Sitting of 23 February 1981

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER In the Chair]
Oral Answers to Questions
  Energy

    Energy Conservation Division
    Mr. Viggersasked the Secretary of State for Energy whether he proposes any changes in the functions of his Department's energy conservation division.
    The Under-Secretary of State for Energy (Mr. John Moore): No, Sir.
    Mr. Viggers: Will my hon. Friend comment on press speculation that the Government might be proposing a new conservation agency? Does he agree that, whatever the merits of such a proposal, the best possible agent for the cost-effective use of energy is a realistic pricing policy?
    Mr. Moore: It is not my place, especially after recent events, to comment on press speculation. I accept the point that my hon. Friend has made about price being a key factor in energy conservaton, but we have no immediate plans to introduce an energy conservation agency. The possibility of establishing an energy conservation agency has been considered in the Department, but only as one possible option for developing the Government's conservation strategy. I agree with the importance of ensuring effective co-ordination of energy conservation policy. My Department already carries out that function. Establishing an energy conservation agency is not the only or necessarily the best way forward.
    Mr. Speaker: Order. For someone taken by surprise, that was a very long reply.
    Mr. Carter-Jones: Does the Minister agree that absent from his statement on the possible reconsideration of energy policy was a statement on the social costs or factors involved in repricing in energy policy? Will he take the aged and the disabled into account?
    Mr. Moore: The Government have made that clear by their large programme of help to those in need. There is a major £200 million-plus programme of help to those in need. That shows the Government's keen concern for those aspects of social, as opposed to energy, policy.
    Mr. Forman: I understand my hon. Friend's point of view about a possible new energy conservation institution, but does he agree that there is a great opportunity for a new Government initiative on energy conservation, as in so many ways that could be the most cost-effective way of proceeding with energy policy?
    Mr. Moore: I accept my hon. Friend's point about the degree to which energy conservation is cost-effective, but he should recognise that the Government's conservation policy, which will be discussed in the debate later today, is proceeding successfully.
    Mr. Eadie: Does the hon. Gentleman agree that to argue before the House and the country that the basis of an energy conservation policy must be pricing is a lazy policy for any Government to pursue in tackling conservation?
    Mr. Moore: Quite the contrary. I was referring to one point that my hon. Friend made. I should have thought that recognising the realities of price was an honest part of our overall energy conservation policy.

    Energy Prices
    Mr. Wallerasked the Secretary of State for Energy if he will make a statement on his consideration of measures to assist industrial high energy users whose energy costs compare unfavourably with their international competitors.
    Mr. William Hamiltonasked the Secretary of State for Energy if he will make a further statement on energy prices for industry.
    The Secretary of State for Energy (Mr. David Howell): It was agreed at the NEDC meeting in January that British industry generally was not at a disadvantage compared with its international competitors over energy costs. The Government have made clear their concern that certain energy-intensive industries are having to pay more for their energy than some of their counterparts overseas. If the pound continued to strengthen against European currencies, it could lead to increasing disparities in energy prices in sterling terms. The NEDC task force will shortly be reporting on the current situation for large users.
    Mr. Waller: Will my right hon. Friend ensure that it becomes better known than it is at present that industrial energy prices on the Continent have risen at least as fast as they have in this country? That is not generally realised. When considering special measures to assist high energy users, will he take into account the fact that those include not only industries such as steel, but certain parts of the textile industry, even though they do not have the same pull as the steel industry?
    Mr. Howell: The concern of the NEDC task force is with the high load and large users, where it seems to be agreed that disparities may exist, but I understand my hon. Friend's question. The first part of his question is correct. All over the world, and indeed in many European countries, energy prices have been rising at a faster rate than they have here. We have had a huge oil price explosion, the shock waves of which are going through all industrial systems throughout the world.
    Mr. William Hamilton: Does the right hon. Gentleman accept that the weight of evidence being produced by several industries, including those mentioned by the hon. Member for Brighouse and Spenborough (Mr. Waller), is overwhelmingly in support of the view that our industry is being unfairly discriminated against on energy pricing? Why are the Government continuously prevaricating on the matter? When may we have a definitive statement on their policies?
    Mr. Howell: The NEDC task force was set up to identify the precise areas where allegations and beliefs proved to be more than just feelings and were facts. As was recognised by the Government a considerable time ago, there are disparities for bulk users. As I mentioned in my original answer, the continual movement of the pound makes the disparities even harder and greater in some cases. That has been recognised. That is why the task force was set up, and the Government have said that they will respond when they see the exact nature of the problem.
    Mr. Hal Miller: Does my right hon. Friend agree that, among our international competitors, the French are making great progress in keeping down the rise in electricity prices by the use of nuclear power? Will he take this early opportunity to rebut the findings of our Select Committee in that respect?
    Mr. Howell: I do not want to take this opportunity to comment on the Select Committee's report, which is being studied closely by the Government. My hon. Friend makes a valid point. The cost structure of an electricity industry with a growing nuclear component and a large hydroelectric component is bound to be increasingly favourable in future. That is why the Government believe that we should have a modest, but expanding, nuclear programme.
    Mr. Rowlands: The Secretary of State should not come to the Dispatch Box and be so bland and complacent on issues that are of serious importance to the whole of our industry. When will the NEDC report emerge? With each week that goes by, companies lose vital export orders as a result of energy prices. Will the right hon. Gentleman confess not only that he forced up gas prices to domestic consumers by more than the British Gas Corporation wanted last year, but that he insisted that it should impose higher increases on industrial consumers? Will he take on board the arguments from both sides of the House that industry is seriously affected by the Government's energy policy?
    Mr. Howell: The answer to the hon. Gentleman's first question is that the report is expected on about 4 March. On the second question, the BGC's industrial energy policy is determined by economic pricing principles, which the Government adhere to and which are in accordance with the corporation's own policy and aims in industrial energy. Domestic energy prices are about half those in France and Germany. That is generally recognised by industry, which has urged that those prices should rise even faster. I have resisted that, because I believe that the proposed rate of increase is substantial. However, industry was pressing me to do even more.

    North Sea Oil Industry
    Mr. Canavanasked the Secretary of State for Energy whether he will make a statement about his investigations into allegations that certain employers in the North Sea oil industry are exploiting cheap overseas labour.
    The Minister of State, Department of Energy (Mr. Hamish Gray): The undertaking that I gave in a recent Scottish Television programme related to statements made about the Universal Services International. My officials have taken these up with the company, which has now
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    given an undertaking to phase out the employment of non-EEC nationals on rigs in United Kingdom waters by the middle of this year. I have asked the Offshore Supplies Office to monitor progress and keep me advised.
    Mr. Canavan: Does the hon. Gentleman agree that it is an absolute scandal that an American multinational company, such as the one that he has named, should have been allowed in the first place to exploit overseas workers by paying them only one-third of the trade union rate for the job and making them work 12-hour shifts, seven days a week, for six weeks at a time? Is it not time that employment protection legislation was extended to the North Sea and that the Government issued instructions through the Offshore Supplies Office that no contracts should be given to the American multinational gangsters that are operating an international slave trade in the North Sea?
    Mr. Gray: The hon. Gentleman has a weakness for overstating his case. To put the matter in perspective, it is worth pointing out that of all those employed on the United Kingdom continental shelf, 92 per cent. are United Kingdom nationals. The company in question has a very good record on procurement. It buys practically all its supplies within the Aberdeen area. In addition, 65 per cent. of its personnel operating out of Aberdeen are United Kingdom nationals. I have no comment to make about those who have been taken on by the company away from the United Kingdom.

    Coal Industry
    Mr. Dormandasked the Secretary of State for Energy when he next proposes to meet the chairman of the National Coal Board to discuss future investment in the coal industry,
    Mr. David Howell: I and my colleagues meet the chairman of the NCB frequently to discuss aspects of the board's affairs. In my recent tripartite talks with both sides of the industry I reaffirmed the Government's commitment to investment in the coal industry's long-term future.
    Mr. Dormand: Is the right hon. Gentleman aware of the great moral debt owed to the coal industry and, particularly, to the miners, because of the ineptitude shown by the Government over the past two weeks in disrupting the good relations in the industry? Will he bear that in mind when he has the investment talks—I read in the papers that there is to be a meeting on Wednesday—and seek to introduce legislation immediately to amend the Coal Industry Act 1980 and to deal with the importing of coal? In closing uneconomic pits, are the Government likely to meet the agreement on production targets that they reached in Venice last year?
    Mr. Howell: There is no need for legislation. I should make it clear that there is no question of having a general system of import controls. I do not like import controls. What is being proposed is that the NCB should have the resources to price more of its coal competitively with the imports being brought in by the CEGB and the BSC and thus help to reduce imports towards the irreducible minimum. That is what the Government have said that they will discuss with an open mind towards movement next Wednesday.
    The undertaking at the Venice agreement was that there should be a doubling of coal production in the next 10

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    years. The vast bulk of that will come from the United States, Canada and Australia. Britain is by far the best performer, almost in the world, in terms of coal burn in electricity and coal use for electricity generation. We are well ahead on that.
    Mr. Skeet: Is my right hon. Friend aware that funds for highly profitable, low-cost pits will not be available if money goes to some of the uneconomic pits'? Is he also aware that it is not satisfactory to the United Kingdom if we have one set of economic laws for the miners and another set for the rest of the country?
    Mr. Howell: The implication of my hon. Friend's question is correct. The long-term interests of the industry, which has a great future, lie in investment in modern pits and effective investment in new faces in existing pits. As it is an extractive industry, that inevitably involves a degree of closures as well. That has always been recognised by both sides of the industry and it is the basis on which we shall plan a common sense future together.
    Mr. Skinner: Is the right hon. Gentleman aware that during the past 10 years, pits have closed on the basis of having no further reserves, and not on the basis of being uneconomic at a particular time? Pits that are uneconomic at one time could become economic later. Will he confirm that the irreducible minimum of imports will be 1 million tonnes, as suggested by Sir Derek Ezra on the night of the concession made by the Government' Will the right hon. Gentleman explain how long it will take to reach that figure? That is very important for the miners. Will he also bear in mind that, to assist the miners and industry generally, the Government have a duty to change their policy in order to get away from the recession, to build up industry, to burn more coal and to help everybody else in the process?
    Mr. Howell: The reduction of imports by the CEGB and the BSC will be discussed with the industry next Wednesday. It is right that that matter should be discussed in the tripartite forum in a common sense atmosphere. With regard to the NCB's policy on closures, the board and the unions have been asked to discuss a pattern for closures consistent with the Plan for Coal, and consistent also with the severe economic realities that all industries face. The Government have indicated that they are prepared to discuss the financial implications with an open mind and also with a view to movement. That is what we shall discuss at Wednesday's tripartite meeting.
    Mr. Eggar: Is it not the case that the coal industry cannot be immune from the economic recession? Does not the Plan for Coal specifically envisage extensive pit closures, only about half of which have been achieved since the plan was agreed?
    Mr. Howell: No industry can be immune from the difficulties faced by all those in business and industry during an economic recession. My hon. Friend is correct on that point.
    Mr. Merlyn Rees: As the whole matter of cash limits and imports needs to be considered positively, will the Secretary of State assure the House that the Government are not going into the talks on the surly basis that they were defeated last week?
    Mr. Howell: My right hon. Friend and I have made clear the basis on which the discussions were held last
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    week and the basis on which the talks on Wednesday will be held. The words that I used in the House on Thursday were perfectly clear. They were the words used to both sides of industry. They are the words that were accepted by both sides of industry. They will be the basis for our talks at the tripartite meeting on Wednesday.

    Energy Prices
    Mr. Campbell-Savoursasked the Secretary of State for Energy what consultations he has had during the last month with leaders of British industry on energy pricing policy.
    The Under-Secretary of State for Energy (Mr. Norman Lamont): At the NEDC in January it was agreed that a task force should be set up to report on energy prices to bulk users. This task force, on which both the CBI and my Department are represented, is therefore the main forum for discussion with industry at present. I will, of course, be discussing its findings at the NEDC meeting on 4 March.
    Mr. Campbell-Savours: Has the Under-Secretary noted the comments of Courtaulds, which has maintained in every closure announcement that it has made over the last 12 months that the reasons for closure have been the high cost of energy and the high cost of feedstock? Will the hon. Gentleman intervene and set up an investigation into the relationship between textile closures and high energy costs and high feedstock costs? Will he say whether he intends to accept any recommendation that the task force may make on prices?
    Mr. Lamont: I have noticed the statements by Courtaulds, just as I have noticed those of a number of firms in the industrial sector. The Government are waiting for the conclusions of the NEDC task force, which will be available on about 4 March. They will then formulate their response. The hon. Gentleman referred to feedstock. I should point out that some companies in this country have very cheap feedstock which has been the cause of comment and complaint from some producers abroad.
    Mr. Hannam: Will my hon. Friend accept that the most effective, immediate way of helping large energy-consuming industries would be a reduction in the rate of duty on heavy oil?
    Mr. Lamont: That is a matter for my right hon. and hon. Friend the Chancellor of the Exchequer. I am sure that he will note what my hon. Friend says. Many people have made representations to that effect.
    Mr. Hardy: Will the Minister accept that almost six months have lapsed since the steel industry in South Yorkshire, both the private and public sectors, presented the facts about the very difficult position faced by that industry as a result of energy prices being higher than those of its competitors in France and Germany? Does he realise that the task force is duplicating the work that was carried out by the industry? When can we expect a helpful response?
    Mr. Lamont: The hon. Gentleman is not right. Many matters have to be clarified. The hon. Gentleman referred to the case made by the steel industry. One point that emerged from the evidence of the steel industry on energy prices was that the utilities in this country had, over two years, put up their prices by rather less than the

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    Continental countries had done. When the exchange rate factor was taken into account, a different picture emerged. It is not so simple as the hon. Gentleman says. We recognise that industry has problems when there are bulk buyers. We have asked the utilities to prepare proposals, to which the Government have referred on previous occasions.
    Mr. Bruce-Gardyne: Is it not somewhat hypocritical for the Labour Party to complain about energy prices when its leader treats a decision to maximise the less economic forms of coal production as a victory? Will my hon. Friend enlighten the House—
    Mr. Skinner: The hon. Gentleman is not helping the Minister.
    Mr. Bruce-Gardyne: I do not always intend to. Will my hon. Friend enlighten the House on whether concessions from the National Coal Board on pricing to enable its two biggest customers to meet the price of imported coal will be extended to substantial users of imported coal in the private sector.
    Mr. Lamont: The answer to the latter point is "No". We are discussing the position of two nationalised corporations. There is no question of the general position being altered. On my hon. Friend's first point, I note what he says, including his remark that he does not always want to be helpful.

    House Insulation
    Sir Albert Costainasked the Secretary of State for Energy if his Department will negotiate with the gas boards with a view to their including a leaflet when sending out gas bills advising consumers how to obtain Government grants for insulating homes.
    Mr. John Moore: I am pleased to inform my hon. Friend that the gas regions have already done so.
    Sir Albert Costain: I thank my hon. Friend for that reply. Is he satisfied that this document shows the extra help given to old-age pensioners? The heating of their homes means so much to their continued good health.
    Mr. Moore: I shall draw the point that my hon. Friend makes to the attention of the gas boards. There are specific additional forms of help, including up to 90 per cent. on insulation, for those who are elderly and in special need.
    Mr. Donald Stewart: Would there not be more advantages for the consumer if the Government adhered to their declared policy of non-intervention, instead of forcing an industry that is making substantial profits to make astronomical rises in prices?
    Mr. Moore: I think that my hon. Friend was trying to ask me to encourage the British Gas Corporation, like other nationalised corporations, to help the consumer to understand the benefits of insulation to industry, to the nation and to individuals. That is to be commended.
    Mr. Forman: I welcome the progress already made by the gas boards, but is there not a case for changing the statutory terms of reference so that both gas and electricity boards can go into conservation properly, as on the West Coast of the United States?
    Mr. Moore: Any suggestions of that kind merit attention, but I am obviously not at liberty to discuss statutory changes at this time.
    Mr. Rowlands: Is the Minister not aware that gas consumers understand all too well that they will face a 25 per cent. increase in gas prices in the coming year? That is a gas bill of £450 million for average domestic gas consumers. Would it not be better at least to withdraw the 10 per cent. surcharge imposed by the Government and allow the British Gas Corporation to set its own prices?
    Mr. Moore: Apart from the fact that the domestic gas sector only just about breaks even, I believe that Opposition Members should be more aware of the ways in which rational pricing is producing an expenditure of £400 million this year on domestic insulation in the United Kingdom.

    Oil Prices
    Mr. Lennox-Boydasked the Secretary of State for Energy what progress is being made towards international adherence to the Venice summit commitment to economic pricing of oil.
    Mr. David Howell: Good progress is being made. The United States has recently taken steps to ensure that domestic prices for oil should take into account representative world prices. We shall continue to pay close attention to this subject in the appropriate international bodies.
    Mr. Lennox-Boyd: I recognise the action taken in various countries on international prices of oil, especially in the United States, but does my right hon. Friend agree that the time is ripe for further initiatives on the prices of gas in various countries, particularly the United States, to ensure that gas prices are set on an economic basis, along the lines of the courageous policy adopted by Her Majesty's Government?
    Mr. Howell: I agree with my hon. Friend's objective. In fact, the Government have made it clear at International Energy Agency ministerial meetings that we believe that economic pricing policy should apply to all fuels, and not simply oil. If that does not happen, as my hon. Friend rightly says, industries in this country, as throughout the rest of Europe, are subjected to considerable unfair competition. That is not satisfactory. I fully agree with my hon. Friend that it is a matter that must be changed.
    Mr. Douglas: Will the right hon. Gentleman concede that his policy of running ahead of the field, in particular in relation to United States energy pricing, is severely damaging to British industry? Does he not accept that we should call a halt until the United States and other like nations catch up with us?
    Mr. Howell: The hon. Gentleman must realise that a policy of general intervention to hold down energy prices would not help solve the particular problems that some energy-intensive industries face. The idea that one can deal with particular problems, which often go far deeper than energy pricing, by general and highly expensive intervention in energy pricing not only undermines future energy investment, but is highly cost-effective. It would be the worst way to help the industries concerned.
    Mr. Merlyn Rees: But what does "economic pricing" of oil mean? Does it mean Government intervention to put our prices at the level set by OPEC?
    Mr. Howell: It means that the price of oil is the world market price, which is set in the Rotterdam world oil

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    market. If the right hon. Gentleman thinks that there is another price of oil that can be secured, I urge him to try to buy oil below the world market price or to sell it above the world market price. He will find that he cannot do it.

    Places of Worship (Electricity Tariff)
    Dr. Edmund Marshallasked the Secretary of State for Energy whether he will issue a general direction to electricity supply boards that places of worship should be classified as domestic premises for the purposes of electricity tariff.
    Mr. Norman Lamont: No, Sir. Formulation of electricity tariffs is a statutory responsibility of the area electricity boards. If the hon. Member has a particular case in mind this would best be pursued direct with the board concerned.
    Dr. Marshall: Is the hon. Gentleman aware that I have done that, without any satisfaction? The Yorkshire electricity board treats places of worship as commercial and miscellaneous premises, with the result that they are allocated a large primary block of units for charging purposes, so large for some spacious churches that their consumption never exceeds that primary block, for which they have to pay through the nose. Will the Minister examine the matter again and iron out this injustice?
    Mr. Lamont: I shall look at the matter again. It is also open to the hon. Gentleman to take it up with the consultative council. I do not think that he has done that.
    Dr. Marshall: I have—nationally.
    Mr. Lamont: It is by no means clear that the change that the hon. Gentleman wants will definitely be of advantage. He should take into account the fact that church halls are often most used at a time of peak demand, when the charges reflect the costs of supplying electricity at that time.
    Mr. Kenneth Lewis: Will my hon. Friend take it from me that if he goes to church regularly—perhaps that is what Ministers need to do, because we are reaching the stage at which at least we need some praying, if nothing else—he will find that churches cannot afford to meet fuel prices, because they are going so high, and half the churches are freezing cold on a Sunday?
    Mr. Lamont: I am glad to tell my hon. Friend that I went to church yesterday, when I had the pleasure of praying for Her Majesty's Ministers. It was extremely cold.

    Energy Conservation
    Mr Adleyasked the Secretary of State for Energy if he is satisfied that his policies in relation to energy conservation are fully understood by the general public.
    Mr. John Moore: Expenditure on information and advice provided by my Department has been increased by 30 per cent. in real terms in 1980–81 as part or our efforts to help the public understand the reality of energy price changes at a time when world energy prices are increasing rapidly. Since the beginning of 1979, world dollar oil prices have risen by 175 per cent. or more than doubled, excluding general inflation. We believe that the message is getting through.
    Mr. Adley: Does my hon. Friend agree that the presentation of the Government's energy policy illustrates the dilemma of having a good policy not very well explained, which is not unknown to Conservative Governments? Where conservation is a major factor in energy pricing, will he and his colleagues do their best to do a little better than they have done to explain the policies, which I am sure are adequate, in language that people can understand?
    Mr. Moore: I shall always listen to my hon. Friend and learn from him, but harsh reality is always difficult to communicate. However, I point out that in the past 18 months about 1 million homes have had their lofts insulated, which I suggest indicates that the message is getting through.
    Mr. Hudson Davies: Will the Minister concede that persuasion, as well as understanding, is required? Will he have regard to the sums being spent by countries such as France, Germany, the United States and Sweden on fiscal measures to encourage conservation, and accept that in the last resort economic pricing is not in itself a sufficient incentive to carry out a comprehensive exercise in conservation?
    Mr. Moore: All the countries that the hon. Gentleman mentioned regard economic pricing as the cornerstone of economic conservation. I accept that changing long-term attitudes is a difficult task of persuasion, but at the end of the day the total of Government expenditure is not a sufficient indicator of the long-term success of a nation's energy conservation policies. The true indicator is a change in individual demand attitudes, which is much more difficult.
    Mr. Budgen: Does my hon. Friend agree that the public are entitled to know where the market price for oil is decided? Does he agree that the market price at present is decided by OPEC, which controls 90 per cent. of the oil used in the free world, and that the Rotterdam market trades in only about 10 per cent.?
    Mr. Moore: I have enough difficulty explaining the Government's energy conservation policies without trying to communicate that problem.
    Mr. Eadie: When we discuss conservation, does the Minister agree that the public are entitled to know that the manufacturers of insulation feel betrayed by the Government, in that their factories are working below capacity and they are forced to pay people off? How do the Government account for that when they boast about their insulation policy?
    Mr. Lamont: We all recognise the difficulties in a recession, but the facts are more important. My right hon. Friend the Secretary of State for the Environment has just announced a 30 per cent. increase in real terms in the home insulation grant for 1981–82. The facts speak far better than comments of the kind that the hon. Gentleman has just made.

    Combined Heat and Power
    Mr. Hooleyasked the Secretary of State for Energy how many local authorities have expressed interest in developing experimental combined heat and power schemes.
    Mr. John Moore: Thirty-two local authorities have expressed some interest in the Government's CHP feasibility programme. However, some of these relate to the same candidate for possible lead city status; for example, South Yorkshire county council has supported the city of Sheffield's claims.
    Mr. Hooley: Is the Minister aware that Sheffield is very keen to take part in the scheme? Such experiments could have far-reaching consequences for energy conservation—far beyond the other programmes that we have so far.
    Mr. Moore: I am very much aware of the support of the Members of Parliament in the Sheffield area and of Sheffield city council for Sheffield's place in the scheme. The six areas that have been recommended are Glasgow, Newcastle, East-Central London, Sheffield, Belfast and Liverpool. There is extensive interest in, and support for, the lead city scheme proposals.
    Mr. Rost: As it is estimated that there are already about 3,000 district combined heat and power schemes in non-Communist, Western Europe, making a major contribution to supplying the consumer with waste heat, and benefiting the economy, does my hon. Friend not think that perhaps we are moving just a little cautiously in removing the obstacles that prevent it from developing here—apart from just one lead city scheme?
    Mr. Moore: I acknowledge my hon. Friend's long interest in, and support for, combined heat and power and district heating. I think that the Government are moving as fast as they can, when they must recognise that ultimately they are talking about the expenditure of public money.

    Private Electricity Generation
    Mr. Rostasked the Secretary of State for Energy if he has any plans to introduce legislation which will make possible the private generation of electricity as a main business.
    Mr. Norman Lamont: As my right hon. Friend announced on 21 July 1980, we intend to remove the present statutory prohibition as soon as a suitable legislative opportunity arises.
    Mr. Rost: If it is the Government's genuine intention to remove this obstacle, by doing which they can make a major contribution to getting combined heat and power going in the country, why not use this afternoon's Energy Conservation Bill and put a sensible clause into that?
    Mr. Lamont: We genuinely intend to make this change, and we have another legislative vehicle in mind for it.

