. It is not an artificial level created by high interest rates. It is a fact of life, in many ways an advantageous fact. It results from North Sea oil and not from interest rates. Somehow we have to contend with it. There is no easy way out.
The right hon. Gentleman spelt out the problem. It is a tragedy that the newsprint industry is in such a predicament, but the previous Government did not

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produce the answer and I am not sure that we know the answer now. I agree with the right hon. Gentleman that we have a tragic document before us, and I wish that we could put together a formula to give a more assured future for our vital paper industry.
10.58 pm
Mr. D. N. Campbell-Savours: We should be grateful to the Select Committee for giving us an opportunity to discuss this issue. I sometimes think that when the Committee recommends matters for discussion on the Floor of the House it gives some hon. Members an opportunity to air their anti-EEC views on issues that would otherwise not be raised in the House.
When Conservative Members were making sedentary interventions earlier, they seemed to fail to understand a central problem of the industry. In all the recommendations made by lobbies from the paper industry, the subject that starts on top of the agenda and is never removed from the agenda is energy prices. Costings of the national paper and board and newsprint industries show that energy costs form 15 to 20 per cent. of total budgets. One can understand why my right hon. Friend the Member for Lanarkshire, North (Mr. Smith) raised the subject. He was right to do so.
I wish to speak specifically to the motion. I shall therefore be much more in order than I usually am in such debates. The regulation raises the ceiling from 1·5 million tonnes to 2·5 million tonnes as regards newsprint imports into the EEC. As has been said, it follows the closure of Bowater. It will reduce the industry's capacity to 150,000 tonnes. That must be put alongside the decline from an 800,000 tonnes capacity only 10 years ago to a 340,000 tonnes capacity in the middle of this year.
The explanatory memorandum, available in the Vote Office, says that there are no new policy implications. There are. By increasing the ceiling for triggering duties, the Government are accepting a supply of imports on to the market. They are saying that they will not pursue the expansion of domestic production. There are further policy implications. The Government accept that there will be a downward trend. This measure only reinforces the present downward trend in newsprint manufacture in Britain. They are rejecting the argument that was put forward by Bowater when that company was being closed down as a result of the Government's policies. Bowater argued that it was not a lame duck. It was right.
Mr. Tebbit: Perhaps I can prevent the hon. Gentleman from going off on the wrong tack and failing to use well the short time available. The memorandum says that there are no new policy implications. There are always policy implications. There is nothing new about the fact that the Government have taken a view about how much paper will be supplied by the home industry and consider that the remainder should be let in duty-free. It has been going on for years.
Mr. Campbell-Savours: If there are no new policy implications, the Conservative Party must have had a prior commitment to run down the British newsprint industry. The Government faced two options. They could have pursued the expansion and retention of the industry or they could have allowed it to run down. The Government have a deliberate policy. They take certain sectors of British
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industry, and when those sectors reel and keel and cannot compete due to international pressures and due to the Government's failure they have to go to the wall. That is unacceptable.
Mr. Douglas Hogg: It is silly.
Mr. Campbell-Savours: The hon. Gentleman may say that, but he should consult his hon. Friend the Member for Bebington and Ellesmere Port (Mr. Porter). He will tell him what happened in Ellesmere Port. Both he and the hon. Member for Basildon (Mr. Proctor) know the truth. The Government have systematically destroyed the British newsprint industry. As a result, only 10 per cent. remains When the Conservative Party took office, British newsprint producers were providing 30 per cent. of the market.
In the explanatory memorandum, the Minister says that United Kingdom newsprint producers have been consulted about the proposals and have raised no objections. It would be interesting to know whether Bowater was consulted. I have a copy of a document that was produced by Ellesmere Port and Neston borough council. It concerns action taken to avert the closure of the Bowater newsprint mill in Ellesmere Port. The document is important. One section of it is entitled:
"Solution based on EEC tariff quota".
It refers to the Ellesmere Port and Neston borough subcommittee and states:
"The Sub-Committee began by seeking to secure increases in the price of UK newsprint by using the mechanism of the EEC tariff quota ststem. Under the EEC tariff regime, imports of newsprint are subject to quotas, and in theory, to duty on imports above the agreed quotas. Moreover, Protocol 13 of the UK treaty of accession was designed to protect the home-based newsprint industry, but it is clearly ineffective. In theory Protocol 13 requires that before deciding on the size of the duty-free import quota, the EEC have to be satisfied that home production in the member States has been taken up and that demand cannot be met from home production."
Obviously, that is what the document is about.
"In theory, too, imports above the quota fixed by the EEC should be subject to duty at a current rate of 6 per cent. for Scandinavian newsprint and 11·6 per cent. for Canadian supplies. The Sub-Committee, therefore, sought a solution based on strict compliance with Protocaol 13; a reduction in the size of the duty-free quota, and, if necessary, the imposition of duty on imports above the quota, unless guarantees were given by the UK newsprint users that they would take up all UK newsprint at agreed prices. This proposal was discussed by the Chief Executive"—
I assume that the Minister will know the chief executive—
"at a meeting in London on September 10, attended by Mr. Andrew Pearce, EMP, a senior EEC official from Brussels, and representatives of Bowaters. The proposal was recognised as being soundly based in law but it was recognised that there would be strong opposition to it by the newspaper users who would strongly object to the use of import controls to increase the cost of home-produced newsprint."
When I was trying to find out what happened at that meeting, it was clear that Bowater at that time recognised that this was a way of preventing the demise or the destruction of the industry. It is incumbent on the Minister tonight to give us an answer on behalf of the Government and to put on record why the Government at the time in question did not respond in this area. Had they done so, there would have been an argument going on within the EEC and we would not have been confronted by the document tonight. The only reason why the Minister can come forward with it tonight is that Bowater is closed, and

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the domestic capacity that Bowater provided originally is no longer available to provide for the domestic market. That is why the Government are failing.
The report continues:
"Councillors Chrimes and Venables and the Chief Executive put the proposal to the Minister of State at the Department of Trade at a meeting in London on September 11, 1980, which was also attended by Mr. Barry Porter, MP"—
I assume that Bebington and Ellesmere Port is a constituency nearby—
"Mr. Andrew Pearce, EMP, and members of the Bowater Action Group. After a lengthy discussion the Minister undertook to examine the Council's proposals very carefully, and as a matter of urgency. On September 25 Councillor Venables and the Chief Executive met a senior official of the Department of Industry, who explained that the proposal had been carefully examined but that the Government were not prepared to press the EEC for a restriction of the newsprint quota or the imposition of duty notwithstanding the fact that mechanism existed for doing so. The Government were reluctant to pursue a scheme which sought to compel the UK publishers to bear increased costs."
The Minister can say that the Government have tried to do something for the British newsprint industry, but here in black and white is a report—with no political input—by officers of a local authority saying that the Government refused to intervene.
Mr. Spearing: Has my hon. Friend any information as to the price differential that the newspaper users would require as a percentage comparable to either the Scandinavian tariff or the one for North America? That would appear to be a germane and important point in the matter of the judgment which Her Majesty's Government have just taken.
Mr. Campbell-Savours: I cannot give my hon. Friend figures for the United Kingdom. I do not want to prolong the debate unnecessarily. In the debate on the Consolidated Fund Bill tomorrow night, I shall hope to show the differentials in Europe, where Governments have arranged for voluntary agreements to be sponsored between newsprint consumers and newsprint manufacturers, to ensure the retention of a domestic manufacturing newsprint industry in those countries.
Mr. Spearing: Is my hon. Friend telling the House that the sort of arrangement that was asked for from the Bebington Bowater committee—if I may call it that—is operated inside some of our partner member States in the EEC but that the Government are refusing to operate that sort of agreement in the United Kingdom?
Mr. Campbell-Savours: Not in that particular area. But a number of recommendations made by that committee apply within the European Community—if not that one, certainly others. Again. I shall be drawing the attention of the House to those matters tomorrow night.
I turn now to the level of the quota. I understand that the idea is to raise the ceiling from 1½million to 2½million tonnes. That is done under our GAIT obligations. It is also to supplement the domestic production deficiency. In other words, the gap between what we can produce and what we need is to be made up by imports which would not carry tariff.
According to the "Proposal for Council Regulation", in page 3, the United Kingdom is to take 40·28 per cent. of the new quota. I understand that that is 946,580 tonnes, if my calculator is correct, plus 60,000 tonnes in reserve, making a total of 1,006,580 tonnes that we can take duty-free under the quota. Before the introduction of this
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document, we had taken 39·43 per cent. of the 1·5 million tonnes EEC across-the-board quota—a total of 591,450 tonnes. Therefore, the increase in duty-free imports under the quota, if we take it up, is 415,550 tonnes.
What is the duty loss? That question needs to be answered. The explanatory memorandum, in the final sentence, which is in parentheses, states:
"The duty relief on the proposed UK share is estimated to be of the order of £23 million."
Assuming that £23 million is the relief on 1,007,000 tonnes, which includes the reserve, I estimate that the average duty per tonne must he £22.84. That means that the 415,550 tonnes represents a total loss to the Treasury of £9,491,162. I think that Opposition Members will ask: what could that loss of £9½million do for the industry?
The hon. Member for Bebington and Ellesmere Port made a crucial intervention. Indeed, I was worried, Mr. Deputy Speaker, that you might tell him that he had to sit down, because the more he spoke the more the drew attention to the truth—that the Government's offer was the wrong offer. That was how I understood the hon. Gentleman's intervention. Money was being asked for to help the cash flow, the general turnover, problems of the company. Some £3½million per year was being asked for.
Mr. Porter: It got it.
Mr. Campbell-Savours: If the hon. Gentleman says "No", I can refer him to the document produced by his district authority.
Mr. Porter: Too late.
Mr. Campbell-Savours: No, it is not. I assure the hon. Gentleman that from what I have heard in my discussions with his local authority—and I have informed him of this matter—there was no political input in the document. In conjunction with representatives and executives from Bowater, who could hardly be regarded as bastions of Labour support, the local authority produced an apolitical document in support of its case. Under "Aid sought by Bowaters", this is said:
"The Company in their discussions with the Government have asked for:-

(a)short term direct aid;

(b)minimum to long term volume/price protection;

(c)a reduction in the energy and timber costs so that these can be made comparable with the costs paid by foreign competitors;

(d)long term capital investment aid to achieve profitability so that the need for the above measures can be reduced."

Mr. Porter: It got it.
Mr. Campbell-Savours: As will be known, if it got it, the only one that it got on offer was the last one, and it was the wrong one, because without the other three it could not make a package. That is what happened.
The same authority produced another document in which attention was drawn to the findings of a group of economists at Cambridge university who estimated the loss to the nation of revenue that stems from paying unemployment benefit to those who lost jobs in Ellesmere Port—£19 million.
The more that one goes into the sordid affair of what has happened to the British newsprint industry, the more one has to realise that large amounts of money are circulating and that the Government have found themselves as yet quite unable to channel this money into the newsprint and paper and board industry nationally. If they had done so, and done it long ago, we would have

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much of the industry left intact today instead of having 14 mills close since 1 January this year, 51 machines closed down and 9,500 people losing their jobs due to the inaction and incompetence of that lot on the Conservative Benches.
11.15 pm
Mr. Barry Porter: Perhaps I may make a speech instead of interventions.
I am obliged to the hon. Member for Workington (Mr. Campbell-Savours) for his courtesy in indicating that he would be mentioning Ellesmere Port.He said "mention"; he devoted his whole speech to the place. I am fascinated that he got his information from where I know not. I should like to take his speech point by point.
Certainly, energy prices was one of the matters that Bowater mentioned. I concede at this stage—it is always better to concede bad points at the beginning of a speech—that I am not at all convinced either way about the energy price situation of British industry generally, or what the energy price situation of the British newsprint industry was, and certainly about that of Bowater when it decided to close.
One read in The Daily Telegraph a couple of weeks ago an apologia by my right hon. Friend the Minister in charge of these matters which was so complicated that I failed to understand it. Having listened to debates in the House on energy prices, I doubt whether any hon. Member really understands these matters and is prepared to say that our energy prices are worse than, better than or equal to those of our competitors. I do not know one way or the other. It seems to me that it is marginal either way, but I leave that to my hon. Friend the Minister to explain to the House. But whichever way it was, that was not a significant feature in the closure of Bowater in Ellesmere Port.
In my intervention, I have already indicated that it was my view that it was North American profits that caused Bowater to decide to close at Ellesmere Port. Those North American profits are related to the relative strength of the pound to the dollar. It was a very complicated matter. The whole thing was negotiated with the Newspaper Publishers Association some time ago, when, under the previous Administration, the pound was through the floor. Everyone thought that it was absolutely splendid at the time. This has all gone very well since, and there has been investment in North America and Bowater is doing extraordinarly well there.
As the hon. Member for Workington has said, this is not something that has happened over the last year or so. My hon. Friend the Member for Faversham (Mr. Moate), who has equal interest in the paper industry, has said the same thing. This has been going on since 1964. If my memory serves me right, at that time we were producing about 800,000 tonnes of newsprint and we were down, before the Bowater closure, to 350,000 tonnes. Therefore, this is not something that the present Government have created. If that is so, it cannot, in all conscience, be anything to do with the strength of the pound in relation to the dollar.
One might think of rivers and trees and where they are and how energy is produced, but I shall not weary the House with all that. We do not have a large number of trees or rivers. We are not capable of producing energy at the price at which some others can produce it, as it turns out.
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The House should be able to consider, without the sniggering that we hear from the Opposition Front Bench these days, the long-term future of newsprint. I exclude, of course, my hon. Friend the Member for Grantham (Mr. Hogg), who sniggers at most things. In the discussions I had during the Summer Recess with the managers of Bowater and others, only one significant remark was made. I asked about the strategic importance of newsprint in the future. One gentleman—it would be wrong of me to mention his name—said "What strategic importance?"
What long-term future is there for a high volume of newsprint? Earlier this week, we discussed the electronics industry and the way in which the equipment it produces will disseminate information. I urge hon. Members to think on that, to think on the number of provincial newspapers that are closing and on the probability of a number of daily newspapers closing. How much newsprint shall we need? That was the question that Bowater asked and upon which it took its decision.
It is not by accident that the number of customers for newsprint has fallen over the past 15 years. If one considers what will happen with television and the indications for electronic equipment, one can see where the future lies. Any retailer in the electronics trade will confirm that in spite of the recession people are buying video recorders. That is the type of equipment that will disseminate information. Items will not appear just once. People will be able to record them and see them again. The House should consider the future of the newsprint industry in that light.
My ever-vociferous friend from Workington referred to Bowater as a lame duck.
Mr. Campbell-Savours: I did not.
Mr. Porter: In that case I withdraw the remark. Someone described it thus, however. It was not a lame duck, given the appropriate investment. The hon. Member for Workington was mistaken in suggesting that the Government had not made the appropriate revenue commitment to the Bowater corporation. They made it a capital offer. But, equally, they made a £3·5 million revenue commitment via the Forestry Commission, the National Coal Board and the Central Electricity Generating Board which would have met Bowater's requirements.
I do not apologise for my next remark, which was made at a relatively private meeting. At the beginning of this affair, a senior person in Bowater told me "If we were losing only a million or two we would stand it." The Government offered it revenue support that would have left it losing "a million or two". The Government certainly would not offer it a straight subsidy for the £7 million it was losing in any one year.
Mr. Campbell-Savours: I shall send Bowater a copy of the hon. Member's speech tomorrow.
Mr. Porter: The hon. Gentleman may indeed. I do not think that it will like it much, and it is highly unlikely that I should be appointed parliamentary consultant to the Bowater corporation. The gentleman who said that to me knew that he said it and that he said it to me.
Mr. Douglas Hogg: Presumably in confidence.
Mr. Porter: Not at all. He never said so. But if Bowater could have stood losses of a million or two, it had that offer. I believe that it was totally surprised that the Government ever went as far as that, but they did.
I turn next to the suggestions by the Ellesmere Port and Neston borough council, which has been dominated by the Socialist Party for many years. The suggestion of the chief executive of the council about protocol 13 was put to the Minister. It was answered properly and sensibly, and the local authority accepted the explanation given. However, I ask my hon. Friend not so much about what is happening about protocol 13 but what happened to the other suggestion which came from the borough council that the Newspaper Publishers Association should take certain quotas of British-produced newsprint, which would not, so far as we could see, affect the cost to the association.
That suggestion was put in detail to the Department. I gather that it was probably turned down by the association rather than by the Government. I saw the details, and it seemed to me a sensible approach. It could well have done something to save our Ellesmere Port mill at that time. But the mill has gone, and in some way I feel that I am following a funeral. Hon. Members on both sides of the House made every effort they could to save the mill. We thought that it could have been saved. I felt, and still feel, that the Government had made almost every effort to save it, for very good reasons.
The one difficulty that I had, the one trouble that is still with me, is whether more pressure could have been put on the Newspaper Publishers Association in connection with that suggestion from the borough council—and here I pay tribute to the author of the suggestion, the chief executive of the council. I wish that there were more chief executives like him, especially in the borough of Workington.
It may be that the Minister does not have all the details. I have no doubt that the pincer movement from North America and Scandinavia will squeeze out not only British newsprint but, in the end, European newsprint as well. Whilst I, with some of my hon. Friends, may have failed to save the Ellesmere Port mill, there may well be a necessity for British newsprint to be saved, and, if not that, certainly the European newsprint has to be saved, because, whatever the diminution in the need for newsprint, some base for newsprint in Europe must be saved. I doubt whether we are going about it in the right way.
11.28 pm
Mr. Tebbit: As I suspected would happen, the debate has ranged reasonably wide, although I do not think wrongfully wide. To imply as much would question your judgment, Mr. Deputy Speaker, so I should not say so even if I thought it. But I think it only right that the various points raised should have been raised, and I shall do my best to deal with them.
My hon. Friend the Member for Faversham (Mr. Moate) put his finger on one of the most important points about this whole matter. There has been a decline in this industry over 10 years. The hon. Member for Workington (Mr. Campbell-Savours) was well aware of that. He made a point of it. Yet at times he seemed extraordinarily surprised by the fact that the industry was declining today. I find it hard to believe that everything can be explained by sterling changes or energy prices. After all, during those 10 years sterling has fluctuated wildly. I am sure that the hon. Member remembered the sterling crisis which forced the right hon. Member for Leeds, East (Mr. Healey)
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back from London airport when he was Chancellor of the Exchequer. That was when sterling was in a trough. It had its peaks. There have been variable parities for sterling, so it cannot be said that the fault is that of sterling.
Energy prices have varied widely over the 10 years. It cannot be that recent energy prices account for the problem. We have had Governments of different political complexions, so it cannot be that the fault is due to one Government. I suggest that it would be wiser to look for a common thread throughout those years which applies not only to the newsprint industry but to many other industries, including Fleet Street. That is perhaps one of the finest examples of this common thread.
The common and constant thread has been that labour costs have gone up far faster than those of our rivals while our productivity has gone up far more slowly than that of our rivals. It is sad that the efforts to which my hon. Friend the Member for Bebington and Ellesmere Port (Mr. Porter) referred—and he played a great part in bringing those concerned to see the Government to make their case—were not made until the fate of Bowater's mill at Ellesmere Port was virtually sealed, not by the events of a couple of months but by the events of years beforehand. Those efforts could have been made at any time in the last 10 years. It is superficial, glib and inadequate to suggest to the contrary. It may be that, apart from that, the mills of North America and Scandinavia have natural advantatges which we lack. They have the timber and in some cases they have ideal siting and fewer planning constraints—all sorts of things which make a great difference.
I say to my hon. Friend the Member for Faversham that I am not at all sure, if it came about that we had only a derisory newprint industry, that the North American and Scandinavian industries would be in a position artificially to push up prices. After all, they have had 75 per cent. of the market for some time. When people have that sort of share, they are in a position to push up prices pretty easily, particularly when they know that their competitor is owned by one of their number and is in a soft position over holding down prices.
The hon. Member for Workington made a characteristic speech. He suggested that the document had new policy implications when we had all agreed—except the hon. Gentleman—that it was merely a continuation of similar documents dealing with similar matters. He had some odd figures. He seemed to have the idea that there was some enormous change in the total quota for Europe. I can tell him that the tariff quota for 1980 was 2.8 million tonnes, of which the United Kingdom received an allocation of 910,000 tonnes. The proposal for 1981 is not wildly different. It does not increase the quota from 1.5 million tonnes to 2·5 million tonnes. I am afraid that the hon. Gentleman has got it wrong. He has got wrong a point of detail and a point of philosophy, too.
Clearly, what the hon. Gentleman wants, and it was to some extent implicit in what the right hon. Member for Lanarkshire, North (Mr. Smith) said, is to place what is, in effect, a tax upon newspapers. It is not a novel idea. It has been suggested by many people in the past, but it has' not received much support. The right hon. Gentleman wants to tax newspapers to protect the makers of newsprint. His bright suggestion for that was that we should increase the tariff. "Let us have a bigger and better tariff; let us have more of a tariff', he said. There is only one technical snag—the tariff would not come to the

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British Exchequer but would go to the European Community. It would not be a very effective ploy in any case. I do not think that the right hon. Gentleman got very far there.
My hon. Friend the Member for Bebington and Ellesmere Port asked: what is the future of demand for newsprint? That is a difficult question to answer, but when one looks at the closures of newspapers that have taken place in Britain, and when one looks at the problems of The Times—I understand that a mere £15 million or so has gone down the drain there in a very short time, yet the right hon. Gentleman wants to put a tax on The Times, just to increase the chances of the men in Fleet Street being put out of work—one realises that the newspaper industry in Britain is not in that good a shape to take extra taxes and to absorb more newsprint in the future. I am sure that my hon. Friend is right when he says that, for structural reasons, the industry is in decline. As I said, nobobdy could have done more than my hon. Friend has done to avoid the closure of that mill, but he himself raised questions about the long-term future of the industry.
My hon. Friend asked about the suggested quota by the NPA and whether the newspapers should have volunteered to buy newsprint at a higher price than they might otherwise have done. I can only say to my hon. Friend that these matters were put to the newspaper industry and that, not surprisingly, in view of the look of the balance sheets of most of Fleet Street, it felt that it could not volunteer to put up its costs beyond what it had been accustomed to paying in the past.
The other matter that came through almost everything that was said this evening was energy pricing. I think that this is one of the most interesting points that has been raised in the debate, and it could not have been raised on a better evening, in view of the business that is to follow. I say that because the right hon. Gentleman and others suggested "Let us get rid of the tax on heavy oil. That is a good idea. Let us perhaps reduce the price of gas." That was the implication of what he said. I ask the right hon. Gentleman to consider, with his hon. Friend the Member for Midlothian (Mr. Eadie), what would be the effect on the coal industry in this country if the other energy producers started to undercut it. What good would that do for the jobs of miners in the coal industry? I see that the hon. Member for Midlothian is eager to answer. I hope that he has a good answer.
Mr. Alex Eadie: The hon. Gentleman's history is not accurate. The reason for the introduction of the tax on oil had nothing to do with the miners. It was introduced by Selwyn Lloyd as a means of raising revenue for the Exchequer. Times change, and I know that the Chancellor of the Exchequer will not divulge what will be in his Budget, but perhaps circumstances will change. I hope that the hon. Gentleman is paying attention to the high productivity of the miners at this time. We have nothing to fear. The hon. Gentleman is raising a white elephant.
Mr. Tebbit: The hon. Gentleman says that he has nothing to fear, but does he want a price war to break out between oil, gas and coal? Does he want them to try to undercut? I am delighted, as the hon. Gentleman is, with the levels of productivity that are being reached, but I should be even more delighted if the price of coal were
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falling rather than increasing. It would be very dangerous to start price-cutting in the other energy areas for the benefit of the coal industry.
Mr. Eadie: The hon. Gentleman should talk to somebody who knows the facts.
Mr. Tebbit: Yes, and I am sticking to this, because I know it very well indeed, and so does the hon. Gentleman. He is very loyal to come to the aid of his friends, but it will not go down all that well in the coal mining districts that the Labour Party wants to start a price war to undercut coal. I know, as the hon. Member for Midlothian and his hon. Friends on the Labour Back Benches know, that if oil and gas become cheaper than coal there will be a flight away from coal. There could be nothing more stupid than to do that. I am astonished that it was even suggested.
Mr. Edwin Wainwright: Does not the Minister realise that other Governments are subsidising energy in their countries to ensure that energy-using industries produce cheaper manufactured goods of all types? When they are in competition with us, we are at a loss. Does the Minister have an answer to that?
Mr. Tebbit: The hon. Gentleman should have gone to Bali this week to have a chat with the OPEC Ministers. He should have told them that the British Labour Party has another new policy. To suggest that we should embark on a programme of subsidising all energy prices in a world that is desperately short of energy is nothing short of madness. The Americans have an economy that is in serious trouble, not least because they have failed to grapple with their problem of properly pricing energy. I am glad to be able to tell the House that my hon. Friend the Minister of State, Department of Trade in Brussels today has been raising support from other members of the Community for a concerted approach to the Americans on their policy of subsidised energy prices. It is bad for trade, for industries in Europe and for the world economy in the long run.
Mr. Frank R. White: Will the Minister assure the House that his hon. Friend will report to the House on the decisions that have been taken at Brussels, which will be of major importance to all sections of British industry?
Mr. Tebbit: My hon. Friend the Minister of State is happy to talk to the House about these matters whenever it is possible for him to do so. It does not depend on me to determine the allocation of time in this place. I shall bring what the hon. Gentleman has said to the notice of my right hon. Friend the Leader of the House and my hon. Friend the Minister of State.
Mr. Moate: If we had gone to Bali—many of us would have liked to do so—we might have stood a greater chance of getting some clearer facts than we are getting currently from many of our Ministers on the costs of energy to industry. We do not want energy to be subsidised for newsprint and other industries, but we want to be sure that we are not paying more than our European competitors.
Mr. Tebbit: I agree with my hon. Friend. The problem is that it is not easy to get at the facts. The paper and board sector working party formed a working group on energy prices. I understand that it hopes to report to the sector working party in January. That will be an interesting report. The CBI initiative does not seem to be producing any very clear facts.
Mr. Campbell-Savours rose—
Mr. Tebbit: There will be an NEDC meeting early next year. I think that it will sit on 7 January. The CBI survey is expected to form the basis of the discussion. Some agreed facts may emerge from that. I can assure the hon. Gentleman that there is no unwillingness to try to find the facts. However, to compare like with like in these matters is extremely difficult.
Mr. Campbell-Savours rose—
Mr. Tebbit: It is not too difficult to ascertain what is paid in Britain, but it is extremely difficult to ascertain what is paid abroad.
Mr. John Smith: Does not the hon. Gentleman agree that it is unsatisfactory in a matter of such importance to British industry that it is left to a working party organised by the CBI and by various interest groups to try to establish facts when the Department of Energy and the whole of Her Majesty's Government and their commercial and diplomatic services overseas should be able quickly to establish the facts? Why are not the Government, with all the power at their disposal, taking effective action to settle the argument once and for all?
Mr. Tebbit: The Government think that it is settled. Our industry is not paying excessive prices in comparison with most of its competitors. On the other hand, we are happy to accept evidence, if the CBI or others can bring it forward, to show whether our information is wrong. We are not arrogant about the matter. We are willing to consider the evidence if and when it is produced.
Mr. Campbell-Savours: Will the Minister acknowledge the comments of his hon. Friend the Member for New Forest (Mr. McNair-Wilson), who, in a debate on the steel industry today, informed the House that a company directly related to a company in Britain, with premises in Calais, is buying electricity as an industrial consumer at 30 per cent. less than it is paying in Britain? There is the example for which the hon. Gentleman asked. Will he follow up that example? If he wishes, I will table a parliamentary question asking how his investigations are progressing.
Mr. Tebbit: If the hon. Gentleman tables a question, I shall no doubt transfer it to the relevant Department. I can give him two pointers. First, one has to look more closely than the unit cost. One has to look at a number of terms—for example, the period of contract and many other matters. Secondly, I understand that the French are now producing 52 per cent. nuclear electricity. Perhaps the hon. Gentleman would tell some of his hon. Friends, and some of my hon. Friends, about the implications of that.
When asked about the Government's plans towards the industry, the answer is that we want to see a British newsprint industry that is competitive and able to meet the requirements of its customers. We cannot afford a newsprint industry that requires subsidisation or a tax on newspapers—that is what the suggestions about import duties amount to—in order to protect the industry.
We have ranged fairly widely in the debate. I hope that I have dealt with most of the matters that were raised, even if not to the entire satisfaction of the whole House.
Question put and agreed to.
Resolved,
That this House takes note of the draft proposal by the Commission of the European Communities for a Council Regulation opening, allocating and providing for the administration of a Community tariff quota for newsprint falling within the subheading 48.01 A of the Common Customs Tariff (1981) and extending this quota to include certain other types of paper, as set out in the Department of Trade's unnumbered Explanatory Memoranda dated 28th November 1980 and 11 th December 1980.

Coal Industry (Redundant Mineworkers and Concessionary Coal)
11.48 pm
The Under-Secretary of State for Energy (Mr. John Moore): I beg to move,
That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) (Amendment No. 3) Order 1980, which was laid before this House on 5 December, be approved.
The order gives effect to the provisions of section 7 of the Coal Industry Act 1980, which the House considered last summer. Its main provision is to extend the redundant mineworkers payments scheme to comparable grades of employee at cokeworks. The National Coal Board has, since 1978, been providing redundant cokeworkers with benefits equivalent to RMPS benefits, and the present order allows the Government to take over those obligations. As my right hon. Friend the Secretary of State told the House on Second Reading of the Coal Industry Act 1980, we think it right to do this in the present circumstances, where a contraction in the demand for coke may necessitate a reduction in the scale of cokeworks operations during the next few years.
Cokeworkers employed by the NCB who are made redundant at age 55 and over get about two-thirds of their previous pay for three years and then a weekly sum equivalent to unemployment benefit plus premature pension until they are 65. Those aged under 55 receive lump sum payments on the same basis as mineworkers. Under the order, the Government will meet the cost of these payments. The order also makes a small change in the Amendment No. 2 Order which came into effect in June; it changes the date laid down in that order by reference to which a man's weekly pay is calculated for the purpose of determining his entitlement to a lump sum. The date used will now normally be the date when notice of redundancy is given rather than the date of redundancy itself. The change will have negligible impact on the overall level of payments. The earlier procedure turned out to be very difficult to operate in practice.
The order also allows the Government to reimburse the costs of concessionary coal provided to redundant cokeworkers in the same way as to redundant mineworkers.
The NCB cannot insulate itself from the problem of declining markets for coke, but it is right for the Government to give every reasonable assistance in compensating the workers affected and assisting their redeployment.
The order also extends the period during which redundant mineworkers and cokeworkers may qualify for benefits for a further three years, to the end of the board's financial year 1983–84. This is in accord with the Coal Industry Act 1980, section 7, but in no way does it imply that the RMPS will end then. Indeed, as I made clear during the Committee stage of the Bill, we envisage bringing forward in 1983 further primary legislation to permit a further extension.
As the House will be aware, the redundant mineworkers payments scheme was first introduced by the Coal Industry Act 1967. At that time, it was for mineworkers made redundant in the period to March 1971. Since then, successive Administrations have in successive pieces of
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primary and secondary legislation extended the duration of the scheme and the benefits available; for example, the 1973 Coal Industry Act enabled some of the board's expenditure on concessionary coal to be reimbursed. The 1980 Act and order are simply the latest in this series.
I ask that the House approves the order so that expenditure on payments to cokeworkers can be reimbursed as of next Monday, the date of coming into operation. Provision for the payments is being made in the Supplementary Estimates, which were approved earlier this evening.
I commend the order to the House
11.52 pm
Mr. Alex Eadie: We welcome the extension of the redundant mineworkers payments scheme to cover redundant cokeworkers.
The House will be aware of the history of the schemes. The mineworkers scheme was introduced after the approval of Parliament, which the Minister hinted at, in July 1968. The cokeworkers scheme became effective on 1 January 1978 and offered comparable benefits. However, the 1978 scheme was entirely funded by National Smokeless Fuels Limited, which is a wholly owned subsidiary of the NCB, rather than the Government. As the Minister said, that is where some financial change is involved.
It is appropriate to comment on the NCB's external financial limits and the need for greater flexibility in its operation. The financial limits are usually fixed the autumn before the start of the financial year to which they relate. In the case of the NCB, that is the beginning of April.
The financial needs of industry can change suddenly through external and unforeseen events. Because of recession, sales of coal in 1980–81 will be about 6 million tonnes less than last year. In order to absorb the immediate impact of that abrupt change in the industry's markets, the NCB is putting about 5 million tonnes into stock and increasing its exports at prices somewhat below what the coal would have fetched if sold within the United Kingdom. In such circumstances, there should be a relaxation in the external finance limits. The alternatives are a cut in the industry's essential investment programme, on which its long-term future depends, or further price increases, which would result in a loss of business and miners' jobs. A direct consequence would be a larger and more expensive mineworkers' redundancy payments scheme.
We are told that about 500 persons at Evenwood, Bedwas and Monkton will be covered by the introduction of the payments scheme in the event of redundancy. Workers at Phurnacite and by-product plants will not be covered but they will be covered by the RCPS.
There is a proposal that Manvers cokeworks should close in February 1981 and that about 100 people will be covered by the redundant mineworkers payments scheme if the effective date is 26 December 1980. That leads to the question of Government grants to aid the coking coal industry. European Coal and Steel Community rules permit member Governments to pay grants towards the cost of coking coal production and towards the cost of stoking coke. The purpose is to provide financial support against third country coking coal in the medium term.

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During 1979–80, the National Coal Board was paid £8·5 million in grants for coking coal production and £12·9 million in coke stoking aid.
Earlier this year, the British Steel Corporation announced its intention to import all coking coal needs. After prolonged negotiations, the NCB and the BSC reached an agreement which will retain about 4·2 million tonnes for the British coal industry next year. That involves the NCB aligning its prices to world coking coal prices, in return for which it will get a reduction in the price of some of the steel that it buys. Nevertheless, there was a heavy cost to the National Coal Board in holding on to the business and the mineworkers' jobs that it represents.
The board argued the case with the Department of Energy and the Government for a considerable increase in coking coal production subsidy, which would have been permitted within ECSC rules. The board said that the claim was based on the tonnage which it would produce for blast furnace coke production. The Minister mentioned the contraction of the coke industry. However, the Department has refused the claim and has fixed the level at a figure which is much lower than the Community rules permit, although no extra Government expenditure is involved, since the deficit grant would be reduced by the sum involved.
We indict the Government for their senseless attitude. We accuse the Government of seeking to present the coal industry's financial results in an unfavourable light for senseless, doctrinaire reasons. If the Minister denies that, he has a responsibility to explain why his Department has shut its eyes to Community rules. We often hear about how he and his hon. Friends go to Europe to demand the maximum return from our entry into the Common Market. They say that they discuss with their European partners how we should benefit.
We indict the Government for not approaching the European problems vigorously, for not examining the rules and, to some extent, for hamstringing and misrepresenting the coal industry's financial position. As a result, the coal industry does not receive the assistance that it would receive if the Government stood their ground and applied the rules.
No retrospection is proposed in the order. There could be an explanation for that, and the Government should state it. I and my hon. Friends think that an administrative aspect is involved. The Minister shakes his head, but I leave that as a query. Although the order is important, a number of questions need to be answered. That is one, and the other questions that I have raised should also be answered by the Government. We seek an explanation from the Minister about the order and about the present position of the coal industry.
12.1 am
Mr. George Grant: The order will be welcomed by the National Coal Board, the National Union of Mineworkers and, most of all, the cokework operatives. While the order is welcome, the cokeworkers do not want redundancy payments. They want Job security. The policy of the NUM is to look upon any closures of cokeworks in the same light as it looks upon any colliery closures. We ask the Minister and the Government to consider, in the interest of the nation, the proposition that the United Kingdom Government are doing less towards coking
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production than any other country in the EEC. I repeat that the policy of the NUM is to look upon any coke plant closure in the same light as a colliery closure.
12.3 am
Mr. Edwin Wainwright: I simply wish to say a few words about the Manvers coking plant. In South Yorkshire we were disturbed that the Manvers coking plant was closed. The Government should have aided and kept the plant open so that there would have been no claim for redundancy payments. They should have kept it open at least until a new coking plant took its place. Some of the batteries could have been used for several years, and during that period a new coking plant could and should have been built. Governments have promised that in the past. But, of course, because of the recession and the reduced demand for steel, resulting in a reduced demand for coke, we were greatly affected. The Manvers coking plant episode is over. The men decided to accept redundancy payments.
There is a feeling that the order will not cover some workers because of the date of the agreed closure of the plant. The Minister has indicated that the order is merely a transfer, but I want an assurance put on the record for my hon. Friends and for the coking plant employees who could be affected. It is essential that they should he guaranteed that the redundancy payments provisions will be a continuation of the existing agreement.
I should be happy if we could get an increase in the redundancy payments. The district is in a disastrous state. There is already 16·2 per cent. unemployment, and those made redundant from the coking plant will have to sign on as unemployed. The resulting effects will be a terrible calamity for Mexborough, Wath-upon-Dearne and the surrounding districts.
Mr. Alec Woodall: And Bolton on Dearne.
Mr. Wainwright: My hon. Friend is correct. Many of those employed at the coking plant come from the Thurnscoe, Goldthorpe and Bolton area. The unemployment record in that area is also high, though the coking plants employees are included in the Mexborough employment exchange area and, therefore, in the 16·2 per cent. unemployment.
I understand that the NUM and the NCB are happy with the order. We want a debate on the mining industry in general. We are disturbed about its future, which should be bright, because the demand for coal is bound to increase as supplies of oil and gas eventually reduce. If I can have an assurance from the Minister that the coking plant employees who have been made redundant will be safeguarded regardless of the date in the order, I shall be happy.
12.8 am
Mr. Michael Welsh: It is vital that the date in the order is not strictly adhered to. It was stressed during the Committee stage of the Coal Industry Bill 1980 that we must help the coke industry.
If 22 December must be adhered to and no retrospection can he allowed, it will be embarrassing to a number of employees in the coke industry. May we have an assurance that the date is not a firm date and that, as we were promised in discussions on the Coal Industry Bill, retrospection will be possible?
12.9 am
Mr. Frank Haynes: Like my hon. Friends, I welcome these proposals. I compliment the Minister, because he has not had the close association with the mining industry that some of my hon. Friends have had for many years. The Minister is doing his best to go round the industry and look at the situation. The hon. Gentleman is trying to help in any way that he can. However, he is a Minister in a Government who support a reduction in public expenditure.
The proposals will increase public expenditure. It is in the Minister's interests to retain our coking plants. In the final analysis, if those coking plants are not retained there will be further pit closures. That would be unacceptable to those of us who represent mining communities and who have an association with the National Union of Mineworkers.
Together with my hon. Friends, I shall fight to the death for the industry. The further closure of coking plants will have a serious effect on the mining industry. There will be one hell of a fight both in this House and outside to stop such policies. I hope that the Minister means what he says in our private talks about the work that should be done in the interests of the mining industry, those who work in it and the nation's economy.
12.11 am
Mr. Allen McKay: I shall not go over ground that has already been covered. Today there was a steel debate. We heard about the closure of certain steelworks. Such closures affect the mining industry. A colliery close to me supplies a steelworks in Rotherham that is about to close.
I welcome the measure because it is long overdue. The people involved have been treated differently from others in the mining industry. The order will bring them into line. However, I should like the Minister to consider some other people—namely, those who work in the central workshops that are not attached to coking works or to collieries. The closure of such workshops must be attached to the closure of a colliery. If that is not so, they will not come under the same scheme. This is an anomaly, because they alone will be left out of the scheme.
The Minister said that the date involved would be that of giving notice and not the date of termination. Does that create a precendent for the redundancy payments scheme? It is important to know. In addition, we must know whether there is to be any alteration. Although I welcome the measure, I cannot welcome the closure of coking works when we are importing coking coal from abroad. It is a sorry indictment of the Government and of the system that we should close coal works when we are importing coking coal. There is something seriously wrong with a system that allows that to happen.
A person with £2,000 in the bank will be debarred from claiming supplementary benefit. That is sad. A person receiving redundancy pay will fight to keep less than £2,000 in the bank when he should be investing money for the future. According to Government policy, a pound for every pound is docked from unemployment pay if a person receives £35—plus in superannuation pay. That is contrary to the meaning of the redundancy scheme. It is a traumatic experience to be made redundant. A man should not be kicked in the teeth as well.
I have not received any answer to a question that I asked on the phasing out of the earnings-related supplement.
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Who will pay the earnings-related supplement? Will the men lose it, will the Government pay it, or are both to pay? I have not yet had an answer on this point, and it is very important for the finance of the board that we should get this straight.
12.15 am
Mr. John Moore: With the leave of the House, Mr. Deputy Speaker. I shall try to cover as many of the points as possible, within the ambit of the order, as briefly as I can at this time of night.
I would not wish, having been only briefly associated with coal, to see anything other than passion used in describing this great industry, so I in no way question or query the legitimate passion of the hon. Member for Midlothian (Mr. Eadie), who had a lot to do with the beginning of many of these benefits and has a legitimate reason to be proud of the kind of benefit structure that he helped to create when he was in the position that I now have the privilege to hold.
At the same time, I know that the hon. Member and I—and all those who are as interested as I am in coal—would like to have the opportunity for longer, fuller and more detailed debates on what most of us regard as our prime energy asset in Britain. The hon. Gentlemen touched on the external financing limit, the coal industry stocks and the position of coking coal grants through the European Coal and Steel Community arrangements. Those are areas that I would love to be able to go into tonight, but clearly they are not within the ambit of the legislation. But I take the points that the hon. Gentleman made and will draw the attention of my right hon. Friend the Leader of the House to the need for all of us, as soon as we come back after the Christmas Recess, to pursue these matters in a longer coal debate.
The hon. Member for Midlothian asked one specific question, which came up again later in the debate, concerning the dates in question, which are obviously of great importance to the industry. There is a little confusion here. It came first out of the question whether we could have retrospectivity. Let me make clear that all that the order is doing is effectively to allow the Government to pick up the benefit payments that are currently being paid by the board. To the extent that the board is currently paying the benefits, no change occurs in any way, whether the men are at Manvers cokeworks or anywhere else or whether they are tragically touched by redundancy. There is no change, effectively, to the men. The only change, effectively, is that the Government have a modest degree of flexibility to enable them to acquire that area of responsibility. That is what I thought we had agreed in discussions in Committee. To that extent, there is no real relevance to the discussion of the application of the order. It happens that we could have attached a retrospective character to the payments if within the Act we had established a retrospective feature. We did not do that, and we were not, until the Estimates were passed today, able to pay the board. The board clearly wants it as soon as possible. That is the effective background to Monday's date, no more and no less.
But there are points related to the nature and the timing of the redundancy payments—which come within the order and which are a second feature of the date in question—where there are clearly areas for further discussion and debate beyond this Chamber. It might, however, help if I put something on the record to indicate

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the reason within the order for the specific change in redundancy timing, because it is of administrative assistance to the board and to the men.
The Amendment No. 2 Order, which we passed in June, related to the lump sums given to the pre-redundancy weekly pay of redundants. To calculate this, reference is made to the average pay for the 12 weeks up to redundancy. The Employment Protection Act lump sum is calculated by using the average pay for the 12 weeks up to the time that notice is given. To have two different bases for calculation and to be uncertain right up to the date of redundancy as to what a man's lump sum will be is confusing and creates uncertainty for the man involved. The present order thus makes the change. There should be no effective difference to the men. There are only minimal changes, but these will make it administratively much better for both the men and the board to organise.
Other points were raised specifically by the hon. Member for Penistone (Mr. McKay), who referred to the central workshops. Workshops, stores and plant pool depots ancillary to either coal mines or coal works are already covered by the redundancy arrangements of the board, but not by the arrangements that we are discussing of the Government taking up the additional RMPS.
The hon. Members for Morpeth (Mr. Grant) and Dearne Valley (Mr. Wainwright) and other hon. Members welcomed the help but deplored the need. Indeed, all of us do so. Nobody would wish to see redundancies in any industry, certainly not in the cokeworking industry, let alone in coalmining. I accept and share the sentiments behind the comments that were made. At the same time, all that we are seeking to do within the ambit of this modest order is to absorb a little of the cost away from the board into the State to offset the difficulties through which the industry is going. To that extent, this is of modest assistance. I commend the order to the House.
Question put and agreed to.
Resolved,
That the draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) (Amendment No. 3) Order 1980, which was laid before this House on 5 December, be approved.