    Cross-Channel Cable
    Mr. Palmerasked the Secretary of State for Energy why he asked the Central Electricity Generating Board to investigate an alternative cable route across the Channel for the 2,000 megawatts cross-Channel cable link; what was the cost of the survey; and who will meet it.
    Mr. Norman Lamont: At the public inquiry, objectors to the proposal to site the converter station at Sellindge suggested Dungeness as an alternative. Being able to site
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    the station there depends on the feasibility of taking the cable there from France via the Varne Bank. My right hon. Friends the Secretary of State for the Environment and Energy therefore asked the CEGB to investigate the feasibility of a cable route frome Varne to Dungeness. This involved a sea bed survey.
    I understand that the survey cost about £500,000. The cost is being met by the board.
    Mr. Palmer: Does the hon. Gentleman agree that approval for the scheme was given by his right hon. Friend as long ago as last July, that the French are getting increasingly impatient about the delay, and that the delay is due not to the CEGB but to the objections of highly placed individuals living near the proposed site for the converter station, including the editor of The Daily Telegraph and Lord Aldington, vice-chairman of the General Electric Company, both former Members of this House? Is it not wrong that so much trouble should be taken over two objectors because they are highly placed, when the ordinary objector would not be listened to?
    Mr. Lamont: The hon. Gentleman will know that my right hon. Friend has a statutory duty in this matter and, therefore, that it would be improper for me to comment on his remarks.
    Sir Albert Costain: Does my hon. Friend appreciate that the statement made by the hon. Member for Bristol, North-East (Mr. Palmer) is only half true and that, had he been at the inquiry at Sellindge on Monday, Tuesday and Wednesday of last week, he would have learnt that new information came to hand which was vital to any decision?
    Mr. Lamont: I am afraid that my answer to my hon. Friend must be the same: we are not in a position to comment, because of the statutory position of the two Departments.
    Mr. Gwilym Roberts: Will the Minister at least take the opportunity today to confirm his belief in the urgency of this proposal in terms of the additional generation that it provides for the CEGB and the further impetus for coal usage, in view of recent decisions?
    Mr. Lamont: This is such an important project that the Government have to pay regard to the objections that have been raised.
    Mr. Warren: Can my hon. Friend tell the House what will be the impact of delay on this project, which will be of advantage to both sides of the Channel?
    Mr. Lamont: My hon. Friend is right in saying that there are considerable economic advantages in the project. However, the Government, despite seeing that clearly, and despite having given investment approval to the project, are statutorily bound to pay attention to the environmental and other objections that have been made against the scheme.

    North Sea Oil (Taxation)
    Mr. Eggarasked the Secretary of State for Energy whether he is satisfied that the present regime of taxation of North Sea Oil producers is optimally suited to the needs of United Kingdom energy policy.
    Mr. Gray: I am confident my right hon. and learned Friend the Chancellor of the Exchequer will take full account of United Kingdom energy policy requirements when considering his Budget measures.
    Mr. Eggar: Although I accept the case for additional taxation, is there not a real danger that frequent changes to a taxation policy that is already extremely complicated will lead to a decrease in activity in the North Sea, which will be very harmful to the long-term development of our energy policy?
    Mr. Gray: I feel confident that the proposals that will be announced by my right hon. and learned Friend will not place any inhibition on the oil companies. I remind my hon. Friend that of the seven changes in taxation affecting the oil companies that have taken place since the Government came to power, albeit some of them very minor, six had already taken place before the announcement of the seventh round of licensing, yet, with 123 applicants, we broke all records in that.
    Mr. Edwin Wainwright: Does the Minister realise that many financial experts think that the major oil companies are getting away with much bigger profits than they should be allowed? Will he therefore use his influence with the Chancellor of the Exchequer to make. certain that the country gets a fairer and better share of the profits from North Sea oil?
    Mr. Gray: I suggest that the hon. Gentleman has exaggerated slightly. It is necessary for us to have a steady flow of investment in the North Sea. The line that we draw between getting the proper benefit in the national interest and providing an incentive for those who wish to invest is a very delicate one. I am sure that my right hon. and learned Friend the Chancellor of the Exchequer will get it right.
    Mr. Viggars: Although high rates of taxation are, to a greater or lesser extent, no doubt a disincentive to exploration in the North Sea, does my hon. Friend agree that uncertainty is also a disincentive? Does he agree, further, that there may be grounds for considering quite soon some kind of assurance on the lines of the Varley assurances given in 1970–74, which would give some idea of future stability for the industry?
    Mr. Gray: My hon. Friend will be aware that we honoured the Varley assurances. It might be useful to look at something along the lines that he suggests. We are always prepared to consider these matters. I assure him that this is receiving serious consideration at the moment.
    Later—

    Energy Conservation
    Mr. Hannamasked the Secretary of State for Energy what representations he has received from the insulation industry concerning the effectiveness of the conservation programme; and if he will make a statement.
    Mr. Moore: The Government have regular contacts with all sectors of the insulation industry. We believe that our energy conservation policy will result in a continuing and expanding market for the industry.
    Mr. Hannam: Does my hon. Friend accept that the change in the system of housing improvement finance has meant that there has been a drop in the number of insulation improvements carried out in public sector housing? Will he consult the Secretary of State for the Environment with a view to restoring specific allocations of housing grants for local authorities for public sector housing?
    Mr. Moore: Although there has been a drop, it has been somewhat exaggerated in comments by the industry. The take-up seems to be nearer 60 per cent. than the 33 per cent. that the industry's figures suggest. It is not fair to observe that that necessarily arises from a change in the system of allocation. However, I obviously share my hon. Friend's concern about any reduction in local authority insulating standards.

  House of Commons

    Scottish Business
    Mr. Canavanasked the Chancellor of the Duchy of Lancaster whether he will take steps to improve the opportunity of the House to deal with Scottish business.
    The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): I have no proposals to make at the moment.
    Mr. Canavan: Although the Government have now clearly ditched any older commitments for genuine devolution, why is there such reluctance even to the idea of having the Scottish Grand Committee sit in Scotland now and again? Are the Government afraid that Scottish Tory Members and Scottish Office Ministers would be publicly exposed as the puppets of a discredited Government whose policies are so disastrous and unpopular that more than 50,000 people took to the streets of Glasgow on Saturday to demonstrate their opposition?
    Mr. Pym: This is an important matter. In recent weeks I have been considering the inter-party talks. In due course I shall bring forward proposals to the House as a result of those talks.
    Mr. Millan: I remind the right hon. Gentleman that the Government, as far back as 7 August of last year, said that they would recommend to the House that the proposals from the inter-party talks should be accepted by the House. Why is there this delay? These are extremely moderate proposals, but they would provide a little improvement in the way that we handle Scottish business. They should have been brought forward long before now.
    Mr. Pym: Be that as it may, in the course of the last five or six weeks that I have held my present office I have been considering this, among many other matters. One of the matters remaining to be cleared up was, for example the important one of pensions, which we dealt with last week. I shall bring proposals on this matter before the House reasonably soon.

    Select Committees
    Mr. William Hamiltonasked the Chancellor of the Duchy of Lancaster what plans he has for increasing the time available on the Floor of the House for debating reports from Select Committees.
    Mr. Pym: I shall endeavour to find time for such debates as the need arises and in accordance with the wishes of the House.
    Mr. Hamilton: Is the right hon. Gentleman aware that that is an extremely vague and meaningless reply? Does he not recognise that, as these Select Committees are

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    working extremely hard and producing extremely important reports—especially the Treasury and Civil Service Select Committee—he should give a firm undertaking that in this Session he will bring forward proposals to specify a number of days per Session for debates on these important reports?
    Mr. Pym: I agree that these reports are important. However, it is fair to say that, up till now at any rate, the Liaison Committee has not felt it necessary to make representations in the sense just made by the hon. Gentleman. I want to watch the development of these Select Committees. I doubt whether a specific number of days will be the appropriate way of dealing with the problem. But I am sure that, as the need arises, we can consider in due course how best to handle it.
    Mr. Crouch: Is my right hon. Friend aware that if he allows more time for debates in this House on the reports of these Select Committees, it is possible that right hon. and hon. Members who serve on Select Committees will dominate those debates? Will my right hon. Friend take into account the fact that some of us are concerned that the appointment of the Select Committees has already detracted from the value of the Chamber itself? I hope that he will not continue this process.
    Mr. Pym: It is also true that the Select Committees have provided a good deal of additional information, both for this House and for people outside. They are still at a very early stage of their development. I do not think that there is any need for events in a Select Committee to affect how a specific matter is handled on the Floor of the House. There has never been any question of anything like every report from every Select Committee being debated on the Floor, obviously not, but from time to time there will be occasions when the House feels that a specific report should be debated. As the need arises, I shall endeavour to find time.
    Mr. John Silkin: Will the Leader of the House bear in mind that for the past 150 years there has been a succession of excuses for the Chamber being empty, that this is only the latest of the various excuses, and that the Opposition hope that he will continue with the experiments, and indeed increase them?
    Mr. Pym: I note what the right hon. Gentleman says. It must, and I am sure always will be, the case that this Chamber is the centre of our deliberations.
    Mr. Fell: If my right hon. Friend is successful in finding plenty of time, will he consider taking a few Committee stages of Bills on the Floor of the House?
    Mr. Pym: I am not sure how popular that would be. My hon. Friend knows the constraints upon any Leader of the House. Where it is appropriate, naturally we shall have to find the time. I note what my hon. Friend says.
    Mr. Skinner: Will the Leader of the House also bear in mind the fact that there is a strong body of opinion on both sides of the House, and certainly on the Opposition Benches, to the effect that any available hours should be used to debate matters of urgency, such as the many that have arisen over the past few months under this Conservative Government? That would give us an opportunity to raise such matters without having to make application all the time to you, Mr. Speaker. Will the Leader of the House bear in mind that some of
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    us—perhaps more than that now that the Committees are sitting—believe that they are simply sloppy all-party consensus Committees and that we cannot afford to spend any more time on them down here?
    Mr. Pym: As the hon. Gentleman knows, there are no new proposals before the House to change its procedures in that way at the moment. I know that the hon. Gentleman is one of those who seek to take advantage of such opportunities as there are for raising mattors, but I have no new proposals to make at present.

    Parking Space (Disabled Persons)
    Mr. Carter-Jonesasked the Chancellor of the Duchy of Lancaster if, to mark the International Year of Disabled People, he will take measures to increase the parking space available for disabled people within the Palace of Westminster during office hours, having particular regard to the increasing number of disabled people attending debates and meeting Members.
    Mr. Pym: I will arrange for a review to be held. It would be helpful if the all-party disablement group would make its own reappraisal, and bring forward a proposal as part of the overall review of facilities for the disabled which it has already been agreed should be undertaken.
    Mr. Carter-Jones: While thanking the right hon. Gentleman for his helpful reply, may I suggest that there are facilities in the House that are being misused? Will he look at that? In this International Year of Disabled People, will he take into account the embarrassment and difficulty faced by these people? Does he agree that we should consider also the embarrassment caused to ourselves when constituents visit us and the problems faced by Officers of the House and the police in finding such accommodation?
    Mr. Pym: It would, of course, be the purpose of such a review to look at all these matters. We thought that it would be a good beginning for the all-party disablement group to put in its own views in the first instance, but of course we want to do what we can to help.
    Mr. Adley: Is my right hon. Friend aware that as part of the activities in my constituency for the International Year of Disabled People I spent a couple of hours in a wheelchair on Friday, which gives one a much better opportunity to appreciate the problems? As my right hon. Friend is responsible for co-ordinating Government policy, will he do his best to ensure that local authorities, Government Departments and organisations such as the Post Office make a real effort this year to see what they can do to help disabled people to overcome some of the problems in their ordinary lives which those of us who are more fortunate do not normally encounter?
    Mr. Pym: I think that every organisation, both public and private, is giving consideration to this matter. I do not think that it is for the Government, as it were, to instruct the Post Office, but it is well known that the Government are behind the efforts being made in this International Year of Disabled People, and we shall, of course, wish to do what we can to help.

    Members' Office Facilities
    Mr. Soleyasked the Chancellor of the Duchy of Lancaster whether he has any plans to improve the office facilities available to hon. Members.
    Mr. Pym: Not at present, but, as the House knows, there is the Casson scheme for Bridge Street, which could be reconsidered when circumstances are more favourable.
    Mr. Soley: Does the Minister agree that conditions are far worse here than in almost any other comparable country? How long will it be before decent facilities are available at least to all those who wish to have them?
    Mr. Pym: While what the hon. Gentleman says may be true, I can only say that when I first came to the House the arrangements were a jolly sight worse. I think that it is necessary to point that out. As the hon. Gentleman has complained, it is right to recognise what has been done in the intervening years. It is a continuing process. If a major advance is required, in due course, when times are better, no doubt we can make it. Clearly, one is aware, in one's own capacity, apart from anyone else's, of the shortcomings of this building.
    Mr. Fell: Axe we sure that it is desirable to change the character of the House? Is my right hon. Friend aware that that is what has happened over the past few years? By providing all these facilities, are we not already denuding the Palace of Westminster of the Members themselves?
    Mr. Pym: Whilst I might in a sense have some personal sympathy with the view expressed by my hon. Friend, I think that it is only the truth to say that over the years the great majority of Members in all parts of the House have required, and almost insisted upon, the kind of expansion, development and improvement of office and other facilities that has taken place. I think that it has been in response to the general wishes of the House that these changes have been made.

    Government Policy (Presentation)
    Mr. Adleyasked the Paymaster General if he will make a statement on methods of presentation of Government policy.
    Mr. Pym: The Government seek to ensure that information on all aspects of their policy is widely available. Ministers explain the policies they are pursuing in speeches and by interviews, through press notices and briefing and speeches and statements in the House.
    The Government also make use of all forms of paid publicity, including press and television advertising, posters and leaflets.
    Mr. Adley: Does my right hon. Friend agree that the description of "Right-wing extremist" applied to my right hon. Friend the Prime Minister and the Government, when the Government are quite properly providing huge sums of money for the nationalised industries, is ridiculous? Will my right hon. Friend therefore accept that many of us very much welcome his recent speech at Putney, which reaffirmed the pragmatic role of the Conservative Party, and will he please keep at it?
    Mr. Pym: All that I can say is that, whatever else I am responsible for, I am not responsible for comments on my right hon. Friend the Prime Minister, on any other Minister, or indeed anybody else for that matter.
    Mr. John Silkin: Will the Leader of the House amplify that reply just a little? We have heard that the Secretary
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    of State for Trade does not intend to be a Kamikaze pilot. I had some personal experience of Kamikaze pilots during the war.
    Mr. Warren: A failed Kamikaze pilot.
    Mr. John Silkin: On the contrary—the hon. Gentleman is thinking of chicken Kamikaze, of course. The interesting thing about Kamikaze pilots was that they headed direct for the crash. They were not for turning. In the light of that, would the right hon. Gentleman present the Prime Minister as a Kamikaze pilot or perhaps as a more orthodox form of pilot now?
    Mr. Pym: I think that I shall leave the Prime Minister to present herself. The right hon. Gentleman may not have been a Kamikaze pilot, but at least we share the fact that in previous incarnations we were both Chief Whips.
    Mr. Stokes: Can my right hon. Friend assure me and, I think, most other Conservative Members, that, in spite of the slight contretemps last week, the Government will resist strikes in the public sector?
    Mr. Pym: That is not a matter for me.
    Mr. Robert Atkinsasked the Paymaster General if he remains satisfied with the effectiveness of the coordination of the Government publicity.
    Mr. Pym: There is always room for improvement.
    Mr. Atkins: Is my right hon. Friend aware that as long as he continues to make speeches on industrial and economic strategy of the kind that he made recently in Putney, Ministers will not have to waste any time attacking the likes of the Limehouse Lefties, as the Government will then be occupying the mainstream of politics?
    Mr. Pym: I shall simply say that I am grateful for what my hon. Friend has said.
    Mr. Sheerman: Will the right hon. Gentleman help Members of the House who are in difficulties after hearing the weekend broadcast of the Secretary of State for Trade, in which he said that we should take no notice of what Ministers actually say?
    Mr. Pym: I have nothing to add to what my right hon. Friend said. He is capable of defending and standing up for himself.

    Questions to Ministers
    Mr. Freud: On a point of order, Mr. Speaker. Would you be good enough to explain by what strange alchemy I was not called to ask question 33?
    Mr. Speaker: I shall explain it, very slowly. The hon. Member should realise that the Secretary of State for Education and Science, to whom his question 33 is addressed, is not down to answer questions today. We therefore turned to the Minister who was first on the Order Paper to answer questions. We then went on to questions to the Chancellor of the Duchy of Lancaster and then to those to the Paymaster General. It so happened that I went back then to the questions to the Secretary of State for Energy. If we had exhausted the questions to the Secretary of State for Energy, the first Minister on the Order Paper, I should have called the hon. Member to ask question 33.

Rosyth Dockyard
Mr. Dick Douglasasked the Secretary of State for Defence if he will make a statement on the disappearance of radioactive material from the Royal Naval dockyard at Rosyth.
The Under-Secretary of State for Defence for the Royal Navy (Mr. Keith Speed): A portable radioactive source used in the testing of radiation-measuring instruments in the health physics department at Rosyth dockyard was found to be missing from its normal position on 5 February. So far, searches in the base have failed to locate this equipment and a board of inquiry has been set up by the port admiral.
The radioactive source is in a specially designed container and is not immediately hazardous to health provided that it is not tampered with.
Mr. Douglas: Will the Under-Secretary of State confirm the day on which this material was last found to be available in the base at Rosyth? Will he also give some indication of the reasons for its disappearance? Are they related to new constructions in the health physics area of the base? What warnings are available to the public should this piece of material get outside its container? I understand that it is rather a large container, weighing about 241b, so it is not something which could easily go missing. Will he also make sure that as long as this material is still missing he will keep the House and the public informed?
Mr. Speed: On the last point, yes, of course.
On the first point, it is for the board of inquiry precisely to determine the circumstances. I hope that there will be an interim report at least within the next few days, so we may get some indication there.
The hon. Gentleman is quite right in what he says about the general public. The container weighs about 241b, it has a diameter of 7 in, it is painted bright orange and it is marked with the words "radioactive material". I am informed that with the unit closed and at a metre range, the dosage rate is insignificant. The danger could arise if the inner container holding the radioactive material were to get out. If any member of the public finds it, he is advised to leave it alone and immediately contact the Ministry of Defence police or the Fife police, who are very much involved in the investigation.
Several Hon. Members rose—
Mr. Speaker: I shall call those hon. Members who have already risen to speak, along with the Front Bench speaker.
Mr. Barry Henderson: Is my hon. Friend aware that hon. Members on the Government Benches share the concern of the hon. Member for Dunfermline (Mr. Douglas)? Can he describe the scale of the efforts being made to recover this dangerous material? If the container were broken, would that assist the discovery of the material relatively quickly? Finally, what would be the effect on the container if it were immersed in sea water?
Mr. Speed: I thank my hon. Friend for his questions. Both the Ministry of Defence CID and the Fife CID are very much involved in looking for the container. They are being assisted by staff of the health physics department and staff of HMS "Revenge", which is in the dockyard, as well as by other people in the dockyard itself. A major effort
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is going on to try to track down the whereabouts of the container. The board of inquiry itself is making official inquiries. I am satisfied about the effort being made.
As for whether the breaking of the seal would help detection, the radioactive source would be exposed. Therefore, special equipment is being used so that if the seal is broken the radioactivity can be detected.
As for immersion in sea water, I am informed that a stainless steel inner shield, which protects the radioactive source itself, would not corrode for many years. Therefore, there would be no dispersion of radioactivity in the sea water and no danger to animal or marine life.
Mr. William Hamilton: How soon was the Under-Secretary informed about when the object was missing? He suggested that it was found to be missing on 5 February, but it was not public knowledge until late last week. Can he explain that delay? Does he not think that this incident shows a terrifying lack in security measures at Rosyth?
Mr. Speed: No, I would not wish to anticipate the findings of the board of inquiry. I have every confidence in Admiral Kennon, who has set up the board of inquiry as a matter of urgency. I am sure that the hon. Gentleman, who is normally fair in these matters, will not wish to anticipate its findings either. I was informed last week.
Coming back to the earlier question, we do not yet know; it is true that it was on 5 February, on a routine muster as part of the security arrangements, that the container was first found to be missing. I would not wish to go any further at this stage, because we must see what the board of inquiry, which will be pursuing the matter with considerable vigour, has found out for itself.
Dr. Brian Mawhinney: What is the radioactive source, and what is its strength in curies?
Mr. Speed: I cannot tell my hon. Friend what the strength is in curies specifically. There are various amounts of radiation, depending on whether the radioactive source is touched directly on the inner stainless steel container within which it is sealed or whether it is touched on the outer lead container.
For example, contact with the surface of the closed container—the closed container would have to be opened with a special tool to get at the inside stainless steel container—would give a dosage of 20 to 30 millirems per hour. If the container were actually held, it would take 16 hours for the legal dosage for one year to be reached. On the other hand, if the container were opened, the dosage rate would be 1,200 millirems per hour, and it would take about three hours to reach the legal dosage for a year. So my answer depends very much on the circumstances. That is why it is important that anyone finding the container should not interfere with it but should leave it well inside so that the appropriate arrangements can be made for it to be rendered safe.
Mr. Bruce Millan: There has been some suggestion in the press that there was considerable delay in informing the local police on this matter. Will the Minister comment on that? If it is true, it is of course worrying. Secondly, even if this container may not be particularly dangerous—unless it is opened, of course—its disappearance raises considerable questions about security at the dockyard. May we be assured,

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therefore, that the board of inquiry is looking into the widest question of security there and not just this disappearance?
Mr. Speed: The right hon. Gentleman is right to say that there are important security aspects. I expect the board of inquiry to address itself to them. There will be an interim report within the next few days, but I expect the final report to address itself to that matter. If it did not, I should wish it to do so.
I am not aware of any great delay in informing the civilian police. However, in the first instance the Ministry of Defence CID was informed. It started its inquiries and then extended them to bring in civilian police. All those matters will be covered by the board of inquiry.

The Hon. Member for Liverpool, Toxteth
The Speaker: I have a brief statement to make.
On Friday last, 20 February, the hon. Member for Liverpool, Toxteth (Mr. Crawshaw) submitted to me his resignation as Second Deputy Chairman of Ways and Means, and also as Deputy Speaker. I believe that the whole House would like me to express sincere gratitude to the hon. Gentleman for the distinguished and honourable way in which he has served the House as Deputy Speaker. He maintained the historic traditions of the Chair with complete impartiality. On behalf of the Deputy Speakers and myself, I wish to place on record our personal gratitude.

Ministerial Statements
Mr. David Winnick: On a point of order, Mr. Speaker. On previous occasions I have complained that the House appears to be the last place where information is given. Yesterday the Secretary of State for Trade made some quite extraordinary and frank admissions about changes in Government policy. If the House is not to be treated with contempt, a Minister, or one of his ministerial colleagues, should make a statement about such important matters. Why should such statements be made simply on television? Why should not Ministers come to the House and say what is intended—
Mr. Speaker: Order. I have given the hon. Gentleman a good run. We are all aware that right hon. and hon. Members are asked questions on television. If they are unwise, they answer them.

Courtaulds, Aintree
Mr. Robert Kilroy-Silk: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the threatened closure of the Courtaulds factory at Aintree, with the loss of 1,550 jobs."
It is clearly a specific matter. It concerns one factory, which is to be closed not because it has a poor industrial relations record, not because it is producing an inferior product, not even because it is uncompetitive, but simply because it is being crippled by the criminally insane and callous economic policies pursued by probably the most bigoted and callous Government of the past few decades.
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The closure of the factory and the ending of Courtaulds' Celon production in Britain are extremely important matters, not only because of the impact that that will have on the textile industry in Britain generally—which in itself is crucial and important—but because of the serious impact on my constituents, who live in an area that already suffers from an intolerably high level of unemployment. More than 15 per cent. of people in Merseyside are unemployed. In some estates in my constituency and in inner Liverpool, 40 per cent. of work-people are unemployed. In the county of Merseyside 153,000 people are chasing a mere 2,500 jobs. There have already been 7,000 job losses in only two months this year. This threatened closure follows that of Bowaters and Tate and Lyle.
It is clearly an urgent matter. Given my brief outline of the facts, we cannot afford to lose those jobs or, indeed, any others on Merseyside. It is important also because that factory—and similarly Bowaters and, to some extent, Tate and Lyle—would not have to close if only the Government would see sense and alter their economic policies. Like so many other companies, especially in the textile industry, Courtaulds' problems have been induced by the Government. It has not created the problems for itself. Its problems are those of an artificially high and damaging exchange rate, an arbitrary Government diktat, a lunatic energy policy, and ridiculous and cripplingly high interest rates. The Government are acting complacently in the face of a flood of subsidised imports. Those are matters that neither the work force nor the company can overcome. The problems are directly attributable to the Government, and only the Government can overcome them.
The matter is specific, important and urgent. It should be debated now, so that the Government can be told at first hand about the sort of problems that they are encouraging, and the problems that they are causing my constituents and many thousands of others on Merseyside. They should be told clearly and openly the way in which their dogmatic and bigoted economic policies are destroying both the future of my constituents and the industrial base of Britain. It is an appropriate issue for the House to debate, for which the Government should be held responsible and to which they must answer.
Mr. Speaker: The hon. Member for Ormskirk (Mr. Kilroy-Silk) gave me notice this morning before 12 o'clock that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the threatened closure of the Courtaulds factory at Aintree, with the loss of 1,550 jobs."
The House listens with anxious care to such applications when they are made. I listened with great care to what the hon. Gentleman said this afternoon. The House knows that it has instructed me to give no reasons for my decisions when I rule on such applications. It knows also that I do not decide whether the matter should be debated. I simply decide whether it should be debated tonight or tomorrow. I have to rule that the hon. Gentleman's submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

BILL PRESENTED
  GAELIC LANGUAGE
  Mr. Bill Walker presented a Bill to promote broadcasting in Gaelic; and to require local authorities in Gaelic speaking areas to promote the use of Gaelic in drama and music: And the same was read the first time; and ordered to be read a Second time upon Friday 6 March and to be printed. [Bill 76.]

  STATUTORY INSTRUMENTS, &c.
  Ordered,
  That the draft Maximum Number of Judges Order 1981 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Goodlad.]

  Orders of the Day
  Energy Conservation Bill [Lords]
  Order for Second Reading read.
  3.47 pm
  The Under-Secretary of State for Energy (Mr. John Moore): I beg to move, That the Bill be now read a Second time.
  I am especially pleased to move the Second Reading of the Bill because of my special responsibilities for the Government's energy conservation policies, which, of course, lie at the heart of Government energy policy. Since the Industrial Revolution, our industry and our way of life have been based on abundant and cheap energy, but 1973 marked a watershed. It is now universally recognised that we have moved into an era of dearer and scarcer energy. The United Kingdom, like other countries, has undertaken—as the Venice Summit last year recognised—to accord an important priority to improving energy efficiency and to breaking the link between economic growth and energy consumption. This is especially important to Britain since, apart from the USA, we are more energy-intensive than our major industrial competitors, and the evidence suggests that we use our energy less efficiently.
  The cornerstone of our policy is, of course, the economic pricing of energy. We have to get the price signals right so that consumers have an incentive to use fuel efficiently and economically. But we also recognise the need to reinforce pricing signals by supplementary measures. We have a strong programme of publicity advice and information, the budget for which has been substantially increased by 30 per cent. this year, in real terms. We make grants for provision of specialist advice to help people identify their problems and take the necessary corrective action. We have a highly successful demonstration projects scheme, which stimulates investment in new technology by mounting show-piece projects with Government assistance. Again, the budget for that is being increased. In the domestic sector we have the homes insulation scheme—for which next year's allocation is being increased by about one-third in real terms. Although we are opposed to unnecessary bureaucratic intervention, we also use mandatory measures where these are in the national interest.
  This is a comprehensive and well-rounded programme, which compares well with what is being done in other countries. But the Government can do only so much, since 94 per cent. of our energy is consumed outside the Government—in a myriad of individual homes, schools, hospitals, offices, shops and factories. Their response provides encouraging evidence of the effectiveness of our policies.
  In industry, many firms are going for investment in energy conservation. They see that these investments make money. They see, too, the general sense of investing in energy efficiency now. They realise that such investment pays handsome, secure dividends and lowers energy costs straight away. Some remarkable savings have been achieved.
  ICI, for example, found that the energy saved by using a microprocessor monitor paid for the £20,000 cost within

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  10 days Sainsbury's has recently achieved savings of £1 million a year on a £7 million fuel bill through staff education, improved lighting and heat recovery. One local authority—Hackney—invested £600 in a controls system for a hot water boiler which saved it £125,000 a year—a payback period of six hours. Pauls and Sandars, a large malting company, has reduced its annual energy consumption by 27·5 per cent., equivalent to 2½ million therms a year. If no energy savings had been made the annual fuel bill would have been £500,000 higher, representing about 15 per cent. of the company's profits. Trust Houses Forte is installing new equipment which, with no loss of comfort, will trim £1·7 million off its anticipated energy bill for 1980–81 of £15 million, with a further £3·75 million potential saving if staff follow an energy-saving code.
  Mr. Arthur Palmer: The Minister is giving the savings that have been achieved by various private companies. However, the Government are great consumers of energy. When I asked the Minister responsible some time ago for details of the savings achieved in each Government Department he refused to give them. May we have some figures today?
  Mr. Moore: I referred earlier to the fact that 94 per cent. of the energy consumed in Britain is used outside the Government. That means that the Government must consume 6 per cent of the total.
  Mr. Geoffrey Johnson Smith: May I ask my hon. Friend about the efficiency and energy saving of some companies in this country? Does he agree, looking back over the past few years, that the overall rate of improvement in conservation by British industry, compared with our international competitors, is not good? What steps does the Department intend to take to ensure that information on technical improvements introduced by progressive companies is made available to those who seek it?
  Mr. Moore: As always, my hon. Friend is slightly ahead of events. I was coming on to describe the workings of my Department's demonstration project scheme and the energy advice schemes. My next comment, which relates directly to my hon. Friend's point, is that our demonstration project scheme is proving exceptionally successful. For example, we are supporting two novel and very successful projects to recover waste heat in the sulphuric acid industry. Several companies have now, as a result of visiting the project, placed orders to buy similar equipment. Other companies are considering doing so. Eventually, we expect the overall result to be a national energy saving of 30,000 tonnes of oil equivalent a year, worth about £3 million a year, for a cost to the taxpayer of £140,000.
  Another example for my hon. Friend concerns another of our demonstration schemes in which Rockware Glass has achieved savings of 55 per cent. in primary energy. If this project is replicated—the obvious key value of these schemes—throughout the glass container industry, savings of some 1 million tonnes of oil equivalent a year could be achieved. That represents about 2½ per cent. of all our industrial energy use. That demonstrates the tremendous size and potential of what can be achieved by demonstration schemes.
  For the schemes as a whole, there are now 80 projects at various stages. Their total cost is about £17 million, with
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  the Government contributing about £4 million. The saving which it is hoped the projects will stimulate totals nearly 2 million tonnes of oil equivalent a year, or, in money terms, about £180 million a year. Very sizeable achievements can come, therefore, from replication.
  We are also seeing results in the domestic sector. As I said at Question Time, roughly 1 million homes have had loft insulation installed in the past 18 months, and expenditure on domestic insulation is running at over £400 million a year. Another area of important achievement is the development of energy management skills throughout industry, commerce and local authorities. We have encouraged the energy management movement and there are now 74 groups throughout the country with a membership of over 5,000 interchanging their experience of conservation equipment and new technology and so reinforcing each other's efforts.
  The figures of our energy consumption for 1980 are telling. Provisional figures show that our primary energy consumption fell by 7·4 per cent. compared with 1979, to its lowest level since 1975. The largest fall—13 per cent.—was in consumption of petroleum products. Although the recession had made its impact, there has clearly been a perceptible gain in efficiency.
  It is against this background that I am introducing the Bill. It will enable the United Kingdom to implement certain EEC obligations. It will add to the armoury of Government conservation policies and provide a useful stimulus to greater efficiency in our use of energy. It is aimed at improving the energy efficiency of appliances which consume about one-third of this country's primary energy.
  The basic purpose of the Bill is to set standards of efficiency for a wide range of appliances. These appliances are, according to the terminology used in the Bill, "heat generators" and "gas appliances". A heat generator is any energy-consuming appliance designed for space heating or hot water production, or both. It can, therefore, be anything from a small domestic fire to a large boiler used for heating a factory, blocks of flats or offices, or for providing such buildings with hot water. A gas appliance is, in particular, any gas-powered appliance used for heating, hot water production, or cooking.
  Some appliances, such as gas fires, water heaters, and central heating boilers are, of course, covered by both definitions. They are heat generators and gas appliances.
  Mr. Peter Rost: Will my hon. Friend explain why the Bill does not cover the other wide range of domestic appliances, such as fridges, freezers, cookers and washing machines, which consume about 40 per cent. of domestic electricity?
  Mr. Moore: That point has been made by the Consumers Association and it is appropriate that I should deal with it. I shall certainly do so later in my speech.
  Part I of the Bill will enable the Government to set standards of efficiency and of safety for any categories of new heat generator and gas appliance which we may specify. These standards will be applied by way of type approval, a well-known procedure for ensuring that appliances manufactured and sold in large numbers conform to specified standards. There is no need, in these cases, for all the appliances to be tested. Instead, if a representative sample passes the test the whole of the

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  production run can be said to have been approved subject to the manufacturer's being able to maintain the quality of the individual appliances produced.
  Type approval arrangements on these lines are already applied for many heat generators sold in the United Kingdom, though only on a voluntary basis. What we are proposing in the Bill, therefore, is not new. Instead, the Bill will build on existing voluntary arrangements. It will allow these arrangements to be given statutory authority, so as to bring in importers and manufacturers who do not participate at present, and for them to be extended to appliances which are not currently covered.
  Under part I the Government will be able to prohibit the sale of any specified categories of new heat generators and gas appliances unless the appliances concerned have been given type approval. Standards to be applied in deciding whether approvals should be granted will be prescribed by the Secretary of State. The testing of appliances to see whether they conform to these standards will be carried out by Government-appointed type approval bodies, which will operate within a framework established and supervised by the Secretary of State. These bodies are likely to be those organisations which operate the existing voluntary-type approval arrangements. These bodies and schemes include the British Gas Watson House laboratories; the Domestic Oil-Burning Testing Association; and the domestic solid fuel appliances approval scheme.
  As I mentioned earlier, type approval depends on the manufacturer being able to maintain the quality of individual appliances produced. Part I also contains provisions, therefore, in clause 5, which are designed to ensure that all further production of a model which has been type-approved continues to conform to the relevant standards.
  The proposals in part I have been the subject of very wide consultation. In August 1979 the Government issued a consultative document which was given wide circulation among organisations representing those likely to be affected by the proposals. About 120 replies were received, revealing a high level of support for the Government's proposals from organisations representing both manufacturers and consumers. In particular, I draw the attention of the House to the fact that most United Kingdom manufacturers of heat generators welcomed our ideas and pointed out that the existing voluntary testing arrangements often were thought to be of inadequate status in the countries to which tested appliances were being exported.
  Similarly, the United Kingdom gas appliance industry strongly supports the implementation of Community standards for gas appliances in the United Kingdom, partly because this will enhance its ability to export to the rest of the EEC.
  Part II is concerned with the testing for compliance with efficiency standards of those heat generators for which "type approval" is either not practicable or is too expensive. In practice, this means very large boilers, mostly with a capacity of 600 kilowatts or over, which are either produced in small numbers or are essentially "one-off jobs. Only about 700 new boilers a year are likely to be affected. For these boilers, the Government will be able to appoint testing authorities to test each boiler concerned on-site after installation to see that it meets prescribed
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  standards of energy efficiency and to prohibit the use of any boiler which does not pass the test within a specified period.
  Part III includes two miscellaneous matters. Clause 15 empowers the Government to make grants for the purpose of energy advice schemes. This does not mean that we intend to introduce new schemes. Instead, the intention is merely to provide specific statutory authority, in accordance with the established convention, for the Government's existing energy conservation advice schemes.
  We are currently spending about £3 million each year on these. One important scheme involved is the energy survey scheme, which provides subsidies for either one-day or extended energy surveys of industrial, commercial or public sector premises. This is proving particularly successful and cost-effective. It has so far involved more than 40,000 surveys. Moreover, a sample study of the one-day surveys has shown that more than 50 per cent. of the consultants' recommendations are implemented and that the estimated savings, involving little or no investment, amount to about 10 times the cost to the Government.
  Mr. George Grant: Does the Minister feel that this advice service or, indeed, the measures in the Bill, go far enough bearing in mind the special energy problems that we face? He talked about oil saving and the EEC. This country has a mountain of coal. Many industrialists would like to change from oil to coal but will find that such measures are not included in the Bill. However, even though France does not have such a coal surplus it gives a 25 per cent. subsidy to those changing from oil to coal.
  Mr. Moore: When I have concluded my speech I am sure that the hon. Gentleman will recognise the limitations of the Bill. I expect comments from both sides of the House suggesting what extra energy conservation measures ought to be included. However, it might be wiser if I let the hon. Gentleman make that point in his speech. It is certainly not envisaged that it should come within the context of the Bill.
  As I was saying, clause 16 was added to the Bill by the Government when the Bill was considered in another place. It is concerned with charges made by water authorities in England and Wales for the abstraction of water for hydro power generation. The users of water power believe that water charges, even when levied at the lowest rate—as they generally are—can seriously undermine the viability of some small hydro power schemes. They also argue that the case for charges on a volume-related basis is, in any case, suspect because hydro power generation restores water to the water course undiminished in quality and quantity.—[HON. MEMBERS: "Hear, Hear".] I am delighted to have vocal support from behind me. When one's Chief Whip supports one, one knows that he is in good company. I therefore hasten to add that the Government have a great deal of sympathy with the position of small-scale hydro power users and certainly wish to encourage their activities, as there is no doubt that small-scale hydro power schemes can make a worthwhile contribution to the United Kingdom's energy needs. We were therefore very happy, when the point was raised in another place, to be able to introduce, as an amendment, the present clause 16. We believe that it goes a very long way indeed to meet the justifiable grievances of water power users.

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  It amends the Water Resources Act 1963 so as to require water authorities to have regard to the need to conserve sources of energy. Water authorities already have powers to make agreements waiving or reducing charges for the abstraction of water, and this clause in the Bill will require them to have regard to the desirability of preventing charges from inhibiting the abstraction of water to use as a source of power. This will have the desirable effect of ensuring that hydro power users are not required to pay uneconomic levels of charges, and avoid the inhibition at present on some users, and potential users, of hydro power.
  Under the provisions of section 60 of the Water Resources Act, water power users will have the important right to appeal to the Secretary of State for the Environment if a water authority does not agree to waive or abate charges, or if it insists on conditions which the water power user regards as unacceptable.
  Mr. Alex Eadie: Does the Bill cover Scotland as well?
  Mr. Moore: As was mentioned in the other place, Scotland seems to be way ahead of the rest of the United Kingdom in this area. There was no need to make special provisions for Scotland, as it is already covered.
  Mr. Peter Hardy: I agree with the Minister that no charge should be a disincentive to this development. Will he make it clear that protection for the user does not extend to the point at which his interests will override environmental considerations or the need to safeguard the water supply for the community?
  Mr. Moore: I made it quite clear that the ultimate appeal authority was the Secretary of State for the Environment. Obviously, this clause, which presumably will be debated in more detail in Committee, does not seek to remove the possibility of all charges as in some cases they are to the advantage of the electricity authorities. It also seeks to retain in the Secretary of State for the Environment those powers which he must clearly have in order to cover the points made by the hon. Gentleman.
  Mr. Palmer: The Minister seemed to dismiss the 6 per cent. energy use in Government Departments in a rather airy fashion. I hope that he appreciates that total use of hydro power in this country, including the North of Scotland hydro board, does not amount to more than about 2 per cent. of total energy.
  Mr. Moore: If I inadvertently appeared to dismiss 6 per cent. of energy expenditure by the Government, I in no way intended to do so. I am conscious of the limitations on low-water hydro power, but I am also conscious of the fact that this is a modest, small-scale potential addition to our nation's energy supply, especially for many small companies which can create small units which in the Schumacher fashion are still beautiful. I would have thought that the Government ought to be commended for moving in that direction.
  The remainder of part III contains supplementary provisions. Two aspects are worthy of mention—consultation and enforcement. First, clause 26(3) contains the very important provision that the Secretary of State must, before making any order under the Bill, consult representatives of those he considers likely to be affected. This is an important assurance that the views
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  of manufacturers, consumers and others concerned will be considered carefully before any of the enabling powers provided for in the Bill are used.
  There is absolutely no question, therefore, of the Government doing anything which will affect new appliances until there has been full consultation with all the interests concerned. Perhaps I could emphasise as well at this point that the Bill relates only to new appliances. It will, of course, have no effect on appliances which are already in use.
  The second aspect is enforcement. Clause 20 provides powers, similar to those in other legislation such as the Trade Descriptions Act 1968, which could, where necessary, be used for the enforcement of the Bill's type approval provisions. However, we do not envisage that these powers will need to be used to any great extent.
  First, they will not be needed to ensure that appliances of a model which has been type-approved continue to conform to the approved type. This aspect of enforcement will be handled by the type approval bodies under the provisions of clause 5. Secondly, there is no reason to believe that manufacturers and retailers will be anything other than co-operative in implementing orders under the Bill; neither have any particular incentive to evade them.
  In practice, therefore, we consider that it will be sufficient for trading standards officers to make visual checks to ensure that appliances which should bear type approval marks do in fact do so. As these checks will mostly be carried out during visits to premises made for other purposes, there are unlikely to be any significant implications for local authority manpower.
  Clause 21 provides powers of enforcement over the onsite testing provisions of the Bill. Again, though we expect these powers to be used only rarely. The number of boilers for which on-site testing will be required will, as I mentioned earlier, be very small. Enforcement, carried out by matching records of boilers supplied with records of boilers tested and by making inquiries about apparent discrepancies, will therefore be reasonably simple. The manpower implications of enforcement are accordingly not expected to be significant.
  I should explain what we expect the public expenditure implications of the Bill to be. The practical implementation of much of the Bill will fall to type approval bodies and testing authorities, some of which exist already, of course, as bodies responsible for voluntary testing schemes. It will not be necessary to set up any elaborate bureaucratic back-up, and I have already pointed out that the manpower costs of enforcement will be small.
  In all, we expect that four civil servants will be needed in the Department of Energy to run the type approval and testing system. They will be found within the existing allocation of staff. Even then this small financial cost—about £65,000 each year—will be recoverable by means of a levy on the fees paid for testing as provided for in clauses 4(6) and 9(9).
  Why do we consider this proposed legislation to be desirable? First, the Bill will enable the United Kingdom to fulfil its obligations to implement an EEC directive requiring member States to ensure that all new heat generators installed in non-industrial buildings comply with minimum standards of energy efficiency. It will also enable us to implement two other directives which are still in draft and under discussion in the Community. One of these directives will require member States to set standards for very large heat generators, such as boilers to heat

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  factories or office blocks. The other concerns the setting of EEC-wide standards of safety and efficiency for new gas appliances.
  In the latter case, member States will probably be free to choose whether to apply the EEC standards. The Government and the gas industry believe it is likely to be in our interests to do so, as this will help United Kingdom manufacturers to export to other EEC countries.
  As well as enabling us to meet our EEC obligations, the Bill will provide a useful addition to our energy conservation programme. Let me make it quite clear that we do not believe in indiscriminately creating rules and regulations which will promote only bureaucracy and not energy conservation.
  Mandatory standards for the appliances covered by the Bill can be justified. Many of the appliances are sold not direct to the customer but through builders and central heating installers. The final user of the appliance—that is, the person who pays the fuel bills and who will be concerned to get an energy-efficient appliance—often has little say over which appliances are installed. The market pressures on manufacturers to improve energy efficiency is therefore indirect and so imperfect.
  About one-third of the country's energy use is accounted for by appliances of the sort dealt with in the Bill. Even a small improvement in the average efficiencies of these appliances would therefore have a significant impact on our energy consumption. There is certainly scope for such improvement. Only very recently has energy efficiency become a significant factor in design.
  Although British standards relating to energy efficiency exist for some but by no means all categories of heat generator and gas appliance, manufacturers are not at present compelled to observe these standards. Moreover, as many of these standards were conceived in an era of cheap energy they may, in any event, be below the levels which would be cost-effective and desirable from an energy conservation point of view.
  Mr. David Alton: I hope that the Minister will refer to other appliances ranging from dishwashers to video machines, which will consume more and more energy in future and which concern many hon. Members.
  Mr. Moore: I am about to turn to the part of my speech that deals with that issue.
  We believe that the enforcement of efficiency standards under the Bill will, over time, make an important contribution to improved energy efficiency. The exact amount of energy saved will depend on a number of factors, such as the rate of technological progress, the rate at which existing appliances are replaced by new and more efficient ones, and the extent to which the existing voluntary arrangements would, in the absence of mandatory standards, have developed.
  It is very difficult to give any accurate estimate, but it is clear that the savings will be substantial. An increase of 5 per cent. in the efficiency of new heating and gas appliances could, for example, eventually save the nation as much as 3 million tonnes of oil equivalent a year, or, in money terms, between £250 million and £375 million at current prices.
  We expect the costs of implementing the Bill to be very small. Type approval, for example, is expected, as under
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  the existing voluntary arrangements, to cost very much less than 1 per cent. of the selling price of an appliance. This should be more than outweighed by the benefit to consumers of more efficient appliances. We expect that manufacturers will also benefit, since the fact that their appliances have been tested and approved under a mandatory independent testing system should make these appliances more attractive to both overseas and United Kingdom consumers.
  The British type approval mark will be unequivocal evidence of the energy efficiency of the appliance in question. The fact that it was issued under a scheme established by law will give it recognition and authority at home and, more especially, in foreign markets. This will be particularly important as other countries, especially those in the Community, develop their own energy efficiency standards for heat generators.
  The Government's intention is first, to apply the powers of the Bill to those appliances, such as oil fired boilers, for which there are already voluntary testing schemes. It is also our intention to have early, and continuing, consultations with the British Standards Institution with the aim of raising existing standards where this is practicable and cost effective and of setting standards for those appliances for which no standards yet exist.
  We will not be making all categories of heat generator and gas appliance subject to type approval right from the start. Instead, we shall be proceeding step by step in full consultation with manufacturers, consumer organisations and others concerned. In addition, we shall not, in any event, be requiring type approval for some types of heating appliance.
  Type approval will not, for instance, make any difference to the fact that most electrical heaters already convert electric energy into heat to a high degree of efficiency. We do not, therefore, intend to require electrical space and water heaters to be subject to type approval under the Bill.
  It may be tempting to argue—as indeed it was argued when the Bill was considered in another place—that because type approval appears to be an appropriate way of improving the efficiency of many heat generators, it is right to extend the principle almost indefinitely to cover all sorts of other appliance from electric tooth brushes, shavers or coffee grinders upwards. I believe that that approach would be fundamentally misconceived.
  It cannot be said too often that the driving force for improved energy efficiency must be the price mechanism. Government action must be aimed at complementing and supporting the price mechanism, not at taking the job over. As I have already explained, there is reason to believe that market mechanisms may work indirectly and imperfectly in the case of appliances such as heat generators, which are normally sold through installers, builders and property companies instead of direct to the person who pays the fuel bills. The market circumstances of most other appliances are very different, and this means that action which is appropriate for one group of appliances is not necessarily appropriate for others.
  I have already drawn attention to the wide support which exists for the proposals contained in the Bill and to the importance that the Government attach to this consensus. To extend the Bill to cover new categories of appliance would mean departing from the principle of full advance consultation, and that is something which the Government are not prepared to do.