Railway Services (London)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
12.21 am
Mr. Fergus Montgomery: I am grateful for the opportunity to raise this matter on the Adjournment. I declare my interest, having recently been appointed as the parliamentary consultant to the Society of West End Theatre Managers..
Although the debate has beeen correctly recorded as being concerned with cuts in British Rail services, my purpose in raising the matter is to draw attention to the effect that the cuts will have in the West End of London, not only on theatres but on cinemas, bars, restaurants and all the other activities that go to make up the West End of London.
I understand that this morning there was a broadcast of an interview which I did last night in which it was said that I was attacking British Rail. That is not strictly true. My purpose in raising this subject is to try to persuade the railway authorities, especially in the Southern region, to draw back from their foolhardy and dangerous proposals. They should be asked to give more serious consideration to the inevitable effects of these cutbacks and to find alternatives to effect the savings that they need to make.
I do not necessarily feel that it is always right to increase fares or to cut back on services. British Rail should use a little imagination to bring back customers to the railways, to try to effect the economies that it wants to make. It could do that during off-peak times, about which it is particularly concerned.
I do not want to go into the nature of the cutbacks that have recently been announced by British Rail, because they have been fully documented in the press. However, they involve the early closure of certain stations in London and the suburbs, the closure of many of these stations on Sundays and the curtailment of many evening services from the stations which are to be left open.
I was recently given a lengthy memorandum by the Southern region in which details of the cuts were outlined. I was appalled at the naivety and what I can only describe as the typically bureaucratic blandness of the comments expressed in that document. It seems to express surprise over what is described as the
"rapid decline in economic activity and consumer spending which has been reflected in lower ticket sales."
The answer is that if railway fares go up too much, fewer people will use the railways.
I see some of my hon. Friends representing what I might call commuter areas which are experiencing tremendous difficulties at this time. I am sure that they are under great pressure from their constituents. I have to admit that British Rail is being cunning. Its aim is to cause as much distress as possible to the commuter in the hope that he will pass his aggravation on to his Member of Parliament, who in turn will put pressure on the Government to increase British Rail's subsidy. It is only fair that people should be aware of that aspect.
There are many reasons why consumer spending has declined. One of the points that should be considered by British Rail is that the service that it offers is often very poor. Commuter trains are frequently cancelled, causing enormous aggravation to the traveller. Catering facilities on long-distance trains are a joke. There is a monopoly.

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One has no option but to eat whatever is provided. One finds that trains are either virtually empty or so overcrowded that one cannot get a seat. The balance never seems to be right. The list is endless.
We have the strange situation that, by British Rail's very actions or failure to remedy many obvious faults, it suffers a decline in business and uses this inevitable decline as justification for making its services even worse. It is not for me to advise British Rail what it should do to make itself more effective, but we are entitled to remind the railway authorities that they should provide the country with a public service. All too often one detects in the public service an arrogance which would be totally untenable in the private sector.
The scream from British Rail is that it needs more and more money from the Government to put right its financial situation. Whilst I am in London, I live in a flat near Victoria station. Recently I have had some correspondence from British Rail through an organisation called Terra Survey by Catterall Sutcliffe Associates. The first letter I received was addressed to "Miss William F. Montgomery". I find this very strange, because it said that "Miss William F. Montgomery" is the main lessee of my flat. The second letter I received by recorded delivery, which must have cost British Rail or whoever does the survey for it a good deal of money. It was addressed to "Mrs. William F. Montgomery". I want to tell British Rail that I am a married man and not an unmarried lady. I am very curious about how much money British Rail has spent on this particular service when it is screaming out, on the other hand, for more and more money from the Government to be paid into its coffers.
Because British Rail is a monopoly, we get a take-it-or-leave-it attitude. To some extent this is inevitable with a monopoly, because we have no choice. We have to take it or leave it. By its own evidence, it is clear that British Rail's customers are leaving the service and turning to other means of transport. In most businesses, if there is a fall-off every effort is made to try to win back the customer.
The contrast between British Rail and the West End theatre managers could not be more stark. Earlier this year it became clear that the West End theatres were going through a very difficult time, partly because of their own failure to market themselves effectively but mainly due to circumstances beyond their control, because of the rapid decline in the number of tourists coming to this country. The British hotel business has priced itself out of the market, and many American tourists, who were the mainstay of the West End theatre, decided to avoid Britain because the costs of accommodation in our hotels had risen very substantially.
Instead of just saying "This is the end of the world" and closing the theatre doors, the Society of West End Theatre Managers decided that it must try to do something about it. It started its own marketing operation. Less than two weeks ago, we had the first of the marketing schemes to win back audiences. My right hon. Friend the Minister for the Arts opened the half-price ticket bureau in Leicester Square in London. I am delighted to say that this scheme has already proved a substantial success, because by the end of this week—in other words, in less than two weeks since the start of the scheme—more than 10,000 people have used the booth to buy tickets to go to West End
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theatres. Many of these are people who would admit that they would not have gone to the theatre had it not been for the booth offering tickets at a cut-price rate. Some of these people, who have never been to the theatre before, have been attracted by this imaginative scheme. We hope that they will continue to go to the theatre. The secret is that, once attracted to the West End theatre by half-price tickets, people become sufficiently interested to continue to go.
If the theatre had followed British Rail's example, it would have closed theatres, introduced shorter plays, closed the bars and taken all sorts of measures to cut back on the service rather than try to win back the paying customer. Instead, the theatre managers are trying to improve their service, to meet public demand. While the railway authorities are proposing to close stations on Sundays, which is scandalous because people often visit relatives or come into the West End on those days, the theatre managements are having discussions with the unions with a view to their opening on Sundays, an experiment that has been a great success on Broadway.
I have no doubt that in defending its attitude British Rail will argue that it has already tried all sorts of schemes. It will cite special summer fares, Saturday prices, the senior citizens £1 offer, the special special Christmas reductions" and the specially reduced rates for children. I contend, however, that British Rail has not tried hard enough. The senior citizens £1 scheme, which is a marvellous idea—it is great if elderly people are able to travel anywhere for £1—was one of British Rail's best-kept secrets. Apart from a few press releases, the only time one saw anything about it was if one happened to visit a railway station. Those not inclined to travel on trains are unlikely to visit a railway station. Therefore, old-age pensioners who did not visit stations knew nothing about that marvellous offer. It is not much use to pensioners if the message is not put across.
My right hon. Friend the Minister of Transport said during Question Time last week that British Rail's advertising budget is about £9·5 million. I begin to wonder whether, at that price, we taxpayers are getting value for money. British Rail must realise that to increase traffic on the trains it must expand the schemes that it is now operating in what I can only describe as a half-hearted way.
Why limit the senior citizens scheme to November? Why limit it to old-age pensioners? Why not introduce a flat-rate fare for anyone using the trains after 6 pm—after the peak period? Most of the trains moving into or out of London at that time are half empty anyway. Sir Freddie Laker operates a scheme of standby fares. It has been very popular. It is better to sell tickets at half price than to sell no tickets. That theme has been embraced by the West End theatres with great success. I do not see why British Rail could not do the same.
It would be a great pity if the Society of West End Theatre Managers were being thwarted in its attempts to revive the theatre in London by the backward thinking of British Rail. In developing their marketing strategy, the West End theatre managers have defined as the primary market target people who live within the Greater London area. British Rail admits that those who live within 20 miles of the centre of London will be most affected by the cutbacks that it is proposing.
Of course, people living in the Greater London area have alternatives—buses and tubes. But criticism of

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British Rail does not necessarily absolve London Transport from the same treatment. The sad fact is that public transport services for Londoners have declined to the point where they are close to total breakdown. Students to whom I have lectured this year and last have told me that their prime criticism is of the cost of transport in central London—the level of tube fares. They felt that what we pay for transport is far in excess of anything they pay, for example, in the United States.
What concerns me most is that with the closure of stations and the curtailment of so many services the traveller is being effectively denied any choice and thus becomes even more captive to the take-it-or-leave-it attitude which seems to be so prevalent at British Rail.
It is not easy to quantify the effect of these cuts on theatre-going. A pilot survey was conducted at the Prince of Wales theatre in the West End a year ago, and only 11 per cent. of those surveyed stated that they had come to the theatre by train. I feel that that figure was rather low. On Monday this week, the Society of West End Theatre Managers distributed a questionnaire to all the people in the queue at the Leicester Square ticket booth. This produced a figure of 60 per cent. who had travelled into London that day by train; 65 per cent. said that they usually used the train, and 75 per cent. of these said that they would be affected by the cutbacks. These figures seem rather high. It could well be that the accurate figure is somewhere between 11 per cent. and 65 per cent.
Whatever the exact figure may be, there is no doubt that theatre-going in the West End and other forms of entertainment will be seriously affected if British Rail goes ahead with these proposed cuts. The West End theatre has shown signs that it is able and willing to fight and win back its audience, and British Rail should not be allowed to undermine those efforts. We should be using all our energies to stress to the railway authorities that they have a duty, not only to the public but to the industries which depend on the railways for their customers, to provide a decent, efficient and reliable service and that such a service should not be limited to the peak hours but should fulfil all the needs of those wishing to travel for business or pleasure. I hope that my hon. and learned Friend the Parliamentary Secretary will be able to give us some hope that British Rail is at least thinking again before going ahead with the plans it has announced.
12.37 am
The Parliamentary Secretary to the Ministry of Transport (Mr. Kenneth Clarke): The constituency of my hon. Friend the Member for Altrincham and Sale (Mr. Montgomery) is quite a long way from London and the South-East, but, of course, I know that he has always been closely interested in the London theatre. I quite accept his case that theatre-goers and theatre management in London must be among those most concerned by recent newspaper reports about the closure of some stations in and around London.
The other Members in the Chamber are, more predictably, London Members, with an obvious interest in the subject. My hon. Friends the Members for City of London and Westminster, South (Mr. Brooke) and Chipping Barnet (Mr. Chapman) must have constituents who are affected, and I see my hon. Friend the Member for Chislehurst (Mr. Sims) in his place, as I am sure he will be again on Friday, when, I understand, he intends to raise a similar matter.
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I can understand the concern of theatre management. I was interested to hear the latest results of the survey that the Society of West End Theatre Managers carried out to find out how heavily customers of the West End theatre depend upon rail travel. The theatre managers have been carrying out such surveys for some time, and obviously an appreciable number of their customers are using the trains.
The cuts are a British Rail management responsibility. The recent cuts were not a decision of the Government. Nevertheless, I should say, in explanation of what British Rail is doing, that the cuts are by no means as severe or as draconian as come of the early press reports indicated. Some of the apparently well-informed leaks proved to be inaccurate.
I suggest that the effective reduction of services is not particularly severe. A 7.30 pm closure of 14 stations is proposed for weekdays—not including Blackfriars, which it was confidently predicted would be on the list. That is 14 stations only, out of 566 on Southern region as a whole. It is true that the list includes two London terminals—Cannon Street and Holborn Viaduct. At present they close at 10 pm. But they are very lightly used after 7.30 pm. I am told, for instance, that at Cannon Street there are only 14 departures after 7.30 pm, and on average there are only 10 passengers on each train. That station is 10 minutes' walk from London Bridge station, which will remain open as at present.
A similar pattern is repeated at Holborn Viaduct, which is about seven minutes' walking distance from Blackfriars station, which will remain open in the evenings. No doubt it is convenient to the limited number of passengers who travel out of Cannon Street and Holborn Viaduct that these stations should remain open, but they are small in number. I shall return in a moment to the point that someone has to pay for the cost of those trains late at night out of Holborn Viaduct and Cannon Street—and it is not the few passengers travelling upon them.
Those are the closures and restrictions proposed. What they amount to is that Charing Cross, London Bridge and Blackfriars will remain open as usual and the weekday and Saturday arrangements for most of Southern region and the London terminals will remain unchanged. I begin by trying to reassure the House that the proposed closures are not as drastic as might have been first supposed from the comments made.
The reason for these reductions being made at all is that British Rail, like any other business, has to attempt to match the supply of its trains and services to the level of passenger demand. There has been a fall in patronage this last year and there are a number of services in and around London which are very lightly used. In so far as British Rail fails to match supply to demand, it incurs unneccessary costs which it must pass on to other passengers or to the taxpayers. Recently we invited the Monopolies and Mergers Commission to investigate the standard of services provided by British Rail to London and the South-East to see what could be done to improve efficiency, reduce costs and improve performance for the majority of passengers. A very valuable report was produced, which made a large number of recommendations, which British Rail assures me it proposes to act upon and which, I hope, will lead to some improvement in the present rather inadequate level of service to commuter passengers.

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One of the recommendations of the Monopolies and Mergers Commission was that British Rail should do something about the fact that in London and the South-East it was operating excess capacity in a wasteful way in services around but outside the peak. I believe that some adaptation of the level of services to the genuine level of passenger need and demand is in the interests of all passengers who use this service during the day.
If British Rail runs empty or half-empty trains and incurs unnecessary costs, it has to hand those costs on, and we all know that there are already difficulties involved with higher fares and high subsidies to London and the South-Eastern commuter services. The closure of lightly used stations and ceasing to run empty or near-empty trains release resources which we hope can be used to try to improve matters for the passengers who have to use the trains at busy times of the day.
I trust—and British Rail will confirm this—that British Rail not only wishes to cut services to match demand and therefore avoid wasteful expenditure but makes the attempt to win additional traffic, which is the other side of the coin, if it is to make better use of presently under-used facilities.
My hon. Friend criticised the ability of British Rail to market its operations and win fresh traffic. I am sure that it will note what he has said with concern and interest. I certainly agree that it is spending enough money on publicity and ought to be getting some value out of it.
It has to be said that British Rail has introduced a wide range of concessionary cards of one sort or another and is making efforts to market them. For instance, I am told that the £1 Awayday ticket available to holders of senior citizens railcards, offered in November, led to the sale of about 70,000 additional railcards of that type to customers who, I assume, British Railways hopes will be won to rail travel at other times of the year. Theatregoers are obviously a category of people who ought to be won to the train, if that can be done, and who ought to have some facilities offered to them. They can already use Awayday returns, which give travel at little more than half price, and they can also take advantage of any railcard scheme for which their age, family or any other distinctive feature of their lives makes them eligible.
I am told that in some parts of the country British Rail runs local promotions for particular theatre shows, and I am sure that it would be interested in taking up some of the suggestions made by my hon. Friend and in exploring any schemes put to it which might have the eventual effect of increasing its net revenue.
Having given that explanation of what British Rail is doing now, and having touched on matters that it might resort to in order to increase traffic on its services in London and the South-East, I have to confirm again that these proposals are not ones over which Ministers have any power. Ministers do not determine the timetabling of trains. We do not have any involvement in the day-to-day management of the railways, and we have to stand behind and support the judgment of the railways when they make management decisions that are aimed at improving their present somewhat unfortunate financial predicament.
I should make it clear, therefore, that British Rail has taken these steps to reduce costs, which is in line with the Government's direction to British Rail, and I understand that similar proposals for other regions will be forthcoming
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from British Rail in due course. All over the country, if steps are taken to match resources to genuine passenger need and to maximise the utilisation of resources at times of peak demand, when most people want to make use of the trains, I think that that will be to the benefit of the travelling public as a whole.
I should like now to touch on a matter to which my hon. Friend referred—although he supported the Government on this—which is the suggestion that has appeared in connection with these cuts that the problem could be solved if the Government were more generous with taxpayers' money and gave more finance to British Rail. It cannot be repeated too often that we have reached the stage where that can no longer be the simple answer to all the problems of British Rail. Management steps have to be taken. There has to be a response from the work force in British Rail to get better value for the money that is being given and to improve the efficiency and performance of the system.
When one looks at the financial position of British Rail, one sees that the Government have been comparatively generous to this industry in helping it to cope with the present financial pressures upon it. When one looks at the general economic state of the country and considers the financial background against which the Government have had to take decisions about public expenditure, one sees that British Rail has come out reasonably well. The main restraint upon British Rail is the external finance limit, within which British Rail is having difficulty in living. Last year there was a wage settlement of 20 per cent., with some productivity elements, which, obviously, British Rail hoped could be accommodated within its EFL for that year. In the event, the performance of the business did not enable British Rail to afford that wage settlement and it had to come to the Government to seek an enlargement of the EFL.
To some extent, the difficulties of British Rail have been caused by the recession and the falling traffic in steel and coal. The Government took the view that it would be wrong for passengers in London and the South-East, Cheshire or anywhere else to pay the cost of these difficulties in the freight business, caused by the recession. Therefore, we have shown flexibility and we have increased the EFL of British Rail by £40 million to £790 million in the present year and to £920 million for the next financial year. It is a difficult target for British Rail but not an impossible one, and it is not an insubstantial amount of money, most of it, in effect, being paid for by the taxpayer.
A sum of £2 million a day is to be expended by the taxpayer on the railways next year. That is £15 per head for every man, woman and child in the country, more or less, and that, I suggest, is not an insubstantial EFL. It is not good enough to challenge it by making comparisons with European countries, many of which regard the level of support that they give the railways as something akin to a national disgrace. Our railways are slightly more successful in earning some resources from revenue, but other countries with stronger economies might be able to afford more. We are affording a great deal.
So far as the passenger service is concerned, we finance that through what is known as the passenger service obligation, and again we have responded to the needs of the passengers, and, therefore, to British Rail. Only last week the PSO was raised by £23 million, to a total of £678 million for 1981. That recognises the difficult trading

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conditions. It is remarkable that the Government have been able to increase that amount, admittedly with no overall increase in resources available to British Rail, at a time of financial stringency.
Investment is often mentioned in connection with services in London and the South-East. We have not cut the investment ceiling of British Rail" despite the present financial cirumstances. It has been maintained at its real value as set by the last Government. Each year £325 million, at current prices, is available for British Rail to invest, and it is investing heavily. There is no bias against investment in London and South-Eastern services, and the Monopolies and Mergers Commission found that 25 per cent. of investment in British Rail was taking place in London and the South-East.
I could give the House a list of improvements taking place in the commuter service within the investment ceiling. The list includes the London Bridge resignalling, the electrification of the Great Northern suburban services, the electrification of the Bedford—St. Pancras services, the Victoria resignalling and track modernisation, the
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resignalling and track modernisation of the London-Brighton line, a rolling programme for the construction of 220 new electric multiple units each year and a programme for refurbishing the existing EMU fleet by the mid–1990s.
All that is being invested by British Rail within the constraints of the investment ceiling that we are operating. We would like to do better, but the railways are not starved of money now. They need to put their own house in order and respond by improving their efficiency and productivity and meeting the needs of their customers in London, the South-East and elsewhere.
I appreciate the concern of everyone in London, not least theatregoers and theatre management, which is struggling with its financial problems. As my hon. Friend said about the proposals for London and the South-Eastern services—
The Question having been proposed after Ten o'clock on Tuesday evening and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at ten minutes to One o'clock.

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

Royal Assent
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Act:
Anguilla Act.

Liquefaction Plant: NCB Proposal
The Earl of Lauderdale: 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 consider that indigenous United Kingdom coal prices are yet low enough (and likely to remain so) relative to those of crude oil to make economically feasible the National Coal Board's proposal to build a £50–65 million pilot liquefaction plant for conversion of coal to oil at Point of Ayr colliery in Wales; and whether they are willing to accede to the National Coal Board's request for a state share in the investment.
The Minister of State, Department of Employment (The Earl of Gowrie): My Lords, on the basis of current indigenous coal prices, synthetic oil produced from United Kingdom coal would not be competitive with natural oil. The coal/oil price relativity is, however, only one of many factors relevant to our consideration of the National Coal Board's request for financial assistance.
The Earl of Lauderdale: My Lords, while thanking my noble friend for that Answer, may I ask him whether the Coal Board have given any forecast of likely return on the capital to be invested?
The Earl of Gowrie: My Lords, I do not think I have that information, but I will see if I can extract it from the department and write to my noble friend.
Lord Elwyn-Jones: My Lords, is not the conversion of coal to oil of very great importance for the future sources of power and energy in this country, and should it not be encouraged rather than discouraged?
The Earl of Gowrie: My Lords, I think the noble and learned Lord misinterprets me. I indeed think it should be encouraged, and for that reason the Government are considering a pilot project in this field. But the terms of the original Question indicate that it is not competitive at the moment.
Lord Elwyn-Jones: My Lords, if I may say so, I was not criticising the Minister but the questioner.
The Earl of Lauderdale: My Lords, as the questioner, may I ask my noble friend whether he is aware that the Coal Board have got a very good gassification technology development and this might well be to the advantage of the conservation of energy? But are the Government satisfied that the direct coal to oil route is the proper one at the present time, as against the possibility of using coal to fire refineries, thereby saving the heavy fuel oil for distillation to a higher grade fuel?
The Earl of Gowrie: My Lords, I think my noble friend has a point. What the Government have to weigh, obviously, are various plural systems of energy generation, and what may be inconceivable or expensive at this moment might rapidly become conceivable and cheap in the future.
Lord Davies of Leek: My Lords, is the noble Earl aware that the accountancy that we apply to a company we cannot apply to a nation? Secondly, is he aware that at the end of the war there were then nine Fischer-Trops plants working commercially, one of which was in Manchuria and the rest of which were mostly in Germany producing one-third of all the automotive and aviation spirit that Germany needed during the war? To cast aside this study by the Massachusetts Institute of Technology in an offhand manner is wrong at this moment when the world needs as much energy as it can get.
The Earl of Gowrie: My Lords, I am most impressed, and I am sure the House is, by the noble Lord's expertise. I am not throwing it back in his face. We are not passing up any studies whatsoever.
The Earl of Lauderdale: My Lords, can my noble friend give the further information whether British Petroleum, as a Government controlled company who have important petrochemical plants in their work, have also been brought into this project, or are being considered as possible associates in it?
The Earl of Gowrie: My Lords, my understanding is that the Government are in consultation with the National Coal Board on this issue, not with British Petroleum. If I am wrong I will let my noble friend know.
Lord Taylor of Blackburn: My Lords, may I ask the noble Earl the Minister when we are going to get a report on this matter?
The Earl of Gowrie: My Lords, as I said in my previous answers, we are studying the issue very carefully and we will try to let the House know what has resulted from the study as soon as ever we can.

Housing Finance
2.41 p.m.
Lord Hylton: 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 ask the Central Policy Review staff to examine and report on matters affecting personal housing finance for both renting and house-purchase.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, no. Now is not the time for another major review. Only three years ago these issues were considered very thoroughly in the Green Paper Housing Policy: a Consultative Document. Indeed, I have with me a little of the conclusions at that time and I thought it might be helpful to show them to your Lordships.
Lord Hylton: My Lords, I thank my noble friend for his reply. Is it not a fact that over the last 10 years successive Governments have avoided rationalising personal housing finance; that this has very considerable implications both for income support for families with children and for pensions policy, and that all these matters tie in very closely with the whole question of means testing? Can we not have some further progress?
Lord Bellwin: My Lords, the whole study of housing finance is in fact an ongoing process. It is something that never seems to stop. There are so many factors each year, almost each month, that concern housing finance. I do assure my noble friend that it is not a subject where one can say, "We have sorted this one out for the moment and we can leave it". It just never stops.
Baroness Birk: My Lords, if the Minister is referring to the cut in housing expenditure and the burden it is creating, it certainly is not stopping under the Tories. I should like to ask two questions. In view of the steep council house rent rises announced yesterday, and the proposal to reduce housing expenditure from £4,700 million in 1980–81 to £2,790 million in 1983–84, can the Minister say what is the Government's future policy, or if they are considering one, on subsidies to council tenants? Secondly, does not the Minister feel that the rent increases and the consequential reduction in subsidies have gravely enlarged the inequality between the public and private sectors as tax relief on mortgages is running currently at roughly £1·5 billion?
Lord Bellwin: My Lords, I should have thought that those questions roamed very far from the original Question, but I entirely understand that the noble Baroness would not want to pass up an opportunity to make an observation on this matter and I of course respect that. I would only say, on the question of fairness between the sectors, that owner-occupiers' mortgage outgoings, and hence their tax relief, depend on the price they actually paid for their own houses, whereas local authority subsidies are based on historic costs and are pooled. So, there is no unambiguous way of comparing the two, and I am sure that the noble Baroness would not want me to start to dissertate on the record of what Labour did as regards housing subsidies and records.
Baroness Birk: My Lords, all I wish to ask the noble Lord is, first, whether he agrees that the question is not irrelevant but is absolutely "bang on" as regards the original Question asked by the noble Lord, Lord Hylton? Secondly, will he accept that there is a considerable inequality of sacrifice—let me put it that way—between the tenants of the public sector and owner-occupiers in the private sector?
Lord Bellwin: My Lords, for the reasons that I have just given, the answer is, "No".
Lord Hylton: My Lords, can I persuade my noble friend that it might be useful to compare the methods used in other countries to resolve the difficulties of personal housing finance, given that I think there is fairly widespread acceptance that our own public subsidy system is shot through with anomalies?
Lord Bellwin: My Lords, one would have to look at the whole of the way in which other countries manage their housing affairs and that is something which, as I have said previously, we look at all of the time. There are some examples, such as West Germany, where the extent of private sector accommodation is far, far greater than exists in this country. Indeed, perhaps if we had followed some of the same kind of policies as they have followed to encourage that situation, we should be in the same position—and a happy position it would be. So, I would say to my noble friend that, yes, there is of course scope to look at this whole area and, indeed, we must look at it the whole of the time and I assure him that we shall do so.
Lord Shinwell: My Lords, does the Minister realise that in all the Government's so-called housing schemes and legislation there has been no concern whatever for the financial position of tenants in the private sector? As a result, rents have soared to a very high level, creating extreme financial difficulties for those in the private sector. When will the Government do something about it? Is the Minister aware that he is one of the worst villains where this matter is concerned?
Lord Bellwin: My Lords, I suppose that I shall have to become used to being called a villain along with others and it really does not trouble me too much. However, what I must be concerned about is that I try to ensure that we do that which we see as right and best in the interests of everyone concerned. Having said that, I entirely accept that private tenants do not get the same form of financial support as owner-occupiers or public tenants, but substantial rent allowances are available to help meet private tenants' housing costs and, in the financial year ending March 1980, £94 million was made available in rent allowances.
Lord Shinwell: My Lords, is the Minister aware that that answer demonstrates that my impression of him is correct?—he is the worst villain in the piece!
Lord Oram: My Lords, will the Minister have in mind that there is another category of housing not mentioned in the Question on the Order Paper or, indeed, in any of the supplementary questions—namely, co-operative housing? Will the Minister

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ensure that, in the continuing studies of housing finance to which he referred, housing co-operatives will have their due consideration particularly in view of the fact—and I am reverting to the supplementary question by the noble Lord, Lord Hylton—that co-operative housing schemes are a major sector of housing in other countries and ought to be in this country?
Lord Bellwin: My Lords, co-operative housing certainly has a part to play and I have always felt that it was one of the forms that we should follow in housing. So I take the point made by the noble Lord without question.

Exports to Finland
2.49 p.m.
Lord Auckland: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what proposals they have to increase the volume of exports from the United Kingdom to Finland.
Lord Trefgarne: My Lords, conscious of the growing importance of the West European market which now takes virtually 60 per cent. of our exports, the Department of Trade has recently set up an Exports to Europe branch to promote our exports to Western Europe, including Finland. The branch will operate on an initiative basis by seeking out export opportunities and bringing them to the attention of prospective United Kingdom suppliers. It is not intended to replace, but rather to complement the BOTB's well-established range of export services given in response to particular inquiries.
Lord Auckland: My Lords, I should like to thank my noble friend for that satisfactory Answer, and perhaps I may ask him two supplementary questions. First, will he do what he can to persuade his department to encourage more British business people to visit Finland?—which is one of the few countries where we have a trade balance deficit and where enormous opportunities prevail in a very friendly country. Secondly, can there not be a repetition of the very successful "Britain in Finland Year", which was instigated 11 years ago and which considerably increased our export potential? Thirdly, will he do ail he can to publicise the fact that Finland is one of our closest allies?
Lord Trefgarne: My Lords, I wholeheartedly agree with the first point which my noble friend made about visits to Finland. It is certainly the case that, in our opinion, British businessmen do not fully appreciate the opportunities that are available there, and we hope that they will visit Finland more frequently, when perhaps they will become aware of the very considerable opportunities that are open to them in that country. As for a "Britain in Finland Year", that is an excellent idea which I shall ensure is considered at the appropriate level. It is, of course, the case that Finland is a most important ally, in both commercial and political ways.
Lord Goronwy-Roberts: My Lords, although entirely agreeing with what the noble Lord said towards the end of his answer just now, in addition to the highly commendable ad hoc arrangements which he and the questioner have indicated exist between us and Finland, may I ask whether there is anything between us and Finland analogous to the Round Table arrangements which we have with certain Eastern European countries? If not, or if the noble Lord without notice is not able to answer that particular question, which I admit is a specific one, could he mention the possibility to his right honourable friends the Foreign Secretary and the Secretary of State for Trade?
Lord Trefgarne: My Lords, I do not think that there is an arrangement such as the noble Lord describes as exists with certain other countries. Of course, Finland is a member of EFTA, which does not apply in the other case, and the European Community has a special relationship with EFTA, as the noble Lord will know. However, I shall certainly bear in mind what the noble Lord says and ensure that it is considered at an appropriate level.

Japan/UK Trade: Delays at Ports of Entry
2.53 p.m.
Lord Orr-Ewing: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what discussions they have had with the Japanese Government about delays imposed at Japanese ports of entry against United Kingdom food and other imports.
Lord Trefgarne: My Lords, no recent cases have been drawn to the attention of the Government. The Department of Trade is always ready to examine specific problems and take them up with the Japanese authorities as appropriate.
Lord Orr-Ewing: My Lords, is it not true that the imbalance of trade between this country and Japan is very great indeed, particularly as a result of the heavy imports of cars from that country? Will my noble friend not consider further efforts?—because many of our struggling food, confectionery and other manufacturers meet difficulties and delays with the Japanese customs over petty points, and it is important that our exports to that country should be increased in order to offset the imbalance of trade.
Lord Trefgarne: My Lords, my noble friend is quite right in what he says. There is an imbalance of trade with Japan which so far this year has amounted to nearly £1,000 million. There are tariff barriers in respect of whisky and confectionery and, indeed, certain other products, as my noble friend said; and a number of non-tariff barriers which cause us certain concern—for example, on standards relating to pharmaceuticals. As my noble friend also said, the trade imbalance is, in the main, created by cars and consumer electronics.

Business of the House
Lord Denham: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m., my noble friend Lord Bellwin will repeat a Statement being made in another place on rate support grant.
My right honourable friend the Secretary of State for Wales is also making a Statement in another place on housing and rate support grant in Wales. It has been agreed through the usual channels that this Statement will not be repeated here, but, with the leave of the House, I shall arrange for the Statement to be circulated in the Official Report.

Licensing Amendment (Off-Licences) Bill [H.L.]
Lord Inglewood: My Lords, I beg to introduce a Bill to make provision with respect to the sale of intoxicating liquor in off-licenced premises; to attach conditions to the grant or renewal of certain justices' off-licences; to prohibit the employment of persons under 18 where intoxicating liquor is sold; and for connected purposes. My Lords, I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Inglewood.)
On Question, Bill read 1a, and to be printed.

Wildlife and Countryside Bill [H.L.]
2.55 p.m.
Lord Bellwin: My Lords, I beg to move that this Bill be now read a second time. I believe that it is something of a break with tradition for the Government to introduce legislation of this kind on subjects which have been well cared for in the past by Private Member's Bills. The cause of nature conservation has been well-served in the past, by the efforts of voluntary organisations and their parliamentary supporters, and by the willing co-operation of landowners and farmers. We intend that the Bill should promote and assist such activities, not replace them by a plethora of controls on countryside activities.
In developing proposals for the Bill, my right honourable friend the Secretary of State for the Environment has, of course, had regard to the social and economic needs of those who live in the country, and this concern is reflected at appropriate places in the Bill. Of course, there must be compromises in the Bill. They are possible and in no way weaken our objectives. It will make wide-ranging improvements to the law on nature conservation and the countryside.
The stimulus for bringing the Bill forward at this particular time is the European Community Directive on the Conservation of Wild Birds, on which member states are required to legislate by early 1981. However, the Bill also recognises the awakening awareness, both nationally and internationally, of the need for conservation of our wildlife resources, as reflected in the Berne Convention on the Conservation of European Wildlife and Natural Habitats, and the Bonn Con-
984
vention on the protection of Migratory Species, to which the United Kingdom is a signatory.
May I now turn to Part I of the Bill. Extensive modifications will be made to the law on the protection of wild birds. Some amendments to the law are necessary in order to comply with the European Community Directive on the conservation of wild birds, and the Bill accordingly includes provisions relating to killing or disturbing wild birds, keeping them in captivity or selling them, dead or alive, and egg-collecting. Our main concern is not the amateur bird-watcher or egg collector, although, of course, egg collecting has largely been illegal since 1954, but those who make a profit from excessive exploitation of wild creatures, or kill them unnecessarily or without due care. The Bill includes provision to allow activities such as falconry, aviculture and taxidermy to continue without endangering the natural resources on which they depend.
While on the subject of birds, I should like to give an assurance about the licensing provisions, under which those who make their living from the land will be authorised to kill pests. The impression seems to have been given in some places that general licences will allow anyone to kill creatures of the species named on the licence at any time. This is misleading. A general licence will be issued in circumstances where it is known in advance that a group of people will need it. The licence will be limited to that group of people and will be specific as to the species to be killed, the period of time, the area of the country, and the purpose and method of killing for which it is valid.
In those cases where a general need is not foreseen, licences will be issued to individuals. It is recognised that destruction of wildlife is not always the best way to prevent damage, and the various Government departments concerned have conferred with the advisory bodies to ensure that the proper balance is struck. Licences will be issued in accordance with policies which take account of the extent of the damage caused, the conservation status of the species involved and the availability of alternative methods of preventing the damage.
I know that the new proposals in relation to bird sanctuaries have aroused considerable interest. I should like to stress that existing sanctuaries will not be affected, but new, more flexible, arrangements should make it possible to establish new areas of protection, which could not be established at all under the current provisions. The Bill provides for sporting and other activities to be allowed in parts of these areas, or at certain times of the year, as long as these activities do not conflict with the purpose for which the area has been proposed. For example, an area might be established to protect the breeding site of a rare summer visiting species, without the need to prohibit shooting in the winter months of other plentiful species.
The scope of the Conservation of Wild Creatures and Wild Plants Act 1975 will be extended, much along the lines envisaged by my noble friend Lord Skelmersdale in the amendment Bill which he withdrew from the House in June last year, to enable protection to be afforded to rare creatures before they are in immediate danger of extinction and possibly beyond help. The list of protected creatures and plants has

985
been extended to take account of Lord Skelmersdale's proposals, of advice from the Nature Conservancy Council and of the requirements of the Convention on the Conservation of European Wildlife and Natural Habitats. The NCC has recommended that the otter in Scotland should be protected throughout Great Britain, and that is reflected in the Bill.
I now turn to the arrangements in the Bill by which the Government are required to seek expert advice on wildlife matters. My right honourable friend the Secretary of State for the Environment has decided to transfer to the Nature Conservancy Council, who are the Government's statutory advisers on nature conservation matters, the function of providing him with scientific advice on animals under the Endangered Species (Import and Export) Act. My right honourable friend is very conscious of the excellent work performed by the Scientific Authority for Animals since the passing of the Act, under its chairman Dr. Michael Brambell, and I am pleased to be able to announce that the Nature Conservancy Council intends to constitute a broadly similar committee, under the same chairman, to enable it to carry out this function.
The Advisory Committee for the Protection of Birds are at present constituted to advise the Government on matters related to the Protection of Birds Acts. If Parliament accepts the amendments to the Acts contained in Clause 21 of the Bill before you, it is our intention to appoint the Nature Conservancy Council to be the Government's statutory advisers on birds, under broadly similar arrangements to those applying to the Scientific Authority for Animals. The arrangement will ensure that appropriate representation is included to cover any interests which are particular to Scotland or to Wales.
In Part II of the Bill, the major innovation will be a requirement for owners or occupiers of the most important areas of special scientific interest to notify the Nature Conservancy Council before they carry out operations which might destroy the scientific value of those areas, and to delay those operations for up to one year while the Nature Conservancy Council seeks agreement with the owners to protect the area. At present, operations outside the development control planning system might destroy such areas without any warning. The new measures will include a right for anyone whose interests are affected to object, and for there to be a public inquiry. Anyone whose operations were delayed for more than three months as a result of an order applying the new measures would be entitled to compensation. I believe that this simple notification scheme will give voluntary arrangements a fair chance to work.
We already have legislation to protect agriculture and forestry against the injurious effects of imported alien wildlife. The Bill will extend this protection for the benefit of our native wildlife. Introduction to the wild of exotic species of animals and plants, which might upset the balance of nature and harm our native species, will be prohibited, except under licence.
The desirability of restraining the use of certain indiscriminate or cruel methods of killing wild animals has long been accepted. The use of poisons and spring traps, for example, is already strictly controlled. The Bill will introduce new controls on other methods,
986
including a total ban on the use of self-locking snares. Our primary aim has been to prevent unnecessary large-scale destruction of wildlife, but we have also taken into account our treaty obligations and public concern that some methods of killing are unnecessarily cruel. However, we have not proposed a total ban on all types of snare, as many people have suggested we should, because in some conditions there is no equally effective, more humane, alternative way of controlling pests. The Bill will not seek to prevent the use of measures necessary to control pests, but it should encourage the responsible use of such measures.
There have been doubts about the extent to which the removal of limestone from limestone pavements is subject to development control. We are planning to remove these doubts. Limestone pavements which cover no more than 5,000 acres or so in England and Wales possess features of great natural beauty and scientific interest, botanic and geological. They have been subject to despoliation, principally to provide rock for garden rockeries. Now county planning authorities and the Secretary of State will be empowered to make orders prohibiting the removal or disturbance of the limestone in areas which the Nature Conservancy Council have informed the local authorities are limestone pavements. Removal will be allowed if planning permission has been granted, or, where the limestone is needed for agricultural purposes, by the farmer himself.
The Nature Conservancy Council will be given wider powers to promote any activity conducive to nature conservation by means of grants, and a new power to make loans. The work of voluntary conservation groups will be further promoted by a provision enabling their reserves to be afforded the accolade "national nature reserve" and, if they wish, to be protected by by-laws made by the Nature Conservancy Council. Voluntary organisations such as the Royal Society for the Protection of Birds, the various county naturalists' trusts, and the Wildfowl Trust maintain extensive reserves, which in many cases are of the highest quality, and it is right that such important assets should be publicly recognised as such, and be as well protected as other reserves of a similar standard which are managed by the Nature Conservancy Council.
The Bill includes specific powers for local planning authorities to make voluntary management agreements with landowners for the conservation or enhancement of the natural beauty of the land, or its enjoyment by the public. National park authorities will be empowered to give grants or loans for the same purposes, which will be very useful in conserving important aspects of the countryside economically.
The Government have carefully considered the issues involved in conserving moorland in the national parks. Since November 1977, when the noble Lord, Lord Porchester, produced his important report on Exmoor, much has changed. Nearly 1,900 acres of the Exmoor moorland have gained protection by voluntary means. The National Farmers' Union, the Country Landowners' Association, and the Exmoor National Park Committee, are in co-operation together to formulate guidelines to serve as a financial basis for voluntary management agreements. My noble friend Lord Avon informed the House on 23rd October that for the Exmoor National Park Committee's

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moorland conservation work, the Government would provide a special rate of financial support, a rate of 90 per cent. instead of the ordinary 75 per cent. The Government's determination that the Exmoor National Park Committee should not lack support has also been shown by the special arrangements made earlier this year to purchase 881 acres of the moorland at Lark-barrow, to tide the committee over until their resources permit them to take transfer of the land.
We are committed to the view that a significant change in the overall character of Exmoor National Park would be unacceptable. We believe that the climate in Exmoor is now sufficiently co-operative to allow any such change to be avoided by voluntary means, provided there is a proper system for the farmers to notify the National Park Committee of their proposals 12 months in advance. The NFU and CLA announced a short while ago that the farmers' voluntary notification arrangements, which until now have provided for six months' notice, are to be revised to provide for 12 months' notice. Nevertheless, it is essential to have in reserve a statutory power to secure 12 months' notice compulsorily if need be. The Bill will now provide that power, although it will not be used in Exmoor so long as the voluntary notification arrangements are observed, and we have no present intention of using it in any other national park.
All these things meet points to which the noble Lord, Lord Porchester, drew attention. However, the Bill does not provide a power of last resort to compel farmers to sell out their rights to convert moorland. Some may think that such a power would be helpful, but, against the background which I have described and in the light of careful assessments of the situation which Ministers have made, we do not think it would help. In conserving Exmoor, we are concerned with practical success and there is as yet no real sign that a last resort power of compulsion would be useful or essential.
The main need is to remove the difficulties which, as the noble Lord, Lord Porchester, said, stood in the way of voluntary management agreements, and to foster the kind of arrangements which suit both the public and the farmers—voluntary management agreements carrying annual payments, unless the farmer prefers otherwise. These requirements are now being met. The attitudes of some conservationist societies are exaggerated. The facts are that land is not being ploughed up without authority. Our policy is working and is successful. A proposal to extend the powers of local authorities to employ wardens on land to which the public have access and on footpaths has been dropped. The proposal had merits, but this is not the time to create new tasks for local authority staff.
The Countryside Commission will become a grant-aided body responsible for employing its own staff and accounting for its own block of money. This will put the commission in a similar position to comparable organisations such as the Nature Conservancy Council.
As regards Part III of the Bill, the current arrangements for the review of definitive maps of public rights of way in the countryside have not worked well. The periodic country-wide reviews have attracted numerous objections which have taken a long time to determine. The revised map cannot take effect until
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all the objections have been resolved, and in some cases this has meant that decisions made years ago have still to be implemented. The requirement for a review every five years will be replaced by a provision allowing definitive maps to be amended continually by means of definitive map amendment orders. This will enable the maps to be amended as soon as any objections to each amendment order have been determined. There will be no limit to the number of paths which may be included in any order. Local authorities will determine objections and will also be made responsible for determining opposed public path orders—that is to say, creation, extinguishment and diversion orders. In both cases, local authorities' decisions will be made following a public local inquiry conducted by an independent inspector appointed by the Secretary of State.
In most counties in England and Wales, by-laws prohibit the running of bulls in fields crossed by public paths. In 14 counties, the by-laws allow any bull to run in such fields provided it is accompanied by cows or heifers. To have different rules applying in different counties is confusing and unsatisfactory and the Bill includes measures to remedy this. A total ban would be far too restrictive and have a serious impact on normal farming methods. The Bill therefore repeats a provision from the Countryside (Scotland) Act 1967 allowing a bull which is not of a recognised dairy breed to be at large in fields crossed by public paths provided it is accompanied by cows or heifers. This has worked well and it is wrong to say there is no comparison between farming in Scotland and England.
We hear much these days of the conflict of interests between those who wish to conserve the countryside and those who make a living from the land. The Bill does not support any one group at the expense of another. Taken together, the various measures in the Bill will promote the conservation of the countryside to the benefit of all who depend on it, whether for their livelihood, education or well-being or simply for recreation. This is a major step forward, after the most careful consultations, and I am confident its measures will prove successful. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Bellwin.)
3.16 p.m.
Lord Melchett: My Lords, we on this side are grateful to the noble Lord, Lord Bellwin, for his comprehensive introduction to what is a major and quite complicated piece of legislation, and we certainly welcome the Bill as a major opportunity to legislate on a wide range of important issues that affect the countryside and wildlife. We also look forward to the two maiden speakers the Bill has attracted.
Although the Government have undertaken widespread consultations on the contents of the Bill—aided a little, I think, by the fact that it was delayed for one Session because of other matters which the Government mistakenly saw fit to put into last Session's programme—there are still a large number of issues that remain to be looked at in Committee. The lengthened consultation period has had a major advantage, namely, that the otter, which originally the Government seemed to be going to leave unprotected in Scotland, is now included and will be protected in Scotland as it

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is in England and Wales, and that will be welcomed in all parts of the House.
I look at the Bill both as a director of a family farming company and as a member of a number of voluntary organisations interested in protecting wildlife. To take up a point mentioned by the noble Lord, Lord Bellwin, towards the end of his speech, I am sure it will be the case from time to time in our debates on the Bill that it will be presented as embodying some sort of conflict between nature conservationists and farmers. I do not feel as if that sort of conflict is going on internally within myself. Nevertheless, that seems to be an important point and I very much hope noble Lords will not see the Bill, its contents and the debates we have on it in that over-simplified way.
Conservationists are sometimes characterised—as the noble Lord, Lord Clifford of Chudleigh, characterised them in a debate last Session on the MAFF capital grant scheme changes—in quite extreme terms. I would simply say, as the Sunday Times pointed out recently, that the voluntary organisations interested in wildlife have over 3 million members, more than the members of my own political party and indeed more than the members of the party of noble Lords opposite. "Wildlife on One", one of the wildlife programmes on television, is more popular than "Match of the Day" and, as another example of the strength of commitment of ordinary people to wildlife conservation, I may say that the amount of work done voluntarily each year on county trust reserves alone—that is, leaving out RSPB reserves and reserves owned by the Nature Conservancy Council and the National Trust or the Wild Fowl Trust, and looking simply at county trust reserves—is worth about three-quarters of a million pounds. So I believe that there is a great deal of serious and level-headed commitment to the kinds of thing which the Bill sets out to protect and foster.
On the other hand, farmers are not the uniform group that they are sometimes suggested to be. MAFF sonic years ago did some research which found, for example, that over a third of the total number of farmers, 38 per cent., were interested in wildlife, half of them from a sporting point of view and half as naturalists. A much larger percentage, 60 per cent. of all farmers, were interested in having advice on wildlife conservation.
A more recent piece of research carried out by Essex University looked, first, at a sample of one in two of all farmers farming over 1,000 acres in East Anglia, and, secondly, at a sample of one in three of all farmers, regardless of the size of holding, in an area of 44 parishes in East Suffolk. That research showed, first, that 87 per cent. of the farmers farming over 1,000 acres and 72 per cent. of those in the 44 parishes expressed what might be termed a sympathetic view to the problem of environmental conservation. Indeed, the most common response that the researchers reported from those whom they interviewed was an acknowledgment of an environmental problem but that this was seen as having been created by impersonal factors, economic and technological, with which the farmer had little choice but to comply. It seems to me that it is those factors that need changing, and that to attack—as I am sure many will in the debate on this Bill—the forces that have led farmers to destroy
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wildlife habitats and destroy the wildlife that depends on those habitats is not to attack farmers themselves.
The researchers at Essex University summed up their work by saying:
"By no means all farmers are as hostile to the conservationist case as is sometimes assumed".
That work was supported by the findings of the Countryside Commission's New Agricultural Landscapes study, which came to very similar conclusions.
There is another point of view on this matter which comes from the countryside, from agriculture, and which I do not think is very often mentioned in debates of this kind, but which it seems to me is well worth mentioning—namely, the views of those people who work in the countryside on farms; agricultural workers. They have an interest in the countryside not only as the source of their livelihood, but also as a place which provides a varied and interesting environment in which to live and work. Agricultural workers are well aware that their jobs are often lost through the intensification of agriculture and the increased mechanisation which is also often responsible for destroying wildlife habitats. A letter in a recent edition of the agricultural workers' newspaper said that,
"the economics of prairie farming are largely one of manpower …".
The letter went on to ask for support to stop the destruction of nature, which was seen as going alongside the loss of jobs in the countryside.
So I hope that we can approach our debates on the Bill without seeing it as a conflict simply in terms of conservationists versus those who farm or work on farms, because I simply do not believe that that is an accurate reflection of the views of either side. Indeed, there is much in common between the two groups: the need to protect rural land from all the threats that face it from urban development, industrial development, roads, and so on; and the importance of a prosperous and thriving community in the countryside. Very often, nature conservation itself depends on agriculture; for example, in the grazing of chalk downland, or the uplands, and so on.
I am quite sure that many farmers, if not all, are aware of the current scale of destruction of wildlife and they wish that the factors that have led that to happen were not as they are and that society had different priorities. It seems to me that that is the major task before us in framing the Bill.
All of us, whether or not we are conservationists or whether or not we live or work in the countryside, have an interest in it. It is an interest in wild flowers and wild birds, in places where we can walk, in wild areas where we can go for solitude, in unspoilt coastlines where we can go for holidays, in areas where we can picnic or camp, and so on. But those kinds of area are disappearing. Enormous changes are taking place—and taking place ever more rapidly.
I want briefly to outline some statistics—and I make no apology for so doing—on the rate of loss of habitats in order to underline the enormously grave problem which we are looking at when we come to judge whether the Bill, in the words of the noble Lord, Lord Bellwin, does strike the right balance between competing interests, and, more importantly perhaps, whether it will actually solve some of the problems

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that we have to overcome and meet some of the international commitments into which the Government have entered, as the noble Lord mentioned.
First, I should like to look at sites of special scientific interest, of which there are about 4,000 in this country, covering about 5 per cent. of the land area of Great Britain. Only about 2,000 of these sites are thought to be at risk; in other words, capable of destruction. That leaves out the tops of mountains, cliffs and so on; and those 2,000 cover about 3 per cent. of the land area. Four to 5 per cent. of all SSIs are being damaged or destroyed every year, according to the estimate of the Nature Conservancy Council, and, at the current rate, that means that in about five years one in four of all SSSIs will have been damaged or destroyed; in other words, probably half of those currently thought to be at risk.
For some habitats the rate of loss is up to three times higher. For example, 80 per cent. of Dorset heaths have been lost since 1811. In regard to heath in the Suffolk and Norfolk Brecklands, there has been a 70 per cent. loss in the same period. In regard to heath in the Suffolk coast area of outstanding natural beauty, 73 per cent. has been destroyed in the 50 years up to 1968.
The noble Lord, Lord Bellwin, mentioned some improvement on Exmoor. That does not alter the fact that one-fifth of Exmoor, 12,000 acres, has now disappeared. That was lost in the 25 years after the war.
With regard to downland, in Dorset a quarter of all downland was lost between 1957 and 1972. En Wiltshire half of the downland, 64,000 acres, was ploughed between 1937 and 1961, and less than 3 per cent. of chalk downland in Wessex remains intact as old, undisturbed grassland.
In ancient woodland the losses have been nearly as striking. In lowland Britain, between 30 and 50 per cent., certainly half in Eastern England, of ancient deciduous woodland has been destroyed since 1947. Despite that massive loss, the losses are continuing, and it is estimated that at the current rate of loss a further 15 per cent. of what is left will go in the next 20 years. With regard to grassland, in Lincolnshire in 30 years half of the ancient grassland sites have been converted to arable or subjected to agricultural improvement.
The statistics regarding wetlands are no doubt well known to many noble Lords. There has been a 70 per cent. loss in Bedfordshire in 25 years, a 99 per cent. loss in Lancashire since 1865. There has been an estimated 75 per cent. loss or conversion nationally. Twenty-five thousand acres of wetland are drained every year, and it is estimated that at the current rate of loss all lowland bogs will have been destroyed by around 1985 to 1990—in the next five to ten years.
It might be said that those are fairly general areas, but that the prime sites, the most important sites, are quite safe and that we need not worry as long as they are safeguarded. Well, that clearly is not true, if about half of the SSSIs currently under threat are likely to be lost in the next 20 years. The national nature reserves, in many people's eyes more important than the generality of sites of special scientific interest, are also gravely at risk. The Nature Conservancy
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Council says in fact that half of the national nature reserves are at risk in the next 10 years, and 15 per cent. of NNRs are under imminent threat.
In 1977 the Nature Conservancy Council published the Nature Conservation Review, a massive work, which I suspect took this country into the lead internationally in having information about wildlife habitats, their extent and importance. It took us into the lead in having the information, but unfortunately it did not take us into the lead in protecting those sites. Since then in parliamentary Answers the Government have admitted that 57 out of the 735 sites listed—that is nearly 8 per cent.—have already been damaged or destroyed.
In my own county of Norfolk, let us look simply at the Grade 1 starred sites in the Nature Conservation Review—and one cannot get much nearer than that in terms of the top level of sites. There are eight starred Grade 1 sites in Norfolk out of 33 sites altogether listed. At least two of those—that is, a quarter—are suffering serious damage already. Indeed, I discovered the other day that one of the Grade 2 Nature Conservation Review sites (there are only 735 in the country) which is listed as an alternate to one of the major sites on the Broads—that is, Barton Broad—has, since the review was carried out, been described as and has become allegedly the most polluted lake in Europe. That says a lot for our ability to gather information, but very little for our ability to act on it.
More important, these threats are still occurring and accelerating. The County Trusts say that 25 SSSIs are currently threatened or have been lost in recent months, 11 of them in Norfolk; 16 per cent. of lowland flood meadows in Oxfordshire were lost to agriculture change in the last two years; and a MAFF official recently estimated that all the remaining 4,200 acres of downland dales in North Humberside would be subject to agricultural improvement in the next 10 years.
Maybe worse, because it is more widespread and less noticed, is the scale of destruction of more everyday features of the countryside, and it seems to me more important as well because these are the features which give most people, the majority of the population, both those who live in the countryside and those who visit it, their pleasure and the joy that a day in the countryside can bring. One-third of our coastline is ruined from the point of view of amenity or nature conservation; and half the ponds in East Anglia have been destroyed. But let me concentrate on simply three features—hedgerows, hedgerow trees and deciduous woodland (broad leaved woodlands).
For hedges, the figures are well known: 140,000 miles of hedge lost so far, and the current rate of loss about 4,500 miles a year. This is an accelerating trend in many areas, and not, as some people think, a decelerating trend. In Cornwall, for example, between 1963 and 1976—in other words, in 13 years—more hedges were lost than in the previous 75 years. Norfolk has already lost 45 per cent. of its hedges (that is, 8,000 miles) in 25 years; and in Cambridgeshire the figures are very similar.
In the case of deciduous woodland, in 25 years since the war 16 per cent. of the broadleaved woods in Cambridgeshire were converted to arable, and 30 per cent. of the broadleaved woods in Lincolnshire were

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felled in the same period. In the 20 years up to 1972, 20 per cent. of Devon's woodland was destroyed. It is not only destruction which is taking place, but major changes. For example, in Dorset, in 1811 95 per cent. of the total woodland was deciduous and only 5 per cent. conifer woodland. In 1972, only 23 per cent. of the woodland was deciduous and the rest either mixed conifer/deciduous or conifer. Furthermore, 30 per cent. of small woods—woods under 2½ acres—had been cleared in the 25 years up to 1973.
My Lords, the position with regard to hedgerow trees is, if anything, more serious than the other losses I have described. Norfolk has lost 80 per cent. of its hedgerow trees in 25 years; and the future looks even bleaker, apart from the effects of Dutch elm disease, which have been bad enough. Saplings should occur in hedges at a ratio of about 50/50 to trees of all other ages. In fact, the proportion of saplings nationally is as low as a third, and in some areas is even down to one-ninth. So the losses that we have seen in hedgerow trees are undoubtedly going to occur to a far greater extent in the future.
My Lords, that lengthy exposition of statistics—for which, as I say, I make no apology because I think them important; they underline the seriousness and gravity of the appalling situation which we face in the countryside—could be mirrored by similar statistics on the destruction and disappearance of species of different sorts. The chief scientist of the Nature Conservancy Council said in an article last year:
"The increasing destruction of natural and semi-natural habitats is such that over the next few decades we could see the extinction of species on an unprecedented scale".
I think one could no doubt argue about the importance of a particular site, or, indeed, of a particular category of sites. People may say, "Well, heaths are not particularly important", or, "I am not too worried about bogs", or whatever. But the overall scale of destruction, I suggest to your Lordships, is quite unarguable, and is horrifying, and we need to do something about it.
Against that background, what does the Bill do? It does nothing for the basic fabric, the everyday things—the ponds, the hedges, the hedgerow trees, the small woodlands. It does nothing at all. For moorland it does nothing more than exists at the moment. The noble Lord, Lord Bellwin, gave a commitment to the preservation of Exmoor which was very welcome, but the actions that follow from that and which are needed in the view of most people are not apparent in the provisions of the Bill. Indeed, the Bill does nothing even for sites of special scientific interest as a whole.
The Minister of State said in a recent speech that a "comparatively small number of sites" would be affected by the provisions of the Bill. Comparative to what? It would be interesting to know from the Government. And at a press conference to launch the Bill, a Government Minister actually spoke of the Bill creating a set of super-SSSIs—a tier above the existing SSSIs, the remainder of which would presumably be allowed to continue to be destroyed as they are at the moment. That remark about a super-SSSI flew in the face of all the assurances which have been given by the Government to all the voluntary conservation bodies during the consultations on the Bill,
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when it was said quite explicitly that nothing of that sort was intended.
My Lords, the threats to wildlife habitats are so important because without their protection the specie which depend on them—the animals, the plants, the birds, the insects and so on—will cease to exist, however well protected they are. We can pass laws, as we have in your Lordships' House, to protect butterflies, to protect otters and so on. If the habitats which those animals and those insects depend on are destroyed, so will be the animals. It may be a protected otter, but it will still be a dead otter. I would suggest that in this vital and most important area the Bill simply does not begin to meet the needs which it should be meeting. We on this side of the House will certainly be bringing forward amendments to safeguard all SSSIs, but, more important, to safeguard the basic fabric of the countryside, the generality of trees and hedges, and so on, of which I have spoken.
Still on the subject of habitat protection, there is one other major omission from the Bill—and I was sorry that the noble Lord, Lord Bellwin, did not mention this—and that is the question of marine reserves, where it has been suggested for some time that certainly the Government were considering this and that the Government would be introducing, if they could, provisions to enable this country to set up marine reserves. I was interested recently to see a leaflet produced by the Central Office of information (I assume with Government approval) called Fact Sheet on Britain, which covers conservation and which says that the Nature Conservancy Council,
"has also made proposals to the Government for the establishment of marine nature reserves".
This important document on conservation in Britain, produced by the Government, goes on to say:
"An important role is envisaged for the trusts"—
that is, the county naturalists' trusts—
"in the promotion of marine conservation".
I am not quite sure how the Government envisage the county naturalists' trusts playing this important role if they are not prepared to produce legislation to enable marine reserves to be established.
My Lords, the two international conventions which the noble Lord mentioned quite clearly place a duty on this country to protect the marine environment as well as habitats on land, and it seems to me quite clear that the Government will be in breach of those international conventions without provisions to set up marine reserves. It looks as if this country will be lagging behind about 40 others, ranging from Indonesia to Ireland, which already have provision for marine reserves—many extensive areas of marine reserves. It is not as if this country did not have some of the most important coastal areas in Europe. Of the 30 estuaries in Europe and North Africa that harbour over 20,000 wintering wading birds, no less than half are British; and against that sort of background it seems to me imperative that this Bill should contain adequate provisions to enable marine nature reserves to be set up.
My Lords, there are a number of other omissions from the Bill and many other points which I have not attempted to cover in the time available to me. My noble friend Lady David at the end of the debate, and

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many other noble Lords on both sides of the House, will no doubt want to cover other points. I want to mention simply two things to give the Government notice of amendments which we think will be important at the Committee stage. First, the protection of badgers. Whatever the rights and wrongs of the gassing programme in south-west England, it cannot be right that the publicity that has generated from the gassing and the argument about it should be leading to the needless and pointless persecution of badgers throughout the rest of England and Wales. We on this side of the House intend to introduce amendments to this Bill to protect all badgers outside the gassing areas in the south-west from killing by anybody unless they have a licence issued for that purpose. I hope we shall have the Government's support in those amendments.
Secondly, ADAS. The noble Lord said very little about how the Government were going to encourage the sort of voluntary agreements and co-operation which they and everybody else wish to see over these issues. For many years now there has been a perfectly clear report which says what should be done and how it should be done: that ADAS should play a major role in giving advice on wildlife conservation. We shall be moving amendments to ensure that the Government live up to the words they used when discussing the farm capital grants scheme when they said that extra staff in ADAS would be available to give advice on conservation and wildlife issues; and, again, I hope we shall have Government support for that.
The Bill, it seems to me, needs to be judged against two major trends which are developing in the countryside. First, away from species protection, away from the protection of individual animals and plants, however important that is—and it is important—towards the protection of wildlife habitats in general to which I devoted so much of my speech today. It seems to me that, on the whole, the Bill does not measure up to these new challenges at all. Secondly, a major trend towards greater public participation in countryside affairs and access to the countryside; the huge growth in the membership and numbers of voluntary organisations and specialist interests; the greater number of people visiting the countryside; the change there has been in the attitudes of those involved in nature conservation—away from seeing people as a threat towards encouraging people to visit reserves through open days and encouraging people to take part in nature conservation.
Again, it seems to me, the Bill falls down badly, in particular in the provisions on bulls and public footpaths—which caused some merriment among noble Lords on both sides; but, maybe, not so much merriment to those who are killed or injured on footpaths by bulls every year, or to the three agricultural workers who were killed in 1979 and the 23 that were injured by bulls in England and Wales. Bulls are dangerous animals and should not be allowed to mix with people. In this respect, the Government's proposals in the Bill are quite unacceptable. It is against those criteria: whether the Bill will encourage public participation and whether it will really provide adequate protection rather than nominal protection for plants and species,
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that we shall judge its progress and move amendments to improve it at Committee stage.

Rate Support Grants
3.44 p.m.
Lord Bellwin: My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for the Environment. The Statement is as follows:
"Local government is responsible for about a quarter of public expenditure and employs more than 2½ million people. Its financial decisions are an integral part of the national economy. The Rate Support Grant settlement must reflect this.
"This settlement is the first for England under the provisions of the Local Government, Planning and Land Act 1980 and I therefore thought it right, exceptionally, to make a Statement to the House. Documents relevant to my Statement to the Local Government Consultative Council are being placed in the Vote Office. I am also laying before the House this afternoon copies of the RSG reports and orders, which will be debated in the House in the normal way.
"My right honourable friends will make separate statements today about Wales and tomorrow about Scotland.
"As part of our policy on public expenditure, the volume of local government current expenditure for RSG purposes will be 3·1 per cent. below the figure for 1980/81. The cash limit on grant will provide for increases of 6 per cent. in earnings from annual pay settlements in this round after 1st November 1980 and provisionally for the next pay round beginning on 1st August 1981. It contains an allowance for price increases of an average of 11 per cent. between 1980/81 and 1981/82. The grant percentage for England and Wales will be reduced from 61 per cent. to 60 per cent. At 61 per cent. the effective grant for England is 60·1 per cent. The effective grant for England in 1981/82 will be 59·1 per cent.
"The aggregate Exchequer grant for England will be £10,895 million at estimated out-turn prices. Specific grants are estimated at £1,447 million. Transport Supplementary Grant will be £416·5 million. A copy of my right honourable friend's statement to the Consultative Council is being placed in the Library. National Parks Supplementary Grant will be £4·5 million. The remaining amount available for the Rate Support Grant is therefore £9,027 million.
"There are two new features of the grant distribution this year. First, the new system is based on a new method of assessing the needs of authorities, which relies on service-by-service appraisal of those factors which affect local authority expenditure. The system is fair, rational and open to scrutiny. The change leads to some significant alterations to the entitlement of some local authorities in the first year.
"The second feature is the introduction of block grant which will replace the old system, with its in-built bias towards authorities who increase their

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spending at the expense of more prudent authorities. These changes are both moderated by safety nets.
"Authorities retain exactly the same freedom to reach their own expenditure decisions as at present, but block grant ensures that a greater weight of the consequences of high spending is borne locally and not at the expense of other authorities. For the first time there is a fair and consistent incentive not to overspend. In particular, the recent drift of grant to London at the expense of the Provinces is reversed.
"The House will remember that pending the introduction of the new system next year, I took transitional powers, for this year only, to limit central Government support to high spending authorities. Of the original 23 authorities liable to penalty, 14 have qualified under the waivers which I set out in my statement of 18th September. There remain only nine authorities liable to abatement of their grant. The House will shortly be invited to approve the appropriate order. They have only limited time, therefore, to make the necessary reductions in their expenditure if they are to qualify for exemption and thus avoid imposing this unnecessary extra burden on their ratepayers.
"I have repeatedly stressed the essential part local authority manpower levels have to play in meeting our public expenditure targets. The Joint Manpower Watch figures for the year ending September are published today, and announced to the House in a Written Answer to my honourable friend the Member for Reading North. These figures show a seasonally-adjusted reduction over the last quarter of 15,446, making a total for the year of 36,500 on a full-time basis. Local government manpower is now back to its lowest level since the Manpower Watch began in 1975. But although the annual and quarterly reductions are the highest ever achieved, the fall is still only 2 per cent. from the all-time record level when we came to power. I reaffirm today that the volume of current expenditure, particularly manpower levels, must continue to drop.
"I turn now to the question of rates. The local authority current expenditure volume target is 5·6 per cent. below the spending in 1978/79. If local authorities plan for that target, and budget in line with the cash limit assumptions, increases for ratepayers should be contained within reasonable levels and be much lower than for this year. I shall be talking to the associations shortly about action to secure that the expenditure targets are met.
"Mr. Speaker, the announcement I have made this afternoon represents a significant contribution to the Government's public expenditure policies. It is a major challenge to distribute £9 billion to 413 authorities administering over 20 major national services. The new system I have announced today achieves this through a system that is fairer, more visible and more comprehensible. This is particularly important when the lower volume of expenditure and the reduction in grant percentage will in any case present local government next year with a major challenge."
My Lords, that is the end of the Statement.
3.50 p.m.
Lord Mishcon: My Lords, it is only proper that I should thank the Minister for his courtesy in repeating a Statement made by his right honourable friend in another place; but I am sure that he will not expect me to congratulate him on that Statement. Only yesterday the Minister talked very proudly of certain local government announcements that were made to which he said some of the local authority associations agreed and all the local authority associations had been consulted and had expressed a view.
The Statement that we have heard this afternoon is a Statement of which not one single local authority association in this country will approve, either in regard to the formula of the rate support grant or of its application. I am sure that that is a somewhat solitary situation in which any Minister in charge of local government would want to find himself.
I wonder whether the Minister will forgive me if ask him some questions arising directly out of the Statement that we have just heard. Is it not right that the Minister has taken unto himself the complete prerogative and arbitrary power of deciding what are the needs of local authorities? In other words, is there not writ large upon this Statement the words: "Mr. Heseltine knows and Mr. Councillor Smith, Jnr. does not"? If I may go in particular into some of the figures arising out of that general question, there are assumptions in the Statement of 6 per cent. in the increase in local authority wage settlements—that, incidentally, to be over a period of two years, two annual pay settlements—and an increase of 11 per cent. in the rise in prices.
Without in any way wanting to comment on the optimism or pessimism of those figures, may 1 ask the noble Lord the Minister whether, if those figures in either case are exceeded, it is intended to make a corresponding allowance back in the grant? I have calculated—and it may be that my calculation is wrong—that this represents a cut or, putting it another way, a saving in grant of some 18 per cent. Does the Minister agree that this is roughly right? And would he also agree that in this so-called saving the Secretary of State has slashed more in one year of local government required expenditure than any other Secretary of State, certainly since the end of the war?
May I ask the Minister whether he would kindly tell us what are the safety nets to which he referred in his Statement, and which are supposed to moderate the changes to which he referred? Turning if I may to the question of the problem areas, the proud statement is made:
"In particular, the recent drift of grant to London at the expense of the provinces is reversed".
Is the Secretary of State aware of the particular predicament of London and many of the urban areas? Does he know, for example, of a somewhat startling figure that whereas in the London area one-parent families represent some 24 per cent. of the families in London, the percentage figure in the rest of the country, if you except London, is just over 11 per cent.?
What is going to be done for the special problem areas? What allowances are being made for them? Is the Secretary of State aware that he is taking a very uncomfortable responsibility, but more uncomfortable for the citizens of London and the urban areas, in

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regard to the whole concept of rates that will now have to be looked at in the light of the reductions that have been made and the complete ignoring of the special problems? Possibly those questions are enough at this stage to ask the Minister. I hope that with his usual courtesy and clarity of mind he will be able to let us have answers to them in full.
3.56 p.m.
Lord Beaumont of Whitley: My Lords, this is a very important Statement. I do not feel that we have a great deal of time to go into its intricacies this afternoon, although I am sure that noble Lords will want to raise the matter very, very fully in the immediate future. I have therefore only one comment to make and one question to ask. The comment is that it is a very strange world and a very strange form of economics that we appear to work under when with unemployment at over 2 million the Secretary of State can boast to Parliament about the number of jobs that he has killed and the number of jobs that he proposes to kill in the immediate future.
The question that I should like to ask the noble Lord—whom we thank for repeating the Statement—is this: How can the Government justify a settlement which penalises local authorities who have conscientously tried to abide by Government guidelines and who have been treated to the same reduction in their rate support grant as the big spenders? Apart from the nine local authorities being singled out for punitive action, it has made no difference whether a council has tried to save money and make economies or whether it has not. How do the Government justify that?
3.58 p.m.
Lord Bellwin: My Lords, first may I deal with the points raised by the noble Lord, Lord Mishcon. He said that not one local authority association in the country will approve of the Statement. Well, of course there are only three. I do not know whether they will approve or not; but it is important that they should know what line the Government have been taking. There has been tremendous consultation all the way down the line. Indeed, it has been the local authority associations themselves who have been helping, through their grants working group and in many other ways, in coming to these conclusions. So, of course, no one will approve of anything that reduces the amount of money that they have been given, and to that extent I suppose that the noble Lord is correct. Whether or not they will approve the final equity of the distribution is something upon which I cannot comment. I suspect that they will not all disapprove of that.
To come to the individual points, the noble Lord said that the Minister has taken unto himself to decide the needs of local authorities. That just is not so. The fact is that under the previous rate support grant settlement basis there was an assessment of need. There always has to be an assessment of need. How else can you try to equalise grant—and that is the purpose of the rate support grant settlement—if you do not try to assess need? The debate has been on the different ways that there are of assessing it.
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I say now, as I said during the time when we were debating this at such great length, when the Bill was going through the House, that it is surprising to me how many friends the old rate support grant system, the multiple regression analysis basis of assessment of need, has now found when, in the past, I never found anybody anywhere who had a good word to say for it. I could, if this was the occasion—but I have to bear in mind that I am answering questions on a Statement and do not want to go into it in depth—go into details of the inequities of the previous system. As to the present one, I will say only this: never before has there been a clear exposition of the exact basis of this assessment of need.
There is here a document—not a thick document, and written relatively in lay terms—which I would commend to the noble Lord and indeed to anyone who is interested. It shows how the assessment of need of every single service has been arrived at. Here for the first time there can be debate on the rights or wrongs of this and on ways of improving it, if you like. I think it is what I said it would be at the time of the Bill, a tremendous step forward. I hope that noble Lords will take the opportunity of looking at this in due course.
The noble Lord asked whether, if the 6 per cent. or 11 per cent. (that being the wage settlement, the wage announcement allowance and the 11 per cent. for inflation) are exceeded, there would be an increase to take care of that. There will be the same increase as there was in the past, when previous Governments made their forecasts and were so woefully out. I so clearly and bitterly remember the 5 per cent. for wages and the 8 per cent. inflation which I, in another incarnation, was given to deal with and to handle when in fact the figures turned out to be multiples of those figures. What we will say is that, as regards these figures, the 11 per cent.—and that is the inflation rate allowed for from April 1981 to 1982—is a realistic figure. We believe that the trends now going on will make that a realistic figure.
As for the 6 per cent., in respect of pay settlements, everybody knows—and if they do not know it by now this would be a good time to reiterate it—the importance of the fact that settlements must be at that level and if they are not at that level the alternative will be that there will be fewer jobs. This is what it is all about, because at the end of the day it is all about what we can afford—something that nobody ever seeks to mention: what can we afford? We have for so long been paying ourselves more than we could afford, and if we will not come face to face with that reality and accept it, then we will be in difficulties. As to the other points—
Lord Mishcon: My Lords, before the noble Minister leaves this point, I wonder whether I may ask him if this afternoon he would kindly not deal with the sins of other Governments but only with the virtues of his own? Would he therefore kindly say whether or not there will be an allowance made, whatever other Governments may have done?
Lord Bellwin: Of course, my Lords; but the sins are so many that who could deny me the chance to comment on them? As to the virtues, only time will tell,

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but the answer is: No, of course not, any more than it applied in the past. As to the safety nets, these are 13p and 7p, depending on the categories; but this is the kind of detail I should prefer to write to the noble Lord about, if he will permit me, because there are masses of statistical information to which, with great respect, he would not have had access at the present time. I think he should have that. I gladly undertake to write to him on that.
Lord Balogh: My Lords, the noble Lord says that we cannot afford it, but if we reduce our national income, with high interest rates and extra taxes, we shall not be able to afford even the new low level. This can go on ad infinitum.
Several noble Lords: Question!
Lord Bellwin: My Lords, this is a Statement. I am trying to respond. I am probably being over-long but I am trying to reply as briefly as I can. I am sure there will be many other occasions for further debate on that. The noble Lord, Lord Mishcon, made a very important point which I should like to comment on. He asked what is being done for the special problem areas. I would answer that by saying that the whole basis of assessment of need is in fact assessing the need of the problem areas. If they have greater needs—and in many cases they have—then this should be taken care of in what we used to call the needs assessment. It then became standard expenditure and now has the title of grant-related expenditure. In that way there is an attempt here to make allowance for that. The noble Lord will also know that in the worst areas, the partnership and programme authorities, there is urban money which goes to them.
The noble Lord, Lord Beaumont, referred to the number of jobs killed. I really cannot get into that sort of a debate. It used to be said to me: is it jobs saved or jobs lost? My Lords, it all depends on who is paying at the end of the day as to how you look at this question. The fact is that the numbers which have increased in local government, not least since the reorganisation, have not been commensurate with the extra levels of services or of the efficiency of those services. It does not help us to go into a debate as to who it was, because I would then reply by explaining who it was who initiated the original suggestion that there should be a reorganisation; and that would not get us too far.
Lord Peart: My Lords, let me say to the noble Lord that I believe the proposal to reorganise local government has been disastrous, has created terrible burdens and destroyed local areas; and so the noble Lord should not rejoice in what he has said.
Lord Bellwin: My Lords, I do not rejoice at all in any way. Perhaps I am able to comment upon local government since the reorganisation as much as the noble Lord himself, having worked in it for some years, as I did. We probably should not quarrel too much between us about many aspects of that—
Lord Peart: Made a mess of it!
Lord Bellwin: The noble Lord says we made a mess of it: that is a matter of opinion. Then the noble Lord, Lord Beaumont, said what he did about equal punishment. If by the word "punish" he means more or less grant, let me say this. The figures announced are figures based on the assessment of need and relate against base figures which have had to be calculated because this is a new system and now every authority receives its grant direct, whereas before it was done in another way. That is why we have had to make calculations. But at the end of the day block grant will come into effect—not at this stage, but at the point when rates are fixed when spending is decided. That will be the time when it comes into effect. This has to do with grant-related expenditure as a basis of apportionment of this finite sum of grant.
Lord Irving of Dartford: My Lords, the noble Lord has indicated that there is to be a redistribution between London and the Provinces, but the forecasts and leaks from the local government council indicate that there will be a massive redistribution between the counties and the districts. This is going to be very serious indeed for the districts. It is forecast—I am talking in terms of 100 to 150—that some will lose anything between a 2p and a 9p rate. Can the noble Lord say whether there will be any amelioration for the districts, whether this will be spread and what is the minimum rate loss in any one year that the districts will suffer?
Lord Bellwin: My Lords, the fact is that what matters at the end of the day is the amount that affects the ratepayer. If there is this adjustment between the counties and districts, it was so within the last three years, I think, that there was a massive switch of some £350 million in adjusting the apportionments. That figure is subject to verification. Two years ago there was a great shift from the counties to the districts—the shire districts we are talking about and not the metropolitan districts—and it was done on a totally arbitrary basis, as the then Secretary of State said. He said: "There is no basis on which I can justify this: it is something which I think I should do." Now at last, as part of the attempt to get some semblance of reasonableness into the way in which grant is distributed, there is a shift to the counties from the shire districts. But, at the end of the day, when the ratepayer has to be affected by what is levied, the two are added together. So if county A receives a net gain and districts within its county have a net loss, then when it comes to fixing the rate the two are added together. Therefore, the effect on the ratepayer as such should not be adverse.
Viscount Ridley: My Lords, my noble friend said that the increase in rates should be kept within reasonable levels. I wonder whether he can indicate what he regards as reasonable levels, bearing in mind the somewhat unrealistic assumptions in the early part of his Statement.
Lord Bellwin: My Lords, I hope noble Lords will not think that the assumptions I made earlier were unrealistic, because, if that is so, what hope does the country have if people are not prepared to work within the totality of what Government feel can be

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afforded? What is reasonable? If I remind noble Lords that last year rates increased from a low of 9 per cent. to a high of 60 per cent., you will see why it is so difficult to try to say what is a reasonable figure. Another danger of stating a figure is that you create a norm. Those who would have rated less say, "We will rate that little bit higher." That is the danger of so doing. Therefore, I do not want to embark on that exercise. I say what I said before. If people will stick to the lines laid down by the Government, then the rates levied should be much less than they were last year.
Baroness Jeger: My Lords, in assessing the needs of problem areas, is the Minister bearing in mind that many of these problems are imported? May I ask him whether he has considered a borough such as Camden, in which I have served in local government for many years? Because it happens to have three main line termini, it is natural that there is an enormous number, a disproportionate number, of homeless families who, because they arrive at these termini, report to the nearest town hall. The centre of our city is the focus for unmarried mothers from all over the United Kingdom. We have an enormous number of homeless families, many of whom have followed the Prime Minister's advice to come to London looking for jobs, which they have failed to find. So why should the ratepayers of Camden be shouldering a disproportionate amount of what is really a national problem, imposed on it by the Government's policies?
Lord Bellwin: My Lords, in no way do I accept the point that the Government's policies have imposed special problems on Camden. The fact is that in assessing need, and in looking at the grant-related expenditure assessments, the factors that the noble Baroness has mentioned, along with many others, are of course considered.
Lord Denham: My Lords, I know that the noble Lord, Lord Taylor, is wanting to get up and ask a question, and so is my noble friend Lord Sandford. But your Lordships may feel that, after those two noble Lords have asked their questions and have been answered, we should perhaps go on to the other business.
Lord Taylor of Gryfe: My Lords, I thank the noble Lord. I wonder whether I may return to the question raised by the noble Lord, Lord Beaumont of Whitley, and ask whether, in regard to the cutbacks that have been announced, there has been any assessment of the consequences in terms of employment. I am concerned not simply about local authority employment, but about the fact that this involves cutting back on capital items such as the replacement of vehicles from British Leyland, or cutting back the construction industry, which may put more people out of employment as claimants on the PSBR, when I understand that the whole purpose of the exercise is to prevent an increase in the public sector borrowing requirement.
Lord Bellwin: My Lords, capital allocations will be announced in the next two or three days. The indi-
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vidual allocations for capital spending have not, as yet, been announced and therefore, as I say, they will come forth. I believe that some are coming today, tomorrow and the next day—during the rest of this week.
Lord Sandford: My Lords, this is such an important Statement that I must crave the indulgence of the House in asking my noble friend one or two more questions. Of course, the associations in local government recognise that, responsible as they are for a quarter of the national economy, they must make a contribution to cutting the local government cloth to match the national economic cloth—
Several noble Lords: Question!
Lord Sandford: My Lords, the question is this. We did not succeed in persuading—
Several noble Lords: Question!
Lord Sandford: If I may just phrase it in my own way, we did not succeed in persuading the Government to delay the introduction of the block grant and so we are faced with a rate support grant which is incomprehensible and unpredictable, as we feared it would be. May I ask my noble friend this question? Is he going to introduce the dampening measures, to make sure that these significant alterations, as between this year and the next, are really held within bounds, having said originally during the consultations that the Government were not prepared to introduce the dampeners? If the dampeners are introduced, will the levels of rate increase which local authorities will be obliged to charge be held within the single figures which his right honourable friend indicated at an early stage would be the case? It is very important to know that.
Lord Bellwin: My Lords, first, I by no means agree that the RSG is now incomprehensible or unpredictable. If I only look at what happened in the past, I am astonished at its clarity. Would that it were more so. As to whether there will be dampeners, multipliers—call them what you like—yes, there will be safety nets—
Lord Sandford: Not safety nets—dampeners.
Lord Bellwin: Dampeners, multipliers—yes, my Lords. There will be multipliers as well. For noble Lords who may feel that this is a technical new word, dampeners is a word which means that you spread out over a period of time the impact of something that you may do. In terms of this subject, that is what it means. As to whether the rates will be in single figures, I shall be very surprised and very disappointed if there are not very many authorities who vote for single figures. Certainly if they stick to the numbers that we have mentioned, and which we have been talking about today, there will be every opportunity for them to do so.

Rate Support Grant and Housing (Wales)
Following is the Statement, referred to earlier, made by the Secretary of State for Wales:
RATE SUPPORT GRANT AND HOUSING (WALES)
"Mr. Speaker, with permission I wish to make a Statement about the Welsh Rate Support Grant Settlement for next year and about housing finance.
"This is the first time that there has been a separate RSG settlement for Wales. At the same time this year's settlement sees the introduction of the new block grant system. My right honourable friend the Secretary of State for the Environment and I have therefore thought it right exceptionally to announce to the House our decisions by way of oral statements on this occasion before I meet the Welsh Consultative Council later this afternoon.
"The Government's decisions (in accordance with the policies already announced to the House by my right honourable and learned friend the Chancellor of the Exchequer) have to take account of the essential economic requirements to reduce public spending, of which local government spending forms such a large part.
"The most important factor in determining the total amount of Exchequer Grant is the volume of local authority spending we are prepared to accept for grant purposes—which is termed relevant expenditure. Until now there has been no separate determination of the amounts of relevant expenditure and grant for England and Wales and in the preparations leading up to this settlement we have had to establish separate relevant expenditure shares. This has involved a comprehensive review of expenditure programmes with other Government departments and I am satisfied that the results provide a fair basis for the start of the separate Welsh RSG system. In deciding the amount of Aggregate Exchequer Grant for Wales we have taken into account the average level of grant received by Welsh local authorities as a whole in recent years.
"I announce first our decisions about housing rent subsidies and housing capital programmes. For Rate Support Grant purposes I am setting the increase in the local contribution for the purposes of housing subsidy at £2·95. In addition, local authorities have to meet housing costs which fall outside the subsidy system and on average these may require rent income of a further 30p per dwelling. The total resources available within my block for housing next year will be £148·6 million at survey prices, of which £23 million will be available to the Housing Corporation and £87·4 million will be earmarked for local authorities. I am holding back from distribution £14 million to cover any possible overspend and to enable underspenders to have a further allocation when this year's final figures are known provided this year's cash limit is not breached. The reserve also covers pump priming for improvements for sales schemes. I am announcing today the housing capital allocations for individual local authorities at out-turn prices and the figures have been placed in the Library of the House.
"Turning to the RSG settlement, I have decided to accept a total, at 1981–82 out-turn prices, of £1,187 million for relevant expenditure. This figure is consistent with the level of expenditure set out in the last Public Expenditure White Paper as modified by the expenditure reductions announced by my right honourable and learned friend the Chancellor of the Exchequer last month. It therefore provides for a volume of current expenditure which is broadly 3 per cent. below the level local authorities were asked to achieve in 1980–81.
"The second decision I have to make is the grant precentage. As my right honourable friend said earlier, the grant percentage, taking England and Wales together, is being reduced by 1 per cent. from the 61 per cent. level last year. In terms of grant for Wales next year this works out at 73·4 per cent.: the higher percentage of Government grant for Wales reflects the substantially lower rateable values in the Principality.
"The Aggregate Exchequer Grant will therefore be £871 million at 1981–82 out-turn prices. In calculating the cash limit within this figure allowance has been made for a 6 per cent. increase in earnings on due settlement dates from 1st November 1980 and provisionally for the pay round starting in August next year. For non-pay items allowance has been made for an increase of 11 per cent. between the average levels for 1980–81 and 1981–82.
"Within the Aggregate Exchequer Grant, specific grants are estimated at £85·14 million the Transport Supplementary Grant
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at £40 million and the National Parks Supplementary Grant at £1·36 million. This leaves £744·5 million for the Rate Support Grant itself, including the domestic rate relief grant.
"For 1981–82 I have decided that for the first year of the new block grant system, il would be sensible to maintain the domestic rate relief at its present level—36p in the pound.
"I turn now to the amount of money to be distributed to local authorities in Wales through the block grant—£696·7 million. I do not propose to go into any great detail about the new block grant system itself since honourable Members are familiar with the basic principles involved and can study the details from the Welsh Rate Support Grant Report I am laying today.
"The principles underlying block grant are of course the same in both England and Wales although there are some differences in the detailed arrangements for Wales to take account of our particular circumstances and of views expressed to me by the Welsh local authority associations. The new system will ensure that authorities that increase their expenditure do not just do so at the expense of others, but that the consequences of the decisions are in large part borne locally.
"There will be some substantial changes arising from the move to the new system based on a current assessment of need rather than on a system based on past patterns of expenditure, and I have decided to moderate these by applying safety nets and a ceiling on grant gains to provide protection for individual authorities and ratepayers. I must make it clear however that the safety net will not provide protection against the expenditure decisions of individual authorities.
"Expenditure decisions remain the responsibility of individual local authorities who, in setting their rates, must consider the effect on ratepayers at large including of course industry and commerce.
"I have confidence that local authorities will continue to respond to central Government targets as they have in the past. The efforts already made by local authorities in Wales to reduce their manpower and expenditure are encouraging as the Manpower Watch figures published today, showing an annual reduction for general services of 3·8 per cent. with a 1·5 per cent. reduction in the last quarter, prove. Nevertheless sustained efforts will continue to be required if expenditure is to be brought down to our targets. I urge every local authority, every councillor, to ensure the Government's volume reductions are achieved and that rate increases are kept to the absolute minimum".