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  In conclusion, in introducing this measure I want to make quite clear what is the Government's view on the use of compulsory regulation in relation to energy-using appliances, both under this Bill and more generally.
  We believe that it is essential that there should be real evidence that regulation will speed up cost-effective improvements in energy efficiency; that regulation will not impose an unnecessary burden on bureaucracy; and that it will in general help rather than hinder the competitive position of British industry. We believe, too, that there must be the fullest advance consultation with those likely to be affected, and that is why we have written such a provision into the Bill.
  I am sure that the Bill will draw wide support from all parts of the House. The Government commend it both as a measure necessary to fulfil Community obligations and as a desirable measure in its own right.
  4.20 pm
  Mr. Alex Eadie: There is an overwhelming necessity—indeed, some would argue that it should be on the list of priorities—for Parliament to discuss the question of energy conservation and to legislate on it. In a debate on energy policy, the Secretary of State for Energy gave us the following reminder:
  "since 1972, the price of crude oil has increased by 1,800 per cent. In fact, it has nearly tripled since early 1979, although, because of the effect of the appreciation of sterling, it has less than tripled—it has just about doubled—lor the United Kingdom. That is the magnitude of the volcano, the price earthquake, against which we are operating."—[Official Report, 21 January 1981; Vol. 997, c. 266.]
  The price aspect—if one may borrow the phrase—makes energy sense and common sense and gives rise to a need for conservation. As regards price and the wish for price stability, it has been said that the days of cheap energy are over and are unlikely to recur. Most of the Governments of the Western economies wonder what price increases will result from the OPEC meeting, to be held in May 1981. They wonder what effect attempts to absorb price increases will have on their respective economies.
  Price escalation has two other dimensions. First, I refer to the availability of energy supplies—particularly of oil—on which the countries of the Western world are so dependent if they are to sustain their economies. In the main, dependence is based on areas of political instability. The Arab-Israeli war of 1973 illustrates that point. The present Iran-Iraq war is an example of how oil supplies can be seized with uncertainty.
  We should not take cosy comfort from the fact that the United Kingdom is self-sufficient in energy. If a crisis arose that involved a disruption of energy supplies, we should be sucked into that crisis because of our involvement with Europe and the International Energy Agency. I see from the press that a statement has been made about the fact that we may become militarily involved. The Opposition have an opinion about that, and perhaps there will be an opportunity for debate.
  Secondly, the fossil fuels of oil, gas and coal are wasting assets. Whatever life span we may give them, they are finite. As we consume more oil than we can find, that in turn adds to the important need for energy conservation. If only part of that background is accepted, the Energy Conservation Bill—which the Government have introduced after it had been hanseled in the other place—remains a bit of a let-down. As the Minister said,
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  it contains three parts and 28 clauses. Given that we know how the Minister in the other place presented it, it is difficult to escape the conclusion that the main spur for its introduction was the implementation of Community directives. Indeed, in a burst of candour, the Minister apologised for the fact that the Bill was rather technical.
  We were told that the heat generator, which describes an important group of appliances, was a term of European origin. Again, "gas appliances" is a Community term that derives from a draft directive on gas appliances. The Bill will enable us to implement Community directives on heating generators with defined performance standards. We are informed that it will enable us to implement directives that are at present only in draft form.
  The Minister referred to the argument—which I well understand—in favour of uniformity of design and standard within the EEC for such things as small domestic fires, heaters and boilers. Indeed, that uniformity could stretch to the largest items. As the hon. Gentleman said, it could help our exporters to penetrate the EEC market. As Britain is a member of the Community it is entitled—if it is reasonable—to look for a share of any potential market. The more one looks at the Bill the more one realises that that aspect is the Bill's main thrust. Without it we should not have an Energy Conservation Bill. However, it does not stretch energy conservation policy as far as it could go.
  The Bill was first introduced in the other place in December 1980. The criticism that the Select Committee on Energy made of the Government's policy on nuclear power could not have been known. However, for the purpose of this debate, it is sufficient to heed the reference made about the Government's need to pay more attention to conservation policies. The view of the Select Committee emphasises the fact that the Bill is dated and, therefore, inadequate.
  It is worth reminding Parliament that, after the Arab-Israeli war, most nations were forced to think about energy conservation. It is on record that the International Energy Agency complimented Britain on its spending on energy conservation and on its imaginative policies. That could not be said today. Where do we figure in the league table today? Britain spends only half the amount that Sweden spends, yet our population is probably 10 times greater than that of Sweden. The only country to spend less than us is Italy.
  Compared with other European countries, not only do we spend less, but we spend considerably less. That does not give much credence to the assertion that we hear from time to time to the effect that, nowadays, Britain counts more in the world. The House should welcome the proposals as they encourage what can be fairly described as modern heating appliances, type design and approval. I refer mainly to domestic heating appliances.
  Within the compass of our public experience we have come across dated heating appliances. There has been a big advance in technology in this area. We now have better, cheaper and more efficient forms of heating. We should praise our manufacturers for making their appliances more efficient and attractive. This applies particularly to coal fires but to some extent to gas heaters as well. There may be others. I am relating my experience. We should publicise and encourage this aspect of the Bill.
  I do not want to comment on the fact that electric heating appliances are omitted from the Bill. We shall certainly want to return to that aspect in Committee. I

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  understand that hon. Members have been contacted by various organisations, particularly consumer organisations, and some of us have read the debates in the other place. Frankly, the Government did not put forward a convincing argument in the other place—nor, without in any way trying to deride the Minister, did he today—for the exclusion of electrical appliances. However, we shall return to that matter in Committee.
  In part I we find the range of "heat generator" and the proposals for "type approval". I want to refer to the large or small boilers which come into that category.
  The Minister in the other place pointed out that oil accounts for 37 per cent. and gas for 28 per cent. of heat supplied to industry. We know that in some areas there is difficulty, particularly for residential categories, in getting a gas supply. A college of education in my constituency has been refused a gas supply. If the Government keep forcing up the price of gas, that situation may change. I am sure that the Government will be pleased about that, as they are wedded to the philosophy of pricing in relation to energy. Surely, it is reasonable for the Government to strengthen "type approval" in the Bill as regards boilers based on their own figures. There should be encouragement to accelerate the process of boiler conversion to coal.
  If the Minister's right hon. Friends, at their meeting with the miners on Wednesday, wonder what to do about the coal stocks, I suggest that this is a good way to tackle that problem. It is not a question of this not being a bargain for those involved in the conversion. The Minister of State, who I understand is to wind-up the debate, can correct me, but I think that coal has a 30 per cent. price advantage over oil. I should have thought that that would influence members of the Government who approach most problems with the minds of chartered accountants. I mention "chartered accountants" because I understand some searching has gone on for chartered accountants to play a role in various nationalised industries.
  Mr. T. H. H. Skeet: Oil boilers are much cheaper to purchase than coal boilers. I am in favour of the hon. Gentleman's argument that the Government should provide some form of subsidy to convert from oil to coalfired boilers. But does he not realise that we have already provided tens of millions of pounds to the coal mining industry? If we are to spend more money on pits which are near to exhaustion, the money will be pre-empted well in advance and it will be difficult to have additional arrangements included in the Finance Bill.
  Mr. Eadie: I knew that the hon. Gentleman would have difficulty in talking about the Bill, because there is very little in it. To call it a "conservation" Bill is an abuse of language. I agree that the nation is investing millions of pounds in the coal industry. However, I remind the hon. Gentleman that the money is being borrowed and that interest has to be paid on it. It is costing the National Coal Board £250 million a year in interest charges. That is part of the reason for the crisis. If we are to have a debate on coal at some later date, the hon. Gentleman and I can probably deal with the matter at that time.
  In view of the stockpiles of coal and the finances of the National Coal Board, I submit that there is an economic case for boiler conversion to coal. I understand that industry would have to pay about 20 per cent. in interest rates to borrow money from the banks. It has been denied
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  that new legislation may be needed as a result of the settlement that we hope that the miners will get on Wednesday. I should like to think that the Government can introduce under this Bill a measure to lower rates of interest on money borrowed for boiler conversions. The Government may say that they cannot do that. Looking at part III, we find "Miscellaneous"—I do not know whether she is a blonde or a brunette—"and Supplemental". Anything can be put in part III. I suggest that the Government may wish to reflect on that.
  After all, the Bill is dated. Events have overtaken it. The Government may decide, when the Bill goes into Committee, that they want to do something under part III to deal with boiler conversion and the high interest rates that are worrying industry. This is a good proposition for the nation as well as for those in industry.
  Reference has been made to how little the Bill will cost. There are two particular aspects here that I should like to mention. The first concerns on-site large appliances. In the other place there was a reference to about 700 conversions a year, and I understand that the cost of testing would be about £500. I hope that we can have more information on these calculations. In part II there is a reference to the persons to carry out the testing being authorised by the Secretary of State. The Minister made a slight reference to this point, but we are entitled to more information. How many persons are we talking about? Whence will they come?
  We understand that type approval for heat generators and gas appliances will be enforced by weights and measures departments. As this is likely to involve local authorities, we are entitled to know what discussions have been held with local authorities and what costs are likely to be involved. How many additional staff will local authorities be required to employ?
  The Opposition are entitled to put these questions to the Government. The question of the rate burdens that local authorities are being asked to impose and the question of authority staff are very much on the agenda. The Bill states that there will have to be additional staff and that that additional staff will come from the weights and measures departments. Therefore, local authorities will be involved in employing additional staff.
  If the Government were to say "Very few additional staff will be employed by local authorities", that would not meet the optimism expressed by the Minister when winding up the previous debate. He said then that the Government expected this to be a growing concern and to be successful. Indeed, if it is to be successful, additional staff will be required. The Government must inform Parliament how many additional staff will be involved.
  Running through the Bill is a great sensitivity on the part of the Government to the effect that the Bill will not cost very much, that there will not be another quango, and that additional staff will not be needed. To some extent, there is a nervousness on the part of the Government even about their own inadequate Bill. Therefore, the Government must tell us more about this matter.
  Whatever else the present Government can complain about, they inherited a vigorous and growing energy conservation strategy from the previous Government. [HON. MEMBERS: "Oh."] Progress was made on a wide

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  front. The International Energy Agency is not complimenting the United Kingdom now on the Government's conservation strategy. I have given the figures. We are well down the league, almost relegated, so I do not know why groans are coming from Conservative Members.
  Mr. Skeet: I appreciate the hon. Gentleman's generosity in giving way. Under the previous Government, what incentive was given to convert from oil to coal? Were any financial incentives provided? Perhaps the hon. Gentleman will indicate exactly how generous the previous Government were?
  Mr. Eadie: The hon. Gentleman wants to know what the incentive was. The undertakers had already arrived at the Department of Energy for the coal industry. The then Government decided to invest in the industry and work "Plan for Coal". One cannot get a greater incentive than that.
  Mr. Skeet: Answer the question.
  Mr. Eadie: Progress was—
  Mr. Skeet: On a point of order, Mr. Deputy Speaker. Am I not entitled to an answer to the question I put to the hon. Gentleman—
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The hon. Gentleman is not heading for a point of order.
  Mr. Eadie: It is very difficult to try to have any enthusiasm about the Bill. However, I have to hand it to the hon. Member for Bedford (Mr. Skeet), who is certainly doing his best.
  Progress was made on a wide front. Unfortunately, the present Government have undermined much of this strategy. For example, as a Government, they cannot deny that by the ending of the industrial energy conservation scheme and by the reduction in the support for loft insulation in the public and private fields, their policies have not been very distinguished.
  The Government have lost credibility in industry because of their damaging pricing policies in energy. At the same time, they are ending incentives to invest in more efficient plant and equipment.
  Whilst price is important, it cannot be the sole determinant of action to conserve energy. At Question Time today, the Minister referred to loft insulation. That is the simplest and quickest way to reduce energy consumpton in homes and to help people to reduce their energy bills. However, in the resources that the Government are making available for such work, they are being shortsighted and insensitive, when these resoures are set beside present energy pricing policies. Millions of houses in Britain have little or no loft insulation.
  Mr. Alton: I think that the hon. Member would agree that the other great resource of Britain is our work force—human beings, people in the construction industry in particular, who are out of work. Whilst he is dealing with loft insulation, would he care to agree that the talents of many of those in the construction industry who are out of work could be used for installing loft insulation and that we should get people out of the dole queues and put them to doing something useful?
  Mr. Eadie: Yes, and I shall be referring to that matter later. The Government ask whether this will be cost-effective. But look what it is costing us in unemployment
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  benefit to pay people in the construction industry who are unemployed. Look how cost-effective it could be, as the hon. Gentleman said, if we were to put skilled people in the building industry back to work. Look at the benefit that that would be to work people and the nation. Therefore, I agree with what the hon. Gentleman is saying.
  Energy management in industry is another area in which greater emphasis would have enormous benefits. Forty per cent. of all our energy is consumed by industry There are major opportunities for greater efficiency in energy use. It is no accident that industry as a whole is attacking the present Government on energy prices and conservation policies. Price subsidies in themselves are not the answer in this context. Hon. Members may doubt this, but they must know how concerned are the various insulation firms. I have one in my constituency.
  Hon. Members must know that the industry is contracting when it should be expanding, and is paying off its work force when it should be expanding and not contracting. Therefore, we should be doing more in relation to insulation.
  I wonder whether the present Government have, to some extent, forgotten the original philosophy of energy conservation. We used to talk about energy conservation as being the fifth source of energy. Taking oil, gas, coal and nuclear power, the fifth source of energy was the conservation of energy. Therefore, if we were really pursuing a proper energy conservation policy, it could be another source of energy for the nation. However, as we were told at Question Time today, the Government's conservation policy is based mainly on pricing. It is said the price of energy will ultimately give us the conservation.
  I asserted today that if the Government's policy continues with pricing as the sole factor in relation to the conservation of energy, that is a lazy policy for a Government to pursue. These arguments were dealt with back in the early 1970s. It was said then that if the Government were to pursue a policy of energy conservation, they would have to invest in order to get it.
  In conclusion, the Minister cannot have felt too proud when he introduced this minnow of a Bill. I cannot ask my hon. Friends to add to the discomfort that he must have felt when introducing it, especially under the misnomer of "energy conservation'' in the title. The best that we can do is to hope for better things to come. What hope there is will probably be the short life of the present Government. Nevertheless, we shall try to improve the Bill and to amend it as best we can in Committee.
  4.47 pm
  Mr. Peter Rost: The hon. Member for Midlothian (Mr. Eadie) was very free and easy with his criticisms of the Government's conservation programme, but perhaps he should have been a little more modest and looked at his own pathetic efforts when he was in government and personally responsible for the programme. I was a member of the Select Committee on Science and Technology during that time. We produced a comprehensive report on energy conservation, which contained over 40 constructive recommendations. The report was published in 1975. The previous Government took virtually no action on it. Therefore, it ill becomes Opposition Members now to criticise the Government for apparently not having pursued what they believe should be an energy conservation programme.

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  Without wishing to offend my hon. Friend the Minister, I must say that this is a very modest little measure. It is rather pretentious to suggest that it is an energy conservation Bill. It received a very rough ride in the other place, and quite rightly so. Whilst it makes a great contribution in a very narrow field, it does not get to the roots of the main problem—the substantial waste of energy resources which continues in Britain.
  Of course, conservation can and must be primarily achieved through the pocket, through pricing mechanisms. The Government have pursued an active and successful energy strategy—far more active and successful than that of previous Governments. It is not necessarily correct to say that such a policy of pricing and producing the right pricing signals always involves hardship to the consumer. On the contrary, a policy that produces the pricing signals encourages more efficient investment in conservation and makes it cost-effective, because the consumer uses less energy.
  A classic example is what is happening in the motor industry. Two or three years ago who would have visualised that motor vehicles would primarily be sold on their petrol consumption performance rather than on the other criteria on which the motor industry previously tried to sell? That has come about only because the consumer is more conscious of the running costs of vehicles and is prepared to pay extra for a vehicle that will provide the same standards of motoring at a lower cost.
  The same applies throughout day-to-day life in cutting out waste in energy. The consumer does not necessarily pay more, but if energy pricing produces the signals, the innovation in the market place produces the greater efficiency from which the consumer benefits.
  My second topical example concerns a visit I made to Thorn Lighting Ltd. a few days ago. I was given a preview of its revolutionary new mini fluorescent lamp, which will reduce the electricty costs for the average householder. It will plug in to a normal light socket and will reduce lighting costs to approximately one-fifth. The life of the bulb will be five times the life of a traditional lamp. It costs much more, but the savings in electricity to the consumer over the life of that lamp will be substantial.
  The reason why such developments, whether the Mini Metro, the new lamp or solar panels, have not come about sooner is that the incentives have not been there. The profit motive has not provided the right signals for industry and the market place to produce the products. I visited Volkswagen about a year ago and saw a new prototype of a Volkswagen Golf which will do twice as many miles to the gallon. I asked why the car had not been put on the market. I was told that the company would do so as soon as the consumer was prepared to buy it. It will cost £1,000 more. That stage is now being reached. That is yet another example of how energy pricing is the most important factor in providing the right motivation for the more efficient use of energy.
  Mr. Palmer: I endorse what the hon. Member said about the great improvement made with the new electric light bulb recently produced by Thorn Lighting Ltd. However, the hon. Member should not overlook the fact that the efficiency of electric lamps has been steadily increasing since the days of the carbon filament lamp, even when the price of energy was falling.
  Mr. Rost: Of course I accept that. But the major breakthrough of the mini fluorescent tube for the domestic market has come about now because the research and development has been rushed forward only since the acceleration in the price of electricity. There are many other examples, especially in the area that I have studied closely, the use of waste heat in industry and in the home. That has not happened in Britain because of the relatively lower price of gas, electricity, which, until recently, has not made it economic to develop a market for waste heat. It has been more economic to throw it away. On the Continent energy prices have been more realistic and combined heat and power has been developed far more extensively. That is another example of how artificial energy pricing has worked to the disadvantage of the consumer, held back the more efficient use of energy and resources and forced the consumer to pay a higher price than he would have paid if the innovation had been stimulated and produced more speedily.
  Pricing policy is the most important policy. Nevertheless, I maintain that the stick is not enough. It is all right to cane the consumer and force the pricing signals to produce greater efficiency. That happens, but with the stick one also needs a carrot. That is where the second half of our energy conservation policy has not matched up to that in other European countries. We have not provided adequate incentives, whether fiscal or tax advantages, which the pricing signals should provide so that conservation occurs. I hope that my hon. Friend will give as much attention to providing the carrot as to the other half of our conservation programme.
  The Bill is a disappointment, because it has missed so many opportunities. I refer especially to a recommendation from the Select Committee on Energy, of which I am a member, as is the hon. Member for Bristol, North-East (Mr. Palmer). The Select Committee is surprised that seven years after the major energy crisis resulting in the escalation of oil prices, the Department of Energy has still not calculated whether it is more cost-effective to invest, shall we say, £1 billion in a new power station, to invest that money in energy conservation projects or to provide tax incentives, grants or allowances for the same purpose. The comparison between the cost-effectiveness of investing in new sources of energy, such as electricity, or investing to produce savings in energy and greater efficiency in the energy we use has still not been calculated. We continue to investigate the spending side of our energy policy and regard investing in reduction or greater efficiency in use as something we cannot afford.
  I do not regard that as a sensible approach, any more than I regard as sensible the way that we have failed to differentiate Government spending, between what is intended for investment and what is for current expenditure. It would be more constructive if we drew a line on Treasury spending accounts, one half to be capital investment, whether in the public sector or otherwise, and the other half to be running costs. Cost-effective investment or cost-effective incentives that will produce investment in energy conservation should be encouraged to go ahead, regardless of the need for that money to be borrowed. I do not think that it is sensible for us to regard it as good for, ICI, for example, to invest in new plant and bad for the Government to provide investment money which is equally cost-effective in saving the nation's resources. Both are creating wealth directly or indirectly and both make a major contribution to the nation's

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  economy. I urge my hon. Friend to consider the manner in which we differentiate unfairly between what is cost-effective investment and what is not.
  I return to the Bill's inadequacies.
  There may be other factors, such as higher productivity or more advanced investment processes in the energy-consuming industries, that account for the differences, but, whatever the reasons, the figures; show that our use of energy is less efficient than that of our major competitors. That puts up the prices of our industry and makes us less competitive, which is one of the problems that we are suffering.
  Those figures are a yardstick of the potential that still exists, and it is time that, in the interests of improving our competitiveness and productivity and restoring ourselves to full employment, we began to grapple with the problem. The Bill would have presented an opportunity for at least one or two more measures to be included.
  I wish to indicate why we have not scratched the surface of the potential for using energy more efficiently. I shall quote only one figure. There are many more that other hon. Members may wish to quote.The Times Europa supplement indicated recently that the United Kingdom produces about £500 worth of goods for every ton of oil or oil equivalent. For the same consumption of energy, Germany produces £600 worth of goods and France produces about £700 worth.
  I am concerned about three major omissions. First, I am sorry that so many domestic electrical appliances have been excluded. I raised the matter with the Minister and he attempted to reply, but his answer was no more adequate then the replies given in another place when the matter was pressed to a Division in Committee.
  A whole range of electricity-consuming appliances, such as freezers, washing machines and cookers—appliances that use 40 per cent. of electricity consumed in the home—are not included in the Bill, and no adequate reason has been provided for their exclusion. The Minister should at least give himself enabling powers. They would not cost anything and be could, at his discretion, subsequently include domestic electrical appliances as he thinks fit. There is no sensible reason why enabling powers should not be included in the Bill.
  Secondly, the Bill is inadequate because it assumes that the consumer does not require guidance in relation to the domestic appliances that have been excluded. But studies show that consumers do not know the consumption of one appliance compared with another. It is a pity that the EEC recommendation that we should have energy labelling is not making progress. Can the Minister tell us a little more about why we are not proceeding with energy labelling?
  The Government introduced the testing of motor cars so that there was a comparative yardstick and the consumer could see the petrol consumption of one model compared with another. Such tests may not be reliable, but they are the only yardstick of comparison and the consumer has found them helpful. The same could apply to the labelling of electrical appliances.
  If the Government are not prepared to include in the Bill the appliances that are heavy consumers of electricity in the home, it would at least be sensible to proceed with the labelling of electrical appliances, so that consumers can see what one product consumes, compared with another.
  Mr. Geoffrey Johnson Smith: Is my hon. Friend aware that the magazine "Which?" has conducted a survey that shows that there is a 2:1 difference between one type of refrigerator and others? Some consume energy much more efficiently than others and the fact that there is such a wide difference lends considerable weight to my hon. Friend's view.
  Mr. Rost: My hon. Friend takes me on my next point. The "Which?" inquiry related to fridges and freezers and found that the worst model of fridge used twice as much electricity as the best. That is a wide difference and the consumer has no idea whether he is buying the one that uses half as much electricity as others or the model that uses twice as much.
  Some guidance would be helpful. That is a part of the energy conservation programme in which information to help a consumer make his choice in the market place would be an advantage. If the Bill is to be regarded as anything remotely resembling an energy conservation measure, it should be strengthened in that area.
  Thirdly, we have missed a great opportunity to do more on thermal insulation incentives. We have the Homes Insulation Act, but that is only a marginal measure. For example, in the autumn there was a great deal of advertising by the Department of Energy and nationalised industries urging householders to apply for grants under the insulation scheme for the insulation of their homes. Many people applied to local authorities and I had many letters from constituents who were upset because the money allocated to my local authority had run out. That was fair enough; there was a budget and it had been used up.
  However, my constituents were annoyed because the local authority's letter of refusal told people who were desperate to insulate their homes that they must not start insulation work because they would not subsequently be eligible for grants. They were refused a grant and told that they had to go another winter without insulation. That was stupid.
  If local authorities had run out of money, the Department of the Environment should have waived the stipulation that work must not proceed before a grant could be given. Why was it not possible to allow the work to go ahead and to permit householders to claim grants retrospectively? That would have been one way of getting homes insulated, and I hope that my suggestion will be considered in future.
  In considering the inadequacy of insulation standards in this country, we must see the Bill as a missed opportunity. It is time that we tightened up building regulations. There was a consultative document as long ago as January last year, but we are still consulting backwards and forwards. There is no excuse for holding up the improvements in building regulations for new dwellings that the Government decided were necessary two years ago.
  We know that much higher standards of insulation are cost-effective and would benefit the nation as a whole. I hope that the Minister will give some assurances that the overlap between his Department and others is being overcome. The lack of co-ordination between Departments has held up much of the energy conservation strategy in the past.
  The final missed opportunity in the Bill is that, with one extra clause, it would have coped with what the

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  Government have already said they are prepared to do, namely to amend the Electricity Act 1957 in order to make changes in the monopoly powers of the CEGB to provide electricity without its being given a directive, or even guidance, that it must promote energy efficiency. The electricity supply industry has rested on this argument as its excuse for deliberately frustrating the development of district heating and combined heat and power schemes. This is the area where the greatest contribution to energy conservation could come about, as is happening increasingly in other European countries.
  The Bill would have been an ideal opportunity for the Minister to include in legislation—he reaffirmed in the House at Question Time today that he intends to legislate—the power to allow private generation of electricity by those who wish to do so as a principal activity. It is possible to generate electricity but difficult to get permission to sell it to neighbours. It would not be allowed as a principal activity. This monopoly, statutory power must be amended to permit genuine competition and the development of localised, combined heat and power schemes in partnership between industry and local authorities. It should not simply be a matter of massive district heating schemes of the type now being examined to find one lead city to promote.
  Mr. Palmer: Is the hon. Gentleman aware that 22 to 25 per cent. of electricity used for industrial purposes is generated privately? The hon. Gentleman misleads the House when he talks as if this were an innovation.
  Mr. Rost: My latest figures are that 15 to 16 per cent. of electricity in this country is generated in combined heat and power plants. All of that, with the exception of one small public sector scheme recently opened in Hereford, is in the private sector. The hon. Gentleman is correct to say that there is private generation of electricity. It has come about only in those larger units of industry where there has been a balance between heat and electricity demand and where there has not be a requirement to sell surplus electricity into the grid or a need to market the heat to a nearby town. In other words, the industry or the firm has been self-contained in its demand for heat and electricity. That sort of scheme—like the one at Cadburys, although there are plenty of examples—has gone ahead. However, the reason why we are at the bottom of the league in using reject heat from power stations is that there have not been localised partnerships between industry and local authorities. About 3,000 of these smaller schemes have gone ahead on the Continent while we have been frustrated by an energy pricing policy that has undermined the cost-effectiveness of combined heat and power and because our nationalised monopolies in gas and electricity have done their best to frustrate them.
  Mr. John Moore: I shall hope to catch your eye later, Mr. Deputy Speaker, to respond to my hon. Friend's legitimate points. I hope, however, that hon. Members will appreciate that, although they may have legitimate desires to see the Bill extended in its scope, powers already exist in building regulations and grants under the home insulation scheme. Hon. Members can legitimately argue for additional funds for that purpose but not the need for additional powers in the legislation that we are discussing.
  Mr. Rost: I am grateful to my hon. Friend. There would be a great deal of benefit if the Government speeded up the policy already agreed that they wish to pursue regarding greater competition in the production of electricity and the marketing of heat which the citizens of this country desperately need. This Bill would provide an opportunity to introduce amending legislation to get this process under way. Market pricing tis already producing he incentive. One now needs to remove the obstacles.
  I regard the Bill as useful so far as it goes. It is, however, rather a missed opportunity. It is rather pretentiously called an energy conservation Bill. I hope that there will be an opportunity to look at it again in Committee. This could have been the ideal Bill for the new experiment under which Bills are examined by Select Committees prior to their introduction to the House or prior to the Government having finalised their ideas. In this case, of course, the Bill went first to another place. It was debated sensibly but, unfortunately, not amended adequately.
  While supporting the Bill so far as it goes and hoping that it can be amended, I hope that my hon. Friend will bear in mind that the Select Committee on Energy is now starting an inquiry into the Government's energy conservation programme and combined heat and power. I hope that the Government will indicate in this Bill that they are serious about coping with the problems of improving the efficient use of energy and will use the Bill to show their determination to tackle the obstacles so that the Select Committee will not, in due course, have to come out with a critical report.
  5.16 pm
  Mr. David Ennals: The hon. Member for Derbyshire, South-East (Mr. Rost) has made a number of points with which I agree. There were one or two points with which I disagreed. The hon. Gentleman has, however, summed up the situation in describing the Bill as a missed opportunity and a very modest measure—the terms that were used in another place. I do not underestimate the significance of the modest proposals that are being carried through.
  I was much concerned with energy conservation as Secretary of State for Social Services. I was able to see a substantial saving for health authorities when they concentrated on energy conservation which enabled them to make more funds available for patient care. The hon. Gentleman will not expect me to agree with him about pricing policy. One reason why the Bill is a modest measure is that the Government are relying far too heavily on the price factor as distinct from measures outlined in the Bill and other measures that should have been included. I shall mention one or two later.
  If the reduction of fuel use were the only factor, it could be argued that 1980 was a good year for the Government in the sphere of conservation. In the first 11 months of 1980, compared with the same period in 1979, there was a fall in the consumption of coal of 4·7 per cent., of petroleum of 13·3 per cent., of natural gas of 1·4 per cent., of nuclear electricity of 3·9 per cent. and of hydroelectricity of 7·4 per cent.
  One might exclaim "What a success story." We know, however, why it happened. There was the dramatic fall in industrial activity and output. The fall in manufacturing output amounted to about 14 per cent., together with an increase of almost 1 million in the number of unemployed.