Wildlife and Countryside Bill [H.L.]
4.17 p.m.
Second Reading debate resumed.
Lord Beaumont of Whitley: My Lords, in reverting to the Bill, it is a pleasant duty to be able to thank the noble Lord, Lord Bellwin, wholeheartedly for his exposition of it. We particularly look forward today to two maiden speeches. I suppose it must be rare that in this House we get such a good bag as a brace of Yorkshire Earls, though possibly on this occasion it might be inaccurate, as well as improper, to refer to them as the right and the left.
A couple of days ago, the noble Lord, Lord Foot, said to me, looking at the list of speakers for today with some gloom, that a lot of noble Lords would rise to their feet, say that they were not going to make Committee points and then proceed to make them. I have decided to take up the challenge of the noble Lord, Lord Foot, and to leave all those matters of the detailed parts and the clauses of the Bill for my noble friends who will be speaking later and also for Committee stage,
There can seldom have been a Bill about which there has been so much discussion beforehand, and where noble Lords who are interested have been overwhelmed by so many briefs—briefs which are all welcome and

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I think will be used by various noble Lords when we come to the Committee stage. Just because I do not at this stage go into details it does not mean that colleagues on these Benches will be backward in putting forward amendments. But I think it is worth looking at the basic arguments which we shall be bearing in mind during the next few months.
The basic questions today are really not dividing the parties. The noble Lord, Lord Melchett, made considerable play with what they on those Benches would be doing and saying. But although it is the Opposition's duty to oppose, I suspect that the arguments in this House on this Bill will not be the normal ones of Conservative, Socialist and Liberal, to which we are so accustomed.
Much more important will be the divide which the noble Lord, Lord Melchett, also mentioned between farmers and conservationists and which he quite rightly said is probably not so great as we are sometimes led to believe. But we are going to have this debate and discussion between the farmers and the conservationists, both of them working within the constraints of the Government's economy which, much as many of us may regret it in certain fields, we have to take as a fact. That will be the main discussion, with a few blood sports enthusiasts baying round the outside.
It should not be beyond the powers of this House, including as it does many who have a foot in both camps, many of whom would call themselves both conservationists and farmers, to reconcile these interests, in so far as they can genuinely be reconciled. The objectives of both are honourable. The agriculturalists do not want unnecessarily to be bound by bureaucrats; nor do they wish to lose money; nor do they wish to farm, as they would regard it, uneconomically. These are views towards which everybody in this House must be sympathetic.
But the conservationists want to preserve wildlife and certain aspects of country life, and it is a wide spectrum that they cover. Most people will agree with one main point that the conservationists put forward: that where there are rural phenomena which have existed for centuries and whose continued existence is under very real threat, they must be preserved both for now and for posterity. This applies, whether it is butterflies, heathland, or anything else.
From time to time these threats to the countryside become great, as they are now. The last occasion was the time of the enclosures. Very few noble Lords will have first-hand memory of that particular occasion, but we have our witnesses. Noble Lords may know John Clare's poem Remembrances, written just after the enclosures:
By Langley Bush I roam, but the bush hath left its hill,
On Cowper Green I stray, tis a desert strange and chill,
And the spreading Lea Close oak, ere decay had penned its will,
To the axe of the spoiler and self-interest fell a prey,
And Crossberry Way and old Round Oak's narrow lane
With its hollow trees like pulpits I shall never see again,
Enclosure like a Buonaparte let not a thing remain,
It levelled every bush and tree and levelled every hill
And hung the moles for traitors—though the brook is running still
It runs a sicker brook, cold and chill.
The people who made the enclosures were honourable men, too. No doubt many of them had the very best
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motives, and in some ways the enclosures were a necessary part of the development of the English countryside. But too much ruin was wrought in the process and we must see that the same does not happen at this new moment of danger. And it is a moment of danger, of the same order as that one.
Farmers, however, must live and food must be produced. I should be the last to want an unprosperous farming community. I worked on farms all my youth, during the war and after. I read agriculture at university. It was, noble Lords will remember, a time when memories of the 'thirties and of the decay of agriculture in that sad time were still ripe in the minds of men.
I know the evils of neglect. No Liberal is likely ever to forget that food is needed in the world, although at this moment the kind of food we produce is probably not of very great significance in terms of world supplies. But we do need to reconcile the interests of agriculture and the environment. It is a very great shame when dealing with this Bill that we cannot at the same time cope with the revision of our agricultural policy in order to reassure and reward the farmers. It is an even greater shame that countryside matters are split between MAFF and the Department of the Environment. It is a great pity that we do not have, as so many European countries have, a department of rural affairs.
Despite these handicaps, we must try to reconcile our differing interests, always putting first those things which cannot be reinstated if they go. We must safeguard those things whose loss is irrevocable. There are many at stake. Let us at the same time say to the Government, "We understand your problems. We respect your determination to stick to policies, even those which we on these Benches believe to be wrong. We congratulate you on this Bill, the first Countryside Bill to be brought forward by a Conservative Government. But if the need is shown by fair argument in this House, which can contribute so many experts, for more money to save the irreplaceable, or to recompense the farmer in order to save the irreplaceable, that money must be found".
No true Conservative would have it said of him that he sacrificed any part of the heritage of the countryside to solve an economic crisis which, however deep and however abiding, is transient compared with the history of rural Britain and the profound age and continuity of our natural scene. Let it not be said that over the next few weeks we in this House made that sacrifice.
4.28 p.m.
Lord Gibson: My Lords, may I begin by asking to be forgiven. I have an early evening appointment which might prevent my returning in time for the winding up, though in view of the number of speakers it is possible that I shall return in time. However, if matters turn out otherwise, I hope that the noble Lord will forgive me. I will try to take the advice of the noble Lord, Lord Foot, in his two Committee points. It has the extra advantage that it enables one to be brief, which is doubly important with a list of speakers as long as that which we have this afternoon.

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Generally, I want to welcome the Bill. One must always have the utmost sympathy for people who are in the difficulty of trying to reconcile opposing points of view. Although the noble Lord, Lord Melchett, made the very worthwhile point that many people in this area wear many hats—farmers are also naturalists, and people do not always find it difficult to see each other's point of view—the fact remains that conservation societies, which exist for one purpose, often find it difficult to take account of the point of view of others. In fact, it is not what they are there for. Therefore one's sympathy for the Government in their attempt to reconcile these conflicting approaches is genuine.
Certainly I, who speak as the chairman of the National Trust, have great sympathy for them because we are one of the largest public landowners in the country. We are always trying to reconcile opposing pressures from naturalists, archaeologists, our own tenant farmers and the public who want access, whenever they can get it. It is only by a policy of balanced management that one can hope to achieve some success in reconciling these perfectly legitimate but often contrary pressures.
The National Trust owns and manages about half a million acres of land for public benefit—and not only for the benefit of our own members, who now number about a million, but for the benefit of everybody. That is quite apart from the 200 or so open houses and the villages and the windmills and the landmarks and all the other cottages that go to make up our general estate. Formed in 1895, we have been landowners for a long time, but what I think is relevant to today's debate is that it is really only since the Second World War that we have come to appreciate increasingly, as have all enlightened landowners, the immense complexity of the treasures that we own.
Of course that applies as much indoors as out; as much to textiles, furniture and pictures, on which specialised knowledge has grown immensely in the last generation as therefore has the cost of applying that knowledge to conserve them for future generations to enjoy. Knowledge of all the things that happen in the countryside has also grown immensely. Because of increased public interest many more people study them and far greater treasures are being seen, alongside the knowledge that has developed about their existence and their practice.
This poses us the very difficult problem of finding the money to do all the things which we now know we ought to do. As usual, cash is at the bottom of our problems, as it is at the bottom of most of the problems which the Bill seeks to resolve. So it is against this background of finding a policy of balanced management—by which I mean managing our land selectively for the particular needs of each different area with which we are concerned, having discovered how important it is and that we can only advance and achieve any real success through such a policy—that I look at this Bill. The fact is of course that legislative protection can only play a negative role and these policies of balanced management are expensive and the Bill does not provide very much hope that it will be possible to provide greater resources to back the kind of management agreements which I am glad to see the Bill envisages.
At present we in the National Trust are prevented by
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lack of funds from taking many of the conservation measures that we and the Nature Conservancy Council know to be necessary. Past experience shows that the NCC itself has been greatly curtailed in its ability to help owners by means of grants and loans under existing legislation, so I am rather dismayed to read in the explanatory and financial memorandum to the Bill that additional expenditure under this heading is not expected to be significant.
Likewise, as regards Clause 31, which empowers planning authorities to conclude management agreements for conserving and enhancing natural beauty for public enjoyment, which of course are two of our major objectives in the Trust, we know from experience that, to be effective, this provision must be supported by adequate finance.
So it costs money to implement management agreements and it costs money not only because it can necessitate compensation to owners or rent abatement to farmers but because grants or loans may be needed to carry out actual work and because, in our experience, management schemes take a great deal of time and trouble to draw up and management time to monitor. I recognise fully that until our economy is in better shape little can be afforded in the way of finance, but I should be more encouraged if in the Bill the Government showed more recognition of the basic truth that in this crowded island of ours management of the countryside, where we need to achieve the required balance of interests, cannot be achieved without whatever agencies are set up being properly funded.
In regard to the first Part of the Bill, I should like to make one general point. The Bill certainly makes genuine progress towards the preservation of birds, animals and plants, but there is the problem of policing and I should like to make the suggestion that the County Naturalists' Trusts should be given greater standing than they now have. I believe they are very useful bodies and those whose job it is going to be to police these provisions would be very much helped by these trusts if the trusts could be regarded as part of the system. I am reminded of the system under which the Territorial Army was regarded by the War Office as part of our defence system and territorial regiments had adjutants who were regular soldiers. If the Nature Conservancy Council had funds to pay the salaries of the secretaries of these naturalists' trusts—in many cases the secretary's is a full-time job and generally the trusts are too poor to be able to pay their own—I believe the trusts could be very much more effective and they could do a great deal to help in the policing of the sort of arrangements which the Bill quite rightly envisages.
Turning to Part II of the Bill, I want to say only that I found what the noble Lord, Lord Melchett, had to say about the phrase "super areas" echoed strongly in my mind. It alarmed me when I read that comment from the Minister in the paper because that is exactly what we do not want, to create super areas and downgrade the rest. The sites of special scientific interest, of which I think there are 2,000 biological sites, have not been designated idly. Of course they cannot all be given the same degree of protection but they are graded as historic buildings are graded and they ought to be afforded the degree of protection appropriate to their grade. Certainly no agricultural

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or forestry change of practice ought to take place on any SSSI without very careful consideration. I am just afraid that by concentrating on super areas we shall automatically downgrade the rest. As the noble Lord, Lord Melchett, said, nothing is really done in this Bill for the ordinary countryside, and I think we have to regard our countryside as a whole.
That is all I want to say about the Bill. In general I welcome it. It does not go as far in every respect as I should like but I hope that we shall be able to make some changes in Committee. I think it is a genuine advance and an attempt to strike a balance and, in short, I welcome it with what the late Mr. Ivor Novello called "modified rapture".
4.39 p.m.
The Earl of Halifax: My Lords, I feel very honoured and privileged to intervene in this important debate with a maiden speech. In the short time that I have been a Member of your Lordships' House I have learned that none of your Lordships takes part in any debate without abundant qualifications to do so. The qualification I dare to claim is perhaps the most sincere of all, a deep devotion to the countryside and to that part of Yorkshire in which I have always lived. Since the reorganisation of local government I have, strictly speaking, ceased to be a Yorkshireman and become a Humbersider—but I try to forget that if I possibly can! Therefore I fully support what I believe to be the essence of this Bill, which is the preservation of the countryside and the provision of facilities for public enjoyment of it. But if this is misinterpreted and misrepresented it could lead to a confrontation between the urban and farming communities and, more serious, between the farmers and the environmentalists.
The majority of those who pose as defenders of our rural heritage seem to point an accusing finger at our hard pressed and hardworking farmers. Miss Short, in her book Theft of the Countryside, presents a one-sided picture of a countryside revaged by farmers, a destructive minority hell bent on transforming the most beautiful countryside in the world into a featureless factory farm. The consumer and the environmentalist lobbies are both attacking the farmer, the one for the huge cost of food and the other for destroying our hedges, the weeds and pests of our crops. My Lords, while we may deplore what some regard as the rape of the countrside for profit, we have to accept that agriculture is a business, that the agricultural community, farmers, farmworkers, manufacturers and suppliers of all sorts of services and goods, is dependent on its economic success. Living as we do on an island, and still dependent on imports for half our food, we must surely realise that the British farmer is the hub of the economy. We have therefore to look for a pattern of rural development which accommodates the aims of this Bill within the needs of the agricultural community.
The countryside bears the stamp of man almost as much as nature. In particular it owes its characteristic features to the fact that it has been farmed. It is for this reason that neither the farmer nor the forester can be regarded simply as members of an industry or on the same footing as those in other industries. In addition to their function of providing food and
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timber from the land, farmers and foresters are unconsciously the nation's landscape gardeners, a privilege they share with the landowners. My Lords, I am convinced that the beauty of the countryside is enhanced and in no way impaired with a thriving farming industry.
Enormous changes have occurred over the past few decades in the pattern of the countryside through the farmers' need for bigger fields, including heavy loss of hedges and hedgerow trees. However, we cannot simply urge a policy which seeks to prevent such changes, for it would be self-defeating. Trees in our time will die and if they are hedgerow trees they will not be replaced. Our landscape one hundred years ago was mainly one of small fields divided by hedgerows; farms were smaller both in area and in the size of their buildings; villages were the hub of an agriculturally dependent community and not a dormitory for the more affluent urban workers. While we may regret the loss of such a state of affairs from a scenic point of view, it has gone for good.
The Bill is as much concerned with the preservation of our flora and fauna as with the conservation of the countryside. The principal reason for this concern must surely be the loss of habitat. Unless we can secure for our wild animals and flowers satisfactory habitats, measures for their protection may be in vain. One has only to think back to the unimproved meadow and the wealth of wild flowers and herbs which it supported to understand the need. They can no longer be fitted in with modern farming, but they must be fitted in somewhere.
I have argued that if modern farming in the largely arable areas, with its powerful machinery, requires large fields for economic operation, then this must be accepted. It is a change which is dictated by necessity. As such, it is at one with the loss of woodland which followed agricultural developments in the Middle Ages or the ploughing up of uncultivated land during the Napoleonic Wars. But we must seek to encourage measures to prevent an agricultural desert. I see this as the encouragement of woodlands or shelter belts more widely spaced than the hedges for which they will be a substitute. This will have an effect of providing more habitats for our wildlife and so help to prevent future losses among our species. Such shelter belts would provide a new but not unattractive replacement for some of the familiar hedges we have lost or are in process of losing. I should therefore like to see incorporated in this Bill, in addition to the negative proposals which seek to prevent things from happening, positive proposals which will preserve to some extent our rural heritage, albeit in a different form.
I think it is necessary to put this problem of public enjoyment of the countryside into its proper context. The 1949 Act sought to secure reasonable public access to land for the purpose of recreation. This was usually achieved by defining as public rights of way footpaths shown on Ordnance Survey maps. At the time these maps were produced there was probably little or no public demand for access to the countryside, and there was certainly no feeling that consents were needed. When Victorian factory workers sought rest and recreation they went to the seaside, and new towns grew up to accommodate them. Parallel facilities in

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the countryside would, of course, be self-defeating; but we may be approaching something of the same scale of demand and this has to be recognised. We who live in the country are anxious that others should enjoy it, but it is essential that the arrangements for them to do so should be acceptable to reasonable opinion in the rural areas. Any solution imposed on country people would inevitably lead to the confrontation of town against country to which I have referred earlier.
My Lords, I have no miracle recipe for preserving the countryside, which is the envy of the world, or indeed for making sensible arrangements for all who want to enjoy it. But I am confident that long after the last dregs of our newly found oil reserves have been exhausted the richness and beauty of our land will remain. But it will remain a joy for our descendants only if all of us, town dwellers, farmers, landowners and all countrymen, both love it and respect it. It is very precious, and if we treat it without respect we could destroy it for ever.
4.49 p.m.
Lord Walston: My Lords, it is always a privilege to be the speaker after a maiden speaker. On this occasion it is a very special one, because we have listened to a very special speech from somebody who clearly not only knows the countryside and has it close to his heart but has thought deeply about it, and has expressed himself in a way which I know has commended itself to all your Lordships. My only regret at following so closely upon the noble Earl is that he has in fact made my speech for me; he has said all I intended to say, and he has said it very much more cogently and much more briefly. But, my Lords, I shall not be deterred. I hope he will find that what I have to say at least reinforces and underlines his views. I certainly hope that we shall frequently hear him on this and other subjects.
I think that at the outset I should declare not one interest but three. My first interest is that of a countryman, of somebody born and brought up in the countryside who simply enjoys the country: enjoys walking in it; enjoys smelling it; enjoys getting his boots dirty from its mud; enjoys looking in a very amateurish way at the things which grow there and, in my own particular part of the world, enjoys something which is a part of the countryside, but which clearly does not come into the ambit of the Bill, and that is the sky, the clouds and the feeling of space and freedom. That is my first interest.
My second interest, allied to the first, is that of somebody who for many years has been connected with a large number of organisations concerned with the preservation and improvement of our environment and, in particular, with my own local Cambridgeshire and Isle of Ely Naturalists' Trust which has done, as have so many others, admirable work in this respect.
My third interest, which perhaps I need scarcely mention to your Lordships now, is that of a farmer, and it is primarily as a farmer that I shall speak this afternoon. Other speakers have already told us about the changes that have been and that are taking place in the countryside. I do not think that that can be over-emphasised. The countryside which most of us enjoy today is a countryside which was created by reason of economic forces over the last 200 years.
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Before the great enclosures, as the noble Lord, Lord Beaumont of Whitley, reminded us, our countryside was very different indeed. There were many people, including John Clare, whom he so aptly quoted, who bemoaned the passing of the countryside that they loved.
Closer to home in my own case, the fens of Cambridgeshire and the Isle of Ely are today a wonderful habitat for all sorts of species and many efforts are made—and successful efforts—to preserve certain areas of them because of the fauna and flora which live there and which live in few other places. But before Vermuyden came along in the 17th century there was nothing of that sort. There were other types of animals and other types of vegetation. Had certain conservationists been as vocal then as they are today, and had they got their way, we would not have those fenlands and wetlands which we now cherish. It is all part of a dynamic process brought about by economic forces because it is worthwhile draining land, worthwhile enclosing land, worthwhile ploughing up land and worthwhile removing hedges. All that is part of the dynamic process which created the dynamic countryside.
We have no right to say that this is enough, that today, December 1980, is the occasion when the countryside is perfect and must not be changed. We must encourage the change and live with the change. We must realise that certain types of fauna will disappear—just as the wolves and many of the snakes have disappeared from the countryside without being very much regretted—and others will come and take their place. The balance will alter, but for all that it does not mean to say that we can have unbridled economic exploitation. It must be exploited on economic grounds, but with restraint, with understanding and with love.
We have the conservationist lobby—and the noble Earl quite rightly drew our attention to this matter this afternoon—and we have the environmentalist lobby, many of whom are doing admirable work and all of whom are inspired by the best possible motives. But some of them, I am sorry to say, do a disservice to the cause that they wish to promote. An article in last week's Sunday Times, already referred to by one noble Lord, speaks of "no hiding place for Britain's wildlife". That is an alarmist piece of journalism with half truths and some full truths, but giving a very misleading impression. I shall not go into it in enormous detail because it would take far too long. But there are some facts about which I think it is worth speaking and I shall confine myself solely to the removal of hedgerows—a matter which the noble Lord, Lord Melchett, mentioned.
Personally I do not like hedges—aesthetically I do not like them. I would much rather see wide open spaces and maybe that is because I was brought up in an area that was reclaimed from heathland about 130 years ago and, on my farm, without removing a single hedge, I have one field of 400 acres and one field of 300 acres. To my mind it is far more lovely countryside than the little four and five acre fields of the West Country where one cannot see over the hedges and one cannot see the countryside at all. There are very few people who walk slowly along those roads looking at the wild flowers growing on the banks. Most drive

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rapidly past and would be happier—at least their passengers would be happier, though I hope not the drivers—if their eyes could wander and see the countryside instead of endless rows of hedges.
Be that as it may, let us look at some of the facts about hedges—economic facts and wildlife facts. I was sent the other day a publication from the University of Cambridge Department of Land Economy entitled Farm Modernisation and the Countryside, written by Dr. Ford Sturrock and Mr. John Cathie. I strongly recommend it to your Lordships. It contains certain figures concerning the size of fields which are worth quoting at length to your Lordships. It states that in a two hectare field (five acres) only 37 per cent. of a tractorman's time is spent in cultivating, the remaining 63 per cent. is spent in turning, cultivating headlands, changing fields and contingencies. In a 10 hectare field (25 acres), which is not an enormous field, it states that the effective time rises from 37 per cent. to 59 per cent., and in a 40 hectare field to 71 per cent. It inevitably makes a very considerable difference to the cost of production if one is going to get that much increase in the effective time of the man who is driving the tractor and of the tractor itself.
It goes on to state that an increase from 10 hectares to 20 hectares (25 to 50 acres) increases the work rate by up to 24 per cent. So, there are very real economic advantages in increasing the size of fields and in removing hedges.
Viscount Massereene and Ferrard: My Lords, surely that depends on the type of soil? I knew someone who removed all his hedges in Norfolk. A great gale blew and he lost all his land. It depends on the type of soil. If one has very light soil and a 400 or 500 acre field it can be a very dangerous process.
Lord Walston: My Lords, I do not want to enter into a detailed technical argument with the noble Viscount at this stage and in this place, but I should be happy to do so elsewhere. In fact, that argument is dealt with in the publication, which the noble Viscount will doubtless read, and I hope that he will be convinced that there is very little, if any, danger of that sort of thing happening other than in the fen country of Eastern England where there are no hedges. And in any case, hedges do precious little good, but shelter belts are of enormous importance.
Let us see what problems arise with regard to wildlife if we remove hedges. Here again there is some very interesting information in a paper published in 1970 by Mr. Hooper. Bird nests were counted on three farms which the author believed to be closely comparable, except that Farm No. 1 had fewer hedges than Farms Nos. 2 and 3. To compare Farms Nos. 1 and 3, they are both 200-acre farms. Farm No. I had 1·8 miles of hedge on the whole farm and Farm No. 3 had double that, 3·6 miles of hedge. Yet, curiously enough, if you counted the nests per 1,000 yards of hedge, you found that Farm No. 1 had 20·5 nests per 1,000 yards and Farm No. 3 had 11·9 nests. In other words, the farm which had half the distance of hedge had virtually double the density of nests. The number of birds nesting there was identical.
I do not put that forward to your Lordships as
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scientific proof that by removing hedges you do not in any way damage bird life. I am simply suggesting to your Lordships that we need to look far more carefully at the generally-held thesis, that by removing a hedge here and and a hedge there we are inevitably damaging the wildlife, and in particular the bird life on any particular farm. I think that that is something which could well warrant further research.
I shall move on, briefly, to comment on access to the countryside. I believe very strongly that farmers and landowners must adjust themselves to changing circumstances, to the need and the desire, not only of townsmen, but of the people who live in the villages themselves but who are, in essence, urban people at heart, working in the towns and spending most of their life in the towns, to have access to the countryside.
They have their motor cars and their motorways, which enable them to leave the urban centres and travel to the heart of the country. When they get there they want to be able to picnic; they want to be able to walk; they want to be able to play games with their children, and they want to be able simply to sit and enjoy life, to enjoy the sounds and the smells of nature. Farmers have an enormous privilege in that those are things that they have every day of their lives and we, as farmers, cannot hug it to ourselves and say that nobody else must go there.
There must be more access to the countryside, more footpaths, more bridle paths, more picnic places and more caravan sites. All those must develop as time goes on, but they must be developed in such a way that the potential conflict between the urban and nonagricultural users of those amenities and the farmer whose livelihood depends on them is, in fact, avoided.
In my own case, instead of erecting signs saying "Private property—keep out" or "Trespassers will be prosecuted", we have put up signs saying "Walkers and riders are welcome, but please do not bring your cars and please stick to the paths". On the whole, that works very well, but I am afraid that we still suffer from a certain number of mainly young men who bring their motor cycles along and use the land as a testing ground for them, and then skid round on what they think is am empty field—they may not even think about it at all—but which, in fact, contains a planted crop. We suffer even more mainly from young ladies on their ponies who do not realise that the path is a narrow one and that they must stick to it; hoof marks go all over the place, and if you speak to them they say: "I am very sorry; I did not know this was a crop. I thought it was just grass", or something of that kind. There is a need for a great deal more understanding and education by the environmentalists, the hikers and all those people who are concerned with the countryside, towards teach those who do not live on the land—as many of us here do—what is the right form of behaviour.
The final point I would make is the one which the noble Lord. Lord Gibson, also raised—namely, the question of cost. Inevitably, all these things cost money. The countryside of the 18th and 19th centuries, particularly with its beautiful trees and its lovely plantings of Capability Brown onwards, all cost money. It was paid for, in the main, by rich landowners who had plenty of money to spare and who were growing the trees for posterity, mainly for their own families but also for the enjoyment of others.

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Today, circumstances have changed. There are a few—but very few—landowners still with sufficient confidence in the future, still with sufficient altruistic imagination and still with sufficient money to do that sort of thing. To some extent farmers will do it, especially if they have adequate profit margins, because they enjoy it. But the point that we must all accept is that this sort of embellishment of the countryside—the planting of new shelter belts, the planting of new small woodlands, the planting up of the corner of fields, and so on—are expensive operations and are being carried out, not for the enjoyment of a single landowner, not for the preservation of game for one or two shooting tenants or shooting owners, but for the enjoyment of tens of millions of people today and in the future.
I believe that it is a public responsibility to ensure that, by some means or another, this type of embellishment continues and is made possible. Although I share other noble Lords' welcome for this Bill, I should like to see a more positive approach taken particularly in this matter, so that the generations ahead will be able to look back and say, "The Countryside Bill of 1980–81 is what we have to thank for the countryside that we are enjoying today", rather than, "What a missed opportuity that was".
5.8 p.m.
Lord Middleton: My Lords, I, too, have special reasons for expressing my pleasure in welcoming the "debut" of the noble Earl, Lord Halifax, and in congratulating him on a first-rate speech. As a small boy in Yorkshire, I held his grandfather in what amounted to veneration. There was this great man—ex-Viceroy of India and Foreign Secretary, about to carry out the vital task of Ambassador in wartime Washington—who had the marvellous gift of talking to humble people with the same courtesy and on the same intellectual level as if he was speaking to his colleagues on the affairs of state. He was just as happy discussing the behaviour of Mussolini as the probable line of a fox. In that connection, I do not think that he would have appreciated the hedgeless countryside advocated by the noble Lord, Lord Walston.
This made a deep impression on a schoolboy. I also held his father in great admiration and affection and, like many of your Lordships, I shared in the widespread pleasure occasioned by the Halifax family victory when Shirley Heights won the 1978 Derby. I look forward keenly to the maiden speech of another fellow-Yorkshireman, the noble Earl, Lord Peel.
Like the noble Earl, Lord Halifax, and like most of those who have the great privilege of owning land in the English countryside, I am an ardent conservationist and at the same time a farmer and forester. I provide and maintain habitats for wildlife, and I am a food producer using modern farming methods. I have served on planning authorities, one of which had two national parks in its area, and also on bodies concerned with the needs of industry. I have sites of special scientific interest and public rights of way within my farmland, and I run beef cattle with their bulls on land where new footpaths and bridleways are being created. Therefore, I have a personal interest in most of the provisions of this Bill.
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I am well aware of the multiplicity of pressures upon rural land, and I am glad that these pressures were acknowledged by the noble Lord, Lord Beaumont of Whitley. Our total land area in relation to our population is small. Only 40 per cent. of that land is capable of being cultivated, and from that proportion of the total area 3 per cent. of our population has to provide food for the other 97 per cent., while the supply of agricultural land is being diminished each year.
Land must be made available for development of every kind, for improving communications and for the winning of minerals. On top of this, as we have heard this afternoon, the recreational needs of the urban population and the pressure to conserve wildlife grow more urgent every year, and all of us want somehow, and at the same time, to maintain the incomparable beauty of the countryside. A balance has to be found to reconcile all these pressures in the best interests of the nation, and any Government which attempt to legislate to strike such a balance have my profound sympathy as well as that of the noble Lord, Lord Gibson.
The need for balance was stated in the Countryside Act 1968 where we have these two well-thumbed sections, Sections 11 and 37. Section 11 says:
"every Minister, Government department and public body shall have regard to the desirability of conserving the natural beauty and amenity of the countryside".
Section 37 says that every Minister and the Countryside Commission and the Nature Conservancy Council and local authorities shall have
"due regard to the needs of agriculture and forestry and to the economic and social interests of the rural areas".
These two sections are no help whatever when trying to determine just where the balance should be struck. They serve as a reminder of the difficulties inherent in making good land use.
I am sure that the Government have gone to immense trouble in drafting this new countryside Bill to take fully into account the kinds of pressure and conflicts to which I have referred. I therefore welcome it both for what it aims to achieve and for the ways in which it seeks to fulfil these objectives. I have a great deal of sympathy with the objectives of the many pressure organisations that form the conservationist lobby, and I listened with great interest to what the noble Lord, Lord Melchett, had to say earlier.
Recently many of the conservation arguments and the agricultural arguments have been aired in the correspondence columns of The Times. Sadly, some of these letters show some lack of understanding of the natural world and the problems of food and timber production, and it is quite apparent that there are wide differences of opinion about how best to regulate land use in the national interest. This, I think, is not so very surprising. I am therefore equally certain that many of the provisions of this Bill will come under attack in its progress through Parliament.
There are those who say that conservation of the landscape is too important to be in the hands of farmers, and that planners should take charge. I disagree with them. Anyone who has seen what planners have done to some of our towns must feel alarm at the prospect of letting them loose on the countryside. Moreover, the whole aim of Government nowadays in the interests of the national economy is to speed up

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the planning process where it applies and not to extend it to new areas, and there could be no better evidence than Circular 22/80 recently issued by the DOE on Policy and Practice in Development Control.
I am quite sure that the best way of achieving conservation is through sensitive management policies, voluntarily and willingly pursued by landowners and farmers, and not through coercive restrictions. All this, according to my reading of the Bill, is well recognised by the Government. Such recognition finds expression particularly in the moorland conservation clause, Clause 33, which, as the noble Lord, Lord Bellwin, told us, provides a reserve power for Ministers of Agriculture and the Environment to prevent heather moorland being converted to agricultural use unless 12 months' notice is given to the National Park Authority. The intention is that this period should give the opportunity for voluntary arrangements to be agreed between farmers and the relevant authorities.
This clause provides proof of the Government's confidence in the kind of voluntary restraint and co-operation to which the noble Lord, Lord Bellwin, has referred and which is already evident in the case of Exmoor between farmers and landowners on the one hand and the National Park Authority on the other. The Government's judgment that this kind of procedure will give the best results, and the Government's reluctance to take on compulsory powers will, I believe, despite Lord Melchett's fears, be fully justified.
The other principle which appears to be accepted is that if the community wishes to restrict an owner's rights in the interests of conservation, then the community should be prepared to accept some financial responsibility. There is a widespread misconception that conservation is free. It is not, and this point was well made by the noble Lord, Lord Walston, just now. It means extra costs of production, and it means lost opportunities for increasing the national wealth. It may still be very desirable, but in the end it is the general public who will foot the bill, and they ought to know its size before they decide whether they want to pay.
If the community demands that certain areas remain agriculturally unproductive either to preserve habitats or for landscape reasons, then the community should contribute to the cost. This seems to be recognised in Clause 30, which provides for grants and loans to be made by the NCC; in Clause 31, which provides for payments to be made for the purposes of management agreements; and in Clause 34, where planning authorities are empowered to give grants and loans for conservation and for the better enjoyment by the public of facilities in national parks.
As the noble Lord, Lord Bellwin, told us, Clause 26, which empowers the Secretary of State to make orders designating areas of special scientific interest, forbids an owner or occupier from carrying out any operations which might destroy that which is intended to be preserved; though other people, and other bodies or agencies of possible destruction, do not appear to be covered by this prohibition. I, in passing, wonder how much of Lord Melchett's alarming catalogue of damage was attributable to these other agencies and how much to owners and occupiers.
In the department's information paper it is implied
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that these Clause 26 orders should be made only in the limited number of cases where the situation is critical. One is led, therefore, to compare this procedure for what I might call extra special sites with the present procedure for designating ordinary special sites of which there are, if Lord Melchett is right, about 4,000. These were created merely on a declaration by the NCC that the site was of scientific importance, and all that was required under the 1949 Act procedure was notification of the local planning authority. Owners did not have to be informed, and in some cases were left quite unaware of the designation of part of their land. Neither does an owner have any right to question the declaration or to challenge its scientific validity.
On the other hand, there was no statutory obligation on an owner or occupier not to do things that might damage the site; but there was mechanism in the 1968 Act for voluntary agreements. So in some respects that procedure was unsatisfactory, and I can understand the reason for introducing special procedure for extra special sites. But what could happen is that the Clause 26 system of designation by order, which is far more restrictive and which on contravention carries a penalty of up to two years' imprisonment, will become the normal method of designation. We must, I think, delve a little further into this in Committee.
I might add in passing that the mind boggles at the idea of the number of inmates in our overcrowded prisons being swollen by the arrival of malefactors who have contravened Clause 26(2). Meanwhile, perhaps the noble Earl, Lord Avon, could tell us when he replies how many extra special sites he has in mind, and I should be grateful too if he would tell us whether he agrees that the 1949 designation procedure for ordinary SSSIs could be improved. Does he also agree that better financial backing should be given to management agreements for the old categories of SSSIs as well as the new?
I have no doubt that Part III of the Bill, dealing with public rights of way, will attract a good deal of attention both here and in another place. I merely say that broadly I welcome Clause 39, which sets up a continuous review procedure for keeping up to date definitive maps. Clause 46, which prohibits the keeping of bulls on land which is crossed by a footpath or bridleway, was strongly criticised by the noble Lord, Lord Melchett. I thoroughly approve of the general prohibition. There is a fear, however, which I can well understand but which I believe to be wholly unjustified, that not to extend the ban to herds of beef cows will create a danger for footpath users.
Some provision must be made for beef herds if production is not to be seriously curtailed. It is a fact, long accepted in the countryside where such matters are understood, that suckler herds, with or without the beef bulls that run with them, do not present a danger to persons crossing their grazing ground on foot. It may be a pity that the idea of temporary diversions that was, I believe, accepted by the Ramblers' Association and by the owners' and farmers' organisations was thought to be impracticable by the local authorities. However, what is now proposed is fully in line with the law in Scotland, which seems to be working satisfactorily.
Inevitably there will be matters of detail to discuss

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in Committee—I have a few in mind—but I hope the Government will strongly resist pressure to introduce any further legal controls into the management of the countryside. The Bill as drafted seems to strike an acceptable balance between regulation and non-interference in countryside affairs. I conclude by reminding your Lordships of some words used by the Secretary of State for the Environment at a conference last month,
"The fact is that unless farming is in good shape, the countryside cannot be".
5.22 p.m.
Earl Peel: My Lords, in adhering to the traditions of this House, I crave your Lordships' indulgence as, like my noble friend Lord Halifax, this is the first time I have had the honour of addressing your Lordships. I had been advised that when making my maiden speech it should really be on a subject that is not particularly close to my heart (what some people regard as a secondary subject) but I am afraid that I must admit that I am perhaps breaking one of the basic rules of the House, for this Bill is extremely close to my heart due to the fact that I live, work and own land in one of England's national parks—dare I say the most beautiful national park?—the Yorkshire Dales. 1 must add that I commiserate with my noble friend Lord Halifax for having been voluntarily moved out of Yorkshire; he has my every sympathy.
I had thought originally, before I had a chance to consider the Bill more closely, that Part I confined itself to a large extent to birds and mammals of the United Kingdom. It was therefore with considerable amazement and a certain degree of disillusionment in my powers of observation throughout the English countryside that when I first opened the Bill I read about such creatures as the desert rat kangaroo, bridlenail-tailed wallaby and hairy-eared dwarf lemur. However, on closer examination I soon became aware that these splendid creatures were not likely to be the subject of any SSSIs, unless of course they were found, in which case I presume they would be.
Noble Lords, as they have expressed, are very much aware that during the last 30 years or so there have been far-reaching changes in our countryside and great demands made on it. There has obviously been a demand for increased food production, more timber and a growing need to facilitate the desires of an ever-increasing leisure-conscious population. This has naturally resulted in legislation and negotiation to try to cope with the inevitable diversification of interests that have developed, with the aim of trying to maintain a sensible balance. Nowhere is the balance more acute than in the national parks and the uplands of Great Britain.
Much debate and a certain amount of action has taken place with regard to the introduction of small industries into rural areas for the purpose of trying to introduce new blood, and of course to try to restrict the demise of the local population. This is indeed a most important consideration and must be pursued wherever possible; but equally important, and in many ways more so, is the necessity to give maximum support and encouragement to those involved in the established industries, for once they go they will never be replaced.
I sometimes wonder whether people tend to forget about the main upland industries, primarily farming,
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which have held these areas together for so long, and how important it is both now and in the future not to pressurise these people to too great an extent but to give them every encouragement and the recognition they deserve. In my area alone the number of farms has halved in the last 30 years, and as older generations die out the prospect of continuity becomes increasingly remote.
There is another activity besides which over the years has played a most significant role in the preservation and management of the moorland environment. Further to the comments of the noble Lord, Lord Beaumont of Whitley, I am one of the "baying Lords on the outside", I am referring of course to field sports and, in particular, to shooting, for I must say, without any hesitation whatever, that the contribution of this sport to the enhancement and benefit of wildlife in general has been of the greatest significance, and if for any reason it should be run down in the future I am quite convinced that the effects will become glaringly obvious. In addition, it should not be forgotten that shooting in general, and in particular in the uplands, has become a major foreign currency earner.
However, those of us involved in the activities of the uplands must accept that these accepted and traditional land-use methods have to operate within a framework that can incorporate the needs and desires of others, and thus we must learn to co-operate more fully with the various authorities that have become prevalent in trying to satisfy all these many and varying demands. I feel so far, however, that due largely to sensible give and take on all sides, most upland areas have managed to maintain a sensible and reasonable balance. It is therefore within this basic need, to give every possible encouragement to those who live and work in the countryside within a sensible degree of management and control, that I consider the Bill.
I am well aware of the considerable discussions, representations and debate that have taken place during the build-up of the Bill. Although I am unhappy to a certain degree about aspects of the Bill, in particular in Part I, I believe that the Government should be congratulated on attaining a reasonable compromise.
I am also aware that the basic aims of Part I of the Bill are to bring this country into line with Europe. Whereas I quite understand and appreciate the need for discussions between member countries, I find it a little odd perhaps that, bearing in mind the traditional understanding and management that exists in this country, and our level of wildlife, which far exceeds that of most European countries, we should take directives from Europe. I believe that they should be taking directives from us. The fact that the Game Conservancy Council has on many occasions been to Europe to advise countries on how to get back their wildlife is, I believe, indicative of the state of wildlife in this country.
Having considered Part I of the Bill with Members of your Lordships' House and others, it seems to me that there is a variation regarding the interpretation of some of the clauses, and therefore there is certainly scope for improvement. In particular I find difficult to comprehend the treatment of Schedule 2 mammals in Clause 2; and the system of licensing in Clause 15 concerns me very greatly indeed. How general will the licences be and how easily will they be obtainable?