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  This is a tragedy of national proportions, affecting every part of the country, not least my constituency in Norwich that has usually been spared the horrors of unemployment but where there are now about 8,000 unemployed—a figure new to a city such as Norwich.
  A contributory factor is the Government's ruthless use of its price mechanism to curb the industrial use of energy. If we look at other countries, we see at what a disadvantage we have been placing industry, apart from the effect on the pockets of our people. In the past year British Gas prices have risen by 30 to 40 per cent., and in some cases by 70 per cent. This is crippling for the energy-intensive industries. Worse is to come later this year.
  British industry as a whole is paying £8 a tonne in heavy fuel oil duty, which is, with that of Ireland, the highest rate in Western Europe. In Germany the duty is under half, at £3·55 a tonne, and in France industry pays less than £1 a tonne, to the great benefit of French manufacture and trade. So we can see what the Government are doing to industry and the consequences that it is having.
  The British Gas Corporation is making massive profits, which will enable it to pay for 1980 about £400 million to relieve the public sector borrowing requirement. That looks nice for the Treasury, but it is not nice for industry. I find it difficult to take it when the hon. Gentleman says that that is the best method of energy conservation.
  Mr. Rost: Is not the right hon. Gentleman being a little unfair about the so-called massive profit of British Gas? Is it not true that it could hardly fail to make profits, considering the price at which it has managed to buy the gas from the original southern North Sea basin? Those resources are now running out, and, because the price was so low, it has not been profitable to develop an alternative British gasfield, so that British Gas now has to buy Norwegian gas at about 10 times the price that it is paying our own developers. Is not that a nonsensical policy? It is not surprising that the gas price is low now but will have to rise sharply when the prices of that imported gas come through the pipeline.
  Mr. Ennals: The hon. Gentleman's intervention enables me to remind the House—every hon. Member knows this—that the price of gas now is, and will increasingly be in the future, higher than the corporation would wish it to be. It has been forced up by Government decision. That enables the corporation in a sense to act as tax collector for the Government, at the expense of both industry and the public. Industry is paying at least £300 million a year more for its gas supplies than it would in other EEC countries. The result is heavy lay-offs, increasing unemployment and lost orders.
  My second point concerns the inadequacy of our energy conservation programme, which is small compared with that of other countries. Conservation is not simply a long-term programme; it is the only short-term method to reduce fuel consumption—apart from the price mechanism, with all its disadvantages.
  Our fuel costs are very high, yet our spending on conservation is extremely small. My hon. Friend the Member for Midlothian (Mr. Eadie) referred to the Federal Republic of Germany. Perhaps I may put the matter differently. We consume as much energy as it does, whereas our gross domestic product is only half that of the Federal Republic. Our use of energy is much less effective; the Federal Republic is twice as effective in fuel use.
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  Sir William Hawthorne, former chairman of the Advisory Council on Energy Conservation, has said that
  "existing technology lavishly applied could almost halve our energy consumption".
  That is borne out by studies by the International Institute for Environment and Development, the Open University's energy research group, Friends of the Earth and others. I wish that the Government had taken more of that advice in drafting the Bill. I hope that there will be significant changes in Committee.
  We spend on energy conservation half of Sweden's programme, though our population is many times larger. Only one country in Western Europe spends less than Britain on energy conservation. This must be remedied, and this is the Bill in which we should seek to remedy it.
  My third and last point is linked with my second. Like the hon. Member for Derbyshire, South-East, I want to draw on the excellent report of the Select Committee on Energy on the Government's statement on the new nuclear power programme, published last week. The Minister decided—and I understand this—that this was not the opportunity to comment on the report, but one or two of the Committee's statements should be considered in this debate. I want to carry a little further one of the points made by the hon. Gentleman. In paragraph 32 of the first report we read:
  "although the official energy projections include allowance for potential conservation in each main economic sector, we were unable to detect real progress towards a coherent, effective policy for energy conservation as recommended in 1975 by the former Select Committee on Science and Technology … we were dismayed to find that, seven years after the first major oil price increases, the Department of Energy has no clear idea of whether investing around £1,300 million in a single nuclear plant (or a smaller but still important amount in a fossil fuel station) is as cost effective as spending a similar sum to promote energy conservation."
  The Committee's recommendation, following from that, was:
  "We therefore recomend that the Department of Energy should assess in future, as it should have done in the past, the economics of public expenditure to promote energy conservation, with the same rigour as that required for the economic appraisal of new generating plant."
  I strongly support that recommendation. The Minister and the Committtee considering the Bill should reflect upon it.
  I wish also to draw upon the evidence —page 527 of the minutes of evidence—given to the Select Committee by the Friends of the Earth, arguing strongly against the Government's plans for a substantial expansion of the nuclear power programme at a cost of about £15 billion over the next 10 years, and especially against the pressurised water reactor System. The Friends of the Earth advocated more use of combined heat and power stations, and said that they
  "have a conversion efficiency of up to 85 per cent—far greater than the average efficiency of 30 per cent for the UK's present stations. CHP is a reliable technology, unlike the PWR, and several European countries are meeting an increasingly large proportion of their space and water heating requirements from combined heat and power stations both in industry and through district heating systems. District heating systems, an increasingly large number of which incorporate CHP, supply a quarter of the total heating load in Denmark, 20 per cent. in Sweden and 40 per cent. in the Soviet Union… The United Kingdom is rapidly falling behind other countries in the provision of heat from CHP/ DH schemes."

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  These schemes can be built more quickly, and are more effective, than nuclear power stations, and I hope that there will be a greater emphasis on them as a result of the recommendations of the Select Committee.
  I hope, too, that we shall look at other conservation measures such as solar energy. I do not want to go into any detail, but it is clear from the experiments that have been taking place—some of them even in this country over many years—that solar energy is a force to be taken into consideration. It is renewable, and I believe that eventually it will play a very important part in our total fuel economy.
  Although I welcome some of the recommendations contained in the Bill, my main criticism of the measure is that it is unimaginative and misses great opportunities which ought to be tackled seriously in Committee. At one stage, the hon. Member for Derbyshire, South-East in a sense criticised even the short title of the Bill, which describes it as an energy conservaton Bill. But its long title says that it is
  "An Act to make provision for regulating the design, construction and operation of certain energy-consuming appliances and otherwise with respect to the nation's use of energy."
  One of the greatest advanages of both its short title and its long title is that it will enable hon. Members on both sides of the House to put into it some of the more imaginative proposals which seem to have escaped the notice of the Government and which will, I hope, be considered seriously in Committee.
  5.31 pm
  Mr. Nigel Forman: I welcome the Bill as a small step in the right direction, and I find myself very much in agreement with the words of my hon. Friend the Member for Derbyshire, South-East (Mr. Rost), who made the case that it had been my intention to argue. However, he did it so well that I can confine myself to some rather briefer observations.
  What is needed from the Government over the months and years ahead in this connection is more "carrot power", as implied by my hon. Friend. As he said, we have had the stick of the price mechanism, which I support strongly and recognise as an integral part of the Government's conservation policy. But I think that more "carrot power" in the various forms which my hon. Friend described is urgently necessary.
  There is a danger in energy conservation, like all good causes, that rapidly it can become almost what I have heard some people say in a Freudian slip an energy "conversation". That is not entirely surprising bearing in mind the nature of the concept and the fact that it can provide packages which offer attractions to all people from all points of view.
  Whatever may be the semantics of the matter, it is very important to have on record the very serious energy background to the Bill which was sketched out so clearly by the Minister. I hope very much that one outcome of this debate will be for my hon. Friend's Department, if it is not already intending to do so, to publicise as widely and as clearly as possible those very good examples of how energy conservation can pay off in hard-nosed economic terms. That is the best possible way of demonstrating to consumers of all kinds the enormous advantages both in
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  terms of a very good return on the money invested and in terms of short pay-back periods of so many of the projects being undertaken in both the private and the public sectors.
  I note from what the Minister said that the Government recognise the need to reinforce price signals with supplementary measures. He gave instances of the Government's advice programme on energy conservation and the various demonstration projects to which he said the Government were contributing some £4 million a year. He went on very interestingly to underline how already it could be said that that £4 million a year was producing savings worth £180 million a year.
  Earlier today, at Question Time, we had the related point about the very large sums of money now going into energy efficiency in the domestic sector. The figure of £400 million was mentioned in connection with the domestic sector. It is clear that this, in the shape of insulation, double glazing and the rest, is having very beneficial results already.
  Looking at what is happening in energy conservation and looking at the prospects for the future, we see that it is fair to conclude that the assumptions built into energy planning hitherto have been very conservative. In all the documents, we have seen talk about 20 per cent, energy savings overall by the end of the century compared with what would otherwise have been the case. These projections were made back in 1979, assuming roughly 1 per cent, a year, albeit with a cumulative compound effect, and the time must shortly be arriving when the Department of Energy will be in a position to revise those assumptions and the forecasts which are based on them.
  There is no doubt that this is a vitally important area, even if this is a fairly modest Bill, not least for the reason given in a very interesting article in The Times on 9 February, when Pearce Wright, the science editor, reported at some length on an idea which was then canvassed for a national agency committed to energy conservation. The point was made in the article that the objective was nothing less than to reduce Britain's £16,000 million fuel bill.
  Looking at the dimensions of the problem in that way, we see that, whatever the strength and advantage of all the sensible investment which is going on in the private sector to encourage energy conservation, the figure of £120 million in a full year which, according to my noble Friend in another place, speaking for the Government, is apparently what the Government are contributing to energy conservation, seems to my way of thinking to be not as large as it should be.
  When we consider that this Government are committed above all to forms of investment in the public and private sectors which bring us value for money, I can think of no item of public spending where the value for money would be more dramatic and more quickly responsive to what we invest wisely than energy conservation.
  I hope that the Minister will be able to tell the House a little more and hold out some hope that that £120 million, albeit an indicator though it is not the only indicator of the Government's energy conservation programme, will be expanded in the near future to good effect not only for the consumers concerned but also for the country as a whole.
  There is no doubt that there has been a lot of agreement, in the House and outside, about the nature and purposes of energy conservation, I refer, for example, to the excellent submission made by the Council for the Protection of Rural England, which no doubt the Minister

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  has seen. It makes some powerful suggestions for ways in which this small Bill can be improved and extended. I do not know whether all its suggestions are necessarily apposite or timely, but I should like right hon. and hon. Members to be aware of the support of this thoughtful organisation for some of the measures and suggestions already touched upon by my hon. Friend the Member for Derbyshire, South-East.
  The council's first point relates to the wider scope of these energy efficiency standards and the desirability of applying them to domestic electrical appliances of the kind mentioned already. I shall not labour that point, but I hope that the Government will be prepared to look at it again and to consider it carefully.
  The second point relates to the idea of giving the Secretary of State powers to initiate programmes of thermal insulation of the existing household stock and also to make reports to Parliament on the wider cost benefit analysis of energy conservation.
  This, of course, links closely with the point mentioned at least twice by the right hon. Member for Norwich, North (Mr. Ennals) and others, namely, paragraph 32 of the recent Select Committee report. Any fair-minded person will agree that, although that report is entitled
  "The Government's statement on the nuclear power programme",
  paragraph 32 is one of the most important single paragraphs in it and has a great bearing on the Bill and on the Government's energy conservation strategy.
  The third point to which the Council for the Protection of Rural England attaches importance, is one that I raised at Question Time today, namely, the possibility of amending the statutes which apply to the area gas and electricity boards to empower them to provide advice, loans, audits and possibly even packages of energy conservation hardware for the benefit of customers. The idea has been floating around for some time. There was an article in The Guardian along those lines not long ago. Moreover, it has not remained merely in the realm of theory and newspaper articles. As the Minister knows only too well from his own experience, it is being put into practice in countries such as Sweden and in states such as Oregon and California in the United States. It can be done, and it can be of great financial benefit to the energy users concerned.
  As this has already been pioneered by companies such as Pacific Power and Light and the Tennessee Valley Authority, to name but two public sector organisations in the United States—the home of free enterprise and the entrepreneur—I hope that this aspect, too, will be seriously considered by the Government.
  The fourth suggestion of the CPRE brings us to the more difficult question of amending the statutory terms of reference of the CEGB. This has already been mentioned by my hon. Friend the Member for Derbyshire, South-East. I believe that it is a crucial aspect. Again, therefore, I hope that the Government will consider this further.
  The possibility of turning around and modifying the objectives of an organisation as large and as monolithic as the CEGB is, of course, very worrying. Indeed, previous Secretaries of State have sometimes said that they cannot have an energy policy worthy of the name, that the CEGB is the only organisation in this country which really has one. Whether or not that is an exaggeration, the fact remains that Parliament must do everything possible to make its terms of reference flexible, to point it in the right
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  direction and to ensure that it interprets those terms of reference in a way that is consistent with the long-term needs of this country. After all, in dealing with energy policy and energy conservation, we should be considering principally the long-term needs of the country.
  The key words in section 2(5) of the Electricty Act 1957 put a duty upon the CEGB to provide
  "an efficient, co-ordinated and economical … supply of electricity".
  Clearly, without being too semantic about it, the key question here is what exactly the CEGB takes the word "efficient" to mean. How broad is the concept of efficiency to be? Is it to be confined simply to providing electricity at the lowest feasible cost in order to maximise the market share of the CEGB and, of course, the Scottish boards? Or is it to be seen in broader, slightly more ambitious terms as energy efficiency pure and simple?
  If, as the Minister said at Question Time, it has been decided to be somewhat cautious about a national energy agency because of the difficulties of setting up new institutions, one must nevertheless hope that we shall at least consider seriously—preferably taking early action—an alteration to the statutory terms of reference of these vital energy utilities. If we do that, we may bring about changes more quickly than any institutional engineering that we may seek to undertake.
  All in all, this is a good small Bill. I hope that it and the Government's policy can be expanded and improved as time goes by.
  It behoves me to say, briefly, how I think that the policy might be expanded. First, the Government must continue to reply upon getting the right economic price signals through to consumers of all kinds. That must be the bedrock of the policy. Secondly, there is a role—although probably one with diminishing returns—for advice and exhortation through all the various mechanisms and centres available to the Government. Thirdly, demonstration projects in energy conservation are clearly effective, as my hon. Friends figures showed.
  Fourthly, there is a role for private and public sector investment in insulation and similar campaigns. The dilemma here, as my hon. Friend in only too painfully aware, is that responsibility for these matters is shared among a range of Whitehall Departments and public sector institutions. There is thus a perennial problem of knocking heads together and getting Departments to co-operate and give equally high priority to a matter which crosses departmental boundaries. None the less, if the Government realise that they have the support of both sides of the House in this vital matter in the national interest, I believe that that should strengthen the bond of Ministers who have to deal with these interdepartmental matters.
  There are, however, two aspects of the energy conservation package in which I believe the Government are still falling short of what they could achieve. The first is in the area of what my hon. Friend chooses to call "regulation". I wish that he would not call it that. I wish that he would adopt a self-denying ordinance and drop that word from his vocabulary, because it is not a good "buzz word", at any rate on these Benches. It would be far better to speak in terms of improving and raising standards. If that can be done in education, to argue by analogy from another sphere, surely we can seek to do it in energy, where it is equally vital.
  If we can raise mandatory standards to levels which also encourage our Community partners to do more

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  themselves, we shall have a better chance to export energy conservation equipment to markets elsewhere in the Community and overseas. If we set standards of efficiency in all sectors of energy use which achieve the results that we hope to see and have built into our calculations, that can only be good for the country and a saving of scarce resources for the future.
  To take one small example, I remind my hon. Friend of the point that I made previously about the Offices, Shops and Railway Premises Act, in which temperature levels are laid down. As one who is wearing a sweater this afternoon, I believe that there is a great deal to be said for encouraging people to live in healthier, cooler temperatures. The Government have a role to play in this regard. In many places that one visits these days, one notices the extent to which buildings of all kinds, including factory premises, are overheated, wastefully heated, or both. Very often, the temperature is too high, the windows have to be opened to make it more tolerable, and there is a double waste of energy.
  I therefore hope that other important pieces of legislation which cross departmental boundaries, such as the Act to which I have referred, will be re-examined with a view to tightening them up. I am sure that the Government would have public backing for measures of this kind. They are commonsense, moderate, realistic measures of the kind to which the Government are committed in other spheres. I believe that they would redound very greatly to our credit if we adopted them in energy conservation as well.
  Underlying the arguments of several of my hon. Friends on this and other occasions is the fact that we need a new approach to energy efficiency, whether in distribution, conversion, storage or final use. Whatever sector of energy processes we are discussing, we need a different approach—an approach which asks whether it is better to spend £100 million, £10 million or £1,000 million on traditional energy supply channels, or to spend less in a number of different parcels on different forms of energy efficiency.
  If we can approach that goal and get across to the public the idea that it need not mean lower living standards or greater discomfort and inconvenience, that it might actually be consistent with better value for money, we should be true to our party principles and serving the interests of future generations in a way for which we would wish to be remembered.
  5.51 pm
  Mr. Arthur Palmer: I was Chairman of the Select Committee on Science and Technology, so I know that the hon. Member for Carshalton (Mr. Forman) served on it with great distinction and worked very hard. As ever, he has spoken with great good sense on these matters.
  I should like to take up one point that the hon. Gentleman made about the Central Electricity Generating Board. I am not hostile to the idea of looking again at its powers, but it must be remembered that the electricity supply industry, unlike the oil and gas industries, which are in a position to provide interruptible supplies, has to give a supply 24 hours a day, day and night, and must accept every consumer offered to it. It cannot pick and choose its market as the other energy industries can.
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  The hon. Member says that the Government should do something about the CEGB. But the Government had the opportunity to do something but neglected it. They refused to do anything about the Plowden report for the industry's reorganisation. That would have given a great opportunity both to the Government and to the House to consider the relative powers of the electricity boards, and their powers in relation to other generating sources including private sources.
  Mr. Forman: I share the hon. Gentleman's view that Plowden's diagnosis was sound, but I am more dubious about its prescriptions. That is why I am glad that the Government have not proceeded with those prescriptions.
  Mr. Palmer: I do not want to go too far down this road, because it would lead us away from the subject of this debate, but it is not unknown for Governments to make considerable alterations to reports when they are drawing up legislation. That happened with the Herbert report on electricity supply in the 1950s.
  Like everyone who has spoken, I welcome the Bill—not that it goes very far in itself. As other hon. Members have said, it is only one facet of conservation, which as a whole deserves much wider consideration. As I said, total electricity output from water-powered schemes including the Hydro Board and what is left in North Wales and in Cumbria, does not amount to more than 2 per cent, of our energy requirements. The sources are exhausted economically. So I do not see how we are going to get more energy from water. It is a very marginal contribution. I thought that the Minister brought it in to puff out his speech.
  The Bill is none the worse for being inspired by European legislation, but I doubt whether we would have seen the Bill at all if our membership of the EEC had not required us to do something along these lines. That is the true genesis of the Bill.
  This is a Bill for Committee, and I do not intend to deal with Committee points. I shall content myself with some general observations on conservation.
  Of course we waste energy in every direction. Much more could be saved by home and factory insulation, by remedies for process losses in factories, by combined heat and power schemes—the hon. Member for Derbyshire, West (Mr. Rost) is a great expert on that—and in other ways. That cannot be stressed strongly enough. But it is important to distinguish between the reduction in energy consumption due to lower standards of life and energy saved by the avoidance of waste. Genuine energy conservation means higher efficiency by the use of less enegy to maintain a given output of goods and services and of comfort and convenience to the individual.
  For example, if I switch off the light when I leave a room, that is sensible and saves energy, but it is equally sensible to return to the room to install a higher power bulb to facilitate reading without strain—even if it does mean that I am using more energy. I am raising my comfort and convenience, and in a small way my standard of life.
  Energy saving is only one aspect, although a very important one, of the misuse of natural resources as a whole, and as such is a separate issue from the origin of energy. People often mix these things up. For instance, if all our electricity came from windmills, whirling across the countryside, mile after mile—a huge number would be needed—it would be just as important to conserve it as if

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  it came from three or four gigantic nuclear reactors. Conservation is an aspect of energy efficiency, and should be seen as such.
  In all circumstances, conservation must be related to the purpose for which the energy is used. Such purposes as the higher overall productivity of the country and improvement of living standards may mean greater energy use rather than less. Therefore, in quoting figures, the Department of Energy should try to discover how much energy, particularly in present circumstances, we have truly saved so far.
  Unemployment is now over 2 million. We are faced with redundancies, factory closures, short-time working, falling demands for goods and services all round and cuts in Government expenditure. No wonder that in those circumstances we are using less energy. It would be amazing if we were not.
  One of the fixed points in the Government's thinking is that pushing prices higher all the time will save energy in proportion. I very much doubt it. If the ordinary domestic consumer has installed electric space heating only to discover that natural gas—it used to be oil, but that is no longer true—might save him money, he cannot afford to pull the whole expensive installation out and replace it with a gas system.
  There may be an adjustment over the years, but by the time one has reached it, gas may be more expensive than electricity. These relationships are always changing. I am not an economist—I am sometimes grateful for that—but I think that the expression is that energy consumption is not particularly "price-elastic". To say that energy is being saved because prices are higher is to say that people cannot afford to use it. That is not much of a recommendation.
  Some hon. Members kindly referred to what was said in the recent report of the Select Committee on Energy. For some extraordinary reason, the press and some hon. Members are representing the report as anti-nuclear. It is nothing of the sort. As a member of that Committee, I know that its report wants a more effective, efficient and better use of resources and the development of a more cost-conscious nuclear programme. The Committee is not against nuclear energy as such. The present report refers to the pioneer work of the Select Committee on Science and Technology, of which, as I said, I had the privilege of being chairman. Its report was produced about five years ago. Having emphasised the meaning of true conservation related to efficiency, the report states:
  "Nevertheless, if, as we are persuaded is feasible by several expert witnesses, the energy consumption of this country could be reduced by 15 per cent, without sacrificing output, employment, or living standards, it would wield annual savings of around 50 million tons of coal equivalent (mtce). At current prices this would reduce the nation's annual fuel bill by approximately £1,000 million. The greater the: proportion of the total saving represented by oil, the greater the benefit to the balance of payments.
  Furthermore, it is quite clear that the capital sums involved in a sustained energy conservation programme would have to be very large indeed to equal the high costs of developing an equivalent additional supply capacity from North Sea oil and gas, the Selby coalfield, or nuclear power stations?"
  Five or six years ago we made the point that so many hon. Members made today.
  The Labour Government must take some responsibility in the matter. It is not a divisive party question. How far do the Government think they have gone in achieving a 15 per cent, genuine saving in energy use? I see no reason
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  why figures cannot be given to the House. I know that it might not suit the Government to do so, but the House has a right to know.
  We have been given figures relating to savings made by Marks and Spencer. I was delighted to hear them. I could quote many firms in my constituency that are making savings. That is very good. But the Government are an enormous consumer of energy through the defence-establishments, the dockyards, the National Health Service, and so on. Some time ago, I asked the Government whether we could have a list of the savings achieved in each Government Department. I was fobbed off with the answer that the figures could not be obtained—in spite of the enormous governmental statistical system in Britain. I do not think that it was convenient for the Government to give those figures because the Department of Energy has little control over other Departments. I must press that point with the Minister. The Government's arguments do not carry conviction, because there are such blanks in their statements.
  I wish to raise just two possibly Committee points. I do not think that the present standards for gas and other heating appliances covered by the Bill are high enough. The British Standards Institution plays some part in that. I know a little about that body. It once had great prestige and standing, but its methods are becoming out of date. It tends to include in its Committees too many experts from the firms making the appliances. It is often argued that they are the only people available who know enough about the product. However, they do not necessarily take a critical attitude to the standards being established. The Select Committee on Science and Technology thought that when BSI representatives appeared before it for our electric lamps inquiry. Those remarks are not meant as an attack on BSI, but it needs to modernise its methods. There is a great deal to be said for both the Government and consumers' organisations being more strongly represented.
  I shall support the Government on the question of electrical appliances. To include electrical appliances, perhaps with the exception of refrigerators, would mean an increased inspectorate. I do not think that the resultant benefit would be great enough to warrant the cost. Electrical appliances, especially those converting electricity direct into space heat, do the conversion at practically 100 per cent., and for water heating by more than 80 per cent. Those are high efficiencies. The high-conversion efficiency of electrical appliancies in the total heat cycle does a great deal to make up for the often quoted loss of heat in the power stations.
  Mr. Rost: Was not the hon. Gentleman in the Chamber when I said that the most efficient electrical appliance—for example, a refrigerator or a freezer—uses half the energy of the most inefficient appliance of the same size? That fact comes from a study produced by Which? magazine. Will the hon. Gentleman concede that the consumer could benefit from some guidance on which appliance is more energy efficient?
  Mr. Palmer: I said"perhaps with the exception of refrigerators".
  Generally speaking, it would not be worth the trouble to bring in electrical appliances. If the whole range of

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  electrical appliances was included, the net gain would not be great enough. We need to concentrate on the energy areas where there is proven and accepted inefficiency.
  6.8 pm
  Mr. David Alton: While I disagree with the hon. Member for Bristol, North-East (Mr. Palmer) about electrical appliances, I wholeheartedly endorse his remarks about the central Government and local authorities putting their own houses in order. There are many ways in which we could save energy through the way in which we distribute our resources through both central Government Departments and local authorities. For instance, it is crazy that local authority schools close for several weeks during the summer holidays when the need to consume oil and heat does not arise, while during the winter months—at a time when we consume far more energy in the school buildings—schools close for only about 10 days at Christmas. That might be a practical suggestion of an area where the Government might try to save energy.
  The Minister will appreciate that criticisms from hon. Members are not directly about the Bill. We all agree that, as a small measure, it contributes to energy conservation.
  But Members are not looking for that. I suspect that the critical speeches by the hon. Members for Carshalton (Mr. Forman) and for Derbyshire, South-East (Mr. Rost) and by Opposition Front Bench spokesmen, came about because they see the Bill as a small, 21-page token rather than a grand programme to try to conserve energy. It has been referred to as a minnow of a Bill, as being modest and as a charter for lost opportunities
  Britain lacks an energy policy. The Government have been floundering. They have been plodding along from pit closure to reduced insulation programme, from fast-breeder reactor to half-hearted conservation measures, on to a dismal response to the question of alternative energy resources, and from an oil glut and the petro-pound to inordinate price increases for fuel and redundancies in firms for whom a realistic energy policy could have provided a lifeline.
  Now the Government have provided only this 21-page Bill which will do little to put us on the right road towards energy conservation. It is a modest Bill with much to be modest about. Its grandiose title hides its limited aims. It should properly be called the heat generator, gas appliance efficiency and miscellaneous energy provisions Bill, as was suggested in an amendment in another place. Instead, its title inevitably raises false hopes and expectations among hon. Members who are concerned about the matter.
  The Bill is inadequate and unsatisfactory precisely because the Government do not have an energy policy. Instead, they rely on market forces to cripple large sections of industry and on a commitment to spend £15 billion, without discussion, on nuclear power stations which probably will not work and which the public certainly do not want.
  The Prime Minister asked us last year to have faith in the development of nuclear fast-breeder reactors. She was seen sitting on top of one of these virility symbols of the '80s at Dounreay saying "It's safe, it's safe, it's safe." I think, however, that we have all learnt that what may at first sight appear to be safe does not necessarily work out that way. The right hon. Lady has been depicted by
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  some—perhaps unfairly—as being like Attila the hen who has all her nuclear eggs in one basket. Instead of pouring resources into the construction of fast-breeder reactors, with all their safety problems, the Government would do better to examine alternative sources, and the conservation of energy.
  Britain's record to date on energy conservation has been lamentable. In terms of our GNP, our energy consumption is extraordinarily high. We have a population seven or eight times that of Sweden, but we spend less than half Sweden's budget on energy conservation. I believe that the figure this year will be about £120 million, a derisory figure compared with what the Government are spending on nuclear energy, nuclear missiles and so on. The Minister has had his attention drawn to paragraph 32 of the report of the Select Committee on Energy, which was published last week. While I support what hon. Members have said about that paragraph, I disagree with the hon. Member for Bristol, North-East (Mr. Palmer) who said that the report was not anti-nuclear. He was a member of the Committee, but we must be guided by what is in the report. Paragraph 34 states
  "We concur broadly, however, with the conclusion of the Royal Commission on Environmental Pollution that it would be unthinkable for any Government to commit this country to a substantial programme of nuclear power until there is a firm prospect that the problems of the transport and long-term disposal of nuclear waste can be managed safely."
  Therefore, rather than the Government spending vast sums on the development of a fast-breeder nuclear programme they should think more carefully about how existing energy supplies can be saved by the development of energy conservation.
  Mr. Palmer: Perhaps I misheard the hon. Gentleman, but I thought that he referred to a fast-breeder programme. There is no contemplation of a commercial fast-breeder programme. The question is whether we go ahead with AGRs or PWRs.
  Mr. Alton: I accept that, and I am sorry if I misled the House. However, there is talk to the effect that the fast-breeder reactor of the type that was built at Harrisburg is being contemplated for possible use in this country. Therefore, we must accept that, until the lessons of that incident have been learnt and we have properly investigated the differences between the various types of reactors available, until we have overcome the problems of the disposal of nuclear waste, we ought not to proceed along that road.
  The Liberals have no doubt about the merits of promoting conservation above the production of energy. The claims of the nuclear industry are looking increasingly thin while the public are beginning to question whether we should go nuclear at all in the shadow of the Three Mile Island incident. My hon. Friend the Member for Truro (Mr. Penhaligon) has spoken several times on that matter in the House. Our current surplus of fossil fuels will not last for ever. The more we save the more we shall be able to export in order to pay for other raw materials, all of which will be increasingly scarce and expensive.
  I turn next to the question of alternative sources of energy. While we must be prepared to invest heavily in searching for alternative sources, we should not delude ourselves that they will supply us with energy in quantities and at prices to which we have become accustomed. They can play a part in saving conventional energy. For instance, the St. George's school in the Wirral on

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  Merseyside has been heated by solar energy for over 15 years. That must make a valuable contribution to saving conventional sources of energy.
  We are doing far too little to insulate our buildings at a time when so many people in the building industry are unemployed, have little to do with their time and cost, according to the Treasury's Economic Progress Report, £3,500 a year each in unemployment pay and lost tax revenue. They could be employed on providing the country with a proper insulation programme that would save the estimated one-third of energy that is lost by inadequate insulation through the roofs of our homes.
  If the Minister tries to claim that broader issues of this type are outside the scope of the Bill he should not present it with such a misleading short title. It is only a heat exchanger and gas appliance efficiency Bill. It is a modest measure. If it were presented as such we should support it in that spirit. The Government would then, however, be unable to trumpet about how much they have done for energy conservation. The Bill should be given more teeth. I should like its powers to be extended to all domestic appliances, as was suggested in another place by my hon. Friend Lord Beaumont of Whitley in an amendment that was defeated by only five votes.
  If the Government are to legislate for gas appliances because of an impending EEC directive, they might as well use the opportunity to legislate for electrical appliances and make sure that they, too, are energy efficient. I refer to appliances such as washing machines, tumble dryers, dishwashers, refrigerators, televisions, ovens, irons and freezers. They account for 38 per cent, of the United Kingdom's domestic consumption of electricity, and their use is concentrated at periods of peak load when the level of overall demand is used by the CEGB to justify its policy of nuclear expansion. Therefore, anything that can be done to cut the energy consumption of these devices will help to prevent unnecessary investment at tremendous public expense in more giant nuclear reactors. In view of the forecasts of increased ownership on a whole range of appliances from videos to dishwashers, legislation on this subject will become even more important. I therefore hope that the Government will take the opportunity to amend the Bill in Committee to include those appliances, as the hon. Member for Derbyshire, South-East (Mr. Rost) suggested.
  It is no good the Government relying on advertising. People are not obsessed with the fuel economy of household appliances in the way that they are with the fuel economy of motor cars. There is tremendous scope for improving standards of ovens and refrigerators and for improving insulation. Work is being carried out on that aspect in Denmark and in the United States, so why not here?
  I turn next to the possibility of an energy audit. I should like money to be made available for such an audit to cover the country, particularly with a view to extending the installation of thermal insulation. Clause 15 on the provision of grants for insulation should be amended to allow such a survey to take place. I wonder, for example, how many Government and local authority offices have been surveyed to see how energy can best be saved. I do not want a quango. I want to see the legislation used to ensure that the Department of Energy does the job that it should be doing.
  I should like more emphasis to be placed on combined heat and power schemes. Many hon. Members live in
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  Dolphin Square. That is a practical example of a block of flats which is heated through a combined heat and power scheme from Battersea power station. The problem is that at the moment, to achieve a conversion efficiency of up to 85 per cent., compared with 30 per cent, in a typical power station, electrical generation may be less efficient. I should therefore like more research to be conducted and more schemes to be promoted on this aspect.
  Finally, I should like to see an amendment, not connected directly with energy conservation but which could usefully be enacted in this legislation. That is the provision for the placing of gas and electricity meters outside people's homes, as is quite common in other countries. The Minister should realise the increasing terror, induced in elderly people in particular, when the meter man calls. There have been many incidents of muggings and burglaries through people pretending to be what they are not. Indeed, my noble Friend Lord Winstanley has been responsible for instituting a "password" scheme in the North-West, and Liverpool city council has introduced outside meters on some of its council estates. Such a reform would also get around the problem of estimated bills, and might prevent some of the cut-offs that occur today due to misunderstandings.
  This is not a bad Bill, despite my strictures. It is just inadequate and short-sighted. My hon. Friends and I will support it, but in Committee we shall be looking for changes along the lines that I have suggested so that it can live up to the grandiose name with which it has been baptised.
  6.20 pm
  Mr. Ednyfed Hudson Davies: Like many of my right hon. and hon. Friends, I wish to express some modest satisfaction with the Bill as far as it goes, but I stress that it goes nothing like far enough.
  Just a year ago, the President of the EEC Commission, speaking of the Community as a whole, said:
  "We have built our industrial society on the consumption of fossil fuels, in particular oil. It is certain that if we do not change our ways while there is still time, our society will risk dislocation and eventual collapse… We should rapidly raise our investment in new ways of saving energy. In the short term, energy conservation must be the cornerstone of our policy."
  In another place, the Minister of State, Dept of Employment, acting as spokesman on energy, said during the Second Reading debate on this Bill:
  "Energy conservation has a central and permanent place in our energy strategy".—[Official Report, House of Lords, 11 December 1980; Vol. 415, c. 802.]
  I am prepared to concede that the Government really believe that and that the Secretary of State for Energy is genuinely concerned to achieve more energy conservation. But he is far from prepared to tackle the measures necessary to achieve thorough-going conservation.
  On the basis of the figures which the Government placed before the Select Committee on Energy, it is evident that countries such as France, Germany, Sweden and the United States are prepared in each case to spend about £300 million on grants and loans to encourage conservation measures.
  The Secretary of State refuses to acknowledge that we should be doing much the same. Our problem in Britain is that the Government believe that the only mechanism required to achieve conservation is the price mechanism combined with some exhortation. The Department these days is taking praiseworthy steps to inform the public and

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  the industrial sector of the cost saving which can result from investment in energy efficiency, but then it simply expects it to happen.
  It believes that the degree of conservation that we require could be achieved if, on the domestic level and in the commercial and industrial sectors, cost-effective conservation measures were taken. In other words, provided that people know how much they can save, they will go in for energy-saving measures as a sensible, businesslike decision; and nationally we will have achieved the desirable level of conservation.
  Again I quote:
  "We feel that the key to effective energy conservation is economic and realistic prices".—[Official Report, House of Lords, 19 March 1980; Vol. 407, c. 299.]
  Those are the words of the Minister in another place.
  When the Secretary of State gave evidence to the Select Committee on Energy on 28 January, he defended the Government's refusal to introduce subsidies to assist sectors of the economy which have been facing collapse and closure as a result of high energy prices by shielding behind the price mechanism. I quote from his words on that occasion:
  "it is a fact rather than a virtue that if energy prices are set at their correct levels as determined by the market or the price to cover the long run cost of supply on a continuing basis they will as a consequence send the correct signs to industry in making their calculations when they come to order new equipment, build new factories, or redesign their present processes, or improve their costs in the factory".
  Later he said:
  "The major incentive for that new investment in energy-saving is getting the correct price, but on top of that the Government recognise that more can be done, and this is why we do indeed spend taxpayers' money on demonstration projects and pilot projects which would enable industry to have confidence and invest in new equipment which will cut energy costs."
  I contend that there are two underlying fallacies in the assumption that if we get the price right—and it is a high price—and we explain to people what they can save, conservation will be achieved automatically.
  The first fallacy is that even if every individual and every firm made the correct rational, cost-effective decision, it does not follow that overall we would achieve the degree of conservation that we might nationally need. I do not think that that follows at all. It might well be that there are factors which make it desirable to have a level of conservation higher than the totality of cost-effective, voluntarily taken decisions might lead to.
  For example, oil is a finite commodity, and that in itself can be an argument for conserving it for its own sake, sometimes even at a cost. Moreover, it is desirable that we should decrease our dependence on politically unstable Middle Eastern suppliers, again even at a cost—perhaps a higher cost than the financial saving involved.
  There are certain things which we need which are not cost-effective. Surely the Government would not argue that defence expenditure had to be cost-effective. Yet, as I have already said, other countries, such as the United States, France, Germany and Sweden, have seen the necessity of spending and investing to attain a level of conservation as an insurance for the future so that they may face a future energy crisis.
  To face the problem of future energy costs, and to free ourselves from Middle Eastern dependence, we may have to do things very differently from the way which a
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  traditional cost-effective approach might require. For non-economic reasons, it would pay us in the long run actually to spend in order to achieve conservation.
  The second underlying fallacy is the assumption that the price mechanism, coupled with adequate information about energy-saving techniques and some exhortation and persuasion from the Department, will at domestic and industrial level lead to sensible and rational decisions leading to energy saving. In fact, it often does not work that way.
  One problem is that investment leading to long-term saving, sensible though it would be, must frequently give way to more immediate short-term investment requirements both in the home and the factory. Decisions in real life do not follow rational patterns. In answer to a question of mine this afternoon the Minister stated that what was needed to achieve conservation was a "change in individual demand attitudes." Change in human attitudes to demand involves more than a simplistic reliance on a price mechanism
  The Minister will be aware of the work carried out by Ellis and Gaskell in the Department of Social Psychology of the London School of Economics. The Government should conduct their own sociological research into the way in which energy-saving decisions are made. For instance, if a family decides to insulate its home, will it save on energy costs or will it enjoy a higher temperature level for the same energy cost?
  A further complication arises when we consider the desirability of sensible expenditure to install energy saving devices. In many instances, both domestically and industrially, the money is not available. What point is there in explaining to an industrialist how over a few years he could pay off an investment in new energy-saving equipment when perhaps he does not know where to find next week's wages? He cannot make that expenditure, yet in the national interest his energy saving is needed and the Government should be willing to help finance it.
  I quoted earlier the Secretary of State's evidence before the Select Committee on 28 January. I quote from this evidence again. He said:
  "To give a homely viewpoint, the plain fact is that anybody who comes to a personal decision about buying a new motor car is now automatically looking for something with a very much better performance in terms of miles per gallon. That is a homely and personal viewpoint which is now going on throughout industry."
  Is that so? It is an interesting simile, but if the Minister notes the cars that are owned in low income areas, he will find not sensible low-consumption saloons but old heavy-consumption bangers. The young man on a low income needs an economical car to run more than anyone else, but he cannot raise the money to buy it. Very often the only thing that he can afford is the ancient six cylinder model that will be a constant drain on his pocket.
  So exactly it is in many homes and firms. Without Government help they cannot afford the energy-saving investment that would pay them in the long run, because they do not have the necessary cash flow. That is something that the Government do not seem to understand. In the short run, sadly, it is often cheaper to waste than to save. The Government should realise that the price mechanism will not overcome that unpalatable fact. Like other countries, Britain will have to be willing to subsidise conservation if it is to achieve it.
  I am convinced that the two main planks in our future energy policy should be coal and conservation. Both a

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  healthy coal industry and a successful conservation policy have to be paid for. This week the Government seem to have learnt the lesson that we must subsidise the coal industry to safeguard its future. It is time that they also accepted that we shall have to pay the proper price for effective energy conservation. It cannot be obtained on the cheap.
  6.34 pm
  Sir Bernard Braine: I shall be brief, as I know that the debate is coming to its conclusion after some interesting speeches. I preface my remarks by saying that I always consider it to be a great pity that so often Governments introduce useful legislation of this sort which would be much more effective if it had been preceded by fuller consultation with the interested parties—in this instance, the Consumers Association and the electricity and gas consumers' councils.
  I wish to make two points. First, I find it odd that the Bill as drafted is restricted to water and space heaters and a limited range of gas appliances. It is true that the former are the main users of electricity in the home. Nevertheless, we can all think of a wide range of domestic electrical appliances that are currently excluded from the Bill—for example, freezers, tumble dryers, ovens, washing machines and refrigerators—that are important users of energy in the home. The International Institute for the Environment and Development demonstrated that 38 per cent, of domestic electrical consumption is used by such appliances. That is a substantial proportion. What is more, ownership of such appliances is growing steadily.
  The Bill provides an opportunity to give the Secretary of State enabling powers to issue type approvals for a broader range of appliances at his discretion. Surely it would be a significant and useful extension of his powers if some provision of the sort that I have postulated were included in the Bill. I hope that he will say that he will be amenable to accepting an appropriate amendment in Committee.
  Secondly, we are all urged nowadays to conserve energy. The Government have given a lead on home insulation. Their scheme is a recognition of the cost-effectiveness of thermal insulation as a way of reducing energy costs for the domestic consumer and contributing to the nations's need to reduce energy consumption. There is clearly a need for much more urgency in identifying the contribution that the cost-effective thermal insulation of homes and work places could make towards lessening the demand for new and ever more expensive generating stations.
  Surely it is obvious that we should be examining the cost-effectiveness of all energy conservation schemes. It would be tragic if we lost the opportunity that the Bill provides of doing something on these lines. I hope that the Minister will accept an amendment in Committee to require, for example, that a report be laid before Parliament within a year on potential energy savings from a greatly expanded thermal insulation programme and on ways of overcoming any obstacles to achieving such a target. Such an amendment would focus the attention of the Department of Energy on the problem in a way exemplified by the Select Committee on Energy in its recent First Report.
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  Let us see whether the Government really mean business in this important area of energy conservation. I look forward to hearing what the Minister has to say in reply.
  6.39 pm
  Mr. Lawrence Cunliffe: May I try to bring some balance into the debate? As the Minister and my hon. Friends and colleagues know, I have a vested interest in energy conservation. Before I came to the House I was employed as a mining engineer—I was an employee of the National Coal Board and I am now sponsored by the National Union of Mineworkers. It is in that context that I shall try to put into perspective the feelings of my constituents and the organisation that I represent in the House.
  I associate myself with the remarks of the hon. Member for Derbyshire South-East (Mr. Rost). Unfortunately the hon. Gentleman is no longer in the Chamber, but I acclaim some of his arguments. It may be that some of us, including the hon. Gentleman and myself, had expectations concerning the Bill that were too great. In my view the Bill is minute and abysmal in the context of a global energy strategy. It only tinkers and pussyfoots about with some minor regulations. History will record that its effects will be insignificant in terms of energy planning, saving and conservation.
  It is regrettable that electrical supplies and appliances are not covered by the Bill. Anyone with a little foresight about the next 10, 20 or 30 years will know that we should plan for posterity and that we should do so in a more positive manner than has been demonstrated in the past 20 years or so. Electrical supplies will always be provided by cables, not pipes. Gas has had a distinct advantage over coal and over the cost of electricity supply.
  The Bill does not deal with the imperative needs that many of us recognise. As recently as last weekend, I addressed the North-West miners' conference on energy conservation. Despite "the week that was"—which the Minister will know about—some legitimate and responsible contributions were made. I am sure that the Minister will readily understand that, as it was a miners' conference, it was not as impartial as it might be if it had been a pure conservation conference or a gathering of Friends of the Earth. Nevertheless, some sensible recommendations were made.
  I do not wish to pre-empt the tripartite talks that are to take place this week between the National Union of Mineworkers, the NCB and the Government. I wish to reflect the NUM's thinking about future energy demands and requirements. If the Government are serious about energy planning and conservation, they should consider some of the points that will be raised this week by the NCB and the NUM. One of the best contributions that I have heard towards a positive, useful and rewarding form of energy conservation is the suggestion that we should achieve the maximum conversion of possible oil-consuming industries to coal. What better time could there be? Much of our industry is running at under-capacity and order books are low. In my opinion, and that of the NUM, this is an ideal time to encourage conversion to coal and to move away from our precious and diminishing supply of oil.
  In the British Isles it is estimated that there are 45,000 million tonnes of coal reserves. It is inconceivable that we should lose this opportunity, at the best possible time, for

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  conversion. If the Government wish to make a declaration of faith and intent to the mining industry and to the NCB, they should enter into a period of dialogue as to how investment can be directed into another avenue.
  As a result of a strong pound and high interest rates, many industries are struggling. Their viability is in question. In the package deal on the coal industry's borrowing powers—and in the hope that cash limits will be raised—would it not be wise to offer cheap loan grants and lower interest rate subsidies to industries so that they can convert? However, I shall not go into the raising of those cash limits, as I do not wish to pre-empt any tripartite talks.
  The financial facts of life are that British coal is the cheapest to produce in Western Europe. Unfortunately, the hon. Member for Bedford (Mr. Skeet) is not in the Chamber. I always relish the opportunity to take him on when unit and energy costs are referred to. The coal supplied to power stations is about one-third cheaper than the same amount of oil. Therefore, an argument on the economic value of coal can be made. Home-produced coal is not only cheaper to British industry than oil, but it offers—as the hon. Member for Essex, South-East (Sir B. Braine) said—greater security of supply
  There is an understandable and widespread desire to convert from oil to coal. The NCB already has a long list of factories that have planned switches that will allow considerable savings in running costs. Unfortunately, as a result of the recession, many industries cannot afford to convert. It is for the Government to take the initiative and to encourage industry, if they wish to keep faith with the mining industry. It would mean a minor change of course. It would also involve foresight and good planning for the energy requirements of our nation. However, in the long run, it would pay dividends.
  We must think seriously about using our investment grants to the best of our ability if we wish to ensure that we receive a suitable reward for our effort. Other countries have taken such steps. For example, France has offered grants to large users of up to 25 per cent, of the total conversion costs. Medium-sized firms used to be the backbone of the Conservative Party. Reference has been made to the many family firms that will have to close and that will never reopen.
  Inducements could be given. They would give firms the financial stability to see them through a difficult period. It is argued that such provisions would mean lower costs for manufacturing industry. I hope that the recession will come to an end. Indeed, we should look forward to that time and plan for it. At the same time, much useful and much-needed work could be provided for combustion equipment makers. Everyone knows that the coal industry deserves some assistance.
  Several months ago many members of the Committee that examined the Coal Industry Bill pointed out what the future held in terms of cash limits for particular industries. There are some classic examples. For example, a great combine such as Boots chose to switch its heating system to coal. Its main chemical and pharmaceutical plant in Beeston, Nottinghamshire, has switched to coal-firing. That is another indication that during the 1980s industry will return to coal-fired energy, which will be assisted by fluidised bed combustion technology. Over a 10-year
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  period, Boots will gradually replace its ageing gas and oil-fired boilers with new, coal-fired equipment. It will need 350,000 tonnes of coal a year from local collieries.
  The company predicts that there will be a considerable saving in its fuel bill, because, therm for therm, coal is significantly cheaper than other fuels. Now is the time to grasp the nettle and the opportunity. I shall not go into more detail. However, hundreds of firms would grasp the nettle if the Government would give them some encouragement based on financial inducement.
  Oil is unpredictable because of potential military crises developing in any part of the world. We see nations which have great oil resources acting aggressively towards each other. That, again, is a warning factor which should be taken into account. If we were to mount a large scale campaign backed by Government support—certainly such a campaign would be guaranteed support by the Opposition and I am sure by other sensible political elements in this Chamber—to switch from the 14,000 tonnes of oil now being used by British industry to its equivalent of 23 million tonnes of coal, not only would we sustain the jobs of 40,000 to 50,000 miners, but that would be the sensible way to go about energy planning and conservation. We would also bring about sensible industrial relations in the mining industry, and that would play a great part in making a substantial and positive patriotic contribution to our economy.
  6.53 pm
  Mr. Peter Hardy: My comments will be brief, largely because my hon. Friend the Member for Leigh (Mr. Cunliffe) has said so much with which I agree. I hope that all hon. Members agree that his suggestions were both sensible and relevant.
  I hope that the Bill can be enacted rapidly, not because it is perfect—it is a meagre little Bill—but because we should have the legislative space for the Department of Energy to bring in another Bill, which many hon. Members are eagerly anticipating, to put right the Coal Industry Act of last year.
  I say not that the Bill is bad, but that it is meagre. I do not suggest that the Department of Energy is appalling in its attitude to conservation. We could possibly criticise and find much fault in it, but we must accept that the Minister—I do not know about the Secretary of State—who has taken reponsibility for conservation matters, has put a great deal of personal energy, drive and imagination into them. It is a pity that his imagination is limited by Treasury policy.
  I am particularly angry that the Minister's efforts regarding conservation have so often been frustrated by the Department of the Environment. If the Minister disagrees with me, I suggest that he consults experienced people in local government, because they will explain to him the distressing, unfair and unjust approach towards conservation which has been adopted by the Department of the Environment. I believe that, unless Ministers in the Department of Energy can persuade Ministers in the Department of the Environment to change their approach to conservation and the priority accorded to it, the Minister's efforts will be confounded and whatever good little Bills of this kind may bring about will be grossly overshadowed by the effect on conservation of matters such as the housing moratorium. In my area we are not seeing the progress in insulation and conservation activity