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Furthermore, why is there no right of appeal if a request is rejected?
Whereas the Bill allows for the protection of livestock from mammals, no provision seems to exist to protect either livestock or agriculture from birds. In my opinion a licence should be available to protect these categories from any bird. I would also include in this regard Schedule 1 birds. In addition, I am somewhat surprised that the greater black backed gull has been taken off the protected list, since I am sure that landowners are fully aware of the extensive damage that this creature can cause. The stock dove interests me as well, because in fact its numbers have increased five times since 1966. It seems rather strange to me that it should suddenly find itself on a protected list. I believe that certain provisions in Clause 2 will be bound to cause at least a certain amount of feeling in the agricultural world.
Like the noble Lord, Lord Middleton, I also wish to refer in particular to Clauses 26 and 27 and the restrictions regarding the SSSI system. Whereas I heartily agree with some of the remarks of the noble Lord, Lord Melchett, I am concerned that the restictions may be carried too far. My own experience of dealing with these matters suggests that individual members of the Nature Conservancy Council are thoughtful and practical people who are prepared both to listen and to respond to suggestions. However, no doubt many of your Lordships are aware of the case of the Berwyn Mountains, in Wales, where an area of 53,000 acres has been named as a SSSI. That would seem rather extreme. It is bound to upset and dismay the agricultural fraternity and generate suspicion and mistrust. Therefore I sincerely hope that it is the intention of the Secretary of State to introduce the new designated areas only as a last resort and to make decisions on size—and this is perhaps an important point—which compare favourably with what is being protected. I am glad to see that Schedule 10 makes provision for an appeal against such an order.
I believe that the introduction of Clauses 30, 31, and 34, enabling the various authorities to enter into management agreements with owners, and to make grants, payments and loans for the purpose of enhancing the natural beauty of the countryside, is a very important and significant step forward. I heartily go along with all aspects of those particular clauses.
It is important for everyone to realise that conservation is a costly operation, and it is only right that in these instances it should be recognised accordingly. It is also right and proper that those fortunate enough to live in the national parks in this country, in the areas of outstanding natural beauty, should show particular respect and courtesy for the environment in which they live. But it must not be forgotten that more often than not they are subjected to pressures from outside forces, additional and stringent planning control, and the knowledge that they are constantly under surveillance. Their confidence, and indeed the confidence of all rural inhabitants, should not be undermined. I am sure that with the exception of clauses in Part I, and bearing in mind my concern about the possible misuse of certain clauses in Part II, the Bill will provide the framework in which further co-operation and understanding in country matters can develop.
5.36 p.m.
Lord Hunt: My Lords, we have this afternoon listened to two very notable maiden speeches. It was the privilege of my noble friend Lord Walston to speak in praise of the first maiden speech, that of the noble Earl, Lord Halifax, and it is my privilege, and my great pleasure, immediately to follow the noble Earl, Lord Peel. The noble Earl brings to your Lordships' House the benefit of professional training at an agricultural college. He also brings the knowledge and experience of his own professional activity on the land. He bears a historic name. He chose to speak on a subject of which obviously he has very great knowledge, and he has spoken with tact in an area which, in my small experience, is not void of discord. He has spoken with balance. But he has also displayed great courage in speaking with deep conviction about interests which he himself enjoys and which he proposes to defend. We have listened to two notable speeches, and I am sure that your Lordships join me in hoping that we hear the noble Earl, Lord Peel, speak on this and other subjects many times in your Lordships' House.
I am well aware that this is not an appropriate occasion on which to enter into a full discussion of the whole area of which the Bill is but a part. I understand that the Bill purports to do no more than to amend and update existing legislation. But since, at a conference to which the noble Lord, Lord Middleton, referred just now, the Secretary of State said that there would be no review next year of the policy and administration regarding national parks, a review for which some people had hoped, I feel that as a newcomer to the convervation lobby—I hasten to say an active, though relatively non-militant, newcomer—I should venture to make a few preliminary general remarks and to raise a few questions before turning to specific matters in the Bill.
I declare a non-financial interest as President of the Council for National Parks, and, having that commitment, I shall not be speaking in a totally balanced way. I shall not be speaking without a certain conviction and bias on one side of the arguments that arise and that are bound to arise. The debate would be the poorer if we all attempted to achieve the same degree of balance, and perhaps it should be said that where there are differences—differences of purpose, interest and method, even differences of emphasis—in political terms it cannot be denied that the farming lobby, the landowning lobby, wields formidable political clout.
My Lords, what appears to me (coming to this subject afresh today) to be lacking, as was apparently the case when Lord Sandford reported to the then Labour Government in 1973, is clear evidence of the present Government's commitment to the original concept of the national parks as an entity, embracing all the environmental interests which the national park can and does contain, not only the scenic and recreational ones but, of course, also the archaeological and geological ones, and the interests of the naturalists, too. What appears to me to be lacking is evidence of a strategy with priorities for giving effect to that commitment, a strategy which ought to be common to, and ought to provide firm guidance for, all departments of state, all public bodies and local authorities with differing interests in the areas involved in the national parks; a strategy which would help to ensure that

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planning within the national parks could be harmonised.
I shall be grateful to know, when the Minister comes to reply at the end of the debate, what is the policy of this Government towards the national parks? In 1952 Mr. Harold Macmillan, who was then Minister responsible for planning had this to say:
"In those areas designated as national parks, amenity and access are to be given an overriding position".
He went on to say:
"While proper regard must be paid to industrial and material needs, in the national parks the position is reversed and amenity considerations have priority".
That was an unequivocal statement of policy and a commitment to it. Will the Minister confirm that this is still the policy of this Government; and, if so, is it not opportune, with the passage of this Bill, that the Government should reiterate their commitment and that they should give expression to it by ensuring that all departments of state and all public and local authorities are made aware of it afresh?
In a consultation document which was one of the trailers to this legislation, the Government said in regard to the moorland:
"The Government regard protection of the characteristic moorland and heath as a matter of national concern";
and the Minister, Lord Bellwin, had other words to the same effect in his speech just now. I should like to ask this question. If that is the standpoint of the Government in regard to that aspect of national parks, the moorland, how can it be right for one department of state—to wit, the Ministry of Agriculture, Fisheries and Food—to encourage farmers by means of powerful incentives, capital grants, to reclaim and develop for minor agricultural gains vital areas of moorland within a national park whose principal feature is moorland, while in contrast and, indeed, in contradiction by compensatory grants another department of state—to wit, the Department of the Environment—is trying to dissuade farmers from proceeding to reclaim, to plough or otherwise to develop, but with no power to prevent them? It seems to me (coming afresh, admittedly, to this subject) that a degree of ambivalence has crept in, diminishing and obscuring that unequivocal declaration of 30 years ago. I am the more puzzled, looking at this legislation, by the apparent failure in it to relate the related subjects, which are separately dealt with in the Bill. I think we are entitled to clarification on this point, because it seems to me essential background to considering the particular clauses of the Bill itself.
Having said that, I will limit myself to those clauses, Clauses 31 and 33, which deal with management agreements in the national parks. I am, of course, entirely with the Government in preferring—in fact, in preferring very strongly—agreement by persuasion (or, rather, dissuasion) in order to conserve moorland and heath. It is my understanding that in the case of most national parks the prcoedures laid down in the 1968 Act have worked reasonably well; and it seems likely that an extension of the period for notification of intention to develop moorland, whether by ploughing or in other ways, and of the time to pursue the discussion by negotiation, from six to twelve months should be helpful to the national park authorities and to the landowners and farmers.
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However, my Lords, there is an important weakness at that point in the Bill, although I accept that it may not be capable of remedy in legislation. This Bill says nothing about the duration of such agreements save that they should be—and I quote from Clause 31(1)—
"during a specified term or without limitation".
A short-term agreement or a "break" clause after, say, three years in a 20-year agreement gives, in either case, no security for a moorland area. On the contrary, it holds out a prospect of continuing uncertainty, of "Stop-Go", and that is hardly the climate in which an atmosphere of harmony can be fostered in negotiations concerning a national park.
But the main objection to that part of this Bill derives from the fact that there are exceptional circumstances in respect of two areas, Exmoor and the North Yorkshire moors, whose very characteristics are essentially moorland and heath, where conversion to farmland, simply or mainly by virtue of management agreements in which an element of compromise comes in, have resulted in a shrinkage of the moorland to critically low levels. In these circumstances I believe that the reserve powers that featured in the previous Government's Countryside Bill to prevent agricultural development are essential. It is interesting to note that, in relation to Exmoor, the national park committee and the local conservation society, the Exmoor Society, which do not always agree, are at one in feeling that that power is necessary.
On Exmoor, as we have heard from Lord Melchett, 12,000 acres have been lost since 1949; and we have heard from Lord Bellwin of the 2,000 acres, or thereabouts, which have been saved since 1977. What Lord Bellwin did not say is what has been lost in terms of acreage since 1977. It may be only a matter of hundreds of acres, but in a situation where the remaining moorland has become so critically small those hundreds of acres mean a great deal. If one excludes the exceptional case of the Pembrokeshire Coastal Park, Exmoor is our smallest national park; and I foresee it as the logical and inexorable result of this gradual process of erosion of moorland on Exmoor, by increasing pressures and incentives to reclaim it with modern machinery, that within perhaps less than 25 years there will not be enough continuous expanse of moorland on Exmoor to justify its continuing designation as a national park. That would be a tragedy, not only for the scenery, for the recreational interests, but, of course, for that wider spectrum which was intended to be implicit in the designation of a national park—the naturalists' interests, the archaeological interests and the geological interests, too.
For this reason I support those who, like Lord Porchester and Lord Sandford, have examined the problems thoroughly in the context of the original concept of national parks and have concluded that there really is no alternative but to have statutory powers as a back-up to be used as a last resort if absolutely necessary, whether by making a conservation order, as proposed by Lord Porchester, or a compulsory purchase order, as proposed by Lord Sandford, of course with adequate compensation to the owners from the public purse—and here I naturally agree with what Lord Middleton had to say.

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I see the objections to the very principle of compulsion. I understand the drawbacks to each of the models which have been proposed. But I firmly believe that there must be such a reserve power and I hope to join with others in putting down amendments during the later stages of this Bill. I am not sure at this stage whether the reserve powers should be made generally available for all national parks or particularly for Exmoor and the North Yorkshire moors where the moorland has become critically small and is in danger of becoming positively fragmented. But I hope that this question, too, can be resolved in Committee.
In conclusion, I venture to echo what has been said so eloquently by the noble Lord, Lord Melchett, and no less eloquently by other noble Lords and by many others in and outside this House at various times but which bears saying again. What was perceived by the Government of the day in 1949 as being of overriding importance to the nation in terms of our inherited landscape and archaeological sites, in terms of its habitat for wildlife and its recreational amenities, has now become vitally important to the life, to the health and to the ethos of this country as the 20th century draws to its close. Advances in farming technology, higher standards of education and higher standards of living and the means for travel by far more people, in particular, the vastly greater numbers of private cars now available—all this, allied to and reinforced by the pressures and the social problems in our huge urban areas, has made it even more necessary to provide the amenities of tranquillity, of unspoilt and beautiful landscape, of wild country and the challenges which wild country affords.
There is little enough of it left now. By reducing it still further, even in one area, adds to the pressures in other national parks, thus reducing the value of the whole concept. It seems to me to be an inescapable fact that, national parks being priceless assets, they must be safeguarded before it is too late.
5.53 p.m.
Lord Chelwood: My Lords, as one of the very few noble Lords who have made two maiden speeches in this Chamber, may I congratulate both my noble friends on two outstanding maiden speeches. They were a treat to listen to; they were very well-informed in content and skilfully presented. I am sure that all noble Lords enjoyed them enormously. The conservation movement greatly welcomes the Government's initiative in introducing this Bill which I think is a good one and which I hope will be an excellent one by the time it has been through both Houses. I must apologise, incidentally, for the fact, for the first time, that I shall not be able to stay throughout the debate, for inescapable reasons.
I am very much the amateur where nature conservation is concerned, although I have rubbed shoulders with professionals in many different fields. I am a member of the National Conservancy Council and I was president of the Royal Society for the Protection of Birds and closely connected with the SPNC as well; but I speak for myself, although, naturally, I reflect the views of some of my friends. This Bill is also a timely Bill, being introduced nine months after the launching of the World Conservation Strategy which
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was so strongly endorsed by the Secretary of State when he said that that conservation and wise use of natural resources are essential for mankind's survival. I should like to congratulate the Government on the widespread consultation there has been over a period of 18 months. It was a model of consultation for other Government departments, some of which are not nearly so good. I do not think that anybody in the National Farmers' Union, the CLA, the NCC, the Countryside Commission or the voluntary bodies would differ from what I have said.
How well the NFU and the CLA put what we are trying to achieve today in a pamphlet three years ago, from which I quote one sentence. They said:
"With care and foresight, it is possible to increase production and the attractiveness of the farm, as well as its ability to support native Nora and fauna".
If we, all of us, bear this in mind, throughout our debates, we shall do very well indeed; for that in fact is what this Bill is all about. The noble Earl, Lord Halifax, put it equally well and even more briefly when he said that farmers are Nature's landscape gardeners. I like that. This Bill must be seen in the context of a number of major international initiatives which, for brevity, I will call the Bonn, the Berne, the Washington and the Ramsar conventions, and, of course, in the light of the EEC Birds directive, regarding which I should like to inform my noble friend Lord Peel that it is modelled almost entirely on the British birds protection Acts. They came to us for advice from the very beginning and they have incorporated all the best features of our legislation. So we are not being "directed" from the other side of the Channel. Before the Committee stage is reached, I understand that we shall have the opportunity to read and study the report of Sub-Committee "G" of our European Communities Select Committee on the EEC's environmental action programme. That, I think, will be helpful, too.
Conservation strategy, as I see it, in all these welcome initiatives has to rely on two interrelated approaches: the protection of species and the protection of the habitats on which they depend. It is surely right that this Bill extends the scope of the Conservation of Wild Creatures and Wild Plants Act 1975 to protect vulnerable species of plants and animals, including protecting the otter on a nationwide basis. That is something which the late Lord Cranbrook would have been glad to know about. Similarly welcome are the proposals to control the deliberate or negligent release of non-native species into the wild and the intention—because it is really, I fear, no more than that—to afford greater protection to the habitats of national and often international significance.
I see three areas of considerable worry where this Bill is concerned. It does not really seem to measure up fully to the clear needs of the moment or to all of our hopes. First, it lacks any proposals, as has been mentioned already, for marine conservation. Secondly, the proposals for habitat protection are very complicated and yet inadequate. Thirdly, the licensing system for the control of pest species of birds, where this is permitted under Article 9 of the EEC Birds directive, does not seem to me to be satisfactory. Running through all three points will be my conviction as a member of the Nature Conservancy Council that we suffer in that Council from a very serious lack of resources

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which greatly inhibits our carrying out our statutory duties.
First, briefly, marine conservation. In October 1979 the NCC published an excellent report called Nature Conservation in the Marine Environment. Their conclusion was that there was an undeniable need for the conservation of marine communities. How illogical that the NCC's ability to establish nature reserves should end at the low-water mark, when the interdependence of marine and land-based ecosystems is self-evident. Very soon, we shall have an international commitment under the Bonn and Berne conventions to protect marine creatures and the habitats in which they live. Many other nations have already established statutorily protected marine reserves. If little countries like the Seychelles can do it—and what a beautiful reserve it is!—for Heaven's sake why cannot we? Surprisingly, therefore, where others lead, we, for once lag, as the noble Lord, Lord Melchett, has said. How curious it is that we should be lagging behind as an island nation with so much "marine" around us. It is time we caught up, and this Bill gives us the perfect chance to do so. I hope it will be suitably amended in Committee and will have all-party support. I look for, I hope for, Government amendments. If it is not done now we may well have to wait for another 10 years—and that could be too late.
Secondly, I want to say something about the habitat protection clauses, 26 and 27. In A Nature Conservation Review, published in 1977, the NCC listed more than 700 biological sites of national importance, to which they have added 29 or 30 since. These are critical areas if the wildlife resources of this country are to be maintained at anything like their present level. Once lost, these areas are gone forever. Over 50 of these key sites already suffered significant losses of nature conservation interest, mainly as a result of intensive agricultural and forestry work outside planning control.
These key sites account for only 4 per cent. of the land survey of the country, and less than one-fifth of their area is actually under nature conservation management through ownership, through leases or through agreements. That arises directly from the NCC's lack of resources. Even the protection of 167 national nature reserves—"key key sites", if you like—is not guaranteed in perpetuity as renewals of agreements are sometimes quite impossible and well beyond the NCC's means. There are close on 3,000—not 2,000 as a noble Lord said earlier—biological SSSI's and this includes the key sites. They cover between 5 per cent. and 6 per cent. of the land surface of the country. Although planning applications—and, since last summer, proposals to carry out grant aided activities—are the subject of consultation with the NCC, we in the NCC have no power of decision where these matters are concerned.
But worse still, the owner or occupier of an SSSI can destroy its conservation interest, by accident or design, at his own expense simply by not asking for a grant. Even SSSI status, contrary to popular belief, does not in itself offer any direct protection to a site. I want to reinforce what the noble Lord, Lord Melchett, said about loss of habitat. The loss and damage to SSSIs has been very pronounced recently in the cases of lowland and chalk grassland; natural and semi-natural
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woodlands, wet lands; and heaths. In the past few years four key sites have been destroyed, more than 50 seriously damaged, and many more threatened. The main reason is that there has been agricultural intensification, often grant aided, with little if any account taken of the need for nature conservation.
No doubt MAFF grants of well over £500 million a year are mostly well spent. I am not against them at all; I am very much in favour of them. But tuppence out of every £1 spent through MAFF grant provided for nature conservation would be a godsend to solve most of our national problems.
Without going into detail at this stage, some way simply must be found to ensure that all SSSIs have adequate protection, otherwise why create them at all? They will not get this protection unless the Bill is amended to take account of the need for advance notification of any potentially damaging activities to any SSSI, including the 900 or so geological ones (which I have not so far mentioned) and perhaps also we might consider doing the same thing where sites of special landscape value are concerned.
Lord Gibson-Watt: My Lords, would the noble Lord allow me to intervene? I agree with what he is saying. Would he not also say that one of the great drawbacks that the Nature Conservancy suffer under at the moment is that they are able to make areas SSSIs without informing either the owner or the tenant of land? This is doing them a great deal of harm in the country.
Lord Chelwood: My Lords, I entirely agree with my noble friend. Speaking for myself, I would not object to having a statutory requirement that there must be consultation with the owners. Nor do I believe that anybody else could seriously object. Incidentally, the Nature Conservancy Council I think are going to publish a summary of the scientific criteria on which they base the selection of these sites. That is something also of considerable interest to owners and many other people as well. I was saying that these sites will not get the protection that they need unless the Bill is amended to take account for the need of advance notification of any potentially damaging activity to any SSSI.
Then, advice could be given by the NCC or the Countryside Commission on ways of minimising its effect or an opportunity would be provided to negotiate a management agreement—a voluntary one—over the land with the right of appeal (which is also very important) hopefully avoiding the threat of a compulsory purchase order. The less there are of those the better so far as I am concerned. To apply designation orders only to those sites selected from time to time by the Secretary of State is only trifling with the problem. There are already three "Ss" in "SSSI." Do not let us have a fourth—for "Super"—please.
We also ought to consider—and this is a matter for the Treasury—whether something more should not be done where capital transfer tax is concerned for owners of SSSIs. Practically none of them gets relief from capital transfer tax. I think that there are only about four or five in the whole country. But if one is going to suffer some disadvantage through owning an area of special scientific interest, why should one not have some fiscal advantages just as one would have if one owned

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a historically important house, valuable pictures, an ancient monument, or something. This has been looked at before but nothing has been done about it. If my noble friend, in reply to the debate, could at least say that he will ask the Chancellor to look at this possibility it will be very helpful indeed. Then, instead of landowners looking with suspicion—and even distaste—on SSSI designation, they might even clamour for it. So far as I am concerned, I would. I own some land in Sussex which is now being considered—and, by the way, I have been consulted. It is difficult not to consult a member of Council !
Next, a word or two very quickly regarding licensing, about which I understand my noble friend Lord Arbuthnott, who is the deputy chairman of the NCC, will be saying more. I am far from happy about the proposals in the Bill. Under Article 9 of the EEC directive the Commission is empowered to make sure that derogations are not incompatible with the directive. The article provides for derogations where these are necessary:
"to prevent serious damage to crops, livestock, forests, fisheries and water".
Where there are derogations they have to specify some clearly defined things. What I am worried about is that there seem to be two ways in which the derogations can arise. First of all there are the Clause 4 derogations which are simply repeating the present situation which one finds in the Protection of Birds Acts. Secondly, there is the general licences outlined in Clause 15. I am not convinced of the need for both these methods, although perhaps they can be satisfactorily combined. I cannot help thinking that unless assurances are given about general licences being issued to cover very wide areas, many of the methods that are used for scaring, decoying and other techniques, to keep wild birds away—particularly some of the geese—may well be dropped if blanket licences can be given too easily without having full regard to conservation requirements. I hope that this will be looked at with the very greatest care.
Of course, we are only too well aware of the damage that wild birds can do in many different ways. In my old constituency how well I remember that it does not take a flock of bullfinches more than half a day to strip two or three acres of gooseberries. When I introduced that particular Bill in another place we provided for this. I am sure we could find a satisfactory answer here. But who should be the licensing authority under Clause 15(1)(i)? Surely not the agricultural departments, who have expressed doubts about their capacity to do this work—and they are right to do so—and whose primary concern must be to promote productivity in agriculture above all else. This clearly points surely to the right department being that of the Environment Minister. He should be the authority, and I strongly urge this view on the Government. I hope that it will be considered and dealt with in Committee.
Lastly, may I say a word about resources? Several times during this speech I have said that something has not happened because the resources to do not exist. So I noted with some pleasure the statement in the Bill's Explanatory and Financial Memorandum that a sum between £600,000 and £700,000 "on average per
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year" (what that means I have not the faintest idea) is likely to be needed to enable the NCC to make more management agreements or to acquire land. I fear that this is a serious under-estimate, though it is of course an earnest of the Government's good intentions which I do not for one moment question.
At the moment, the budget of the NCC is only just over £9 million. This is less in total than the increase which was given to the Arts Council last week. That means we cannot fully meet our statutory obligations which were imposed on us by the 1973 Act. We do not want a fairy godmother, much as we appreciate the attitude, the understanding and helpfulness of the Secretary of State. As the Sunday Times article of 14th December by Brian Jackman said—it was criticised earlier but I thought it was really very good and not at all alarmist—speaking about the NCC:
"There is a crisis and cash is at the root of it".
We do not need a great deal more money but we could certainly do our job better if we had it, and there is a real risk of our falling down on it if we have to run our affairs on a shoestring for very much longer.
I do beg the Government to look at its priorities with greater care. Unless they do so there will be continued erosion of critically important habitats for wild life, simply because the Government's excellent intentions have not been matched with the minimum necessary resources. That would be a tragedy and it would place unfair burdens on the loyalty and dedication of the staff of the NCC, which is admirable. Cuts in our budget—we have not had cuts: in real terms we have had the same thing for three years—are like taking off a limb. It just does not grow again.
I conclude, my Lords, by saying—and I apologise for having taken rather longer than I intended but I got carried away—that somehow we must get across to the whole Government that nature conservation is a positive objective and not just one of several conflicting considerations or options. I hope this Bill and the debates on it during its passage through both Houses will bring home to everyone the importance of finding better ways of managing our natural resources. Town and country, farmers and naturalists, we are all in it together. Provided there is unstinted cooperation between all Ministers whose responsibilities touch on any aspect of this many-sided subject, there will be no problem in proving that good husbandry and higher material standards of living are consistent with careful protection of our wildlife and our countryside.
6.12 p.m.
Lord Houghton of Sowerby: My Lords, it is on these occasions that I think to myself how fortunate some noble Lords have been in their inheritance—noble Lords who in my youth were known as the "landed gentry" or, as my uncle called them (he farmed in the Vale of Belvoir), the "hunting toffs". It is nice to meet the descendants of those noble Lords in the flesh. I think I remember that the forebears of the noble Lord, Lord Middleton, lived in Colwick Park in Nottingham and shared a large part of the countryside with the Duke of Devonshire, the Duke of Rutland and other noble Lords of the time who, I heard in the early days of Liberal politics, wore top

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hats, gold chains, smoked fat cigars and grew mangold wurzels. That was what the Budget of 1909 was all about.
We have listened to two most fascinating maiden speeches from two young men of talent whose stake in the future, both in scale and time, is greater than those of us whose visions of the future grow shorter—and the shorter they get the more concerned we are about it.
I think we are very fortunate in having a Bill like this coming to this House before it has been gone over by another place. I thought the noble Lord, Lord Bellwin, who introduced the Bill, failed to allow his enthusiasm for it to show through. When he made a statement on the rate support grant his vitality returned and he was soon a combatant in this Chamber. Nevertheless, I think the noble Lord, who can withstand a Committee stage with fortitude and great ability, will warm to his subject as the Committee stage goes on—because evidently we are going to have a long one. This Bill is of such wide scope, and coming here first offers such opportunity for constructive amendment, that we shall be reluctant to let it go until it is a very much better Bill. It is, I am told, the most comprehensive Bill on this subject ever to come before Parliament, which makes it all the more desirable that we should grasp the opportunity of making it better.
There have been a great many consultations preparatory to the introduction of the Bill: that we fully understand. It might be interesting to learn at some time just what those consultations were. We are also told that there are compromises in the Bill. It might be interesting to know what they are. Numerous references have been made to agriculture. The noble Earl, Lord Halifax, said we must remember that agriculture is a business, and I have no doubt that the farming interests, as they are called, have been very fully consulted. That brings me to the National Farmers' Union. I am not against unions—I was a secretary of one for many years—but I have never been able to understand why the National Farmers' Union has been regarded as a more benign combination than, say, the Transport and General Workers Union, because their acquisitive instincts have been developed along similar lines. Samuel Gompers, a United States labour leader, when asked what it was the unions wanted, said, "More". That is a very strong impulse in all unions, whether they are farmers or transport workers.
I think that in the course of our debates we might try to clear away some of the prejudices—I use the word advisedly—and the misunderstandings that attach to some of the descriptive words used in this field. There is a great deal of jargon in it. One hears the words, "environmentalists", "conservationists", "welfarists", as if they were a race apart. On the whole I think that conservationists and welfarists are regarded as "cissy types", not like farmers who take bulls by the horns. They have a dilettante approach to the realites of the countryside and of wildlife. Well, at least they have never behaved like the gamekeepers of old, who swept the foxes from the moors and shot everything within sight that might be a 'predator of the artificially-reared pheasants that were—
Lord Home of the Hirsel: Not on the moors.
Lord Houghton of Sowerby: —needed for the enjoyment of the countryside. I have mentioned grouse, but surely we are all conservationists and we are all welfarists who have the spark of civilisation and humanity in us. That goes for those engaged in the agricultural industry, the townsmen and those who have the benefit of and enjoyment in life in the countryside. Personally I should like to see the principles of conservation and welfare of animal life taught in the schools as part of religious instruction. I think it is just as important. That would help to make not only a beautiful but a civilised Britain.
I should just like to make a reflection upon my own deeper philosophy in this matter. This Bill, like all legislation dealing with the claims and the welfare of other species, rests upon the doctrine that the interests of the human species are paramount; that the needs of man must come first and, if necessary, to the exclusion of the rights of all others. When other species get in the way we call them pests. But the real pest in the living world is man himself. He is the most destructive creature that was ever brought on to this planet. If the world is ever destroyed, it is man who will do it; and yet we claim to have been created in the image of God.
It never occurs to many people that other species have as much right to be here as we have. In fact, they were probably here before we were—at least, before we were in human form. Man, with his demands on resources and with his selfish cruelty, is a threat to the survival of large sections of the living world at the present time. That is my philosophy—to reconcile our claims with those of other species. Unless we do that, the world will become infested by human beings. What a world that will be! With all the stresses of congestion, of overcrowding, of rivalry and of the instinct for war, the world will no longer be worth living in. It is only by the consideration that we give to other living creatures and by our willingness to concede to them the right to live that we shall understand more deeply our true position in the universe. But I must not dwell on that aspect any longer.
There are just one or two points that I want to make—and only one or two—on the Bill itself. When we come to the Committee stage we shall have to examine why it is that this Bill treats birds more favourably, in some respects, than mammals. I do not want to start a war between the urban community and the countryman and I do not want to start a war between birds and animals, but the fact is that the protection given to birds is stronger than that given to mammals. Whether it is because the clauses of the Bill dealing with birds derive from the EEC directive, and those dealing with mammals derive from the Convention of the Council of Europe, I do not know, but one sees that, while the Bill provides a blanket protection for all birds under Clause 1 and then goes on to make exceptions by schedule, it does it exactly the other way round when we come to mammals. The habitat of birds is protected in a degree which the habitat of mammals is not.
Another inconsistency seems to be that, in dealing with mammals, we give to some protection which is greater than that given to others. We have a separate schedule—Schedule 6—which lists animals which may not be destroyed in particular ways, except where a

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licence is granted. One wonders why something that is regarded as revolting and unacceptable as a method of destruction should be permitted under licence, especially when looking at the astonishingly short list of mammals in Schedule 6. These are inconsistencies which we shall wish to examine more closely at Committee stage.
I join my noble friend Lord Melchett in making a very strong plea for the badger. The badger ought to be in Schedule 5 and I am glad to see the otter in Scotland there. The badger is having a very rough time. We thought that we were putting him in his proper place in the wildlife of Britain, when we passed the Badgers Act of 1973, but then came this dreadful business of the suspected infection of animals by badgers with bovine tuberculosis. The destruction process began and it has gone much further than ever we thought it would at the time when we permitted it to be done. As my noble friend pointed out, the badger is now suspect as being a carrier of TB infection. This is completely wrong and should be discounted everywhere, because a great deal of persecution of badgers is going on at the present time, in the belief that they have ceased to be an acceptable part of our disease-free wildlife.
I also make a plea for marine conservation, which was mentioned by the noble Lord, Lord Chelwood, and my noble friend Lord Melchett. It is a mistake to think that marine conservation relates wholly to fishing, over-fishing and the conditions in the sea itself. It depends greatly upon the foreshore and the connection between the land and the sea. That relationship must be maintained for the benefit of many of our species of marine life.
That is where I shall finish. I welcome the Bill. It is a good Bill so far as it goes. It can be made better. It will be made better, if your Lordships will permit it to be done. We can then send it to another place, feeling proud that we have contributed to one of the historic measures for the conservation of the wildlife and countryside of Britain. That, surely, is something of which we can be proud if we achieve it.
6.27 p.m.
Viscount Ridley: My Lords, I should like to add my congratulations to the two noble Earls who have made their maiden speeches this afternoon. We have received two excellent recruits to these Benches, and their great knowledge of country matters will be extremely valuable to our debates in future. I, for one, hope very much that we shall hear them again, not only in Second Reading debates but in Committee stages and matters of that kind, when we shall find their advice more than valuable.
I shall not start by speaking on Part I, as I should like to be as brief as possible. I shall go straight to Part II, in regard to which I want to discuss the moorland conservation order, which I think is Clause 33 and onwards. I find myself almost entirely in agreement with the Government's conclusions on this matter of the conservation of heath and moorland, which arises principally on Exmoor, but also elsewhere. It is right to try to reach agreement between the various interests involved and that, I understand, is very close.
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Therefore, the Minister's reserve power for delaying such agricultural improvements as farmers would like to make is the right one. One notes the irony of the fact that the improvements which farmers want will be done, as the noble Lord, Lord Hunt, said, through generous grants from the state or from the EEC As he remarked, it is a strange situation.
The compulsory moorland conservation order, which was to have been in the previous Government's Bill as absolutely a last resort, has been dropped from this Bill. But I understand that Somerset County Council and the Exmoor National Park, which is part of that county, and other counties involved in the national park movement would still like to see a long-stop or reserve power to be used only by Parliament—and I repeat "only by Parliament" —because I think it is right that this power should be available only to both Houses of Parliament, and not to local authorities or to the Countryside Commission in cases where absolutely critical areas may be threatened.
This was the conclusion of Lord Porchester's report, and I believe there is some merit in having an ultimate deterrent in these matters. It is probable that such a long-stop power might never be used, but it might equally make it easier to obtain the voluntary agreements which we all need. Not all farmers are angels, though a great many of your Lordships farm. Therefore I exclude them from these remarks. It will be tempting for some farmers to try to get paid for not ploughing out heath and moorland, which they had no intention of ploughing out, anyway. It would not be impossible to have a go at that. Before the war, many farmers in the United States were paid money not to raise hogs. Lots of farmers made lots of money by not raising lots of hogs. It is possible that this kind of thing might happen here. The House must agree that voluntary agreements have to be tried first; that any such powers will only be a very last resort.
I want to raise briefly two other aspects of the matter. The first relates to the cost of these agreements. It is not acceptable to find in the preamble that no additional public expenditure will be involved in this part of the Bill. The cost of such agreements on a large scale might cover hundreds of acres in a national park, and the cost to the National Parks Authority or to the nation could become quite a serious commitment. The difference in lost revenue between moorland and improved grassland could reach, before too long, £20 per acre. The potential acreage on Exmoor alone which is threatened amounts to over 12,000 acres. There are other areas in other parts of the country which could be affected in due course. It is not acceptable to say that the cost will be covered by the national parks supplementary grant or the rate support grant. May I therefore ask the Government where the extra money is to come from? My noble friend the Minister talked about a 90 per cent. grant. Would that come out of the very meagre national parks supplementary grant, which we were told earlier this afternoon would be £4½ million, or would it come out of the rate support grant? If it comes out of the former, the other national parks will suffer. If it comes out of the rate support grant, other services will have to be reduced to pay for it.
I hope that we can tackle the problem because we as a nation are not spending a great deal on our

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national parks. The total to be added to the £4½ million of the Government's contribution in terms of local authority contributions is of the order of £6 million per annum. This is not a big sum for an area which covers one-ninth of the surface of England and Wales. It is, I understand, about the same sum as the British Steel Corporation manages to lose in about 48 hours.
If we want to conserve heath and moorland we must be prepared to pay for it. I am not certain whether Exmoor is necessarily ruined by its conversion from heather to glassland. That may be just as heretical a statement as the dustbowl farming of the noble Lord, Lord Walston. If we want to conserve such areas, we must be prepared to pay for them. We cannot expect them to be provided on the cheap, though it is possible that the hill farm subsidies which would be saved if conservation orders were made would pay for some of the difference.
Further, if it is wrong—and it says so—to destroy the ancestral moorland scenery of our uplands in this country by ploughing and reseeding, why is it not equally wrong much more drastically to affect the landscape by blanket forestry of the alien coniferous kind? If it is not possible to bring large-scale forestry into the orbit of planning control, which is where it should be, logically it should become subject to this part of the Bill. I hope that we shall return to this point.
If I may turn to the Countryside Commission, this is an appropriate moment for the House to congratulate the noble Lord, Lord Winstanley, whose tenure of office as chairman of that commission comes very shortly to an end. I believe that to some extent he has found it to be a bed of nails and, like many people on beds of nails, he has not tried to lie down on the job. I believe that he has very much tried to influence the relationships between the Countryside Commission and the other bodies concerned. As noble Lords know, many other bodies are concerned. I believe that the commission has achieved a great deal under the noble Lord's chairmanship. I believe that they have come to realise that it is not only the state and its various agencies, but also landowners, farmers and occasionally local authorities which have contributed a great deal of money and expertise to the care of the countryside and have enhanced the beauty and the public enjoyment of the countryside which we all want.
I look a little critically at the proposed executive functions of the Countryside Commission. I wonder whether it is necessary that it should be involved in the grant distribution process of this very minimal sum and whether or not the appointments of national park officers need to be made by it. Nor am I happy that it can, under Clause 35, propose changes in the boundaries of national parks without apparently consulting or obtaining the approval of the relevant local authorities and the elected members for those districts. I hope that this will be put right. I see no useful purpose in the regional offices of the Countryside Commission which are Quangos ripe, if not for the axe at least for a critical look.
I turn briefly to Part III, footpaths. I do not want to say very much about them. However, I greatly welcome the simplification processes which are involved. I hope we can make them even more helpful without destroying the absolute necessity for the public
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to have the right to a say over the closing and alteration of footpaths. It must be a local government function and it should become more so. Subject to the totally independent inquiry, the right of appeal and so forth, I think we can make this a very good part of the Bill and make a great step forward. I did not agree with the Countryside Commission when it said in a Press release last week that impartiality and consistency are both at risk.
I end with bulls. We have not heard so much about that subject as we might. If it is not mixing metaphors, this has been a hot potato in many circles for a very long time. I hope I am right in saying that nobody in this country has yet been killed by a bull in a field which has a footpath in it. Let us hope that that never happens. Many people have been very frightened by bulls on footpaths, in houses and elsewhere, but nobody has yet been killed by one. It is very important that nobody should be. A cow with a calf is, in almost all cases, a much more dangerous animal than a bull. I suggest that many people think they are being chased by a bull when in fact it is an old cow. As noble Lords are well aware, the female of the species is a great deal more dangerous than the male. Whether a rambler will, as he runs for the gate, be able to use his last breath to accuse the bull which is about to trample on him of being of an unrecognised dairy breed and thus to persuade the animal to desist, I do not know; it remains to be seen.
However, I believe that Clause 46 is a very acceptable compromise. As we know, it has worked in Scotland. It is essential, if we want meat, to have bulls by which to breed calves. I hope very much therefore that we can accept this part of the Bill. In conclusion, I give a general welcome to the Bill and look forward very much to some of the debates we shall have during the Committee stage.
6.38 p.m.
Lord Sandford: My Lords, I should like to give a fourfold welcome to the Bill. First, I am intensely interested in and gain a lot of enjoyment from the countryside, though my responsibility is limited to the care of four window boxes and a small bay tree in Smith Square, Westminster. Therefore, my responsibility is not so extensive as that of many other noble Lords, and makes me one of the rarer species in this House, though perhaps taking a detached view which is in common with most of the citizens outside it.
The second reason why I particularly welcome the Bill is that it is being introduced in this House where the very wide experience that is available can be brought to bear upon it during its first Committee stage. I think your Lordships will agree that the two maiden speeches of my noble friends Lord Peel and Lord Halifax are very good illustrations of that fact. The third reason for welcoming the Bill is that it is the first Countryside Bill to be introduced by a Tory Government. One particularly commendable aspect is that, although they were not responsible for all its parentage, they can take credit for having been admirably thorough in the consultation process. The fourth and final reason for especially wanting to welcome the Bill is that, in clauses such as Clauses 35 and 36 it implements a number of the matters upon which I made recommendations

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when I was reviewing the national parks some seven or eight years ago.
My noble friend Lord Middleton reminded us that Section 37 of the 1968 Act makes the point, in statutory terms, that the prerequisite of any effective set of policies for the countryside is the sustaining of the rural economy. That rural economy always involves agricultural prosperity—although it involves many other things as well—but without it we cannot have any satisfactory set of policies for the countryside. It is therefore very important to give full regard to the economic and social needs of those who live in the country, a point which the noble Earl, Lord Halifax, made admirably.
After a whole string of urgent reports and anxious studies from the ACC, the ADC, the National Council of Voluntary Organisations, the National Association of Local Councils and many other bodies, all stressing a serious decline in the rural economy and in the rural population in the remoter areas, the common thread and theme going through all their remedies is the need to take a more integrated approach to rural matters and to adopt what the noble Lord, Lord Gibson, has described as "balanced management".
In his opening remarks the noble Lord, Lord Melchett, said that nothing is gained by polarising the issues involved here or by exaggerating the conflicts. Certainly if we want balanced management and an integrated approach, that would be the worst possible way of setting about it. I hope that through this Bill and as a result of debates on it, we shall be able to develop further a sense of partnership between all concerned towards a more positive and more sensitive and more balanced approach to the use of land in the countryside. The CLA and the NFU in their joint publication which has already been referred to described the problem as being that of making the most of all the potentials in the countryside: its value for food, its value for timber; its value, as the noble Earl, Lord Peel, said, for field sports; its value for tourism, its value for recreation, its value for study and a possibility of establishing a whole lot of rural industries which will add value locally to local products before they go off to market.
I think, first, the noble Lord, Lord Melchett, and then the noble Lord, Lord Gibson, stressed that the Bill is thin on those aspects. I can only find one particular clause—Clause 31—containing the provision for management agreements, which addresses itself particularly to this theme and therefore I should like to spend a little time on it. I think Clause 31 is the only clause in the Bill which has general application over the whole of the countryside and contains real potential for development and for bringing both private and public benefit. So that is the clause that I particularly welcome.
I particularly welcome those substantial formal management agreements which are already in operation in some of our national parks. I welcome the spread of the many smaller, informal management agreements which constitute the uplands management experiment which was initiated some years ago by the Countryside Commission in one part of the lakes and now extending over the whole of that national park and several others, and I regret the relative lack of further action to establish
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management agreements elsewhere in the countryside especially by district councils, who ought to be into this business. I look forward to further constructive action when this Bill is on the statute book.
One of the most promising next steps in integrating policy is being taken in the Eden district of Cumbria—a project known as East Fellside, initiated by several rural agencies acting together. And research is proposed by the EEC for further integrated rural development in which the United Kingdom is taking part and which again will be concentrated on two districts, one in Wales and one in Eden in Cumbria, as well as other possible places.
I am concerned to try to find out, by way of probing amendments to other amendments during the course of proceedings on this Bill, what the role of ADAS is to be in establishing this new approach. A wider and fuller role has been advocated in the Strutt Report, but like my noble friend Lord Chelwood I should like to see the process carried forward and to have assurances during the passage of this Bill that it will be so.
The noble Lord, Lord Hunt, mentioned my role in the moorland conservation business. In the course of reviewing the national parks in fact we could see that there was a problem on Exmoor and we took a certain amount of evidence on it, but it was quite clear that if we were going to complete a review of all 10 national parks in a reasonable time we should have to leave the detailed study of the problem of Exmoor to somebody else. That is in fact what happened and Lord Porchester was asked to make a special study. I think it would have been hard to choose anybody better qualified for that: he is a farmer, he is a landowner, he has been the chairman of the planning committee and he has been the chairman of the county council, and so he was well able to judge the evidence presented to him from his own extensive personal experience.
In the course of writing his report he asked me what I would recommend and I urged on him very strongly the desirability of trying to achieve a solution to the problem by way of management agreements only. But the fact of the matter is that, having taken all the evidence and having studied it all on the ground, with all his experience from both sides he came to the conclusion—and it is there among his recommendations—that scope for moorland conservation agreements on their own would not achieve the result; and he recommended moorland conservation orders and the previous Government accepted that advice,
Coupled with that we have the fact that 20 or 30 years ago when the problem was not moorland conservation but access to moorlands, after considerable battle—and literally a battle on Kinder Scout—we introduced access agreements backed up by access orders. The access orders have never actually been enforced; they have been there in the background and there is a strong argument to the effect that without the access order in the background it would have been impossible to negotiate the wide range of access agreements which are now in force in the Peak District and in many other parts of the national parks.
That is an argument which has to be faced and met. Then there is the further point introduced by my noble friend Lord Ridley that the Somerset County Council—on which farmers are not under-represented—have

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come to the conclusion in the light of experience since the Forster Report, during which time further acres of critical areas have been lost, that they cannot do what is required of them without a moorland conservation order. The upshot of all that is that when we get to this point in Committee I think we shall need to hear stronger arguments than any that have been adduced this afternoon as to why it is that the advice offered by Lord Porchester can now be overruled.
I do not want to say anything more or go into more detail at this stage of the Bill. I believe that in general (and that is the exception to what I have just said) we do not want to strive for further designations of land and ever more elaborate special controls unless the need for them is very cogently argued and expressed. What we want to do is to follow the advice of the noble Lord, Lord Gibson, and many others and go for a different approach, a balanced approach, a balanced system of management which is sensitive and positive; an approach by way of agreements that integrate both private and public objectives on the same land; and an approach that makes the most and best of all the varied and marvellous potentials in the countryside by way of agreement. To the extent that I think this Bill advances that approach I very much welcome it now, but I think we have got to work hard on it to ensure that it does so in full measure.
6.50 p.m.
The Viscount of Arbuthnott: My Lords, I would like to join other noble Lords in their congratulations to the noble Earl, Lord Halifax and the noble Earl, Lord Peel, each on his maiden speech and welcoming each into this House. We are now not quite halfway through a long list and while I also will be welcoming the Bill generally I do not want to go over ground that has been covered by other speakers except perhaps to add a change of emphasis.
The noble Lord, Lord Chelwood, mentioned that I am deputy chairman of the Nature Conservancy Council. I should like to speak briefly on the role of the council as it may evolve from provisions in this Bill. There has been in the past an understandable hesitation to go beyond the strict role of an advisory body on the part of the council, but I believe a more robust attitude is needed. It must speak for conservation and be accepted by all sides as able to take an independent but sound line. This can be achieved in a number of ways and there is already much that the council can do within its present remit.
However, since this Bill moves the council into a wider advisory role on bird protection and brings forward new proposals for licensing which imply the need to monitor species survival and the control of animals or birds damaging trees or crops, I would venture the thought that we in the United Kingdom have now entered a new dimension of animal, plant and countryside conservation that will need the closest possible understanding between all primary land users, and I include the conservation use of land as one of these. I do not look upon it, as some noble Lords I fear do, as a sort of blight on the countryside.
Respect for the Nature Conservancy Council as a spokesman for an adviser on conservation will only be gained by its activity in the field, where land management problems are to be solved. I should not like to
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see the power of decision on licensing left to agricultural or forestry departments. They will know much about damage, but so far they have shown little evidence of knowledge of conservation. I do not believe that ADAS in any other guise will have the capability of advising other primary land users on conservation. Scenery enhancement and crop protection have a rightful place in land management, but they are peripheral to the real needs of conservation. I believe, therefore, that this new role, or change in role, of the Conservancy will give it a status that it requires. I believe that licensing must be in the charge of the Department of Energy under the Secretary of State. And I hope that the council will find a role that will give it more the image of a wildlife advisory service acceptable and sought out by land users, just as they now turn to others for advice on agriculture or forestry matters. But, as Lord Chelwood said, the resources are lacking.
This leads me to my second point, on the subject of sites of special scientific interest. The present notification system is by no means perfect, but only a very small number of cases have caused aggravation. Nevertheless even this number will grow, and it is vital that a system is devised that will win the confidence of all land users. We cannot put the clock back now and must find a solution. I do not believe that the Bill goes far enough. Part of the trouble is caused by the inadequacy of a system that was designed to fit into the planning legislation we know and within whose narrow field it has largely worked. At a time when the pressure is on all land users, and when the cheapest way to make more land is to reclaim it or drain it or reseed it, or when afforestation seems an attractive alternative, then there will be a clash between the accepted uses and conservation use.
The Bill goes some way to a resolution, but there will be no successful answer until managing land for conservation reasons can be shown to be acceptable and respectable and not the soft answer that some say it is. The compensation for non-conventional development of land, or the financial payment in any arrangement made between the council and the land user, should hopefully demonstrate that there is no real revenue loss, at a time when many of us farmers are beginning to count the so-called return, which is often a negative one, gained by striving for a profit from the last ten suckler cows or the last 50 acres of upland barley, and in some cases are getting agricultural grants to help us strive. This, I think, puts a different aspect on the point made by Lord Middleton, in that the national wealth should not always be counted in agricultural or forestry improvement. I believe that proper use for conservation of part of our uplands can indeed be increasing our national wealth.
My third and last point is to underline the importance of recognising how much is done already by voluntary organisations in the field of conservation. It may, therefore, be suprising to some that this is achieved just as effectively by many shooting sportsmen. I confess to another interest here, as president of the Wildfowlers' Association. The concept of the hunter-conservationist is now well established by that organisation, and for many years it has been shown by shooting men in their practice and by the co-operation with other voluntary bodies that conservation and