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  that we hoped to see. The responsibility for that lack of progress lies entirely at the door of the Department of the Environment.
  I believe that the Minister's approach to the matter, which has concerned the Consumers Association, is correct. Normally I would support the Consumers Association wholeheartedly, but, in view of the appalling position in which sections of British industry have been placed, I believe that it would be inappropriate at this time to insert "electrical" in the early clauses of the Bill. I hope that the trading position will improve. In that event, there may be strong arguments for applying the logic of the Consumers Association's recommendation.
  I should like to ask the Minister about the arrangements for giving approval for on-site inspection, seals of approval and so on. I take it—it will be good to have the Minister's confirmation—that we shall not discriminate between British and overseas firms. I am sorry that the Minister agrees with me. When I consider some of the unfair practices and the ruthlessly unfair competition currently facing British industrialists, I believe that, sooner or later, such an honest and relatively noble attitude should not persist.
  For example, one firm in my constituency realised that it could beat the French into a cocked hat in a particular commodity. Unfortunately, it cannot sell its goods in France. It can beat the French, its quality is superb, its deliveries are first-class, but it has not been able to get a certificate of approval for its product from the French Authorities. The reason is that the French have not yet set up the necessary bureaucracy to allow a foreign supplier to get the seal of approval which is readily available to French firms.
  Recently, I put down a series of questions about electrical goods from Australia. There is at least one ship on the high seas now bearing electrical goods towards Britain. They will face a tariff of 4½ per cent. If British electrical goods manufacturers wish to export to Australia, they face a tariff on similar commodities of 30 per cent. Obviously, they face enormous difficulties. For that reason, the Minister should ensure that they do not have this additional burden, but it would be better if the Government ensured that the much greater burdens imposed upon industry by central policies were relieved.
  I suggest that the point made by my hon. Friend the Member for Caerphilly (Mr. Hudson Davies) should be borne in mind by the Government. Many firms in South Yorkshire—this goes for the rest of the country as well—would dearly like to invest in new heating and energy-providing arrangements, but they do not have the liquidity or immediate trade prospects to justify such expenditure. They are too busy meeting redundancy costs, laying people off and frantically striving to get orders to maintain themselves to embark on expenditure which would be so valuable in the national interest.
  I hope that we shall soon see the Bill enacted and see it rapidly succeeded by a new coal industry measure. I hope, too, that the Minister will maintain his enthusiastic and imaginative approach and exercise his personal drive to ensure that we get an energy conservation Bill which will start in the Commons rather than in the Lords and make a more positive and helpful contribution to this country's interests.
  6.59 pm
  Mr. Edward Rowlands: There has been a considerable degree of agreement and understanding and common ground among all who have spoken in the debate. There has been one major disagreement on the role of pricing policy in relation to conservation, to which I shall refer later. Otherwise, there has been common agreement.
  I do not know how much comfort that should give the Minister. The common agreement is that the Bill is so modest that it scarcely deserves the attention that has been devoted to it and that it is a Bill of missed opportunities. The number of hon. Members on both sides of the House who have used that term should be a slight warning to the Minister that he faces a Committee stage in which there could be certain all-party understandings and support for amendments and for expansion of the Bill in certain directions.
  At one stage, after the speech of the hon. Member for Liverpool, Edge Hill (Mr. Alton), I thought that the Minister would be found guilty of a breach of the Trade Descriptions Act in bringing forward the Bill as an energy conservation Bill and that, had it been so labelled in a shop window, quite rapidly the trading standards men would have been round to tell him that he was mislabelling and was misleading the House and the public in describing this as an energy conservation Bill.
  However, as almost all hon. Members who have spoken in the debate have attempted to put the Bill in the context of a broader energy conservation policy, I shall shortly follow suit. Before doing so, however, I want to raise two specific points about the Bill. One of them has already been mentioned by hon. Members on both sides—the exclusion of domestic electrical appliances from the provisions of the Bill. I tried to follow the Minister's arguments for the exclusion. I am still willing to be convinced by him. He seemed to suggest that the chief reason for the exclusion was that energy efficiency in the design and production of electrical appliances had reached such a point of success that it did not require the sort of supervision of testing and monitoring that the Bill will apply to other forms of appliances. I am not so sure that hon. Members are convinced on that point. I look forward to the professional technical evidence that can be brought forward to justify that, in the whole area of domestic electrical appliances, we have achieved a degree of efficiency which means that the Bill is not required and the application of the testing powers of the Bill is not required for electrical appliances.
  I should like to raise a point about gas appliances which has not been mentioned. In describing the monitoring and testing procedures, the Minister said that they would be very much in the hands of the voluntary bodies and the existing institutions. He made specific reference to the important role of British Gas at Watson House. Hon. Members know of the tremendous work done by the research outfit of British Gas at Watson House. The Minister will know that British Gas has played a pioneering role, in co-operation and close partnership with manufacturers of gas appliances, in the development of safe and energy-efficient appliances. That role has stemmed primarily from the fact that British Gas is the major supplier in sales and distribution of gas appliances.

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  The whole of that role, which has been vital in the promotion, development and design of safe and energy-efficient, gas appliances, has been put under a cloud as a result of the absurd proposal by the Monopolies and Mergers Commission, which suggests that British Gas should be banned from selling any form of gas appliance. That is the so-called radical solution of the Monopolies and Mergers Commission. If that disastrous stupidity were to be accepted by the Government, it could damage irrevocably the invaluable role that has been played in the design and development of safe and energy-efficient appliances promoted by British Gas.
  Everyone wants wider and better competition in gas appliances, as in other appliances, for the British consumer. But to ban British Gas from the major role in the sale and distribution of gas appliances would damage the whole area of development and the substantial and successful standards in safety and energy-efficient appliances which British Gas has promoted. That would leave the door open to a collection of cowboys who would be only too happy to lower the standards of gas appliances and to sell cheaply, to the greater expense, eventually, of the consumer.
  This matter is very relevant to the Bill and the success of its monitoring and testing aspects, so I hope that the Minister will tell us when we can expect the Government's decision on this report from the Monopolies and Mergers Commission. I urge upon him that that decision should be sympathetic to the role of British Gas and should be made as early as possible to lift the blight that exists as a result of this recommendation.
  Like other hon. Members, I wish to raise the matter of our general energy conservation policy and to put the Bill into some sort of context. In 1979, the Government's projections, referred to by the hon. Member for Carshalton (Mr. Forman)—I wish that he were present now, because I would have had some complimentary comments to make on his speech—assumed a 20 per cent, reduction in primary energy demand by the year 2000 as a result of conservation measures. That amounts to 100 million tonnes of coal equivalent by the year 2000.
  The hon. Member suggested that this target would be very easy to reach. I am not so sure. The fact that there has been a recession and, therefore, we have had this initial boost in savings in energy, chiefly as a result of the recession, does not mean that that target is easily achievable. Our fundamental disagreement with the Government's conservation policy is that we do not believe that such targets can be achieved just by higher and higher energy prices. We do not believe that that sort of target can be achieved by just punishing the consumer into some sort of conservation policy.
  Therefore, although, as hon. Members on both sides rightly say, price signalling—which is the rather "in" word for saying "Here come some hefty price increases"—has a role in bringing home to the consumer the cost of energy; and, therefore, it leads him to conserve energy or to have a more conservation-minded approach to his own domestic, industrial or commercial energy needs, we utterly reject the over-dependence of the Government on pricing as the only basic conservation measure. Rationing by price hurts the most vulnerable and loads unnecessary costs and burdens on consumers, domestic and industrial. It is a crude and coarse way of conserving energy. It does
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  nothing for our competitiveness. We heard repeatedly at Question Time today about the growing uncompetitive-ness of British industry, as a result, partially, of the energy-pricing policy followed by the Government. Such a policy, dependent upon higher and higher prices in order that we may conserve more and more, only fuels inflation. The crazy decision to raise gas prices again by another 25 per cent, for the domestic consumer will be the best proof of that point.
  The Minister and other Conservative Members suggest that it may force people to use less and shiver more. But surely there must be a better way than that of encouraging a positive conservation policy. The hon. Member for Derbyshire, South-East (Mr. Rost) and other Conservative Members are beginning to recognise more and more that what he called the carrot power, or the carrot as well as the stick, has to be an essential part of any energy conservation policy.
  Mr. Rost: Will the hon. Member also accept that perhaps the consumer would be better off today if the previous Government had allowed the price of gas to rise to nearer the market level in Europe? If so, we might now have that North Sea gas-gathering pipeline already carrying the gas to where it is needed, and our petrochemical industry might still be alive today, and not half dead, and the consumer might have more gas—admittedly at a slightly higher price earlier—instead of having to buy it in from Norway at much higher prices.
  Mr. Rowlands: That was a rather long intervention. I am sure that we shall have the opportunity of debating that matter further if the hon. Gentleman joins us on the Gas Levy Bill on Wednesday, when we shall be able to discuss why the gas-gathering pipeline could not be built faster, and some of his remarks, which I thought were misleading, about British Gas's role in the southern and northern North Sea gas reserves. We shall deal with that at greater length in Committee on the Gas Levy Bill.
  I was trying to gain a measure of agreement with the hon. Member for Derbyshire, South-East, who made a constructive and interesting speech which hon. Members on both sides supported. One can take to extremes the argument of pricing policy as the chief mechanism for conservation. The Government are in grave danger of doing that. There is surely a more positive way of encouraging and develop energy conservation policy and attitudes towards conservation by the individual, and the firm whether commercial or industrial.
  We recognise that the Bill might make a minor, modest contribution to a positive conservation policy. I shall not put it any higher. Hon. Members on both sides have supported the need for a broader total energy conservation policy, planned and financed. That must be part of a total energy policy.
  A number of times hon. Members on both sides have referred to the vital recommendation made in the most recent Select Committee report on energy. Governments of all complexions can be condemned for the fact that years after such a recommendation we still have not achieved a method of assessing whether it is better to embark on a £15 billion power station programme with all the problems and arguments, especially if it is a nuclear programme, against the possibility of more modest energy conservation measures supported and financed in a way which would conserve energy rather than promote the

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  supply of energy. That is what hon. Members on both sides have told the Minister. There is a gap in the major area of policy. There is a gap at a much lower level—even at the level of the Bill.
  I have had discussions recently with two experienced consultants who have suggested that marginal gains made from the use of more efficient appliances would play a minor part in total energy savings, especially in the energy needs and consumption of a building. What is needed is a total energy view of the building—its design, structure, fittings and appliances. We doubt whether the Government have adopted such a total view.
  The hon. Member for Derbyshire, South-East and others have spoken about the importance of the new building regulations to reinforce energy conservation consciousness among architects and those building new buildings as well as converting existing buildings. There is no point in ensuring efficient heat generators in an energy inefficient building, which is partially insulated and which has wasteful lighting systems. As many hon. Members have said, the Bill is a missed opportunity to promote the concept of a total energy requirement and to produce a comprehensive view and approach to energy conservation.
  What is worse—this is where Government Back Benchers pulled their punches—is that other Government actions are damaging a positive conservation policy. From the nice catalogue produced by the Minister when he introduced the Bill one would have thought that all was going well, that the Government were putting more money into insulation, promoting successful industrial conversion projects, and so on. there are good examples, but they should be a spur for others. But that spur is missing because the Government will not renew the important grant scheme designed to encourage industry, to save energy, to improve insulation and to replace or renew boilers. The incentives to convert from oil to coal in the passionate speech justifiably made by my hon. Friend the Member for Leigh (Mr. Cunliffe) are missing. There is little likelihood of that sort of thing happening in the present econonic climate.
  What is worse, in measures such as the reduction in the allocation of funds to local authorities the decision made by the Government will impede the promotion of insulation of large numbers of public sector houses. The hon. Member for Derbyshire, South-East mentioned the painful letters he had received from constituents about that matter.
  In other respects the Government's policy and actions are damaging the promotion and developments of energy conservation policy. For example, I am surprised that the Government are lowering the standards of roof insulation which have been adopted by local authority housing departments. They are reducing the cost-effectiveness standards from 100 mm to 80 mm at a time when higher energy prices have increased the cost-effective thickness to 140 mm or more. The Minister shakes his head. I hope that he will confirm that that has not happened. I understand that it is one of the measures that is now in the pipeline.
  We want to be sure that the Minister who comes to the Dispatch Box from the Department of Energy has the support of Ministers in the Department of the Environment and other Departments who, in their other decisions, are doing damage to the policy. That is the point that Members on both sides of the House made to the Minister.
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  Many imaginative and innovative ideas are being introduced in energy conservation. Like other hon. Members I have been to the Thorn Lighting laboratories—I have a substantial Thorn factory in my constituency—to see the new fluorescent lamp. I also saw some simple ways in which one could save lighting by reorganising the arrangement of lighting in a room, as the Minister indicates, by reflecting the light on to the ceiling. That is the sort of idea that should be promoted by the home energy centres in our communities which have been abandoned by the Government. Energy centres could have promoted simple changes which, to the individual, might have a significant effect on his energy bills. Instead, the Bill does nothing to promote energy advice centres. Indeed, the Minister said that the Bill would authorise the spending of money that has already been spent. In a small way that is a condemnation of the limited scope and vision of the Bill. Even in the one clause that looked hopeful it turns out that it will not promote a wider range of advice centres for consumers.
  I turn, finally, to a subject mentioned by almost every Member who has spoken, that is the necessity to spend in order to save. There can be no worse time and less likelihood of that than now. Speech after speech made by my hon. Friends that Members for Rother Valley (Mr. Hardy), for Caerphilly (Mr Hudson Davies), for Leigh and others all said that the chances of industry taking the opportunities for major energy conservation measures by spending initial capital now to save later are less likely because of the dreadful economic and industrial climate in which such decisions have to be made. The Minister quoted a number of examples, but those examples should by now have been multiplied, but that is not likely now as a result of the Government's economic strategy and the climate in which firms are having to take decisions.
  In the new spirit of compromise and pragmatism which pervades the Department of Energy, and for which we are all thankful, I suggest that the Department might consider one of the ways in which selective reflation could take place in the economy, creating jobs and promoting energy conservation—by financial backing and support for a number of industrial projects, to which my hon. Friend the Member for Leigh and other hon. Members referred, and which at the same time would help to create jobs in the vital industries which are working on short time or which have announced large scale redundancies.
  While we welcome this modest measure, we do not support the broader conservation policy that the Government are following. That view was echoed in speeches from both sides of the House. My hon. Friend the Member for Rother Valley advised us to give the Bill a speedy passage so that we can get on to the real Bill. Many hon. Members would like to use the measure before us as the vehicle for a real energy conservation policy. I hope that the Minister will give us a positive response to the points raised in the debate and will assure us that this or another Bill will achieve the sort of conservation policy that we all desire.
  7.20 pm
  Mr. John Moore: By leave of the House, I shall reply to the debate. For a modest, minor, meagre minnow—to use some of the descriptions of the measure—the Bill has given rise to an excellent debate. We do not have sufficient opportunities to debate conservation and, if nothing else, the Bill has given us such an opportunity.

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  However, I wonder how modest the measure is. Despite its modesty, it has been welcomed on both sides of the House and, after recent events, a touch of modesty may be more acceptable than an immodest politican. We are talking about a Bill which encompasses one-third of the energy used by the nation. Some may regard the sums involved as modest, but a mere 5 per cent. improvement in efficiency in the areas covered by this modest measure would save the nation between £250 million and £375 million. I find it difficult to throw around such sums of public money and regard them as modest.
  I am sure that the hon. Member for Merthyr Tydfil (Mr. Rowlands) paid attention to my opening speech. He said, rightly, that the cornerstone of the Government's energy conservation policy is pricing. I continue to stress that and our view is accepted by all nations in the Western world. However, I said with great care, and I do not wish to repeat it all in detail, that we sought to reinforce the pricing signals by supplementary measures, including publicity, advice and information, grants, demonstration project schemes and certain mandatory measures. I cannot say that more clearly, but obviously it merits repetition.
  The hon. Member for Merthyr Tydfil made some strange remarks about building regulations. I ought to put him right. The existing building regulations for loft insulation, which are not my Department's responsibilty, effectively require 50 mm of loft insulation as a bare minimum in new buildings. The proposals in the original consultation papers were to increase that minimum to 80 mm. In consequence of much debate and discussion, for which my Department should take some credit, new consultations will take place soon, before new regulations are laid, in order to see whether the minimum can be increased to 100 mm. That is a development for which we should receive commendation from hon. Members.
  The hon. Member for Merthyr Tydfil also referred legitimately to the role of British Gas and, in particular, to Watson House. I visited Watson House recently and saw the excellent work being done there on safety. The hon. Gentleman linked that to the Monopolies and Mergers Commission report. The hon. Gentleman will understand that I do not wish to comment on the possible outcome of implementing the commission's report. It is still under consideration, and I cannot give any further information about timing, though I recognise the need for speed. I promise to draw the attention of my right hon. Friend the Secretary of State to the point made by the hon. Gentleman.
  The corporation has expressed the view that there cannot be a clear distinction between research into appliance development and research into gas safety. There is no reason to suppose that the implementation of either option should affect Watson House's important role in setting and maintaining safety standards. I said earlier that it is likely that Watson House would be one of the type approval testing bodies.
  The hon. Member for Rother Valley (Mr. Hardy) was highly flattering and, after recent events, I do not know quite how to treat that. I shall respond to some of his points later, but he said that we will not be discriminating. However, he will be aware that we shall be giving a British statutory, non-tariff type approval test. British industry will be pleased to see that.
  706
  I shall also refer later to some of the valuable comments made by my hon. Friend the Member for Essex, South-East (Sir B. Braine). He referred to the home insulation scheme allocation. I remind him that we do not need additional powers in the Bill to increase the allocation. Indeed, the Secretary of State for the Environment recently announced an increase in the allocation for the scheme of 30 per cent. in real terms for 1981–82.
  Sir Bernard Braine: I am not questioning the allocation. I was concerned with ascertaining the cost-effectiveness of what is being done.
  Mr. Moore: I said that I would come back later to other points made by my hon. Friend.
  The hon. Member for Midlothian (Mr. Eadie), the right hon. Member for Norwich, North (Mr. Ennals), who has apologised for not being here for the end of the debate—he has another appointment—my hon. Friend the Member for Derbyshire, South-East (Mr. Rost), and the hon. Members for Bristol, North-East (Mr. Palmer) and for Liverpool, Edge Hill (Mr. Alton) all referred to the Select Committee report which was published only last Week. It is long and complex and we have not yet had a chance to study it in detail. All its recommendations will be given careful consideration and a full reply will be made in due course. I am advised that there will be an opportunity to debate both the report and our reply.
  My hon. Friends the Members for Derbyshire, South-East and for Carshalton (Mr. Forman) raised again a matter that was raised in energy questions earlier today, namely, the private generation of electricity. The Government confirmed their commitment this afternoon to remove the statutory prohibition on the generation of electricity as a main business and we intend shortly to introduce a specific provision to that effect.
  The hon. Member for Bristol, North-East raised many interesting points and referred specifically to quantifying energy savings. That is an important area to which we should return time and again. The hon. Gentleman was rightly concerned about energy savings by the Government. One of our difficulties is that most Government buildings are run by the PSA, but energy savings of more than 30 per cent. have been obtained since 1972, the data base on which information is obtained. It is not possible to break down the savings Department by Department. The figures are not compiled on that basis; the PSA has responsibility for the whole building stock of the public sector. I assure the hon. Gentleman that, even with that excellent record, the PSA will continue to improve on it.
  Mr. Palmer: Does the Minister's figure include the Ministry of Defence—dockyard establishments, and so on?
  Mr. Moore: It includes all the establishments controlled and managed by the PSA. I shall come back to the hon. Gentleman on the specific point of Ministry of Defence buildings. I cannot say whether they are controlled by the PSA.
  The hon. Member for Edge Hill raised many interesting points. I attended all the discussions on the Bill in another place and heard there one or two of the points that the hon. Gentleman raised. I should correct one misapprehension that seems to linger in the minds of those who see in many of these measures an anti-nuclear position. The hon.

  707
  Gentleman referred to energy going out through the roof. We are talking about a Bill which concerns itself with space and water heating. Space heating and water heating have little electrical contribution. The nuclear industry is related directly to the production of electricity. We have to get this sorted out.
  The hon. Member for Caerphilly (Mr. Hudson Davies), in an interesting speech, mentioned the need for more sophisticated analysis of demand attitudes relating to people's energy habits and how these are established in the long run. The hon. Member for Edge Hill went further, as did his party in the other place, and sought a massive national energy audit. The Government tried to point out at the time, in contrast to what the hon. Member for Caerphilly said, that we know pretty clearly in what areas of installation major cost-effective achievements can be made. That is relatively well understood. It would seem to the Government to be essentially a waste of public money to introduce a massive national energy audit of that kind, especially so far as domestic stock is concerned.
  The Government accept the point made by the hon. Member for Caerphilly that there is a need for a more sophisticated understanding of the degree to which patterns of use of energy in domestic buildings are carried out. The Government are involved in a new study that they have commissioned, involving the Department of the Environment, which will compare, for the first time, the patterns of energy use in dwellings with the patterns of occupancy. This will be a valuable additional tool for the Government.
  My hon. Friend the Member for Carshalton, in his usual very high standard of contribution to our energy conservation debates, talked of the need for more carrot power. I understand what he says. My hon. Friend, however, proceeded further and talked about getting the word "regulation" out of our discussions because it is not an easy, buzz word, as he described it. My hon. Friend said that we should use the phrase "improving and raising standards", but within 30 seconds he talked of achieving them by mandatory methods. We are: conscious of the limitations and the ways in which we must carefully exercise any form of mandatory powers in office. I am sure that my hon. Friend will recall that the Government reduced the temperatures in public buildings or sought to reduce them by reducing the level permitted.
  There was also reference to the supply industries' involvement in conservation. In an outstanding speech, my hon. Friend the Member for Derbyshire, South East argued that it was a modest Bill. I do not deny modesty. My hon. Friend expressed better than [have heard from either side of the House for a long lime the essential arguments surrounding the use of price and price mechanism in the long term ways in which attitudes change. My hon. Friend put that matter extremely well, as did my hon. Friend the Member for Carshalton. Both argued—the point was also raised by my hon. Friend the Member for Essex, South-East and the right hon. Member for Norwich, North—about the degree to which investment in energy conservation, as opposed to investment in energy supply, was a legitimate and cost-effective operation.
  There is no argument, I believe, on either side of the House, among those genuinely interested in this subject, about the cost-effective nature of investment in energy conservation. The question that has to be asked each time this subject comes up is "Investment by whom?". Does
  708
  this mean investment by the State or investment by the individual? I hope that there will be more time to debate in Committee upstairs the legitimate argument that when the State actually invests for the individual, the individual's long-term attitudes, patterns, and habits of energy demand do not effectively change. His comfort standards and his comfort attitudes might change. The hon. Member for Bristol, North East with his long experience in this matter, talked of the old Committee, of which he had the honour to be chairman, which looked at genuine conservation. We have to be conscious of the difficulty of changing the long-term attitudes of individuals whose millions of demand decisions ultimately are the bedrock for genuine long-term conservation of energy. This is a genuine, reasonable argument that can be pursued in Committee upstairs.
  My hon. Friend the Member for Derbyshire, South East discussed the subject of energy labelling. My hon. Friend had a legitimate point. The Government are keeping open the option of adopting energy labelling of household appliances. They do not consider that the proposals under discussion among EEC member States have yet reached a point at which we can be confident that the proposals would be successful and cost-effective in helping consumers to choose appliances wisely. It would, therefore, be premature to include energy labelling provisions in the Bill. We will, however, continue to work within the Community towards a satisfactory and effective scheme. The labels under discussion did not seem to most, including members of the Consumers Association and consumers' organisations, to merit the argument that housewives or house persons—whatever we call ourselves—going out to buy these articles should be informed in a way we can understand. I would have thought that one needed a couple of economic PhDs to understand most of the tabs that were shown. We do not think that they are good enough at this stage. This is not to say that, if they eventually proved useful to the consumer, the Government will not seek to introduce them later.
  Mr. Rost: I accept the difficulties of energy labelling in a way that would be meaningful to the consumer. Will not my hon. Friend at least consider having our own system of labelling for fridges and freezers where the differential between the good and the bad in energy consumption is so wide and where genuine energy savings could arise if the consumer was given some guidance?
  Mr. Moore: It is worthwhile considering the points that my hon. Friend makes. I believe that there is unanimity of view about the need to try to improve the presentation to the consumer of energy consumption.
  I have tackled the point about building regulations. I stress that I do not see a lack of co-ordination between Government Departments on energy conservation and its initiation. There will always be arguments between Departments. It is my Department's job to argue the policies of energy conservation and to seek to co-ordinate them.
  Mr. Hardy: I suggested that the Minister should consult experienced people within local authorities to enable him to understand the effects of the Government's housing investment policy. I spoke to perhaps the most