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normal countryside recreation can go hand in hand. The shooting man can be seen as having privileges, but he also accepts obligations in equal measure, and he must do this if his sport is to be safeguarded.
The shooting man, certainly, as a member of a responsible organisation, understands the need for constraint and has already shown a proven ability to exercise it voluntarily when the conservation needs demand. There are unexceptional codes of practice which demonstrate this, if nothing else does. Shooting men will, therefore, see no point in any form of control over shooting unless the evidence shows without any doubt that the particular wildlife population is declining or is at risk of undue and harmful disturbance and that the relaxation of shooting pressure is one of a number of desirable amelioratory measures. I would hope that this House would resist any pressure to change the present perfectly satisfactory rules governing shooting seasons. Particularly would I resist the suggestion that this must be done merely to conform to continental European practices.
I should like to draw what I have to say to a conclusion by admitting that, after 25 years in the conservation business, in the old Nature Conservancy and now with the new Nature Conservancy Council, with the Countryside Commission for Scotland, the Red Deer Commission, and principally as a farmer and landowner, I do find that I am repeating myself. But I feel that it is still a criticism of each side in the environmental argument that so much still needs to be done to win hearts and minds and even understanding on the part of both parties to the discussion.
The countryside of Britain is the workplace of foresters and farmers and the playground of some 80 per cent. of our population from towns and cities. Conservation practices do and will conflict with development of land for farming and forestry. Progress towards an understandable policy for rural land use and nature conservation in any developing countryside must be achieved through a better comprehension by all who are involved of all that is at risk.
A conservation ethic must become part of the conscious will of any rural community. It is the ability of just such a community to reconcile an awareness of the needs of itself and of its environment with the demand of its inhabitants for daily work and reward for labour that is at the heart of the matter. The Nature Conservancy Council will secure a limited success within its power to safeguard sites. The voluntary movement will have some success with its lobby, but nothing of all this will ensure that the countryside of 1980 will survive, because conservation is a larger problem and must encompass the activities of all who earn their livelihood in land management and all who seek recreation in country places.
This Bill is probably the last opportunity for this House to consider the wildlife and countryside of these islands. I believe that it has the possibility of bringing understanding and mutual goodwill. If the result is divisive, it will have been a very sad failure.
7.3 p.m.
Lord Margadale: My Lords, I rise, like others, to say a few words in this House about this Bill. I do so because I am a lover of the countryside and have always
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been interested in wildlife. It is my birthday today, but I am not speaking out of any sense of thinking that I am a good orator. I know that I am not, and I do not expect that your Lordships will come to any conclusion other than that by the time that I have sat down, which I hope will be very shortly.
However, this Bill affects the whole of rural life and animals and it is very important to the future. I should like to pay a tribute to all those at the Ministry of the Environment who have done a great deal to incorporate the various points affecting the countryside that have been put to them by many bodies, and I would wish them well in finally producing a Bill which will be acceptable not only to this House and another place, but to all those who live in the countryside. A Bill of this type must be understood and must be fairly clear and simple to be really taken on by the countryside as a whole. The village policeman has quite a lot to do these days. We do not want to make his life too complicated by his not quite being able to understand all that is in a particular Act of Parliament.
I should like to support the noble Lord who has just spoken in regard to the licensing system. Personally I think it is essential that it should be carried out by the agricultural departments—the Ministry of Agriculture in England and the relevant department in Scotland—because they are the people who really know whether damage is being done and who are much more likely to have first-hand information about what is happening in a particular rural area.
I shall dodge about a bit. I took part in the last debate on the Act concerned with bird life. I cannot remember whether it was in this Chamber or another place, but it was a long time ago. At the time when that Bill went through it was considered that there would inevitably be variations in the Act, one way or another, protecting or not protecting various birds. In this particular case some birds are removed from the list of pests as laid down in the old Bill. I think that in certain instances that may well prove to be a pity, although I know that there is a difficulty as regards the EEC rules and the need for special licensing.
All hawks, all birds with claws in fact, have always been protected since the coming into force of the last Act. I like the beauty of the various hawks as much as anybody, but I believe the time may well come—and the keenest conservationists should think about this—when, in some areas where there are too many birds of prey, the very birds that our keen bird watchers like to watch may begin to be in shorter supply than may be appreciated by bird watchers.
I refer to one particular bird which is a very considerable frequenter and has increased a great deal on parts of the West coast of Scotland—namely, the hen harrier. It is a lovely bird. I saw two in Wiltshire within the last 10 days. The male bird is as lovely a bird as one can find—light blue and white with winter plumage. It was being mobbed by two crows within 20 yards of me. It went across the bows of my car. But when one sees 17 hen harriers and no other birds, which is possible in the course of a morning on the West Coast of Scotland, one realises the danger for other birds because of the harrier's claws.
The interpretation of the Act is not very easy as regards some matters. It is nobody's fault, because it is a comprehensive measure which is highly specific

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and technical and inevitably a bit cumbersome. I looked up a stone curlew which is mentioned on page 44 of the Bill. It is known by two other names: a Norfolk plover or a goggleeye. I do not know whether everyone in the Chamber knows that, but I was brought up with that fact. However, if I had looked up either a goggle-eye or a Norfolk plover I should not have found it at all. That bird is, in fact, totally protected. That is an instance of where a description may be a little misleading. We must make sure that the Bill when it becomes an Act is clear and everyone can understand it. With that proviso, and the proviso also that, as I hope, the traditional sports of the countryside will be protected I give my general support to the Bill.
7.9 p.m.
Lord Underhill: My Lords, it is nice that we have had the pleasure of listening to the noble Lord, Lord Margadale, on his birthday and we wish him well. I should also like to pay my tribute to the two notable and excellent maiden speeches that we have heard this afternoon in this debate. The noble Earl, Lord Halifax, said that he understood that your Lordships spoke in this House only when they had expert knowledge. I am sorry to disappoint him, because on this subject and as regards a great deal of this Bill I have no expert knowledge. I speak as one of those millions of whom my noble friend Lord Melchett spoke, who love and appreciate our varied and wonderful countryside and who wants to see preserved and protected as much as possible of our wildlife.
I have no desire to be provocative and I hope that I can say this as nicely as my noble friend Lord Houghton of Sowerby said it. But our coastline, our countryside and our wildlife are as much the heritage of those millions to which I belong as any farming interests or any landowning interests. They are the heritage of all of us.
It will be my intention to listen carefully to the debates and to give support to any constructive and practical proposals to follow a course of preserving our countryside and safeguarding this great heritage of our wildlife. I am sure that no one could fail to be impressed by the information given by my noble friend Lord Melchett, in what I thought was an excellent and a very sincere speech on this important subject. I wonder how many noble Lords were concerned, or maybe even appalled, at the information given by my noble friend on the loss of habitats and of national nature reserves, and at the damage done generally to our countryside and coastline. Perhaps the Minister who is to reply can say whether the Government accept the information given by my noble friend. If they do, what do the Government propose to do about it?—because surely, excellent though many of them may be, the measures proposed in the Bill cannot be sufficient to cope with the problems outlined by my noble friend.
On 5th December an article in the Economist stated that the Government have taken great care to get the agreement of their two powerful lobby groups, the National Farmers' Union and the Country Landowners' Association. That is excellent. But if at all possible—and we have heard some views this afternoon on behalf of the National Trust, the Conservancy Council and the Countryside Commission—I wonder whether the noble Lord the Minister can tell us the general nature of the
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representations that have been made to proposals in the Bill. Are those bodies satisfied? Are all the conservation bodies satisfied, or are there proposals following the line which I have taken, that the Bill does not fully cope with the situation that faces us?
Of course we must not overlook the needs of agriculture and forestry, and of the rural communities in general. Of course compromise is desirable. Of course management agreements are desirable. But if the facts given by my noble friend are correct, will it be sufficient to leave this matter entirely to a voluntary system? What will be the situation if agreement is not reached? I should like to emphasise that I do not want a planned countryside; I want to ensure that the countryside is in no way despoiled.
The one matter that we cannot overlook is that this cannot be a question which waits for future consideration. If what my noble friend says is correct, if we lose the opportunity given in this Bill, it may be too late to remedy the situation. Surely we cannot do less for our heritage of the countryside and wildlife than we do for protected buildings. The Explanatory and Financial Memorandum states that the habitat protection measures may necessitate an annual expenditure of between £600,000 and £700,000. Surely that is not sufficient to carry out what is required. I repeat, I believe that unless we take the right action now, a great deal of our heritage could be lost for ever, because what is lost now cannot be replaced, even though some noble Lords believe that we could have just as good a replacement heritage. I do not accept that position.
I should like to refer to two other matters: first, the provision in Clause 46 to allow bulls to be kept in fields where there are public footpaths. My information is that this will cancel out by-laws which exist in three-quarters of England and Wales. I may find myself in opposition to farming knowledge, but I should like to know the evidence on which the Government have based this decision. From reading various letters and articles, my understanding is that there is a conflict of views on this issue, even among farming interests. Therefore I should like to know the evidence on which the Government base their decision, on which some informed opinion has expressed alarm.
I should like to echo what one noble Lord has said, that should a farmer consider it absolutely essential to have bulls grazing in a field where there is a footpath, surely it is not impossible to make a temporary order for a deviation of that public footpath. Who actually uses public footpaths? Locals use them as short cuts; experienced long-distance walkers who know what they are up to, use them—at least I believe they do. Then there are the many parents who use these footpaths with their children, maybe giving their children their first introduction to country life. I wonder how many of these parents will be assured that everything is safe if they see a bull in that field merely because there is a clause in this Bill? I am not so certain that I would regard that as satisfactory. I should like the Government to take another look at that proposal.
My last point deals with public footpaths and public rights of way. The Explanatory and Financial Memorandum states that there will be a saving of £175,000 in staff costs by placing responsibility for determining public rights of way solely upon the appropriate local authorities. The final authority of the Secretary of

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State is to be removed. At present, in the event of a dispute over designation of a new path or the proposed closure or diversion of an existing path, the final decision rests with the Secretary of State. Surely this is not a matter to be looked at solely from the aspect of a financial saving, which I fear is the case in view of what is said, in the memorandum. It cannot be claimed that a local authority is a disinterested party; if it seeks to close or divert a path or refuses a claim for a new path, it is making a conscious decision.
How then can any objection or claim be impartially left to that particular local authority? I want to find out how many such disputes are actually referred to the Secretary of State. In an article published in The Times on 29th November this year it was stated that about 250 cases go to the Minister each year, of which about half are rejected. That, of course, means that half of the objections are upheld—between 100 and 125 each year. The article continued:
"This is a facility which is both used and useful and it should not be abolished".
I am also informed—and perhaps the Minister can tell me whether or not I am correct—that in January this year the National Farmers' Union, the Country Landowners' Association and the Ramblers' Association—a very happy triumvirate—issued an agreed statement:
"When a third party is called for to settle a path dispute, generally the most appropriate to fulfil this role is the Department of the Environment".
My Lords, on other matters I have complained of excessive powers being given to the Secretary of State. This is one power which we should not ask the Secretary of State to give up. I believe that the final decision on this question of paths should continue with the Secretary of State, and I hope that that provision will be included in the Bill.
7.19 p.m.
Lord Skelmersdale: My Lords, after this great length of time, am I glad to see this Bill? Yes, I certainly am. Not only has it enabled us to hear two very well thought out constructive maiden speeches, but it has enabled your Lordships to do a tremendous amount of philosophising about the general tenets of the countryside and the relationships between the countryside, conservation and agriculture. Last but not least, it has lowered the average age of the speakers in at least one of our debates this week, so that can be no bad thing, can it?
When I withdrew my Conservation of Wild Creatures and Wild Plants (Amendment) Bill in June last year—the Bill that I inherited from the late Lord Cranbrook—I knew that the one we would have would subsume my, by comparison, poor little Bill. However, I never thought that it would be quite such an elephant. We had quite a blockbuster from my noble friend Lord Bellwin last Session and here we have this somewhat extraordinary beast from the same stable this afternoon. I say an elephant because it has had a gestation period of more or less eighteen months, and from my copy, anyway, of the Encyclopaedia Britannica this is the description of the gestation period of an elephant. It has also had six miscarriages—six consultation papers which have been referred to by
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several speakers this afternoon and which have resulted in a totally different Bill from what I think, was in the mind of the department when they first set out on this long road.
What have we got now? I hope that we have not got a puny little weakling that needs suckling for two years; but I bear in mind very much the Control of Pollution Act, vast chunks of which have still not been brought into force after six years. So what are we going to have? What are we striving for? Before I point to what I think are some of the defects of this Bill, I must in all fairness say that it is a much needed revision of modern conservation law; a restatement with amendments of the Protection of Birds Acts and the Wild Creatures and Wild Plants Act, and much else.
Had I had any influence in the matter—and I assure your Lordships I have had absolutely none—I personally would have preferred splitting the Bill into two and leaving the essentially planning matters in Part III to a separate Bill. But I recognise that opportunities for legislation come to a department only rarely and they have to cram in everything they possibly can in order to make the most of their opportunity.
Goodness knows! there is more than enough to say in the first two parts, together with their attendant and often rather confusing schedules, which I shall talk about at length later on in the proceedings and not, I hasten to say, tonight. What I should first comment on is how this Bill differs from my own. Your Lordships will remember that the primary object of mine was to extend the protection warranted to endangered species. The way I chose to do this was to identify species of both animals and plants that were in the scientifically recognisable category of vulnerable as outlined by the International Union for Nature Conservation.
While your Lordships were good enough to commend this idea and put the Bill through all its stages in this House, both in another place and outside Parliament it was thought to be far too rigid. It could, for example, have meant that the law might wish to be in advance of science in adding a species which for one reason or another was thought by the Nature Conservancy Council to be becoming so rare that it was about to become vulnerable or even endangered—that is to say, in danger of extinction—and should be protected.
This is exactly what happened higher up the scale when an order was introduced to add the otter to the list of endangered species given protection by the Conservation of Wild Creatures and Wild Plants Act. My late noble friend Lord Cranbrook prayed against the order for the very good reason that there was no scientific agreement that the otter was so endangered, and so should not be protected by that particular Act. Interpreting the spirit of the Act he was of course quite correct; and who better to be quite correct than the original drafter of that section of the Act. Unfortunately, the otter was becoming so scarce—a deliberately unscientific term, my Lords—that protection was required, and (since his prayer failed) obtained. This will never, I am convinced, happen again if this Bill becomes, as we all expect it will, the law of the land.
Before I continue to punch my few holes in this Bill, I must of course declare my interest. I am a

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professional nurseryman—more of this in a minute—vice-chairman of Co-en-Co, and president of the Somerset Trust for Nature Conservation and the British Naturalists Association. As such some would say I have a foot in two rather distinct and disparate camps; but, like the noble Lord, Lord Melchett, I have never been embarrassed by this, and so far as I know none of the various activities I am involved in, and the people who are involved in them with me, have been embarrassed by me in the opposite direction, so to speak.
Taking the first of these interests first, I am absolutely sure that under this Bill nurserymen are being done out of a perfectly legitimate trade—not once, but twice. First, under Clause 12(2) if any person has in his possession or sells any wild plant whether living or dead included in Schedule 7 he has committed an offence, notwithstanding the fact that he may well have come by it quite legally. Plants of all genera are comparatively easy to propagate and therefore to conserve. There may even come a time when a plant in Schedule 7 had died out in the wilds and/or in botanic gardens and there may be good reasons for reintroducing it. It would be ridiculous if, for want of technical skill, a curator of a botanic gardens was not allowed to obtain, say, a cheddar pink from anyone—whether nurseryman or not—to use for taxonomic purposes, or for the NCC to ask the Secretary of State for a licence to reintroduce it into the wild, then get a licence and find that the plant could not be obtained.
I said: "Not once, but twice". The second time comes when a person does something under Part III of Schedule 9, which creates a new schedule of imported plants which are again not allowed to be kept or sold by reason of the addition of a new Schedule 5 to the Endangered Species Import and Export Act 1976—something about which I know a little as, after the tuition of the noble Lord, Lord Wynne-Jones, I cut my parliamentary teeth on it. Despite the private assurances of my noble friend Lord Avon that this is covered by the definition of "wild plant", I still beg leave to doubt it and will be bringing this up in much greater depth at Committee stage. I am reminded my Lords, of the old children's story where, in the end, for want of a horseshoe nail the kingdom was lost.
Moving on to conservation matters, I am unhappy—as I am sure everyone else is tonight, certainly everybody who has spoken—on the subject of SSSIs. My first worry is not in the Bill at all nor, as far as I can see, anywhere else. I am advised by my legal friends that the only time a landowner knows that his farm includes a part of, or is included in, an SSSI is when the thing is first set up and he is notified by the NCC. Despite what has been said earlier, so far as I know the NCC does always notify the landowners and the councils when they propose to set up an SSSI.
How then is someone buying a farm to know that he is in this position? The outgoing farmer, who naturally wants to get the best price lie can for his land, may well not let on. The fact does not come up in the legal searches, although it may be voluntarily released by the council when inquiries are made about structure plans and so on.
Surely it would be sense to complete the Bill in this respect at least and make sure not only that anyone who asks should be told by the Nature Conservancy Council
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—as indeed I am fairly certain they are now—but that it would automatically come up in the conveyancing procedure. As my noble friend Lord Chelwood has already said, the designation of sites of special scientific interest is more a statement of intent than anything else, although the new super SSSIs have some definite legal safeguard incorporated into them. What the members of Co-en-Co are asking is the reason for not making all SSSIs the same in this respect. I am sure we shall be told, but I again anticipate long arguments in Committee.
On the super SSSIs, I wonder what the Government's philosophy of compensation is under Clause 27. Again we have heard a little of this already. The Explanatory Memorandum says that the Government expect that £600,000 or £700,000 a year will be paid. The question here is whether the payments referred to are once only, or whether there will be a continuing obligation by MAFF, or indeed anyone else, to pay grants for not doing things year after year—such as was envisaged by Lord Porchester's report on Exmoor. If this is so, surely compensation is likely to start at £600,000 or £700,000 a year and will increase, especially if new super SSSIs are made periodically, as we all hope they will be. So what exactly is going to happen here?
I do not want to speak for too long as there are so many speakers, tempted as I am by a whole host of questions that need to be answered, and assuredly will be before we are finished with this Bill. I must, however, in fairness put a few points on what may loosely be described as the health of animals, a subject touched on by the noble Lord, Lord Houghton of Sowerby. To start with, I am sure we all know the two excellent pamphlets put out by the RSPCA and Traffic on the subject of caged animals being sent round the world in cages that are far too small for them, most of them arriving dead. Under Clause 8(2)(a), however, birds in transit are specifically excluded from the provision that birds must be caged so as not to be able to stretch their wings freely. While it would be inappropriate for them to be given quite such homely quarters, surely we have an opportunity here to do something to abate the untimely death of so many birds travelling in such inhumane conditions?
Talking about untimely death brings me to the question of badgers, again to comment further on what the noble Lord, Lord Houghton, said. In West Somerset and Devon badgers are already under threat, rightly, because of being gassed by MAFF for transmitting tuberculosis. I do not disagree with the noble Lord, Lord Zuckerman, for example, in his finding that bovine tuberculosis in badgers was analogous to and caused the build-up of the disease in cattle. However, to our everlasting shame, badgers are often caught in snares set, quite legally, for foxes. While it is not right to make snaring completely illegal, much as I should like to do so on humane grounds—because rabbits and hares, which are a much greater pest, must be snared in certain circumstances—and while accepting that foxes must be controlled, I do not like the snaring of them and should like it to be outlawed, not so much for the sake of the fox but, as I have said, for the badger. So far as I can tell, the Bill, under Clause 10(2)(d), specifically allows it to be a legitimate excuse to say when one is accused

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of snaring a badger that one set the snare for a fox. That really is not good enough.
The other questionable matter appears in Clause 11(1)(c), which makes it illegal to use as a decoy any maimed, blind or injured mammal. The same applies to birds in Clause 5(1)(d), but with one significant difference; one is not allowed to use a live bird. What possible excuse can there be for using a healthy live mammal as live bait? I have asked many people this question and nobody can think of a single reason, and even the department confessed they were a little confused by my question. Perhaps it was an accident; if so, thank goodness for Committee stages.
I am rather worried about Quangos. This Government have an excellent record in reducing the number of Quangos set up to advise them for various purposes, but, under Clause 21 and Clause 2(7)(a), the Secretary of State can set up new advisory bodies. He does not have to do that straightaway; it is left in abeyance so that if he wants to, he can. Elsewhere in the Bill it says that he shall consult the relevant advisory body or the NCC and various other people for particular purposes. That is fair enough, and the great thing about the NCC is that, with all its inadequacies, we have it. Therefore, can we not for once take an existing body which is potentially excellent and give it the strength and finances to achieve the excellence we want of it? As I say, I cannot see the point of adding a new advisory body.
I can best sum up by saying that the Bill is potentially very good and sensible, and I am grateful for it. I described it at the outset as elephantine, but perhaps before I sit down I should put the record straight. I have recently read to my children over and over again, as is the way of these things, about a bird-like elephant with wings. Its feathers start to itch after a while and so, to avoid crash-landing, it has to be scratched. It is called a Phlodolopus. I am sure we have months of scratching ahead of us!
7.35 p.m.
Lord Winstanley: My Lords, I too begin by paying tribute to the two very distinguished maiden speeches we have heard today. I do not know what the collective noun is, if there is one, for a brace of Yorkshire agricultural Earls. Whatever it is, the noble Earls, Lord Halifax and Lord Peel, did us proud. I sympathise with Lord Halifax in having been translated by local government reorganisation from being a Yorkshireman into what he called a Humbersider, but worse things can happen; a few Yorkshiremen have found themselves being Lancashiremen. When I was in Saddleworth recently I asked one of them whether it made much difference, and he replied that he thought the weather had improved a bit, so if one can get used to that, one can get used to being a Humbersider.
The noble Earl, Lord Halifax, helped us greatly with what he said about the role of agriculture in countryside provision initially and he spoke from great knowledge, as did the noble Earl, Lord Peel, who spoke with a clear understanding of the nature and conflicts, and there are many of them, between those who live and work in national parks (as he does, in a very beautiful national park) and those who merely use them for recreation. We heard two speeches from people who
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are clearly very well informed on the subject about which they were speaking and who, I am sure, feel deeply about that subject. If all of us spoke only about what we know and feel, we should get on very well indeed in your Lordships' House.
I wish next to underline the words of the noble Lord, Lord Houghton of Sowerby, in saying how appropriate it is that this important Bill should start in your Lordships' House. I describe the measure as important because, if history is anything to go by, it may be 15 or 20 years before we have another Countryside Bill; that makes this a very important Bill, and it is important that we get it absolutely right. It has always been my view that interest in this House in countryside matters has been greater than in another place. My view has always been that there is a great deal more expertise in, and perhaps a great deal more actual commitment to, the countryside in your Lordships' House. I say that in regard to another place without criticism; I genuinely believe that Members of another place are inevitably preoccupied with what are essentially pressing urban matters, so that sometimes countryside matters get rather squeezed out; not so in your Lordships' House, as one can see from the list of speakers today.
I shall try, as other noble Lords have done, to avoid dealing with Committee points and will make a few general observations. I must however put up a few markers on matters which I may wish to probe rather more deeply in Committee. I do this so that Ministers may know what those points are, without my needing to go into the arguments at this stage. I shall refer first to what are two possibly regrettable omissions from the Bill. I agree with the noble Lords, Lord Melchett and Lord Chelwood, in what they said about the absence of anything to do with marine nature reserves. This is an area where we have fallen badly behind other countries and we should speedily try to catch up, and I am therefore sorry that has been omitted. I am sorry too that something we hoped might be included has been omitted, namely, measures to improve wardening in certain very "sensitive" areas of the countryside. The noble Lord, Lord Bellwin, when introducing the Bill, said that that had been left out and that this was not the time for it. There never has been a time when it was more desperately urgent for us to have adequate, properly trained, civilised, helpful wardens in "sensitive" areas of the countryside.
As for matters in the Bill which might require amendment in Committee, I shall put up a few markers. The first is the general question of moorland conservation, improvement and SSSIs. I very much agree with the noble Viscount, Lord Ridley, who, incidentally, paid such a charming tribute to me, that we shall again have to look at costs as we go further into the Bill. We shall not achieve everything that is necessary unless we are prepared to pay the price. I believe that there is a price, and I am not entirely sure that it is adequately provided for in the Bill.
I also believe that the procedures for the protection of these areas will have to be simplified in the interests of farmers and landowners, who already face enough difficulties—such as the new arrangements for MAFF capital grants. We must work towards a more simplified, unified procedure regarding not only sites of special scientific interest, but also "open country"

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(as defined in the 1949 Act) in national parks. I should like to see a common, simplified procedure regarding both. It may be necessary to have some reserve powers at the end of the day, in addition to the possibility of "stop" notices to prevent certain things from happening while negotiations are taking place to establish management agreements.
It is interesting to note that the Countryside Commission and the Nature Conservancy Council have now arrived at agreed proposals; the Government's two main statutory advisers on the matters that we are now discussing have reached total agreement. Perhaps points in that regard can be put forward at the Committee stage.
I wish very briefly to mention public rights of way and the new arrangements for simplifying definitive maps and so on. The removal of the Secretary of State's role as the final arbiter, independent of the local authority, has perhaps made it easier to extinguish rights of way than to create them. That is perhaps regrettable. The new arrangements might also mean that the county council, which has many important duties, will have to be not only judge but also jury in its own case. That, too, is a matter we shall have to look into.
With regard to the question of bulls and footpaths, I must echo the words of the noble Lord, Lord Middleton. I regret that we have departed from the agreement arrived at so happily by the Ramblers' Association and the National Farmers' Union when the 1978 Bill was being considered. We felt that with those two bodies in agreement that particular problem had been solved, but now that we have departed from it, in Committee we shall have to have another look at the question of bulls. Indeed, I agree with the noble Lord who said that we shall have to look at the question of cows, too. From my experience of walking in Scotland I think that sometimes Scottish cows are even more dangerous than bulls; but we can have more discussion on that later.
I wish to make a brief remark regarding a matter which I hope will not be amended in Committee. Except in the speech of the noble Viscount, Lord Ridley, very little has been said about Schedule 11, which deals with the entirely new arrangements for the Countryside Commission, under which the commission will change from being a departmental body to being an independent grant-in-aid body, staffed not by civil servants, but by public servants. It will be able to recruit its own staff and dispose of its resources in its own way, without being under the direct control of the Department of the Environment, or indeed the Welsh Office.
In a sense that proposal means that we are to do something rather unusual. At a time when Quangos are not exactly popular, the Countryside Commission appears to be choosing to become a Quango. In the present climate of opinion that might seem rather like dressing up as a turkey at Christmas time. However, I believe that there are very good reasons for the change, the arguments for which can be argued in Committee, if necessary. I believe that in its new form as proposed in the Bill the Countryside Commission will be much better able to discharge its functions than it is now.
I now turn from Committee points to a few general
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words on the Bill. I hope that sooner or later we shall all get away from the idea of what is said to be the principal threat to the countryside and to wildlife—and I regard the two as inseparable. When we talk about landscape we do not mean only scenery, but also flora and fauna; they are all part of the same thing. We must get away from the idea that the principal threat to countryside and wildlife comes from agriculture. It does not. I believe that the reverse is the case. As other noble Lords have said, our countryside did not just fall from the skies. Today's countryside is the result of centuries of cultivation of the land. When some of us express anxieties about moorland improvement schemes on Exmoor, not for a moment does that mean that we want to ban agriculture from Exmoor. If agriculture were banned from Exmoor, very rapidly the area would become degraded and would cease to be of use to anybody. So let us get away from the idea that agriculture is a threat to the countryside. It is not. As the noble Lord, Lord Houghton of Sowerby, rightly said, in our desperately over-crowded island the threat in general comes from people and their ever-increasing numbers.
Our country has turned full circle. It is not so long since the days when the majority of citizens lived in the country and went into the towns for recreation. Now the majority of our fellow men and women live in urban conurbations and go into the countryside for recreation. Besides that change people have much more leisure time, and I welcome the clear evidence that more and more people choose to spend their leisure time in informal countryside pursuits. Bearing in mind those facts we can see some of the threats posed to the countryside.
I am concerned about two trends in our society. One is the ever-increasing rate of depletion of basic resources upon which we depend for our very lives. Energy is the resource that we most talk about, but the resource that I am concerned about is land in general and countryside land in particular—a resource that is in very short supply in England and Wales, and for which there is an ever-increasing demand. The second threat is the ever-increasing rate of contamination of the environment in which we live. The noble Lord, Lord Houghton, mentioned this, too, and said, quite rightly, that man has already demonstrated beyond all possible contradiction that he excels all other animals in his ability to foul his own nest.
So we have those two trends—an increasing rate of depletion of resources (land in general and countryside land in particular) and an increasing rate of contamination. In the immediate future there is to be a great growth in the amount of leisure time. Some forms of work are now becoming obsolete, while many people are condemned to do work which is not really fulfilling, but is monotonous, repetitive, boring and sometimes dangerous. If one can lift from people's shoulders the burden of that kind of work, so be it, provided we take the consequential steps.
The most important consequential step that we must take is to provide fulfilling opportunities for the constructive use of leisure in ways which are not consumptive of resources and not destructive of the environment. Countryside informal recreation at its best is exactly that. It consumes nothing, it damages nothing. All my experience in this field—and it is not inconsider-

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able—has led me to believe that countryside recreation can happily go in harmony with productive use of the countryside, be it in agriculture, for food production, in forestry, for timber production, or in water conservation, and so on. The Forestry Commission has proved the point, and the water boards increasingly are showing that the two interests can exist harmoniously and happily.
I think that this Bill, in so far as it is doing something to preserve opportunities for the enrichment of human life in these ways, in doing something very important indeed for society as a whole. I really must finish, my Lords, but I am bound to say at the end that all of us really must realise that the costs and difficulties of re-creating the countryside in its widest sense when once it has been lost will be immeasurably greater than the very small costs, as contained in this Bill, of preserving it while we still have it.
7.50 p.m.
Lord Craigton: My Lords, I must add my congratulations to those expressed by noble Lords to the two maiden speakers. My noble friend Lord Chelwood claimed a special qualification to congratulate the speakers, in that he himself had made two maiden speeches in this House. I, too, have made two maiden speeches, and I only wish that either of those two maiden speeches had been as good as either of those that we have heard today. I should like to express one more congratulation, and that is to the noble Lord, Lord Winstanley, who has just sat down. As my noble friend Lord Ridley said, he did a wonderful job with the Countryside Commission, as we in COENCO know only too well, and this is a great opportunity to thank him personally, in public, for all he has done to help the conservation movement.
My Lords, I speak as the chairman of COENCO. I have, as your Lordships have just heard, a very distinguished vice-chairman in Lord Skelmersdale. COENCO stands for the Council for Environmental Conservation, and we co-ordinate all, or virtually all, the non-Government conservation organisations in the country. Our members' wildlife interests are represented by the Wildlife Link Committee, whose distinguished chairman has made a very good speech in opening for his Front Bench, the Front Bench opposite, today. The Wildlife Link Committee is itself split into sub-committees and working parties to deal with the many important subjects that concern them on this Bill. So it is really on behalf of the whole conservation movement that I welcome this Bill. I thank the Government for introducing it, and I thank the department concerned for an unprecedented effort—and it was an unprecedented effort—to provide advance information on which many meaningful and constructive discussions have been held.
Inevitably there are doubts and fears—we have heard some of them today, and we shall hear more—but they nothing like cover the amendments that we are going to have to put down. I think the discussion on this Bill is going to take a very long time, and I am glad, as Lord Houghton said, that it has started in this House, where we have the time and the know-how to make a thorough job of it.
For myself, I raise only two points. First, as other
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speakers have said, this is the opportunity to create marine reserves. That matter has been discussed for the last ten years, and nothing has been done. Most European nations, as has already been said, have them. Their establishment was recommended in 1979 by a joint report of the NCC and the NERC. The Underwater Conservation Society, which is a member of COENCO, has been campaigning for some time for marine reserves; and there are the two international conventions to which we are signatories. Both these include protection for marine habitats; and so it is again on behalf of the whole conservation movement that amendments should be put down.
I shall put my amendments down tomorrow morning. They may or may not succeed, but I am sure other amendments will go down. This is not an easy Bill to which to add provisions for marine reserves, but it will not be for the want of trying. I believe that those amendments, or some of them, will be carried unless the Government—and I warned the Government on this some time ago; I gave them the maximum possible notice—have already prepared other amendments which we can accept if they do not like ours.
My second point is one on which I personally feel strongly, and I know that many of my noble friends agree. I know the noble Lord, Lord Underhill, would agree, and I think the noble Lord, Lord Middleton, may possibly disagree with me; but the point really is quite simple, and it is this. In this small country, where land is scarce, it is inevitable and understandable that there should be differences among those who, in relation to the use of any particular piece of land, have a conflict of interests. Primarily, of course, this involves farming, forestry and conservation; but the ramblers, the local authorities, industry and many others may also have an interest in the same piece of land. The burning problem that faces this nation is how to arrive at a settlement that will be accepted as fair, whatever the disappointment of those concerned who have not got all their way. We certainly have not arrived there yet; and this is something to which I hope COENCO, as for the first time the non-Government organisations, will turn their attention (this is planned, anyway) when this Bill, which is inevitably partisan, is out of the way.
But this conflict of interests, which the Bill as amended may or may not wholly resolve, depends very much on the nature and size of the plot of land involved. There will be many cases where the piece of land on which there is something in the national interest worth preserving (whether or not it is an SSSI) is so small that its preservation will not affect the proper claims in the national interest of forestry and agriculture, and probably can be justified against other, more local claims. So, based on the precedents already in the statute book for the prevention of unauthorised work on listed buildings and on ancient monuments, I shall move amendments to add similar controls, by listing, to SSSIs and other sites of strictly limited size, and I hope and am sure that many of your Lordships will agree with me.
7.58 p.m.
Lord Buxton of Alsa: My Lords, I, too, should like to thank the two noble Earls for their splendid maiden speeches, which filled me with envy when I recalled my

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own. I think we are extremely fortunate in that they are both resident in that magnificent part of Britain, Yorkshire, even if some of it is called Humberside.
I began to get rather concerned some time ago, and thought I was in some sort of rarefied atmosphere. I think the noble Lord, Lord Winstanley, put his finger on it when he said that in this House there is a huge groundswell of sympathy for all the facets of this debate about the new Bill. There are enthusiastic and responsible landlords, there are enthusiastic and responsible farmers and there are enthusiastic and responsible conservationists. This has carried us through the day, and at one time I almost felt that the Bill was going to be passed with three rousing cheers and no amendments.
If I may be forgiven for striking a discordant note, I have to say that I come in where the noble Lord, Lord Melchett, left off. I am most unhappy about Part II of the Bill. While I welcome that part of the Bill which seeks to protect individual birds, animals and plants, I am concerned about Part II. What the Bill seems to do so far is to identify in Part I those features of wildlife which need protection, and then, in my estimation, to do nothing new at all to help them in Part II—and even, if I understand it correctly, to cut back to a dangerous and probably fatal level the habitat they require for existence.
I share the views of those who consider that the outlook on nature conservation is grim. There are several factors which have contributed, and still are contributing, to the dangerous prospects which we face today. There is sometimes a misconception, particularly in the media, that if agricultural land is not actually developed and put under concrete then it must be OK and is still countryside. It is not always understood that in wildlife terms a ploughed field or clean farming land is in fact simply a desert in another form. It is the other features which make up the landscape, as many noble Lords have said today, the hedgerows, the woodland, the moorlands, the ponds, the wetlands and so on, that constitute the survival factor for wildlife. Agricultural land per se is a negative or denial factor.
I disagree with my old friend, the noble Lord, Lord Walston, in thinking, first, that the article in the Sunday Times was an alarmist one. It was full of facts taken from several valid references. Secondly, I am sorry that the noble Lord is not here but I cannot let pass his interesting statistics about hedgerows. What he did not add was what would have happened if all the hedgerows had been removed from Farm 1 or Farm 3, whichever it was. I think it is not generally understood outside this House that birds, particularly, do not exist on just sky and earth. I agree with those of your Lordships who consider that there should be no conflict with the farmers. I am a farmer, a landlord, a conservationist, a great lover of birds and of sport, of everything to which we have had many references this afternoon. I do not believe there is a problem.
But, in attacking Part II of the Bill, I should like to assure my noble friend who is to reply that I am not going for this Government in particular, because the problems of today have derived over 35 years of successive Governments and it would be quite unfair to say that the problems had been created in the term of this Government; they are responsible for doing their best, I am sure they are, to perfect this Bill. The problem
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in my view derives from the war-time need for maximisation of agricultural production. That still rolls on like a juggernaut and results in the Government contributing £540 million a year, part of it towards the destruction of wild habitats. I believe that that is going on although production targets have been achieved over the last 20 or 30 years and we are virtually self-sufficient in most of the foods that we produce. We must be clear that this Bill does precisely nothing to redress that situation. The Government remain, through grant aid, the chief instigators and supporters of habitat destructions.
Secondly, previous legislation in this regard was enacted in almost a different era. It was introduced before the devastating impact of the technological or power revolution in agriculture. A task that in the old days took 20 men four weeks (and therefore probably was not done) is now done by one man in a morning with a JCB or a bulldozer, earth leveller, backfiller, frontend loader and so on. It is the coming of these implements which has had the devastating impact, because they can devastate features overnight—and sometimes in disregard of public feeling and concern. That obviously would never happen anywhere associated with any Member who has spoken in this debate; but it happens outside in the cold, chill air beyond these walls. Nobody except a lunatic would derive satisfaction from destroying a man-made treasure, say, a Rembrandt; but, either because of the indifference to the interest of future generations or because of the lure of grant aid, agricultural human beings, I am sorry to say, are wiping natural Rembrandts from the face of the earth.
Many farmers and landowners, of course, love their land and their landscapes as do so many Members of your Lordships' House. Wildlife is safe with them. Thus, the concern of the electorate or the public and the interests of future generations are cared for in very many cases and many places by voluntary attitudes and by the sense of commitment and responsibility to the land and the nation. In other cases, farmland and the British countryside is looked upon simply as a factory, as a production base to be exploited to the full regardless of other interests. There is evidence of this—one need not name them—to be seen as one drives around the country. Those who own land should regard themselves as trustees of the British countryside on behalf of the nation. Land should never be regarded by any owner as a commodity at his sole disposition. Such philistine attitudes are not so uncommon, they are not unknown; and they undermine the ideals and philosophies which most of us stand for.
In considering Part II of the Bill, we must see it in the context of the present situation where, first, the Government continue instigating and financially backing the destruction of the habitat to the tune of £540 million, which obviously the country cannot afford at the moment—and, I believe, when there is no longer need for much of it. Secondly, the other major factor is the devastating effect of new technology, and we have to remember that this also is subsidised or partly so by Government aid. Finally, and most importantly, there is, I believe, a tendency in Government to underrate the strength of public sympathy and public opinion and to comprehend the shameful

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legacy that we are in danger of leaving to or inflicting on our grandchildren and future generations if we do not halt this trend now.
At this most critical juncture the Government propose to select, I understand, only some 40 sites out of 2,800 wildlife SSSIs. This means the merest handful of sites which may survive while the vast majority, as has been said, is downgraded. I do not want to imply too much criticism, but it seems to be a crude attempt, albeit well-meaning, to solve financial stringency, the knock-on effect of which may be catastrophic in the long run. Wildlife communities cannot be perpetuated by providing solitary sites. I would hazard a guess that the handful of sites, if they are selected, may be those least likely to be in danger or to cause the department any trouble. Downgrading of the other 2,760 is bound to be the consequence of this misjudgment.
How will the selction be made? I am sorry to labour this point, but I believe it is desperately important. SSS1s were designated for a wide variety of reasons, each differing in its own way from the others. What is important for some may be less interesting for others who have different values and subjects. That does not make one site more important than another. Nature does not stand still. Circumstances change over the years according to the successes or failures of conservation policies. When the rare wading bird, the Avocet, came back to nest in 1947, it was regarded as sensational, its return as a breeding species after a century, and the first nesting sites were considered conservation shrines. Now the Avocet is firmly established in Norfolk and Suffolk, and if yet another Avocet colony arose elsewhere I doubt whether the NCC would feel it essential to make a special designation at all. Another case is the collared dove. I went with Max Nicholson, the new President of the RSPB, to see the first nest on the Norfolk coast 25 years ago. It was the first and only nest in the country, although in fact there were three. Today it is a pest and nobody knows how to get rid of it. I am not sure—I do not have the details—but it was probably designated an SSSI.
So much for SSSIs. Much worse is the outlook for the ordinary countryside of Britain. Discrimination in favour of the SSSIs has dangerous implications. There will be no legal restraints and as to features in the landscape which are not even classified as second-class sites of scientific interest, they will have little or no importance in the eyes of the less responsible and sympathetic farmers or owners who are able to get cash incentives from the Government. It is important to reflect that the public minds about the general countryside probably more than about the SSSIs. The millions who go into the lanes, by-roads and hedges of Britain, on to the coastline, as have been described by your Lordships before me, have a greater vested interest in the ordinary wildlife of Britain than in the Avocet or the Osprey or rare plants. It is the popular, and once-common species which will now be at risk and the Government are doing literally nothing for the British public in seeking to protect only 40 SSSIs. What harm is there in having the support of the conservation authorities in making changes in the landscape?
The objections must be that the farmers fear they will not get conservation support. If that is so, that
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proves conclusively that British wildlife will be steadily diminished until it is no longer a source of joy and recreation for the public. Either one accepts the conservation view or one defies it. If one defies it, the public is the loser. I cannot see why one small section of the population, that is the farmers, of which I am one, morally has the right to introduce an element of barrenness into the landscape. In my experience it is not what most fatmers want, as the noble Lord, Lord Melchett, has indicated. I believe, in the light of experience, that a healthy and viable agricultural régime is entirely consistent with conservation objectives, provided there is no scope for extremists on either side. Conservationists must be reasonable and sensible, and certainly the NCC have demonstrated such qualities from the very beginning. That was where the valuable services of ADAS officers came in, in reconciling the different interests.
The loss of water meadows, wetlands, ponds and marshes brings about a steady drop in the water table, the long-term effects of which in dry spells cannot yet be calculated. Yet the water authorities have a duty to pursue such drainage policies, and in the Severn-Trent area alone there are 4,500 such sites identified for drainage. These policies involve the nation in astronomical costs, and in many cases they are totally unnecessary, even pointless. For wildlife conservation in which the public have a vested interest they will prove disastrous. It should be borne in mind that the Government in 1979 spent £44 million on drainage under various headings. I personally do not believe that a lot of it—except for coastal defence—is necessary. In my view, we must recognise that the Government are in a muddle and few of their numerous hands know what the other hands are doing. Some are actively in opposition to each other. Part II of this Bill demonstrates beyond doubt that the Government have not made their objectives clear and on financial grounds they are tinkering with major problems. The result in my view will be worse than the present, and I feel that it would be much better to leave things as they are until Part II is re-thought. As has been mentioned by several noble Lords, under the financial effects of the Bill the Government state that the habitat protection measures may be expected to cost between £600,000 and £700,000. While supporting the Government in all their economic policies, we must recognise that this is a pitiful sum, the sum apparently judged to be appropriate for the protection of the British heritage in fauna and flora for present and future generations, and it makes Government expenditure on the arts of £80 million look positively obscene. I am sorry to have to drag this in, and I know that I have done it before, but it is totally relevant in the context of Government expenditure. Even this year's increase for the arts of £10 million is more than the total Nature Conservancy budget of £9 million, and this arts increase of £10 million would probably be enough to secure for all time the vital areas of beauty and scientific interest which mean so much to the public.
I am not a philistine and my home is not totally without culture. Yet one has to say that the townee establishment's obsession with the arts has become a bandwagon which it seems impossible to control. The fact must be faced that we are spending £80

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million a year for the benefit of a very small minority, when the long-term benefits of the arts grants are certainly difficult to perceive for most of us. At the same time we are prepared to spare only a fraction of that sum on the most basic of all the factors on which we depend, the land we live on and the natural environment. We get obsessed, quite rightly, about our national heritage and losing great houses and works of art abroad. But what could be more the basis of our national heritage than the countryside and wildlife of Britain? And can we seriously rank it to be worth only 12p in every £1 we spend on the arts, from most of which the public as a whole derive no benefits whatever, and are mercifully not even aware of some of the creative nonsense which the arts grant promotes?
The £600,000 which Government propose for these measures in the whole of Britain is no greater than the sum which GLC give annually to the National Theatre. I am a supporter of this Government and their basic policies, but the PR is bad, because the axe keeps blunting the sharp end where it really matters and in areas where people really care. Last year the BBC external services were nearly axed. Half the world depends on the radio for the voice of freedom. The British Antarctic Survey were nearly axed—and it is a tiny sum involved. Our entire status and influence in the Antarctic depends on the British Antarctic Survey. Now ADAS is being disminished and now nature conservation is expected to stagger along on £600,000 with the SSSIs.
We know that public expenditure must be reduced, but Government will soon he like an army with only an HQ and a sergeants' mess and so on, and no troops in the front line. We are blunting the cutting edge across the whole field of Government activity. That is not to say that I do not think that we are doing the right thing; it is just the way it is falling. There are 120,000 farmers in the NFU but there are 60 million people who mind about the countryside. I know that from wildlife programmes on television. For 20 years my company have made a programme called "Survival" and the last one was in what is called the national Top 20 with an audience of 16 million. One can judge what the public interest is. The NFU can do a great deal to educate their members on the question of conservation, as they did very successfully on the whole subject of straw burning in 1976. The RSPB alone has 350,000 members and the conservation bodies, as the noble Lord, Lord Melchett, mentioned, have some millions.
I therefore will not go on, and I apologise for taking so long, but it is something that I have been boiling up about for a great many years, practically since the war. I therefore urge my noble friend to ask the Government to think again about this question of selecting sites. I believe this will be a slippery slope and a very dangerous one. I also ask the Government to think again about the financing, which is a very serious prospect.
8.17 p.m.
Lord Burton: My Lords, I believe the noble Lord, Lord Somerleyton, is not here and it becomes my turn to congratulate the noble Earls, Lord Halifax and Lord Peel. I am at a loss to know what further one can say to them. It is clear that they have done much
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work upon this Bill and, as a result, those of us from the country are most grateful to them.
At this advanced stage of the debate I have been able to delete a number of matters which I had hoped to raise but I should like to thank all those noble Lords who mentioned marine reserves. I was, however, sorry that they referred only to "reserves". There is a need for general marine protection, at least from over-exploitation and pollution. We have had a series of excellent speeches but I regret what appeared to be a somewhat selfish attitude by the noble Lords, Lord Houghton and Lord Underhill, to the rural inhabitants who, after all, have been responsible for and are maintaining our lovely countryside.
Every time there is legislation on the countryside, those of us who live there are presented with greater and greater difficulties, and this Bill is no exception. It is riddled with anomalies. However, when we come to Committee I fear that we shall be faced with a new problem, for our Ministers have been off to Europe and the last Government signed a resolution without any consultation with Parliament. I believe that we have not yet signed the Berne Convention. When we come to Committee and we find some horror which requires changing, I fear that we shall be told: "Oh we are committed to that by Directive 79/409/EEC of April 1979". We have the best conservation laws of any of the European partners, and we really must not be dictated to by Frenchmen or Italians who for many years have been shooting all their song birds.
On the other hand, we shall have to be careful that in making exceptions in our Bill we do not set an example to the French, in particular, who may then make their own exceptions, letting them revert to their current status quo. Perhaps we can hear more from the Government on the exceptions that we can make from the two conventions. For long we have suffered from pressures by well-meaning lobbies in the countryside and so often the attack has been ill-directed.
Let me quote just one example: it was suggested that eagles were not hatching because their eggs have been rendered infertile by dieldrin sheep dip. Why eagles should have been suffering when there was no diminution of buzzards nor of corvines was not made clear. Let me point out that I am now talking about sheep dip and not about the dieldrin seed dressing which indeed killed many pigeons and then the sparrow-hawks which preyed upon the pigeons. The sheep dip, however, was doing a wonderful job in controlling that horrid little insect, the blood-sucking tick. No efficient replacement dip was produced and when the dip was banned there was a major explosion of the tick population. Millions of birds and animals have died needlessly as a result, and any Highland veterinarian will confirm this. On one occasion a hare was hung over a basin of water and over 1,000 ticks dropped off that one animal. I had a six-week old pheasant poult which I handed to the College of Agriculture, and they counted over 80 ticks coming off this little bird. Our birds and beasts are being killed by anaemia, quite apart from tick-borne diseases. All the moorland birds have suffered—plovers, curlew, grouse, snipe and manymore—and what has been achieved? Possibly one or two extra eagles; but what a price to pay for ill-directed conservation!
Perhaps the most surprising thing about this Bill is that it has come from a Conservative Government.

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It is a mammoth compilation of restrictive legislation couched in phraseology that is most difficult to understand. The result is, I fear, that the law will be brought into disrepute. What is worse, it is once again the private sector which will be most affected, while some of the worst offenders (that is, the public sector) will continue widespread destruction of the countryside. One would think that there was no financial crisis or that no Minister had ever been asked to prune his budget. The Bill, we are told, will add £1 million per year of extra cost to the Exchequer. There are, however, several unpredictable items: for example, nothing seems to have been allowed—one speaker has mentioned this already—for the cost of management agreements in respect of the landscape, and thus the cost may well be in excess of £1 million.
In the process of achieving this, we are told that 20 civil servants will become redundant. If this is the case, how much extra work will fall on the local authorities and have to be paid for by the ratepayers? What is more, it will fall upon the ratepayers of the rural areas, mainly for the benefit and enjoyment of urban dwellers. I say to our Front Bench; surely you must think again. What are we to gain from all these SSSIs? Is it worth the expenditure at this time? My noble friend Lord Buxton just now said he thought the situation would be better left as it is. I was pleased to hear that.
If there is £1 million per annum available for conservation, then there are projects which would bring infinitely greater benefit to nature than the expenditure proposed under this Bill. Let me give your Lordships one more example. On my own doorstep, the whole of the Inverness sewage—not only household waste but the highly toxic distillery and mailings effluent—goes crude (yes, crude, my Lords) into the Firth. This has already caused ecological disasters, and the only thing preventing a comprehensive sewage scheme is lack of finance. If we have money to spend, let us spend it on projects like that.
It is no use being told that one cannot kill this and one cannot take that if in fact the birds or animals are dying out for some reason totally divorced from the taking or killing. A perfect example of this is the otter. Two years of protection in England have made little or no improvement to the numbers. If your Lordships look back at our debates on the Otter Bill, you will find that I made it quite clear then that the drop in otter numbers on the River Ness was entirely attributable to the Inverness sewage which I have just mentioned. If one looks at the otter distribution in Scotland, which is mapped out by the NCC, I believe, one will find that nothing will be gained by protecting this attractive animal in Scotland. It is merely making a pointless offence instead of getting to the root of the trouble. Let us get at the root of this problem instead of playing with it. Let us really protect this animal and not pass something which will just create an offence.
Perhaps an even more nonsensical position arises in the bird section. Surely this Bill is intended to encourage wildlife, but it appears that one will not be allowed to breed mallard ducks or capercaillie—certainly not without a licence. What an unnecessary piece of bureaucracy that would seem to be! Also, one will not be allowed to release that delightful little
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person, the mandarin duck, where it might escape into the wild. Why on earth not? Though all the capercaillie in our area died of some disease a few years ago, I shall not now be allowed to release any to replace them, even if I were allowed to rear them; but there is nothing to prevent anyone releasing goshawks or other hook-beaked predators.
I would just draw attention to Clauses 4(2)(c) and 10(2)(c) referring to the dispatch of injured animals. I shall not deal at length with this now, because it is really a Committee matter, but I should like to pose the question: what happens if one finds a bird with a broken wing, perhaps after hitting a car, and which is not so seriously injured that it could not recover if you took it in and cared for it but which would not survive in the wild? Having read this Bill, I should feel very tempted to pass by on the other side for fear of breaking the law, and it could be much kinder quickly to despatch it. The position indeed could be much worse with Schedule I birds. Think what one would have to do if one found a golden eagle which had flown into a pylon line. Would one leave it to die slowly of starvation or what would one do? I think it is a very difficult situation and perhaps the Government may amend the wording of these subsections on Committee. One other small point: I notice that in spite of the fact that the EEC directive permits the use of a boat, it is going to be illegal to use a boat for shooting rock pigeons, which is frequently done off the west coast of Scotland. It seems an unnecessary prohibition.
Before protecting something, surely we should look to see whether or not there is a need for protection. We should look to see whether the particular species concerned is increasing or decreasing. We should not let our hearts overrule our logic. Why give special protection to a species which has had a population explosion without any protection—or even, as my noble friend Lord Arbuthnott said, a species which is already being conserved by sportsmen and is retaining its numbers?
This Bill is full of questionable conservation advantages, but I must not continue this evening. I merely warn my noble friend the Minister that he and his officials are not specially protected species and I have many shots in my locker to fire at this Bill, many of them for conservation, and others to prevent serious damage to livestock, crops, vegetables and so on. However, before sitting down I must tell your Lordships of one particular grievance I shall have over this Bill, if it passes as it is. I shall have to burn my favourite sporran, which I inherited from my grandfather, because it is made of otter skin and I do not think I could ever get a licence to keep it!
8.27 p.m.
Lord Gridley: My Lords, I feel that before making my speech this evening I should first refer to the great pleasure we have felt in listening to the two maiden speeches of outstanding quality. I would first express pleasure at the outstanding speech of the noble Earl, Lord Halifax. It was made and delivered by the noble Earl with knowledge and sincerity, and was in the best traditions of your Lordships' House. I feel that had it been possible for the noble Earl's father to have heard him, he would have been proud

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of his son's efforts this evening. I should like to couple with the remarks I have just made a reference to the speech made by the noble Earl, Lord Peel. I consider that what I have said in respect of the noble Earl, Lord Halifax, also has application to the speech of the noble Earl, Lord Peel.
The hour is late and I wish to confine my remarks to one aspect of this Bill. I am grateful to the Government for introducing the Bill and I give it a reserved welcome. I propose to confine my remarks to our endangered species for which there is provision in the Bill. But I would say this: when man dies the race survives, our children survive and the world generally goes on. But when we talk about our endangered species we are referring to animals, cetaceans, carnivores and others placed on this planet by the Almighty and which, because of man's greed and exploitation, may disappear from the earth for ever. In that sense, my Lords, I am a conservationist. I welcome the Bill for the way in which it deals with this issue. But, so far as I can see, its success will depend upon the enforcement of the law in the provisions of this Bill, further education of the public on the issues and national as well as international co-operation.
I speak also as a parliamentary adviser to the People's Trust for Endangered Species, which is a trust that is financially supported by donations from the British public. I make no apology for mentioning the splendid work performed by this trust. It is a little over three years since the trust was established. In 1978, in support of the trust, the British public donated £164,000; in 1979, the figure grew to £360,000, and I believe that this year, 1980, that figure of £360,000 will be exceeded. What do these figures portray but a concern by our people for our species which are endangered and a concern that they should not be allowed to perish forever from the earth? Do they not underline the fact that at a time of financial stringency for most people members of the public are prepared to make financial sacrifices to prevent the extinction of species which are threatened?
The trust is in honour bound to place to good use the donations it receives from the public. Where the public has obviously expressed its anxieties, scientific data and information have to be obtained with regard to the policy to be followed, and this is exceedingly costly. In 1979, from donations received, the trust allocated and expended £219,000 on scientific and educational grants, with a further allocation of £40,000 this year. That is a total of £259,000 which, as I have said, has been received from the public.
I would ask my noble friend the Minister, or the noble Earl, Lord Avon, what funds Her Majesty's Government have been able to make available towards scientific investigation and reports in order to protect our endangered species from total extinction. What have the Government been able to do in this sense? These reports are necessary to ascertain the facts and to formulate policy which can be relied upon, so that concerted action can then be taken to prevent our species from extinction.
At this point I would refer to Clause 14 and Schedule 9, under which the powers of the Endangered Species (Import and Export) Act 1976 are to be increased in order to meet the dangers. I welcome the action which is envisaged here, as I welcome all the
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powers of enforcement under Clauses 15, 16 and 17 of the Bill, but I would respectfully suggest to the Government, and to the Minister, that it is important to look at the desired objectives of the Bill in some depth. The threat to our endangered species does not lie only in this country; the threat is global. It is a threat on an international scale. The powers in this Bill are not enforceable to meet such a threat. Enforcement involves international investigation, persuasion, agreement on action and the involvement of scientific investigation to ascertain the facts and to plan policies accordingly. All this is necessary, if the dangers of extermination are to be avoided.
It is for this reason, among others, that early this year Robert Walker and Nicholas Gibson, who are trustees of the People's Trust for Endangered Species and whose guidance has been outstanding, appointed Bill Jordan as director of the trust. I believe that he spoke on radio this morning and he is highly qualified and of international repute. In fact, he has now been selected to advise the Committee on International Trade in Endangered Species. This will be of great assistance to everybody, particularly to us.
According to statistics which I have obtained and which I believe to be accurate, there are at this moment 1,000 species of animals facing extinction, so there is much work of an urgent nature to be done. But let me place before your Lordships some facts which are, in a sense, more encouraging. Of animals that became endangered between 1900 and 1960, 64 were lost forever, but since then only four species have been lost. That is a remarkable improvement. It also indicates man's growing concern for our endangered species and the action which has been taken in the ensuing years.
At this juncture in our deliberations I do not wish to dwell at any length on matters which we can discuss at the Committee stage, but under the provisions of Schedule 9, cetaceans, it is possible that we may desire the inclusion of the orca killer whale and the bottle-nosed pilot whale, as well as all species of cetaceans which fall within the European zone.
There is one question which I would ask my noble friend on the Front Bench, at this juncture. Anxiety has been expressed about the future of the otter in Scotland, and from our trust's sources we made a donation of £20,000 to further the interests of the otter. I believe that the noble Lord, Lord Bellwin, gave us an assurance this afternoon, in his opening speech, that Her Majesty's Government have decided that the otter in Scotland should be protected. I should very much like an assurance from the noble Earl, Lord Avon, that this is so. I should also like to know from the Government what precise steps are to be taken in protecting the otter.
I have not covered in my speech other activities which have been carried out by the trust in the last two years, important as they are, to preserve species from extinction. The hour is late and many worthwhile speeches have been made by noble Lords on other aspects of our countryside. I have listened to most of the speeches which have been made. I listened very carefully to the noble Lord, Lord Melchett, who was speaking for the Opposition. I found myself in considerable sympathy and agreement with him on his anxieties about the importance of preserving the habitat of the wildlife in this country. Action must

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be taken in respect of certain species, if our wildlife is not to disappear. I should like to know the Government's reaction to this point which was made by the noble Lord, for I feel that unless we can get some assurance this important matter should be raised at the Committee stage.
My final comments are these. I have endeavoured to indicate to the Government that there is in this country a widespread public opinion which expresses anxiety about our endangered species. I say that from my knowledge of the activities of the People's Trust for Endangered Species, and from my association with it. I have put questions to the Government which I hope will be answered. We owe it to the future of our children, after we have long departed, to bequeath to them a land to live in, in all its beauty of plant and animal life, and a countryside a love for which has inspired us and will inspire them to overcome all difficulties.
8.40 p.m.
Viscount Massereene and Ferrard: My Lords, I should first like to congratulate the two maiden speakers on their excellent speeches and to say how sorry I am that they had to change their Yorkshire status and become Humbersiders. That is rather bad luck. I wear many hats in regard to this subject. I belong to all the various societies which have to do with the countryside, field sports, conservation and everything connected with them. As I say, I wear many hats. All of us know that the real danger to the countryside is not due to farmers. Unwittingly, I may sometimes have been a danger to the countryside because I farm. However, the real danger to the countryside is the internal combustion engine. I understand that in this country there are nearly 30 million motorised vehicles. They are the real danger. Millions of people pour out of the urban areas into the countryside. That is very good for people, because it gives them different horizons and it is very nice for them. But we must ensure that people do not spoil what they come to see. That is why I welcome the Bill. It represents a fairly reasonable partnership between the State, the landowner and the farmer. There has to be that partnership today because, owing to taxation, many of the big estates have been broken up.
This has nothing to do with the Bill, but I should like to mention that a year or two ago I was informed, though I was never notified in advance, that the Countryside Commission for Scotland had designated a large part of my estate as an area of outstanding natural beauty. I had no objection, because one does not live for ever, but I should have liked to be informed of that fact. I protect the estate as well as I can during my lifetime, but I find that we are getting thousands and thousands of tourists and that a great number of them do not understand the countryside. Although I have made paths for the use of the public and have put up notices asking them to use the paths, many of them do not do so. This creates great disturbances to wildlife. I am told that some of the hills in the Highlands have been eroded by the thousands of people going up them. This has destroyed the flora and has driven away the fauna.
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I hope that this Bill will do something to prevent that from happening. We do not want to spoil what the public has come to see. It is no good putting up notices saying "Beware of the bull" because very rude things are sometimes written on them. I have found that one of the most effective notices is "Beware of the Agapanthus". If my noble friend Lord Skelmersdale were here I am certain that he would say that he knows the plant well, and I am sure all your Lordships also know it well. It is a beautiful, blue plant. I have found that notice to be extremely effective.
The last thing I want to do is to embark upon Committee stage points. However, may I deal with Clause 5, the prohibition of certain methods of killing or taking wild birds. I am surprised to see that automatic weapons are included there. They are illegal, anyway, so far as I am aware. Semi-automatic weapons do not appear to be properly described. I presume it means a rifle or a shotgun where the trigger has to be pulled each time it is fired. I have never used a shotgun like that and I should hate to do so, because it must be a very unbalanced weapon. For thinning out rookeries, however, a semi-automatic 22 ought perhaps to be allowed. Such rifles ought to be allowed in special circumstances.
Lord Melchett: My Lords, before that goes on the record, I hope that the noble Viscount will allow me to say that the rook is a seriously declining species in this country and people should be discouraged from thinning out rookeries in the way he suggests.
Viscount Massereene and Ferrard: My Lords, I do not shoot young rooks. Rooks are very good at killing wireworm. It is probable that in certain parts of the country there are too many rooks. I do not necessarily want automatic weapons to be included.
Turning to snares, one noble Lord referred to badgers. Under the Bill, badgers cannot be snared. This is excellent. A snare is an extremely cruel instrument. Turning to foxes—I am not saying this because once I hunted; I was an M.F.H.; that was quite a long time ago—I think that the people who snare foxes for their pelts, for which they get quite a lot of money, are not very expert. By setting a snare inefficiently they can easily catch a badger. Therefore I hope that somebody will put down an amendment on this matter. If that does not happen, I will.
I should like to say a few words about Clauses 26 and 27. Clause 26 deals with areas of special scientific interest. It is extraordinary that it does not appear anywhere in the Bill that the occupier, landowner or farmer is to be notified in advance that an order will be made against him. In the past I think the occupier has been notified. I cannot find such a provision anywhere in the Bill. Clause 27(2)(a) says if the occupier
"has reasonably incurred expenditure which has been rendered abortive, or expenditure in carrying out work which has been rendered abortive, by the making of the order; or (b) he has incurred loss or damage which is directly attributable to the making of the order".
Although he might obtain compensation for the losses incurred as a result of the work he has done, there does not appear to be any compensation for the reduction in the value of his land if he cannot farm it. That does not seem to be fair.

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Clause 31 will be generally welcomed by farmers and landowners. Management agreements between the national park authorities and the local authorities will be welcomed, but apparently one is not going to have any financial help if, owing to that, one's land has declined in value. I do not believe that this is very fair.
May I turn to public rights of way? On the whole, I welcome this provision. In the past, local authorities have put up notices saying "Public right of way" or, "Footpath". In fact, they did so on my land in Scotland where there were no paths. We found people wandering about, completely lost. So I hope that before the authorities do this they will make sure that the public rights of way are negotiable. Also I should like to make a plea here for the horse. After all, until a short time ago the horse was the only means of tilling our fields. It is a country animal, if ever there was one; so as there will be no restriction on bridle ways at all I hope that farmers will make a distinction between the rider and the scrambler on a motor bicycle. I should like to try to protect the more beautiful countryside from scramblers, who make a hideous noise on their motor bicycles and are completely foreign to the countryside.
I should like now to say a word about bulls. Quite a lot has been said about bulls, and as one or two noble Lords have remarked, certain breeds of cows with calves are far more dangerous than the average beef bull. For instance Galloway cows, which I used to breed, when they had young calves were extremely dangerous, and if they were out anywhere near a public footpath they would be far more dangerous than any bull. Indeed, it was extremely dangerous to approach any nearer to them than 50 yards, whereas on the whole beef bulls are quite harmless if they are out with their cows. I should have thought that any farmer having a beef hull and thinking it was dangerous would be unlikely to have it out beside a footpath. But how one would legislate for that I do not know. I do not think it would be possible.
I should like to support one or two other speakers who have said, regarding marine conservation, that we ought to imitate other countries and have marine parks, because in the last three or four years we have abused our fisheries around the coast appallingly. I frequently warned in this House four or five years ago that if we did not do something about it quickly we should have no herring, and that has happened.
I would end by expressing the hope that, perhaps not now but in the near future, more money will be allocated to the Nature Conservancy Council. I think their budget is £9 million and I believe one noble Lord compared this unfavourably to the money granted to the Arts Council. When we remember the appalling monstrosities we sometimes see produced by the Arts Council I really think that the Nature Conservancy, by preserving our countryside and our flora and fauna, deserve to be better financed. I end by welcoming this Bill.
8.55 p.m.
Lord Kilbracken: My Lords, this is a long and rather complicated Bill and most noble Lords have concentrated on Parts II and III and have been able to talk in general terms about conservation and the
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environment in general. I intend to confine my remarks to birds, which have always been a particular interest of mine, with a word on flowers and perhaps a final flourish on bulls. In fact birds still have two Acts of Parliament to themselves, and the provisions of this Bill follow the existing Acts in starting off by prohibiting altogether the killing of birds, then by imposing special penalties for the killing of rare birds and then making exceptions which enable either pest species or birds that are good to eat, to be shot under suitable conditions.
I should like to take those three points in order. The birds for which one suffers a special penalty if one kills them are set out in Schedule 1, and the fact to which I wish to draw attention is that while this is a list of fairly rare birds it does not include any of the really rare birds, occasional visitors and accidental wanderers, that we should be most concerned to protect and which the villain is most concerned to kill.
I will give an example. This summer a belted kingfisher arrived in Ireland. We have had two "belted Earls" speaking this evening, and I join my congratulations with those who have gone before; but this was a belted kingfisher, and very soon after it arrived it was shot. Because it is such a rare bird—it was the first time it had ever been seen in these islands; it was a vagrant from the United States of America—it would not have carried the special penalty. Therefore in this country the culprit would be liable to a fine of only £50 instead of a fine of £500. Short of adding another 50 to 60 of these occasional species to the list in Schedule 1, I can only suggest, as a preferable solution, that the provisions for special penalties should be abolished, that the fine should be made a maximum of £500 in all cases and that it should be left to the court to judge, on the basis of the rarity of the species and the circumstances of the case, whether the fine should be £50 or £500.
These are really Committee points, but I cannot help mentioning at this stage that I find it strange that birds such as the fieldfare and the redwing, which are extremely common—they are winter visitors but they are common in the winter months—should have been added to Schedule 1 to this Bill. They are not in the 1954 Act, nor is the barn owl, the brambling or the whimbrel, all of which in my opinion are much too common to be on this list, when the Bewick swan, a fine bird and very hard to tell from the whooper swan, has been excluded. So that if I shoot a Bewick swan I can be fined only £50, but if I shoot a fieldfare I can be fined up to £500.
Then again, we have a list of birds in Part II which may not be shot during the close season. But two of them are not here in the close season, the Goldeneye and the Scaup; both breed in the Arctic. And the Greylag breeds only in the areas specified, so it is unnecessary to specify them.
The next curious feature is that Schedule 2 sets out birds which may be killed, either under Part I outside the close season, or under Part II by authorised persons at all times. Yet of those that may be shot outside the close season several are included which attract the maximum penalty if shot during that period. So if you shoot a Goldeneye one day you may suffer a £500 penalty, but if you shoot it the next day you are within the law.

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So we get on, in Part II, to the birds which are named as the pest species, which may be shot at all times but only by authorised persons. My noble friend Lord Melchett will be sorry to see that the rook is included on that list and may therefore be shot by authorised persons at all times, but by unauthorised persons never. Under the existing legislation these pest species can be shot at any time of the year by anyone. Now they can be shot by authorised persons as defined; that is to say, landowners or people authorised by landowners or by others. But they may never be shot by unauthorised people, who are, however, entitled to shoot geese and duck and swan and so on. So an unauthorised person can shoot a goose or a duck but cannot shoot a magpie or a starling, and that seems to me to be quite contradictory.
Turning to the Bill, it seems to me that again and again the Bill begins with the best of intentions and then gradually weakens. To give a couple of examples, an authorised person is specifically allowed to take wild geese and duck for the purpose of ringing or marking them or for examining any ring or mark. The taking of birds to ring and mark is work that requires great skill, a technique which has to be carried out properly. The Bill provides that it can be done by anyone under licence, so long as a licence is issued for that purpose. But an authorised person, which means me on my own land for instance, can go out totally unskilled, take any geese and swan I like, in any way I like, for the purpose of ringing and marking them.
Then again, if I kill or injure any wild bird other than ones that carry the special penalty, it is a defence if, when I am prosecuted, I show that it was necessary for the purpose of preventing serious damage to crops, et cetera. This seems to me to run completely counter to what the noble Lord, Lord Bellwin, was saying this evening about the necessity for licensing in such cases. It is provided that a licence is normally necessary for killing birds for those purposes. My own opinion is that it is only if a licence is provided that somebody should be entitled to kill birds, because he is going to plead later that the birds were damaging the crops.
My Lords, I said I would touch briefly on flowers. The noble Lord, Lord Burton, was complaining, quite rightly, that if he wanted to breed some capercaillie and release them to replenish stocks, he was not allowed to. But if I want to plant some narcissi, tulips, or snowdrops in the wild, which I frequently do, I am not allowed to. I am not allowed to plant, or sow, or cause to grow, any flower in the wild which does not already exist in the wild. Why on earth not? Why should not I be entitled to plant some tulips in the meadow? Why do I need a licence to plant snowdrops? It seems to me a quite unnecessary provision.
I want, finally, to touch on hulls. I agree with the apprehension that has been expressed both by the noble Viscount, Lord Massereene and Ferrard, and by my noble friend Lord Underhill. I agree that most Angus bulls seem to be completely harmless. I agree that the majority of Hereford bulls are docile when they are in female company, but I also know that there are exceptions. I have reared many bulls. Anyone who lives in the country knows that some bulls get a bad reputation, they are known to be wicked bulls and you keep your distance from them.
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But what sort of research has been done on the ferocity of bulls? How do you measure the ferocity of bulls? Has anyone examined the new continental beef breeds, the "Charley as we call him, the Simnenthal, the Blond d'Aquitaine. How about the Red Devon? Have any tests of ferocity been done, and who carried out the tests? Who did the running away from them? What is a recognised dairy breed? Is a shorthorn a recognised dairy breed? It is a dual-purpose breed. Some people do still milk shorthorns, although they are perhaps more usually reared for beef; but that also needs defining. Perhaps that is a Committee point.
I would also agree with the noble Lord, Lord Winstanley, and the noble Viscount who said that in many cases a freshly calved cow was much more dangerous than a bull. I have never had a bull go for me, but I have several times encountered a cow which has calved out in the field and been beside its hour old calf steaming in the grass. If you tried to go near her you would get a much harder time than you would get from most bulls. I conclude by saying that I feel a general anxiety about the presence of any breeding stock in fields with rights of way.
9.9 p.m.
Lord Wise: My Lords, I must first add my congratulations to the two noble Earls who made their maiden speeches today. They were superb and I think that we are fortunate indeed to have heard two such very fine maiden speeches in one afternoon. Farming is undoubtedly a high cost industry which, in order to maintain profitability, necessitates very high output. It is also generally acknowledged that the countryside is, to a certain degree, dependent upon farming and if farming is thriving then the countryside is also thriving. Notwithstanding the remarks of the noble Lord, Lord Winstanley, I feel that there is bound to be some conflict of interest and it is essential that farming interests are always fully aware of our national heritage. As the noble Lord, Lord Buxton of Alsa, said, a landscape feature which perhaps has been created over many hundreds of years can be demolished in a matter of hours.
That brings me to the first point that I should like to raise which is the question of the sites of special scientific interest. I feel that there must be more consideration shown to and more co-operation with the landowner or farmer concerned in the initial stages of the creation of any designated area. It is my experience that, in the past, without any prior knowledge, the farmer has been informed that a certain area of his land has a tree preservation order placed upon it and that it will be designated as a SSSI. Admittedly there is consultation between the district council and the Nature Conservancy Council and other bodies, but the order can be placed, and often has been placed, without any prior inspection of the land and without any consultation whatsoever with the owner. That must be wrong. I am glad that the Bill goes some way towards developing greater co-operation between the farmers and the bodies concerned and at least provides for compensation or purchase of the land.
Lord Melchett: My Lords, I wonder whether the noble Lord will allow me to intervene? He has made

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what seems to me, if I understood him aright, to be quite a serious allegation; namely, that the Nature Conservancy Council had actually designated sites as SSSIs without inspecting those sites beforehand. Maybe the noble Lord can confirm that that is what he said and give us some examples?
Lord Wise: Yes, my Lords. The example is my own case. The area so designated had a tree preservation order placed upon it first, with the inference that it was to be in the future designated as a SSSI. That was done without any inspection of the land whatsoever.
Lord Melchett: Yes, my Lords, but that, if I may say so, is slightly different. I do not want to prolong the debate at this hour. It is slightly different because a tree preservation order is not the responsibility of the Nature Conservancy Council. The noble Lord appeared to be suggesting that the Nature Conservancy Council had been clearly in breach of its statutory duties by designating an area as a SSSI without inspecting it. I take it that he has now withdrawn that suggestion?
Lord Wise: Yes, my Lords; I apologise if I have misled the House.
Lord Burton: My Lords, may I interrupt? I have had at least two SSSIs put on me and I have never been notified that the Nature Conservancy Council were going to investigate. Whether they did so I do not know, but if they did so they never told me.
Lord Wise: My Lords, I was most interested in the remarks of my noble friend Lord Chelwood regarding relief of capital transfer tax for owners of designated land. I think that that could well be worth considering.
The second matter that I wish to raise is the question of bridleways. I know that they can be an awful nuisance to farmers. In fact, I have experienced that. However, I hope that the provisions in this Bill will not result in any decrease in the number of bridleways. Horse riding is becoming an increasingly popular pastime among young and old alike, and it is a healthy and most recreational pastime. All other pastimes and sports have facilities provided, and the only way in which we can provide facilities for horse riding is to ensure the continuance of the bridleways. The vast majority of people who go riding do not own land upon which to ride. Surely in these days, in the interests of safety alone, it is essential to keep horses and riders off our busy roads. Possibly riding schools, using bridleways quite extensively, could assist in the upkeep of gates, et cetera along the paths.
My third and final point at this late hour is to make a plea on behalf of the red squirrel. We are in grave danger of losing this little animal, one of the loveliest of our native wild creatures. It is mentioned only once in the Bill, in Schedule 6, as a mammal:
"which may not be killed or taken by certain methods",
and yet it is not an animal which is protected. I suppose this may be because its only real enemy is the grey squirrel. I do not know why, but when the grey squirrel appears the red quirrel disappears; they do not live in harmony together. There are many different opinions as to why this is so, but it is a fact. I understand that the grey squirrel is sweeping across the
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length and breadth of Britain, especially England, and that the red squirrel is in grave danger of becoming completely extinct. I should very much like to see greater efforts made to protect, and more research conducted into ways and means of protecting, this delightful little creature without which our countryside will be so much the poorer.
9.16 p.m.
The Earl of Swinton: My Lords, it gives me particular pleasure to congratulate the two maiden speakers this afternoon. Being a third Yorkshire Earl, after hearing my two brother Earls from Yorkshire I feel that on this occasion I can rather bask in reflected glory. If I may describe my noble friend Lord Halifax as a Yorkshire Earl, I am sure he would take that as a compliment and not an insult. I think it was the noble Lord, Lord Hunt, who congratulated the noble Earl, Lord Peel, and said that he made a very brave speech. He is a very brave man indeed, because he moved into Yorkshire from Lancashire, and it takes a very brave man indeed to do that. So I am sure that he will show no fear in your Lordships' House in future, and we look forward to hearing both of them again.
At this very late stage of the debate it behoves me to do two things: first, to be brief, which I certainly shall be; and, secondly, to try to raise points which have not been raised so far during the debate, which is much more difficult. I have two questions for my noble friend Lord Avon on that part of the Bill which refers to birds eggs. First, I take it that people who inherit or have inherited long-standing collections of birds eggs may apply for licences and be allowed to keep their collections in the future. I would make a plea that this fact is widely publicised, because I know a number of very distinguished and law-abiding people who have inherited collections, often from their grandparents, and I should hate to think that they would be in peril of being locked up for keeping those collections in the future.
Secondly—and perhaps I ought to declare an interest here—what will happen about the collection and sale of gulls' eggs? I have a gullery and I know that several of your Lordships are very keen on eating gulls' eggs. Again, I hope that a licence can be issued and obtained so that one may continue selling these for human consumption. I take it that this is covered by Clause 15(1)(f) in the Bill.
I welcome these measures on the protection of birds, and I am particularly glad to see that there are stiffer—perhaps they are not stiff enough—penalties for the taking of various types of birds. That may well be a matter which will be raised in Committee.
I should like to ask the Minister—and this is not strictly to do with this Bill, but I think it is very relevant—about one of the growth industries in the countryside, that of poaching. I do not think that there has ever been a time—certainly not in this century—when there has been so much poaching as there is at the moment. At the relevant time I wonder whether the Government will consider introducing stricter poaching law. Many of these laws are archaic; the penalties have existed for a great many years. I understand that a working party is sitting on the matter now. At this time I would simply ask that when this working party reports,

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the Government might find time to introduce legislation on this, for I think that would be only fair and in keeping with these penalties.
Clauses 33 and 34 refer to national parks. It is a splendid decision not to plough up any more moorland; I would be very happy if someone told me that I could not plough up any of mine, even if I wanted to. But I am just a little worried about the effects that these provisions would have on manpower in the national parks. I know that my local national park, at the time of local government reorganisation, had a staff which you could count on the fingers of both hands—it was in single figures. Now the staff of this same national park is 59. I should have thought that this was hardly something which the Government would welcome. If this legislation makes more work, obviously there will have to be more officials and more civil servants to do that work, which I should have thought was somewhat in conflict with the Government's decisions in other fields.
All Governments are responsible for this enactment of legislation which either encourages or forces local authorities to take on more staff, and then they make violent speeches attacking them for increasing the rates, as indeed we heard in the Statement made earlier this afternoon. It would seem grossly unfair if this legislation would in any way force local authorities to take on more staff, only to find that as a result they suffer in the long run. Having said that, like so many of your Lordships this afternoon I would give this Bill a welcome. I hope it will, if necessary, be amended in Committee.
9.21 p.m.
The Earl of Cranbrook: My Lords, I must perhaps apologise for addressing the House and also for the fact that an exceptionally busy day on your Lordships' Select Committee for the European Communities has largely kept me out of the Chamber and prevented me from having the opportunity of hearing much that has been said to great advantage this afternoon. I join other Members of your Lordships' House in welcoming this important Bill. In particular, I echo my noble friend Lord Craigton in welcoming the extent of consultation that went on before this Bill reached its present form. Nonetheless, I am sure that all your Lordships agree that there is a considerable sharpening of opinion through being presented with the actual text of a Bill.
I wish to confine my remarks to a single point that I believe has not been covered; it is the subject of species protection where species other than birds are concerned—that is to say, Clauses 9 to 11 of the Bill. The noble Lord, Lord Melchett, in his opening speech, which I considered to be masterly in the extreme, and others of your Lordships who have spoken today, have placed great emphasis on the important topic of habitat protection. I would agree that adequate protection of an adequate area of habitat is undoubtedly the major significant issue in conservation, but of course it becomes totally irrelevant if there is not matching protection of the particular species of animals that live in that habitat.
I took note of my noble friend Lord Bellwin's opening remarks on this subject. I hope I do not misquote him. He said that this Bill was intended to provide the
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facility to extend protection to threatened species at a stage before such species were actually in danger of extermination—that is to say, in becoming extinct as wild species in the British Isles. In this respect the noble Lord claimed that the Bill followed the Berne Convention. With the greatest respect, I assert that it does not.
Article 3 of the Berne Convention specifies "endangered and vulnerable species". The technical meaning of these terms "endangered" and "vulnerable" is well known to your Lordships. It has been debated in this House before, and in context is clearly understood. The two categories in the Berne Convention are accommodated by two separate schedules designated as Appendix II and Appendix III. Appendix II applies to the endangered species, and Appendix III to the vulnerable species.
The Bill before us at present has a single schedule for animals other than birds, and this is Schedule 5. Schedule 6 also lists animals other than birds, but it is welfare-orientated and it is not conservation-orientated, and, if proof of this is needed, you will see, for instance, that bats appear in both. The restrictions recommended for Annexe 2 animals in the Berne Convention are matched by those in Schedule 5 to the Bill before us. Those restrictions that apply to Schedule 6 animals are not in any way equivalent to those recommended for Appendix III animals in the Berne Convention.
For the record, and because it is short, I shall read the relevant article of the Berne Convention:
"Any exploitation of the wild fauna specified in Appendix III shall be regulated in order to keep the population out of danger. Measures to be taken shall include:

(a) Close seasons and/or other procedures regulating the exploitation;

(b) the temporary or local prohibition of exploitation, as appropriate, in order to restore satisfactory population levels;

(c) the regulation, as appropriate, of sale, keeping for sale, transport for sale, or offering for sale, of live and dead wild animals".

Your Lordships will ask me—I will answer even if you do not—what animals are vulnerable? First, animals such as the red squirrel, which is an animal in decline as a consequence of environmental change. I would say that, to the red squirrel, the grey squirrel is part of the environment; a deleterious part of the environment. Undoubedly, in identifying this cause, the noble Lord who has just mentioned the red squirrel picked on the reason why the red squirrel population in this country has declined severely.
Secondly, vulnerable animals may exist in small, localised populations, and as an example I would cite the species of shrews which live on the Scilly Isles or on the Channel Isles where one has the remarkable zoological phenomenon of species which are not found on the British mainland living on the small islands, sometimes different species on adjacent islands, in the Channel Islands. That is a situation of extreme scientific interest. It is liable to attract research workers, potential PhDs, in their thousands, from the Midlands or even from Yorkshire, and these poor shrews are liable to be sought in large numbers by specimen hunters.
A third example of vulnerable species is species with narrowly specialised ecological requirements, and for this example I would cite many moths or butterflies or other insects. Many of these may in fact be quite

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common locally in relation to the distribution of a food plant to which they are restricted and on which they are totally dependent. But, by this very token, they can be wiped out in a few seasons by assiduous insect collectors with knowledge of their ecological requirements.
The fourth category of species which may be considered vulnerable is those which are subject to commercial exploitation on a large scale, particularly for instance those which are exploited for the educational market. The amphibians in particular provide an example of this. Your Lordships may not realise how extensive is the exploitation of amphibians for the educational market. The current catalogue of one of the two largest suppliers of educational material for school and university science courses offers eight British species in various forms—alive if you like them wriggling, preserved in alcohol if you like them that way, or as skeletons—and there are entries to such effect on 18 pages of their catalogue.
In the main, this educational material comes from other European countries, but, if those countries, in response to the Berne Convention, were to restrict the collection and trade in amphibians and reptiles, market pressures would undoubtedly place great strain on our local populations, and for that reason they are vulnerable. I am told that at present, in the spring, boatloads—that is the expression used—of Irish frogs arrive in West Country ports and are sold on the educational market by the tonne. I have not myself witnessed this, but I trust the source which provided me with the information. If the Government of the Irish Republic, our partner in the European Community, were, either after the Community had adopted the Berne Convention itself or of its own initiative, to stop or limit the trade in frogs, there would undoubtedly be considerable pressures on our British frog population. Your Lordships will see the dilemma.
Vulnerable populations may be quite common and may not appear to be threatened, and for that reason I think they do not actually require the very rigorous protection that is offered to species, other than birds, under Schedule 5. In fact such protection could become ridiculous. If, for instance, it became illegal to tamper with the eggs or young of frogs, we would have done something rather silly. I should loath to make it illegal for boys to collect frog spawn or toad spawn in the spring. To tell the truth, given the fecundity of parent frogs, and the very poor expectation of survival of their tadpole young in the wild, the activity of collecting their spawn is, at the very worst, harmless, and at best is important for the educational value that it has for young people.
Where these vulnerable species are concerned it is quite sufficient to protect them in a distinct and separate schedule, with provisions to control exploitation, such as those that are suggested in the Berne Convention. Representatives from the United Kingdom, both official, and representatives of voluntary bodies, made very considerable and very significant contributions to the formulation of the convention as it now exists. As we have been told, the Bill before us represents our own national ratification of its contents. Bearing in mind both the input to the convention from the United Kingdom, and the fact
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that the earlier version of the amendment to the 1975 Act contained this important category of vulnerable species, I would urge Her Majesty's Government to take account of this important point, and I would press that there should be at least the facility for a two-schedule listing of animals other than birds—because, of course, birds are already listed in this manner—to take account of the points that I have made.
9.33 p.m.
Lord Foot: My Lords, first, I should like to add my warm congratulations to those already extended to the two noble Earls who have made their maiden speeches today. A month or two ago when we were discussing the composition of this House I offered the view that the contribution made by Peers who are here by hereditary right was a very substantial one to the affairs of the House, and that opinion has been fully endorsed by the speeches that we have heard from the noble Earls.
To rise at this late hour as, I think, the 31st speaker in the debate—this is a sentiment in which I may be joined by the noble Baroness and the noble Earl who are to follow me—is, in the memorable words of Mr. P. G. Wodehouse, a salutary reminder that we are not sent into this world for pleasure alone. I shall not encroach upon the goodwill and indulgence of the House by attempting to make anything in the nature of a speech at this late hour; and I shall confine myself to one matter only. It concerns what I believe to be one of the very important parts of the Bill, and it is I suggest a touchstone as to the determination—I shall not say sincerity—of the Government in support of the cause of conservation.
It is the matter of the preservation and conservation of moorland and heathland in the national parks. I say that it is a touchstone of the Government's determination in this matter because in deciding to rely upon voluntary agreements and to abandon the last resort of compulsion, they are departing from the recommendations made by the noble Lord, Lord Sandford, in his report; they are departing from—indeed, they are turning upsidedown—the recommendations which were made by Lord Porchester in his report; and, of course, they are reversing what was to have been the decision of the previous Adminstration.
That decision is a most important decision because, after all, the Sandford and Porchester inquiries are the major inquiries that have been made into the matter of the national parks in the last 10 years, and if we find a situation in which the Government are reversing the recommendations of both those commissions, then they have got to justify it. My noble friend Lord Winstanley was saying earlier on that this is a debate and this is a Bill of very considerable importance, and the reason he gave for that, with which I entirely concur, is that the legislation which is enacted under this Bill is likely to be the foundation of the future of the countryside for perhaps another decade, or even for 20 years, because it is only at intervals of about 10 or 15 years that we are able to consider the matter of the English countryside again.
My Lords, I should like to remind the Government of what happened in this House and in Parliament on the occasion of the last great Countryside Bill, which

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was the Act of 1968. When the noble Lord, Lord Bellwin, was opening this debate, and when he was endeavouring to explain to the House why it was that the Government had departed from the recommendations of the Porchester and Sandford Reports, he said: "We do not think that the compulsory power"—that is, the power of the last resort—"would help. We think it is neither essential nor helpful. We think there is a climate sufficient to enable voluntary arrangements to work." Those words reminded me of the fact that during the passage of the Bill in late 1967 or in 1968—the Countryside Bill of those years—this matter was discussed; and it was discussed upon an amendment for which I and Lord Molson were responsible.
It was an amendment which had been proposed by the Somerset County Council, and it was to this effect. So far as concerned the critical amenity areas of moorland and heathland, not only in Exmoor but indeed in all the national parks, they wanted an arrangement by which the Secretary of State should be empowered to designate the critical amenity areas in each national park, and that if, thereafter, anybody wanted to develop those lands or convert them into agricultural use, they should be required to give a necessary notice to the planning authority, the national park committee. They wanted that the national park committee should then be able to pronounce upon it, and that if they refused it then there should be a right of appeal by the applicant to a public inquiry, the matter being eventually decided by the Secretary of State on the recommendation of the inspector. Further, they wanted that if it was finally decided that the agriculturist—the farmer, the landowner or whoever it might be—was not permitted to engage in the desired process of conversion, then he should be paid suitable compensation.
That was the effect of the amendment. It was, in fact, proposing almost precisely what is the proposition of the Porchester Report. That was resisted. At the time there was a Labour Government and Lord Kennet was the Minister in charge. He resisted, and resisted upon the very same ground now advanced by the noble Lord, Lord Bellwin, and the Government; that is to say: if you were to do this you might alienate the sympathies of the agricultural community, you might make things more difficult, you might make better progress by consultation and by agreement.
As a result the amendment fell. What the Government did was to come forward with an amendment of their own. That was an amendment which eventually became Section 14 of the 1968 Act. Under that proposal (which was a substitute for what we were proposing) the Secretary of State would be entitled and empowered to designate the areas which he considered to be of critical amenity value, and then there would be a process by which anybody who wanted to develop or convert those lands would be obliged to give notice to the planning authority and that the planning authority should have a period of six months or so in which to consider whether they approved of it or not. At the end of that six months, whether they approved or did not approve, the applicant would be able to go on, if he wished, with his development. That is precisely what is proposed in this Bill today. That is exactly what is proposed here: that there should be nothing
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more than the obligation to give notice of your intention and then, at the expiry of the period of notice, you can go on with your development and your conservation, whether the planning authority like it or not.
We are therefore back precisely where we were in 1968. And, of course, Section 14 proved to be an utter futility. It was never invoked. The Secretary of State never designated a single area in any of the national parks. At no time were the procedures of Section 14 ever brought into play and the thing was a charade; and it was precisely because it was a charade and that the thing did not work that we had to set up, later on, the Porchester Committee. If the voluntary arrangements and agreements had worked, there would have been no need for the Porchester inquiry at all. It was all a waste of time. But the fact is that because the Government of the day—that is, the Labour Government, the predecessor Government—were satisfied that Section 14 had not worked, they set up the Porchester Committee. And the further fact of the matter is that this issue cannot indefinitely be fudged.
The fact is that, whatever good will there may be on both sides, on the side of conservation and on the side of the farmers, in the last resort when you are talking about these critical amenity lands, peak land in the national park, a moment comes when there is an irresolvable conflict between the requirements of the developer and the requirements and obligations of the national park committee in conserving these lands. There is no use pretending that, however much goodwill you can engender, you can avoid in the last resort a conflict which has to be resolved not by a fudge but by decision of one side or the other.
The fact of that problem existing which cannot be avoided was most clearly expressed in the first paragraph of the Porchester Report which was headed "The Problem". If I may read it to your Lordships, it says:
"In its starkest form the problem which I have been asked to study can be presented as a conflict between increased agricultural production from moorland and the need to maintain the existing balance of the Exmoor landscape. For sound farming reasons "—
I underline "sound farming reasons"—
"farmers have converted moorland to improve their holdings' stock-carrying capacity and may continue to do so. This has the effect of gradually diminishing the areas of moorland which conservationists rightly say, and many farmers admit, is one of the main characteristics of Exmoor and one of the reasons for its original designation as a national park".
That was the first paragraph in the Porchester Report, and it set out clearly for all time that this is an issue which one day has to be decided, and it cannot be decided by talk about voluntary agreements without any last resort to compulsory power.
That is the issue which this Bill avoids, and that is the matter upon which I suggest not only to conservationists but to the landed gentry, the Country Landowners Association and the NFU is something which ought to be settled in this House and in this Parliament on this Bill. If we fudge it again or try to do what proved a complete failure in 1968, then I have the gravest doubts whether the heartland of some of our national parks will survive for a further decade.
9.47 p.m.
Baroness David: My Lords, I should like to add my congratulations to the noble and young Earls who have made their maiden speeches today. It has been a day for the young, and I feel, as a grandmother of 11 children, slightly out on a limb today. If only we can get this Bill right in Committee I hope that my grandchildren will be able to enjoy the heritage of wildlife and the countryside that we trust this Bill will preserve.
My noble friend Lord Melchett, the noble Lord, Lord Buxton of Alsa, and other noble Lords, have spoken about the central issue in this Bill: the protection of the natural habitats without which wild creatures and plants cannot possibly survive. We believe the provisions in this Bill for the preservation of conditions essential to even a modicum of wildlife are inadequate, and that without more effective means of control and more certain funding than are promised in it, the Bill is no more than window dressing. The measures for protecting individual species, however good in themselves, are beside the point. Nevertheless, in the hope that something will be done about this basic issue, I feel it is worth making a few comments on the more specific provisions for wildlife protection. In general, we welcome the adjustments put forward in this Bill. The aim of many of them is to rationalise the existing arrangements and introduce a greater consistency in the regulations. In this aim the Bill has some success. Indeed, I shall suggest that in some cases the desire to make everything consistent has gone too far.
May I turn to specific provisions on the clauses relating to bird protection and enforcement? Many of the proposals have the full support of the voluntary conservation bodies. Some, however, appear to be less effective than we should wish. A few are definitely retrograde and there are some omissions. Clause 1 is the principal clause giving basic protection to wild birds, their nests and eggs. An important new provision is that the possession of eggs which have been illegally taken will now be an offence as well as the actual taking, and this change will aid enforcement.
I feel that the hunting seasons for wild fowl and waders mentioned in Clause 2 have not been rationalised to fall into line with conservation principles now applied throughout much of Northern Europe. I welcome Clause 5 but should like to see an amendment making any authorising person or body liable for prosecution for one of these offences committed by their agents unless it can be shown that all reasonable precautions were taken to prevent the offence from occurring.
Clause 6 deals with aviculture and the sale of birds, and contains some important new proposals. The list of birds which may be sold if aviary bred and close ringed is reduced from over 100 to 25; and this must be welcomed. Furthermore, only those species which breed readily in captivity would be eligible for competitive exhibition. I am concerned that non-competitive exhibition may take place, for this may continue to encourage the illegal taking from the wild, the keeping and showing of less common birds. The list of species in Schedule 3, Part I, is still too long and includes several birds which do not breed readily in captivity.
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Clause 7 relates to the keeping of birds in captivity. An important new element here is the proposed registration and ringing of all captive birds of prey and other uncommon birds as listed in Schedule 4. This is satisfactory provided that there are regulations for adequate inspection and enforcement procedures. At the moment there are no provisions within the Bill for the establishment of an official wildlife investigation and enforcement agency. This is deplorable. Acts are meaningless without adequate enforcement. Each year the Royal Society for the Protection of Birds receives information on over a thousand possible offences against the Protection of Birds Act alone. The society have a very small staff for following up these reports. Because they are not a statutory body they do not have access to official information to enable the investigations they undertake to proceed swiftly and smoothly. And because of this lack of resources they have to select a few cases to pursue and cannot give due time and consideration to all the information they receive. The RSPCA are in a similar position.
What are these offences? Twenty-two per cent. of the reports received by the RSPB in the last five years are concerned with the illegal taking, possession and sale of birds of prey. In 1980 the society had their worst year on record for robberies of peregrine eyries. The peregrine falcon is a rare bird of prey for which we have an international responsibility. This year there were known thefts of eggs or young from 32 areas, representing about 10 per cent, of those known to exist in Britain. Seventeen young peregrines were eventually recovered by the RSPB and several prosecutions are in process. Egg collecting is still a major problem. For example, four people were prosecuted earlier this year for taking eggs of golden eagles in Scotland. Subsequently two of them were caught taking rare birds' eggs in Northern England: their earlier fine had not been a deterrent.
Is the £500 maximum adequate? Young peregrines can be sold for £1,000 each. I understand that the total number of individuals who appear in court for offences against wild birds is over 200 annually. The RSPB believes this is merely the tip of the iceberg and that it is only the foolish who make themselves obvious to the police or customs and are caught. The large majority, knowledgeable and highly organised, go undetected and make a lucrative profit from the nation's wildlife heritage. Sadly, there is no voluntary organisation similar to the RSPB with sufficient staff resources to deal with offences under the Wild Creatures and Wild Plants Act, and very few prosecutions for contravening this Act have been undertaken. Under import and export legislation the voluntary bodies—
Lord Burton: My Lords, will the noble Baroness allow me to intervene? She mentioned a maximum fine of £500 but I must remind her that I think there is three months in gaol as well.
Baroness David: Yes, my Lords. I hope that people are not going to be sent to gaol a great deal, as no doubt we shall discover later in the week when we have that Bill presented again. But I feel strongly that the maximum fine is not adequate, considering the price that people get for the peregrines. Under the import and export legislation, the voluntary bodies are not allowed

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behind the lines of customs. Thus, by and large, one has to rely on the overworked customs officer to detect offences against the Endangered Species (Import and Export) Act, and how can he be expected to identify the range of bizarre creatures and products that can so easily be smuggled into this country? Importation should be restricted to a very few ports of entry where expert surveillance could be maintained, and where there would be proper conditions in which to house the animals or birds.
I do not want my remarks to be taken as a criticism of the police or customs officers, who are currently empowered to enforce wildlife legislation. It is just too much to expect them to have the time and the necessary technical knowledge to detect and convict these offenders. The present unsatisfactory state of affairs can be remedied only if the Government will provide police and customs with a backing of technical experts. Ideally, this should be done by the Nature Conservancy Council appointing a small wildlife investigation and enforcement unit as the NCC's equivalents do in the USA, New Zealand, Australia and now also in Ireland. Without this, the smuggling rings, the organised egg and falconry thieves, will continue to operate in the knowledge that the risk of detection is very low indeed.
We are very concerned about the Government's proposals regarding the granting of licences under Clause 15. A number of noble Lords have made this point, and I shall therefore cut that part of my speech relating to Clause 15. I should like just to say that the comments of the noble Lord, Lord Bellwin, in opening were not totally reassuring and we should like to probe those in Committee. I should also like to comment that I am disappointed that he is not here at the moment for the winding-up of this debate, and has not been here for a great deal of it. So he has not heard the quite sharp criticisms of the Bill which have been made from his own side of the House—
Lord Sandys: My Lords, if I may interrupt the noble Baroness, she may not be aware that it is the custom of the House that the Government are represented by the person who is winding-up. It is not the normal practice that the Minister who opens is expected to be present throughout. I can assure the noble Baroness that there is no discourtesy.
Baroness David: My Lords, I am very interested to hear what the noble Lord has said. But I must still say that I am slightly surprised that the opener would not be interested enough to hear the comments of the House. To go back to Clause 15 and the licensing, we feel that the implications are horrific. We could go back to the pre-1954 situation, when each county had its own by-laws governing bird protection and nobody knew where they stood. Moreover, we believe that the proposals fly in the face of the spirit, and probably the letter, of the EEC directive. Conservation bodies believe that the authority empowered to issue licences should be the NCC, in consultation with the agricultural departments, and that licences should be for quite specific purposes and not for whole counties, regions or countries. Only so can Article 9 of the EEC directive on wild birds be complied with.
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I should now like to deal with mammals, reptiles and amphibians. Here rationalisation has not gone far enough. All birds and all plants are, in some measure, protected and the schedules of species list those which are to be accorded additional protection, or, because they are pests, which are excepted for protection. We think that the same method, which is known as reverse-listing, should be applied to mammals, reptiles and amphibians. It is surely absurd that only four species in the latter group are to be protected in any way. The noble Lord, Lord Houghton, and the noble Earl, Lord Cranbrook, bore this out in their speeches.
On plants, it is very satisfactory that the schedule of protected plants has been enlarged, but here a striking degree of inconsistency remains. The amended list does not even include all endangered plants in Britain. At Committee stage, some additions to the schedule of protected plants will be proposed. In any case, it is vital that we should ensure that the machinery for amending this and other schedules, by addition or by deletion, should be such as to allow speedy action. Changes in natural conditions, and in the degree of threat, may be very sudden and dangerous and it would be intolerable if the urgent measures necessary were to be impeded by a long bureaucratic process, or suspended until another Bill could be brought before Parliament.
The provisions regarding the sale of protected plants have been brought perhaps too rigidly into line with those for wild creatures. The noble Lord, Lord Skelmersdale, referred to this. We feel it important that it should still be possible to buy specimens of these plants from the horticultural firms which for a long time have been rearing them in cultivation. The Bill, by its definition of wild plants in Clause 25, does indeed safeguard the nurseryman who sells what I may call tame plants, but one can envisage the dishonest nurseryman using this safeguard as a cover for illegal operations. It will be necessary either to keep a register of bona fide growers licensed, after inspection, to grow and sell these plants or—and this is the means to be adopted in the parallel legislation in Ireland—the onus of proving that the plants offered for sale are not wild plants should be placed on the vendor rather than on the prosecutor.
In the proposed legislation regarding the introduction of alien species, plants are again a little too rigidly aligned with other forms of wildlife. The seed of a garden plant which happens to blow over your hedge into the country beyond is in a different category from the coypu deliberately let loose. Some amendment is desirable, and my noble friend Lord Kilbracken has raised some of the complications. At the same time, we should like to add some regulations regarding the sale of foreign seeds of British native plants. Often the foreign strains are genetically very different from the native ones and, if introduced and allowed to interbreed, might noticeably affect the nature of British plant populations.
We very much welcome the provisions regarding limestone pavements in Clause 28, but hope that it may be possible to secure a protection order on grounds of natural beauty as well as of scientific interest. I did not quite understand what the noble Lord, Lord Bellwin, said about this in his introduction, because

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it did not seem to me to be quite in line with the clauses in the Bill. But I shall read his speech with care to see whether I am correct on this.
I now turn to Part III, dealing with public rights of way. When the noble Viscount, Lord Ridley, mentioned Clause 46 which deals with bulls, he said that nobody had been killed; but according to my information, the Ramblers' Association has a file of cases in which walkers have been chased, injured or even killed by bulls. For example, a pensioner was killed by a bull when he was out walking near Thornaby-in-Cleveland in October of last year, so perhaps the noble Viscount was not quite correct in his information.
Viscount Ridley: My Lords, only one in many years.
Baroness David: I think that one is enough, my Lords. To turn back to public rights of way and the other clauses dealing with this matter, we welcome the streamlining of the procedure for updating definitive maps: that there will be a process of continuous updating instead of quinquennial reviews, which in most counties never were quinquennial. We welcome the extension of definitive maps to cover areas which do not have them at the moment—for example, former county boroughs like Plymouth, Cardiff, Leicester.
What we are not so happy about is that the Secretary of State will no longer be involved in the drawing up of the maps or in the processes of creating, diverting or extinguishing rights of way. These powers from now on will be wholly in the hands of the county and district councils. Hitherto, these councils have been empowered to make path orders, but if objections are received the matter is referred to the Secretary of State who makes the final decision.
Under the Bill, there will still be a right of appeal, but only to the authority which made the initial order. Local authorities own large areas of land. They may want to close paths to facilitate development which they themselves are promoting. They might even wish, by closing paths, to divest themselves of their statutory duty to signpost and maintain them. In 1979, there were 75 creation orders and 341 closure orders—far more closures than creations. Path users fear that there will be many closures if local authorities are given the final decision.
A proposal to close a public path is a proposal to deprive the public of certain rights. It is generally accepted as fair that when a local authority wants to deprive an individual of his right to develop his land or property by refusing planning permission, it should be open to the individual to appeal to the Secretary of State. It should apply with just as much force, therefore, that when a local authority wishes to deprive the public of certain rights by closing a footpath, it should then be open to members of the public to appeal to a higher and independent authority.
It has been objected in the past that the process of appealing to the Secretary of State may take an absurdly long time, sometimes over three years. That objection would be removed if the Secretary of State's inspectors were empowered not merely to recommend but to make the decision. The Explanatory and Financial Memorandum claims that the reduction of the role of the Secretary of State will enable savings of about £175,000 per annum to be made in staff costs. These
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costs will merely be transferred to local authorities. There are 53 county councils and 369 district councils, and a small number of civil servants with extensive experience of path orders can surely do the job more cheaply and more efficiently than 422 local authority solicitors who have plenty of other things to do. Moreover, the Secretary of State proposes to retain some independent power of making path orders. The central staff therefore cannot be entirely disbanded and in addition there will be yet another variation added to the bewildering diversity of criteria likely to be applied by local authorities. Inconsistency between decisions in similar cases is surely to be avoided.
In conclusion I would say that the greatest threat to wildlife and to the countryside in Britain lies in the apparently widespread belief that conservationists and farmers are in implacable opposition. That is an absurdity, to which a number of noble Lords have referred. In Britain, the so-called natural habitats and landscape are largely man-made or at least strongly man-influenced. To preserve them in any desirable state requires continuous management but it is the wildest fallacy to imagine that conservation means just freezing a piece of land against any kind of interference and leaving all to nature. In Britain, land subjected to such a policy would rapidly become overgrown with impenetrable scrub of no use to wildlife, to farmers or to the rambler. The obvious people to manage the land are the farmers and the foresters who are used to, and skilled in, working it. The Government are therefore right to emphasise the need for voluntary working arrangements between conservationists and landowners, but these may well not be enough. The noble Lord, Lord Sandford, and other noble Lords have pointed this out, including the noble Lord, Lord Foot.
In many areas there is abundant co-operation and I should like to pay particular tribute to the work of the farming and wildlife advisory groups, where these exist. Inevitably there will be instances where the interests of the farmers and the conservationists conflict, or appear to conflict, and the sort of informal contacts offered by FWAG provide the best opportunity for the resolution, or at least the understanding of such conflicts. Often they arise from ignorance or from a false assessment of short-term as against long-term benefit, an assessment frequently unfairly biased by Government incentives which have been insufficiently researched and monitored.
Many Welsh farmers discovered in the drought of 1976 that unimproved pastures survived and continued to sustain their cattle while those ploughed and re-seeded with rye grass were burnt to nothing. In Wiltshire, however, for centuries agriculture and wildlife have co-existed happily, the tops of the downs being ploughed and the steep uncultivatable slopes left to maintain a rich variety of rare and beautiful plants and butterflies. Recently the practice of indiscriminate spraying with fertilisers from the air has raised on the still uncultivatable slopes crops of nettles, thistles and docks for which the only possible treatment is burning off, along with what little of the original flora has been able to compete with them.
If the Bill is really to do something positive for wildlife and the countryside, it must do much more to ensure that time and opportunity are given for such issues to be fairly examined, in the overall national

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interest as well as in the interests of those immediately concerned and with some insulation against ultimately "phoney" inducements. The Bill must also make some provision against the obstinacy of the purely selfish or bloody-minded landowner. One hopes that these are rare but they certainly do exist, as in every other section of the community, and they should not be allowed to obstruct whatever may be clearly in the long-term interest of the community as a whole.
10.10 p.m.
The Earl of Avon: My Lords, I should like to join with other Members of the House in congratulating my two noble friends, Lord Halifax and Lord Peel, on their maiden speeches. It seems to be that one ought to try to find some relationship with them, so I am happy to tell the House that my mother was a Yorkshire lady and born in the North Riding. I thought the noble Earl, Lord Halifax, made some very wise remarks about farming and forestry, whereas the noble Earl, Lord Peel, brought us up to date on national parks and particularly upland industries. Both their contributions are of considerable value to the House, and I hope we can drag them down from those wonderful moors of Yorkshire as often as possible.
My Lords, this has been a wide-ranging debate. Indeed, I expected no less in view of the wide scope of the Bill. I am sure we shall have the opportunity later, when we go over the Bill clause by clause, of fully considering many of the points raised. Your Lordships would not wish me to answer every question or reply to every point made here this evening, even if I could. The Bill is concerned with subjects which deserve serious attention. I think it is especially important that we should proceed with goodwill and agreement; this is one of the mainstays of this Bill and, on the whole, I think its reception from all parts of the House has been good. I should like also to pay tribute to voluntary organisations which have been involved in long consultations before drawing up this Bill, whose chairmen or vice-chairmen or presidents are around me on all sides.
The noble Lord, Lord Melchett, opened in his normal ebullient way, and I thought I was going to be able to congratulate him on a very well-balanced speech until he ran into hulls right at the end. I should like to take one small issue with him. Really there is not a conflict here among farmers and conservationists so much as a compromise Bill. The noble Lord mentioned one or two points. He particularly reminded us, very wisely, of the continued pressure on the countryside by the so-called civilisation of today. We did, later on, come across the tree preservation order, when he corrected one of my noble friends behind me. There is also, of course, an opportunity for hedgerows and woodlands to come under management agreements; but I admit that this does not happen very often. He also brought up ADAS. I would remind him that they are committed to follow the conservation aspects which are laid down in the Strutt Report.
Before going on to other noble Lords' points, I should say that notes on clauses are being prepared. I am sorry they are not available for this debate today, but they will be available when the House reassembles,
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and I hope will help a number of noble Lords. I think particularly the noble Lord, Lord Margadale, and the noble Lord, Lord Burton, would welcome some guidance on some of the clauses. If that sounds rude, I only say it because they both asked for clarification. The noble Lord, Lord Beaumont, made moving remarks about saving our heritage, and I am sure all the House will agree that in this House there is a real hope that this Bill will be drafted as the best possible Bill. He made some aspersions about the Department of the Environment and the Ministry of Agriculture, Fisheries and Food—it is a pity that this is covered by two Ministries. Personally I think these are the sort of things which are difficult to balance, and I believe there are many advantages in having the two different departments to advise.
The noble Lord, Lord Walston, reminded us of the continuing process of erosion of our countryside, and brought us up to date both with agriculture and the habits of visitors in his area. He has also notched up a considerable dislike of hedgerows. My noble friend Lord Middleton has formidable knowledge and wise advice. I particularly welcome his accent on the voluntary spirit particularly in relation to the SSSIs. I shall come on to those again later.
The noble Lord, Lord Hunt, spoke of national parks and particularly Exmoor. He also quoted to me from some 30 years ago, but I regret to say that at present I have been unable to find a quotation to cap him. However, I do serve under a Secretary of State at the moment who is on record as a committed conservationist, and my right honourable friend the Minister who is the Member for Bridgwater is always on my back about conservation.
I should perhaps put one matter into perspective. About three years ago in a White Paper about Dartmoor it was written that, important as the national parks are, they cannot be paramount over everything else. I think that that is a little cautionary word. As regards Exmoor, since Lord Porchester's report there have been just under 1,900 acres protected in Exmoor, while in this same period we have actually lost 66 acres.
The noble Lord, Lord Hunt, also spoke about agreements. We have in mind agreements for a period of about 20 years which, I think, would be the most satisfactory both for the farmers and for the parklands. My noble friend Lord Chelwood made pleas for money and I shall come to money again later and also to capital transfer tax. I can but say that I shall bring this matter to the attention of my right honourable friend. He also brought up the subject of the licensed control of birds which cause damage. I should like to make a few comments which concern both birds and mammals. The agricultural departments, the advisory committees, the Nature Conservancy Council and the Department of the Environment have conferred on how the right balance is to be achieved. They have worked out procedures which should make sure that any licences to take or kill birds because they cause serious damage are only issued in accordance with agreed policies, taking into account the degree and extent of damage; the conservation threat to the species; the alternative methods of dissuading birds apart from killing them; and the need by proper reporting to assess the effectiveness of any measures approved. May I say once again that that refers to

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mammals as well as birds. We have a duty to do that to comply with the European Community directive and we also have a duty to do it to meet the central principle of United Kingdom bird protection—that birds are protected unless they are plentiful, quarry species or are causing damage. The Nature Conservancy Council will be consulted on a policy for all species. The Government take the view that the rarer and more vulnerable the species the greater the care needed in control of killing.
The noble Lord, Lord Houghton of Sowerby—I hope that he will find me warming to the subject except that he is not here to see me boiling over—talked about consultations. As usual the department has an open door and I think that your Lordships have heard from noble Lords here today enough to realise that the consultation was just about as widely drawn as it possibly could be.
The noble Lord also raised the fact that birds are more protected than mammals. That is a factual statement. This Bill is primarily a conservation Bill, not a protection Bill as such, and the bird protection elements include welfare, but only because they are carried forward from previous legislation and mainly amended because of a Community directive. The animal provisions are designed to reflect the conservation status of the species concerned. Animal welfare measures are provided for in other legislation—for instance, the Badgers Act and there is a Protection of Animals Act as well.
My noble friend Lord Ridley talked about finance and so did other noble Lords. In the general sense I am afraid that my answer will not be very satisfactory. The Bill provides a framework so that we are able to spend money when, of course, the economic climate provides us with the money to spend. But it does provide the framework. My noble friend asked specifically whether the Government's financial support for moorland conservation expenditure in Exmoor will come from the National Parks Supplementary Grant. The answer is, yes. As to whether it is enough, the amount is mainly determined by the Exmoor National Park Committee's own estimate of their needs. So hopefully it will be.
My noble friend Lord Sandford referred to Clause 31. Here one must pay tribute to his report, much of which is contained in Part II of the Bill. I am sure that the noble Lord, Lord Melchett, will recognise it, as he will recognise that much of the work of the last Administration is to be found in Part II. Where we part is at a point which both the noble Lord, Lord Winstanley, and the noble Lord, Lord Foot, have raised, which is in regard to what one might call the long-stop. In his report in 1977, Lord Porchester recommended a long-stop compulsory order to stop a farmer converting his moorland by buying out his rights. This is what we have left out, and this is what the previous Administration included in their draft. As my noble friend Lord Bellwin said, we have omitted it because we believe that we have such a good arrangement going on Exmoor at the moment, an arrangement agreed by the National Farmers' Union, the Country Landowners' Association and the Exmoor National Park Committee. Despite what the noble Lord, Lord Foot, said, this co-operation is proceeding so well that we believe it is better to let it run as it is, and any compulsory order
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might have the adverse effect. I think that we have to agree to differ on this particular point.
I particularly appreciated the words about urgency of the noble Viscount, Lord Arbuthnott, in his very well-founded speech, and I shall read his speech with interest in detail tomorrow. I should like to wish my noble friend Lord Margadale many happy returns on his birthday and, equally, I shall write to him on his particular points. The noble Lord, Lord Underhill—it was refreshing to hear his views among all the farmers—asked me whether I accepted all the statistics which the noble Lord, Lord Melchett, produced. Frankly, without reading them, I should not like to say "yes" straight off, because there was one point with which I did not agree. But perhaps I could take that up with the noble Lord, Lord Melchett, later. I do not think that the report which the noble Lord, Lord Underhill, read from the Economist was entirely fair, for the Economist said that we consulted only one side, whereas I think the noble Lord will now have gathered that virtually everyone has been consulted all the way along the line. I shall come later to his other points about the footpaths and the bulls.
My noble friend Lord Skelmersdale in his interesting remarks said that the Department of the Environment was confused about live animals as decoys. I do not think that the department was confused by that. It discovered that the live animal was not there, and believes that it might be protected under the Cruelty to Animals Act. However, we are checking on that. At the same time I should like to pay a tribute to my noble friend Lord Skelmersdale for all the work he did on his previous Bill. I am only sorry that at the moment he thinks the Bill is not as recognisable as he would like it to be.
I should like to welcome the remarks of the noble Lord, Lord Winstanley, on the Countryside Commission. I rather thought that the present Countryside Commission was a Quango, but I shall not argue whether it will be or whether it was. I am sure that it will be a very good commission under its new status. I also noted with interest the noble Lord's other comments on the countryside, as I am sure other noble Lords will have done.
Perhaps I might say a few words here on badgers, on which the noble Lords, Lord Melchett and Lord Houghton of Sowerby, and my noble friend Lord Skelmersdale, spoke. The badger is already afforded a measure of protection by the Badgers Act 1973. For example, an unauthorised person may not kill a badger, and there is a provision for areas of special protection where authorised persons may kill or take a badger only when it is necessary to do so to prevent serious damage to their property.
In this Bill we are proposing to increase the degree of protection which a badger might enjoy by including it in the schedule of mammals against which a range of methods described in Clause 11 should not be employed, except under a licence. I am advised—f know that this contradicts what one noble Lord has said—that the status of the badger is not threatened in Great Britain as a whole, and we would need to consider carefully any proposals to extend the protection still further. However, if there are new proposals, obviously we shall consider them carefully at the Committee stage.

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The noble Lord, Lord Buxton, fired a lot of shots at me from behind, putting me really into the front line. I can assure him that the Government are not in a muddle. They know where they are going. For instance, he mentioned that drainage seemed to be going one way and conservation another, but I can inform him that the Department of the Environment is also responsible for drainage. At the same time he spoke rather nastily about the arts and the amount of money being spent on the arts. I could equally inform him that I am meant to be the Government spokesman on the arts as well, so there is a little umbrella there.
The noble Lord, Lord Burton, mentioned the Berne Convention. That has been signed but it has not been ratified. He also made a remark about passing by a wounded bird on the other side of the road. That is not necessary in this Bill. There are clauses which take into account taking in a wounded bird and repairing it. My noble friend Lord Swinton asked about egg collections. I should like to reassure him, on the collection of eggs, that it is only eggs taken after the date of the Act which it will be illegal to possess. He will also, in principle, be able to get a licence to take gulls eggs provided that there are no conservation objections. He also asked about poaching. We do not think that that is a right subject for this Bill. On the other hand, we have done a bit towards it by our constant reference to authorised persons.
The noble Lord, Lord Kilbracken, raised a number of technical points. If I may, I shall write to him about them. The noble Earl, Lord Cranbrook, asked why our list differed from the Appendix 3. The NCC advises us on which species are not only in danger of extinction but are also likely to become so no matter what the reason. Hence, incidentally, the otter in Scotland. In Schedule 5 we offered the same protection to both, unlike the Convention. The Convention requires us to take whatever measures are necessary to protect Appendix 3 species. This we have done. We rely on the NCC for advice.
The noble Lord, Lord Gridley, asked for a positive answer that otters in Scotland will be protected. Yes, they will. The measure is in the Bill. He asked about funds for international species. The NCC, in co-operation with many other national and international organisations, funds research into the status of endangered species outside the UK. The Government play a significant part in the international field, and a very recent agreement by the Council of Ministers of the European Community to ban the trade in primary products of all cetaceans and many secondary products was a direct result of United Kingdom research.
The noble Baroness, Lady David, in her closing remarks particularly mentioned law enforcement. Here of course we sympathise with the RSPB on this. No doubt at Committee stage we can discuss whether there is anything more we can do on this matter. I have also taken into account her views of the NCC's assisting either the customs or the police where it is appropriate. I should now like to come to the question on which there were more pros and cons than most, and that is the SSSI.
Lord Craigton: My Lords, before the noble Earl leaves that point, a number of questions were raised about marine reserves. Has he anything to say on that?
The Earl of Avon: I have, indeed, my Lords. It actually comes at the end because it is not in Parts I, II or III. On SSSIs, some noble Lords have raised doubts on the habitat protection measures, saying that they do not go far enough and that the Government should be seeking to protect all sites of special scientific interest to the extent that owners should notify the NCC when they intend to vary the way in which they are currently managing the land. At the last count there were 3,816 such sites, and the Government do not wish to impose what might be an unreasonable and unnecessary burden on farmers and land-owners. The success of nature conservation in Britain depends not so much on statutory provision as on the continuation of the goodwill of those who earn their living from the land and those who are concerned that its wildlife resources should remain unimpaired.
In regard to the notification of SSSIs, the noble Lords, Lord Middleton, Lord Skelmersdale and Lord Chelwood, suggested that the Bill might contain a requirement for all owners of sites of special scientific interest to be notified of the fact. The Government, of course, accept that it is most important that owners of land notified as areas of SSSI should be made aware of the importance of their land. NCC policy is to ensure that this is done and they already make every endeavour to notify all owners. Sometimes this is not possible, despite their efforts, and here I take note of the intervention of my noble friend Lord Gibson-Watt about the danger of not informing people.
I can assure the House that it is not the Government's intention to see the notification system for areas of special interest under Section 23 of the National Parks and Access to the Countryside Act 1949 replaced by the new provision in Clause 26. The two co-exist, and as indicated in Clause 26, my right honourable friend may designate sites of special interest for the purpose of securing the survival of flora, fauna, geological and physiographical features or for the purposes of complying with an international obligation or in the national interest.
In practice, therefore, a designation order will be used only in relation to areas mentioned in the Nature Conservation Review or areas of similar quality and only when there is a real risk of threat to these sites. Apart from one or two Ramsar sites designated under the Ramsar Convention, it is not feasible, or indeed desirable, to give advance notice of which areas might be involved. My right honourable friend intends to restrict these orders to some of the most important and threatened sites, and in the first few years I think it unlikely that the number will exceed 40 or 50.
All sites are important, but of course some sites are more so. The essential difference between normal sites of special scientific interest and those to be covered by the proposed designation order is that the Government are proposing that the latter should be afforded the opportunity of total protection from damaging activities. At present this can be afforded only by ownership and it is protection which we call "super". I believe the NCC should be left to look

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at the SSSIs themselves and they should not be graded; as several noble Lords have said, that would be a bad idea. At present some key sites have been announced and there are also some other very important sites, and it is some of the latter which will be subject to the orders. We believe that our measures, together with the new climate of awareness, will stem any tide, and, after all, that is why this legislation is before the House.
I come to the question of footpaths. I have listened with interest to the views expressed by many noble Lords; the noble Lords, Lord Underhill, Lord Winstanley and Lord Middleton, and the noble Viscount, Lord Ridley, all spoke on this subject. It is our intention to bestow the responsibility on local authorities for taking the final decision wherever possible to create, divert or extinguish rights of way or to amend definitive maps when they are disputed. This proposition is entirely consistent with the philosophy that issues of local importance should be decided locally without the involvement of central Government. Public rights of way are without doubt a supremely local matter, in that first and foremost the path network within a particular area should meet the needs of a local community. Logic demands that responsibility for decisions on these matters should be entrusted to the democratically elected representatives of the local community. That paths may be used by visitors from outside the area does not mean that the needs of a local community should be subordinate, or that responsibility for decisions should pass out of the hands of a local authority.
Much has also been said about the way in which authorities would exercise the additional powers. I have no reason to believe that local authorities would act irresponsibly or be any less impartial in their judgment on disputed proposals. None the less it would be disingenuous of me to pretend that we do not recognise at the outset that the proposal would be controversial and that the impartiality of authorities would be questioned. We therefore propose to make it an obligation on authorities to take disputed proposals to a public local inquiry, which will be conducted by an inspector appointed by the Secretary of State; and it is intended to amend the Bill to bring that about. The noble Lord—
Lord Melchett: My Lords, the noble Earl has made a very important new announcement, and if he is now moving away from that point I wonder whether it can be made clear whether the intention would then be for the local authority to be able to contradict and find in the opposite sense to the inspector at the local public inquiry, or would that decision be final?
The Earl of Avon: My Lords, as we have it at the moment the authority would be able to contradict it, but since I have not yet seen the amendment perhaps we can leave that point until next time.
The noble Lord, Lord Underhill, mentioned appeals to the Minister. It is true that 40 per cent. of them—I think the noble Lord said half—are rejected. We hope that the requirement that I have just mentioned will safeguard the interests of objectors and indeed the authorities, since it will ensure that the arguments are heard by a person independent of the authority
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and that processes leading to the decision will be carried out in public.
My noble friend Lord Wise mentioned bridleways. We see no reason why under the new legislation there should be any reduction in bridleways; in fact we should imagine that there might even be an increase. I believe that this transfer of jurisdiction should be welcome, in view of the terrible backlog that we have at the moment.
So as to waken up your Lordships in the 27th minute of my speech I shall go on to deal with bulls. Several noble Lords have referred to our proposals on bulls and public paths. We have given careful consideration to the alternative proposals of introducing temporary footpath diversions, and various arrangements were discussed with major interested parties. However, as stated in the department's recent information paper, it was not possible to reach agreement. A noble Lord thought that there had been agreement some years back, but it is still not possible to reach agreement. So we have put forward proposals which are reasonable to both the path user and the farmer.
The system works well in Scotland, and has done so for more than a decade, both on low ground and high ground, and our proposal would ensure consistency throughout the country. As I am sure noble Lords are aware, some counties have one type of obligation, while other counties have another type. So one can run away from a bull and get to the county border and the bull cannot cross. Our proposals are surely safer to the path user than the conglomeration of by-laws and no laws that abounds today. We are recommending that beef bulls be permitted to graze in fields crossed by footpaths. That is much safer than the present system in some counties which permit dairy bulls.
The noble Baroness, Lady David, referred to an incident in which a pensioner was attacked and killed last year in Cleveland. I understand that that incident involved 16 young Friesian bulls which were being fatted for beef, and furthermore that it did not occur on a public footpath. So that instance does not really apply to the clause before us.
Turning finally to the question of the marine nature reserves, which was raised by no less than six noble Lords, I am instructed to say that following the publication last year of the Nature Conservancy Council's and the Natural Environment Research Council's joint report entitled, Nature Conservation in the Marine Environment, discussions have been taking place on their suggestion of establishing statutorily-protected marine nature reserves. The issues are, however, much more complex than they appeared at first sight, and the Government are hoping to issue a consultation paper in the very near future.
It is not perhaps surprising that this Bill has aroused so much interest. Many of its provisions reflect the large number of helpful and constructive comments made by a wide range of interested people and organisations before the Bill was introduced into this House. It is a better Bill as a result of those consultations, but I know that your Lordships will ensure that its provisions receive the most careful scrutiny. I commend the Bill to this House, and I invite your Lordships to give it a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

FELIXSTOWE DOCK AND RAILWAY (No. 2) BILL
Examiners certificate that no further Standing Order is applicable: Ordered to lie on the Table.
  ENERGY CONSUMPTION AND MANUFACTURING INDUSTRY
  ENERGY CONSUMPTION AND MANUFACTURING INDUSTRY
  SUPPLEMENTARY BENEFITS AND PRICES
  SUPPLEMENTARY BENEFITS AND PRICES
  SWANSEA UNIVERSITY COLLEGE: POLICE RAID ALLEGATIONS
  SWANSEA UNIVERSITY COLLEGE: POLICE RAID ALLEGATIONS
  MR. RAOUL WALLENBERG: REQUEST FOR INFORMATION
  MR. RAOUL WALLENBERG: REQUEST FOR INFORMATION
  THE FALKLAND ISLANDS: DISPUTE
  THE FALKLAND ISLANDS: DISPUTE
  LOCAL GOVERNMENT LEGISLATION AND STATUTORY UNDERTAKERS
  LOCAL GOVERNMENT LEGISLATION AND STATUTORY UNDERTAKERS