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  experienced local authority housing committee chairman at the weekend. He was particularly angry about the effect of the HIP moratorium.
  Mr. Moore: We have had discussions throughout the debate concerning other aspects of Government policy. On energy conservation policy, the Government are not worried about lack of co-ordination. The reverse is true. That co-ordination has been illustrated by the manner in which the building regulations have been going out for consultation.
  The hon. Member for Midlothian and his right hon. Friend the Member for Norwich, North added to the commonly accepted and classic error in the judgment of conservation success. The hon. Gentleman put the great spending league argument. He argued that we were lowest in the league, or just above Italy, relative to Sweden, or anyone else. That approach shows a fundamental misconception of the nature of long-term conservation policy. The hon. Gentleman concluded that the Government had inherited a growing, successful programme of conservation.
  I am not denying for a moment some of the mechanisms that the Government inherited. It is a fact, however, that when the Government came to office the conservation policies, in reality, were failing. In the last two years of the previous Administration—this is a fact and not a debating point—energy consumption in real terms was growing. It was no longer going down. It cannot be argued that the price mechanism was different. We have been told by the Opposition that the price mechanism is irrelevant. They have to get to grips with the essential dichotomy that exists in their minds. They argue against the price mechanism. However, when the price mechanism clearly had an impact on the manner in which energy consumption from 1978 onwards was rising, they failed to understand the ways in which energy spending by the State are not the key determinants of long-term energy conservation success.
  Mr. Eadie: The House cannot allow that. The Minister has never had any compliments from the International Energy Agency on his conservation plan. If the hon. Gentleman is to talk about the price mechanism, he must confess that since his Government came into office we have had a recession. To draw an analogy between 2 million or 3 million unemployed and the previous unemployment figures is not fair.
  Mr. Moore: In the long term, conservation success is measured by its achievement—the relative use of energy. The consumption of energy growing or not growing in real terms is the ultimate judgment, whilst one accepts that one adjusts for recession or a growing economy. There is no question but that after years of successful conservation, in that from 1974 to 1976 consumption was slowing in real terms, conservation was declining in real terms in the period after that. We can return to the point in Committee.
  The hon. Members for Midlothian and for Leigh (Mr. Cunliffe) also raised the question of coal conversion. The price relativities that the hon. Member for Midlothian raised were right. There is no question about coal's advantage relative to other fuels at this time. That is an area that must be constantly under review by the Government.
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  The hon. Gentleman asked me to give more details of the role of civil servants and local authorities under part II. He suggested that the Government had not given the House sufficient information about the expenditure and manpower implications of the Bill. I thought that I had explained the position in my opening remarks. The facts are also set out in the explanatory and financial memorandum.
  The enforcement role of local authorities will be a matter of trading standards officers making visual checks to see that appliances that should bear type approval marks in fact do so. We imagine that by and large they will do so in the course of visits to premises for other purposes, so the extra work load on them is likely to be small.
  I cannot say precisely how local authorities will deploy their resources in order to fulfill their enforcement role under the Bill. That is a matter for them, not the Government, to decide. There is no reason to believe that the manpower implications will be other than very small. The local authority organisations received the consultative document that outlined the proposals now contained in part I. They registered their general support for the proposals and none of them expressed disquiet about the manpower implications for them.
  We believe that overall about four civil servants will be needed to operate the type approval and on-site testing provisions of the Bill. As I explained, we do not believe that an elaborate bureaucratic back-up will be necessary. The enforcement of part II, for instance, will be a matter of matching records of boilers supplied with records of boilers tested for about 700 boilers a year.
  Many hon. Members discussed the fact that the Government had not sought to cover electrical appliances. Those hon. Members included the hon. Members for Midlothian and for Merthyr Tydfil, my hon. Friends the Members for Derbyshire, South-East and for Carshalton, the hon. Member for Leigh and my hon. Friend the Member for Essex, South-East, who asked about consultations with the Consumers Association and the gas and electricity consultative councils, which in fact had been consulted in the run-up to the introduction of the Bill. The only hon. Members who seemed to be almost completely in line with the Government on this matter were the hon. Members for Bristol, North-East and for Rother Valley. These are difficult questions to get to grips with. We shall have more time to deal with them in Committee.
  I accept much of what hon. Members have said about the likelihood that domestic electrical appliances will consume an increasing proportion of the electricity used in the home, and what has been said about the importance to the consumer of efficiency in energy use. This is certainly not a matter of indifference to the Government. We continue to make it clear to manufacturers and others that we think that a high priority should be given to practical, cost-effective improvements in energy efficiency of all appliances, including domestic electrical appliances. However, there is a number of important points that must not be overlooked.
  The Government remain far from convinced that type approval would be cost-effective for domestic electrical appliances. Most electrical appliances already convert electrical energy to heat or mechanical energy to a high degree of efficiency. Of course, this is not the only aspect which is relevant to energy efficiency—controls on appliances and insulation on things like ovens and

  711
  refrigerators are important, too—but it represents a major difference between electrical appliances and appliances using other fuels. There are even, I am advised, problems about how standards of energy efficiency for domestic electrical appliances might be devised.
  International standards bodies have been working in this field for 15 years, and they have so far failed to produce acceptably accurate standards by which the energy consumption of domestic electrical appliances—except for ovens—could be measured for legislative purposes. It appears to the Government, therefore, that there is a real possibility that setting up a type-approval system for domestic electrical appliances would add to manufacturers' costs, and hence to the prices paid by consumers, represent a further burden of bureaucracy and control, and achieve relatively little in terms of improved energy efficiency.
  Many of the appliances covered by the Bill are not sold direct to the customer. They are sold through builders, central heating installers and so on. The final user of the appliance—the person who pays the fuel bills—often has little say over which appliances are installed. The market pressure on manufacturers to improve energy efficiency is indirect, and often therefore imperfect.
  The situation with domestic electrical appliances is very different. They are bought direct by the final user. There are many competing products to choose from. The customer can go to things like reports of the Consumers Association to see how much different appliances cost to run, and what the alternatives are. Manufacturers use claims of improved energy efficiency as selling points. Recently, for instance, a freezer fitted with a new compressor was advertised as having lower power consumption, as was a redesigned vacuum cleaner. Market forces seem to operate for these appliances in the direction of improved energy efficiency. In these circumstances the case for the Government's intervening in the market place by imposing requirements for type approval is not strong.
  Mr. Eadie Mr. Eadie rose—
  Mr. Moore: I should like to finish this part of my speech before giving way.
  The proposals now incorporated in part I have been the subject of wide consultation. In formulating them we sought the views of 170 different organisations and tried to take their comments into account. The great majority of those that responded—this included a majority of the organisations representing United Kingdom manufacturers and the consumer organisations—agreed with the Government's general approach. We were, therefore, able to bring the Bill to Parliament in the secure knowledge that it commanded a wide measure of support among those whom it was likely to affect.
  If we were now to extend the scope of the Bill to cover domestic electrical appliances, despite all the comments that I have already made about the lack of cost-effectiveness, we should be in a different position. We should be acting without prior consultation. Indeed, we should be in an even less defensible position, since the main association representing manufacturers of domestic electrical appliances has made it clear to us, following discussion of this matter in another place, that it is strongly opposed to an extension of the Bill and that it believes that such an extension would be detrimental to its members' commercial interests, both in this country and in overseas
  712
  markets. The House should consider very carefully before moving away from the broad agreement among those affected upon which the Bill has hitherto been based.
  Mr. Eadie: I am grateful to the Minister for giving way. I know that he was on an important part of his speech when I tried to intervene.
  The consumer organisations have doubts about the matter. It may be that the hon. Gentleman has now covered the point that I wished to raise. I wanted to ask whether he could give an assurance that there was no difficulty in the export market. One of the arguments that were advanced in relation to other appliances was that type approval would help the export market. Is the hon. Gentleman telling us that, because there is no type approval for domestic electrical appliances, no difficulty is encountered in export markets?
  Mr. Moore: The hon. Gentleman has made an important point. We are concerned with exporters of other appliances as well. We are concerned with manufacturing industry generally.
  We have had further consultations with the Association of Manufacturers of Domestic Electrical Appliances. I repeat that it says that an extension of the Bill would be detrimental to its members' commercial interests, both in this country and in overseas markets. We shall come back to this important matter in Committee. It is a factor that we must be concerned about.
  This has been a useful and very timely debate. I am grateful to all those right hon. and hon. Members who have spoken. If I have not taken up every point made in their speeches, I shall deal with them in correspondence.
  The Bill represents a contribution to the country's energy conservation strategy. However modest, I stress that it is a contribution. It is aimed at improving, over time, the efficiency of one of the most important single groups of energy-using appliances. I am grateful for the welcome that it has received, and I commend it to the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  ENERGY CONSERVATION [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to make provision for regulating the design, construction and operation of certain energy-consuming appliances and otherwise with respect to the nation's use of energy, it is expedient to authorise the payament out of money provided by Parliament of—

  (a) grants made by the Secretary of State with the approval of the Treasury for the purposes of any scheme for the provision of advice with a view to promoting the conservation of energy; and

  (b) any expenses incurred by a Minister of the Crown in consequence of the provisions of that Act.—[Mr. John Moore.]

  PARLIAMENTARY COMMISSIONER (CONSULAR COMPLAINTS) BILL [LORDS]
  Order for Second Reading read.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 66 (Second Reading Committees), That the Bill be now read a Second time.
  Question agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).
  INTERNATIONAL ORGANISATIONS BILL [LORDS]
  Order for Second Reading read.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 66 (Second Reading Committees), That the Bill be now read a Second time.
  Question agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  INTERNATIONAL ORGANISATIONS [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to make further provision as to the privileges and immunities to be accorded in respect of certain international organisations and in respect of persons connected with such organisations and other persons, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the provisions of that Act in the money payable out of money so provided under any other Act.—[Mr. Boscawen.]
  MERCHANT SHIPPING BILL [LORDS]
  Order for Second Reading read.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 66 (Second Reading Committees), That the Bill be now read a Second time.
  Question agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  WAYS AND MEANS
  MERCHANT SHIPPING
  Resolved,
  That, for the purposes of any Act of the present Session to replace by amounts equivalent to specal drawing rights of the International Monetary Fund the amounts in gold francs specified in certain provisions limiting the liability of shipowners and others, it is expedient to authorise the payment into the Consolidated Fund of any fees received by the Treasury in respect of certificates issued under that Act.—[Mr. Boscawen.]

  EUROPEAN COMMUNITY DOCUMENTS
  Motion made, and Question put forthwith pursuant to Standing Order No. 73B (Standing Committees on European Community documents).

  INCOME TAX
  That this House takes note of European Community Document No. 4049/80 and the draft Council Directive concerning the harmonisation of income tax provisions with respect to freedom of movement for workers within the Community; and supports the Government's intention to negotiate satisfactory arrangements for those affected by the draft Directive.—[Mr. Boscawen.]
  Question agreed to.

  A12 Road, Martlesham
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]
  7.52 pm
  Mr. Keith Stainton: One is always grateful for the opportunity to ventilate an issue in this Chamber, and I am doubly grateful to the Minister for his courtesy in being present. I hope, not too precociously, that I may look forward to a sympathetic and meaningful reply.
  Briefly, the issue which I raise concerns what was referred to in the June 1980 White Paper, "Policy for Roads", as the Martlesham bypass in Suffolk. It features on page 49 under the heading "Reserve List 1984 onwards" at an end-1978 cost of £3 million. Its projected length is 1·9 miles.
  Both the cost and the length are timely when measured against any current road project, and this is the central point which I wish to make in the debate. We are now witnessing the reconstruction of the Ipswich southern bypass and the Orwell bridge. The total cost of this scheme will almost certainly top £70 million on current updated estimates. Yet the access to and egress from this £70 million scheme at the north-eastern corner at Martlesham will, without implementing the June 1980 White Paper proposal, merely link this magnificent new network to the existing A12 which, through both Kesgrave and Martlesham, is little more than a passable country single carriageway.
  Clearly this would be wrong. The new Ipswich southern bypass will carry traffic from London to East Norfolk round Ipswich and out at Martlesham. Likewise, this junction will funnel in the reverse flow. There is also the ever-mounting container traffic generated by the Haven Ports of Felixstowe, Ipswich and Harwich deriving from the East Midlands and the North-East.
  What must also be understood and appreciated is that the traffic flows in this vicinity are in any event already dangerously high. The most recent figures that I have been able to obtain from the Suffolk county surveyor show about 22,000 vehicles per 16-hour day on a yearly average, and that is a yearly average which diminishes the high seasonal flow in the summer. In the vicinity, the position is being aggravated by the happy relocation and expansion of the Post Office research station at Martlesham and the new county police headquarters and general development in the Martlesham area.
  Without the Martlesham bypass, for which I am arguing tonight, the hazards, delays and tail-backs are certain to become intolerable at this point. It is in this context that I make my plea to the Minister.
  Inevitably, there has been slippage with the Ipswich southern bypass itself. This gives us breathing space, I urge my hon. and learned Friend to use this to accommodate the Martlesham bypass with some certainty as part of the overall Ipswich southern bypass programme.
  It is somewhat distressing that in a letter which I have received from the Suffolk county surveyor I am told that the necessary representations in this matter were made to the director of the Eastern Road Construction Unit of the Department of Transport on 18 September 1979. He says:
  "Despite repeated reminders, no response was received, except that in July 1980 a letter was received, stating that the

  715
  Department had been made subject to cash limits and that they were unable to devote any further resources to the joint study and that their work on Martlesham bypass had stopped."
  It is my understanding from the consulting engineers, Messrs William Dobbie, that that is precisely the situation and that the possibility of the Kesgrave wing itself has become a county project upon which, happily, the county is still conducting its own survey for improvements.
  I should not like, as a result of my reference to the delay in the reply from the Eastern Road Construction Unit to the representations from the county surveyor, to imply friction. Throughout very lengthy exchanges with both the Suffolk county council and the much and properly concerned Martlesham parish council, the Eastern Road Construction Unit at Bedford has shown co-operation and understanding. I should like that to be recorded and transmitted, I hope with a firm date from the Minister, so that when he or the Secretary of State cuts the tape for the official opening of the Ipswich southern bypass he will not finish up in a traffic jam or something worse as he emerges on a single carriageway at Martlesham Hill no doubt en route to visit the other numerous attributes of my constituency of Sudbury and Woodbridge.
  Adjournment debates usually come on late, and the prospect of them is known to engender remote and dangerous thoughts in the minds of certain Ministers. Tonight we have been fortunate. It is still only 7.59 pm. Let us hope that this is a happy omen for a firm and early commitment to this small but critical finish to the bold new road schemes around Ipswich which were authorised ministerially under the previous Conservative Administration.
  8 pm
  The Under-Secretary of State for Transport (Mr. Kenneth Clarke): I begin by congratulating my hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton) on his good fortune in being able to initiate a debate on the Martlesham bypass and also on his wisdom in choosing an evening when we could have a debate at a civilised hour. I know that this is a matter of considerable importance to him and his constituents.
  My hon. Friend began by pointing out the fairly important strategic position that Martlesham has on the very busy A12 trunk road. The A12 is of great strategic importance nationally. It is the main route from London and the South-East to the ports of Ipswich, Felixstowe, Lowestoft and Great Yarmouth. I am glad to say that for most of its length, from London to Ipswich, it is already a high quality road.
  Two stretches between London and Ipswich, however, need improvement. The first is the length from Gallows Corner in Havering to the Brentwood bypass. The second is where the A12 at present goes through the middle of Chelmsford. I am glad to report that we expect to begin work on those two gaps in the not too distant future. We expect to begin work on the Gallows Comer scheme early in 1982. Having announced last year the preferred route for the Chelmsford bypass, we hope to publish the draft orders for a southern bypass in June this; year. There will no doubt be controversy about that bypass, and inevitably there will be a public inquiry. Nevertheless, we intend to proceed with its preparation, and it is in the main programme for 1984 onwards. If all goes well with the
  716
  statutory procedures, and if funds are available, a start early in the period 1984 onwards should be possible for the Chelmsford bypass.
  North of my hon. Friend's village of Martlesham we have a scheme for a western bypass of Great Yarmouth, including a second crossing of the river Yare. I am giving great priority to that bypass because of earnest requests, not least from my hon. Friend the Member for Yarmouth (Mr. Fell). I announced the preferred route in June last year and we hope to be able to publish draft orders for that road in May this year. Again, therefore, much has been achieved for Great Yarmouth.
  There is also the important Ipswich bypass on which work has already begun, and I am glad to say that the Orwell bridge is making very good progress. We still have to take decisions, following a public inquiry, about the route of the southern and eastern sections of the bypass, but my right hon. Friend and I hope to announce decisions to finalise the route very soon indeed.
  That activity up and down the A12 no doubt makes people in Martlesham particularly resentful at having to wait so long for their schemes to begin. My hon. Friend, with his local knowledge, has described better than I could the present traffic conditions on the A12 as they affect the village. I accept that the present road conditions are inadequate and that the village plainly needs a bypass as soon as it is feasible and practicable to finance, design and construct one. I am not sure that the opening of the Ipswich bypasss will bring more traffic on to the road than is there already, but I am sure that it will create an even greater contrast between conditions on the new stretches of the road and those in Martlesham from which my hon. Friend's constituents at present suffer.
  My hon. Friend has asked when there will be tangible signs of progress, because this bypass has unfortunately had a long and chequered history. It appears to have begun life as part of a longer bypass through both Kesgrave and Martlesham. A scheme was included in draft orders published in 1970. Unfortunately, those draft orders for the longer bypass attracted much opposition. In the light of that opposition, the orders were withdrawn in 1971. I have to concede that in the intervening 10 years not very much appears to have occurred. It was apparently decided to await the results of the Ipswich transportation study, which was put in hand to seek a solution to the traffic problems of Ipswich.
  With the decision to provide a bypass of Ipswich, it was decided that the original Kesgrave-Martlesham proposals should be shortened to bypass Martlesham only. It therefore became the Department's policy that the A12 through Kesgrave should cease to be a trunk road when the Ipswich bypass had been constructed. That decision, taken before the present Government came to office, means that it is now for Suffolk county council to decide whether to make any improvement to the road in order to benefit Kesgrave. By the time the Government came to office, therefore, a bypass was envisaged for Martlesham alone. It was not, however, very well advanced when we came to office.
  My hon. Friend asked a parliamentary question of my predecessor in February 1979. The hon. Member for Gateshead, West (Mr. Horam), who then held the post which I now hold, made the position clear. He said:
  "We are continuing work on a bypass of Martlesham and subject to the outcome of the statutory procedures and the availability of funds, construction of this bypass is more likely

  717
  to start in 1985–86. It is too early to give dates for the intermediate processes.""—[Official Report, 23 February 1979; Vol. 963, c. 383.]
  That was the position of the Martlesham bypass when we came to office. One of our first duties was to reorganise the priorities in the national trunk road programme, which we did in preparing the White Paper, published last year, to which my hon. Friend referred. In that White Paper the Martlesham bypass appears in the reserve list for 1984 onwards. My hon. Friend and his constituents feel some disappointment at that not very exciting description of where the Martlesham bypass stands in the national order of priorities.
  Unfortunately, we faced some difficult choices in drawing up that national trunk road programme. The main thing that we had to do was bring some realism into the programme to match the timetable that had been given for progress on various schemes with the resources that were likely to be available. We did not make any significant change in the overall level of resources, and we tried as far as possible to protect the trunk roads construction programme from the effects of the present financial crisis and to avoid unnecessary cuts.
  However, maintaining roughly the same level of spend as our predecessors, it would still have been impossible to complete many road schemes by the dates that our predecessors had given to many people waiting for them. We found that roads in the trunk road programme had been given target dates which were utterly unrealistic and could not be met. The result was that expectations had been created in many towns and villages which stood no chance of being fulfilled. We therefore looked at the likely resources and produced a timetable which made sense in the light of those resources.
  The first call on those resources was intended to be the schemes in the main programme, which include the Great Yarmouth scheme and others to which I have referred. Reserve list status means that such a scheme will not have first call on resources available, including resources available for preparatory and design work. The main programme schemes will have first priority for all resources. But reserve list status means that work will be continued as far as practicable. It is a way of ensuring that, if main programme schemes slip, desirable schemes are sufficiently prepared to be slotted in to take their place. That was the category of road schemes into which we put the Martlesham bypass.
  At the moment, as my hon. Friend has said, there is not a great deal of work being done on the Martlesham bypass. The preparation work is not being given very high priority. Nevertheless, some work is planned for next year, and I assure my hon. Friend that we shall continue the design work and that the consultants will be given the necessary instructions to keep up progress and to get nearer to having a road designed and ready. But we have to be careful in allocating resources for preparation work on trunk roads.
  Our inheritance was that, at least in theory, preparation work was being continued on all 400 roads in the trunk road programme. If resources were to be devoted to preparation costs on that scale, it would merely mean that money would be spent over the next two or three years on preparation work for roads which could not conceivably be built for many years. The money spent on preparation
  718
  work of that kind would reduce the amount available for getting on with construction now on vitally needed roads which are ready to be built.
  We are therefore trying to match the extent of preparation work to likely construction dates and we are giving the highest priority to preparation work on roads likely to be built in the next two or three years. The result is that we are fitting in preparation schemes such as Martlesham as far as possible. As I have said, I hope that it will be possible to spend a significant sum on this scheme next year.
  My hon. Friend's main point, then, is whether sufficient money could be spent and higher priority given to ensure that the Martlesham bypass is opened at the same time as the Ipswich bypass or shortly thereafter. The Ipswich bypass, however, is well advanced. We are making as much speed as possible in building that road, and I hope that the full length of the bypass will be open in the not too distant future.
  Unfortunately, with Martlesham we are at a comparatively early stage of the preparation. The scheme was published in 1970 but excited so much opposition that it was withdrawn. The next step now will be to examine possible alternative routes for taking the traffic around the village and for submitting them to the public for their reactions.
  I realise that my hon. Friend will be more familiar with the village than I and will know this better than I do, but I expect that there will be some controversy in Martlesham whichever route we choose. For example, should we stick to a route on the lines of that indicated in the original 1970 plan, which passed to the west and north of Martlesham? My understanding is that people who live in Great Bealings and Little Bealings would not be very pleased with that choice.
  On the other hand, should we go for an improvement along the lines of the existing road? That would be rather difficult in this case. One can also expect that such an improvement would be fairly unpopular in the village because it would keep the traffic in the centre of the built-up area. One could also examine the possibility of an eastern bypass, but the problem there is that difficult ground conditions could significantly increase the cost.
  I pose those questions not to answer any of them but to show that there is genuinely a need in this case for public consultation and that it will be almost impossible to produce a line which will please everyone. Therefore, we have to have a public exhibition, leaflets, and so on, to try to find out which route will achieve the broadest consensus of the local inhabitants.
  I am glad to say that we expect to reach that stage in the spring of 1982. We shall then come to conclusions about the route, to be worked up as soon as possible after that. Once we have reached the stage of choosing a preferred route, at least that will remove some of the uncertainty which no doubt exists in the village and affects planning decisions and matters of that kind.
  However, even after the choice of preferred route has been made, there will then have to be the detailed design work to produce the drawings upon which the draft orders are founded. If there continue to be objections, there will need to be a public inquiry. I am afraid that the timetable for trunk road works of this kind is such that a great deal of good luck and smooth progress would be required if we were to be ready to start work some time in 1986, assuming that the funds were available.

  719
  I realise that that time scale will disappoint my hon. Friend and his constituents, but there is keen competition for resources. The decisions which we had to take in drawing up our priorities were often hard and involved difficult choices between similar villages in different parts of the country. Many villages like this now find heavy lorry traffic through the built-up area unacceptable. There is a greater demand for bypasses than can conceivably be served in the near future, and some deserving schemes have had to take low places in the queue. But the programme is not immutable, and we intend to review it year by year, taking things a little further as we get roads completed and into use. The time will come in this calendar year when my right hon. Friend and I will have to review the road programme once more and reassess the priorities that we put on roads last year and decide which schemes now appear to be in urgent need and which might be given greater priority.
  As I said, even with greater priority, Martlesham will take some years to prepare, but no doubt the time scale that I have described could be somewhat shortened if we devoted greater resources earlier on to preparation and design work.
  I can make no promises about the outcome tonight, but I am impressed by my hon. Friend's strength of feeling. He has gone to the extent not only of writing to me but of raising the matter on the Adjournment. I can certainly promise him that, when we review the programme and reconsider our priorities when updating the programme and looking at how we will spend our resources next year, we shall specifically consider the case of the Martlesham bypass to see whether we can do something better for it.
  However, there is great competition for resources. Higher priority for the Martlesham bypass will almost inevitably mean a lower priority for some other township which is expecting to have a bypass in the not-too-distant future. However, I shall not deal with the difficulties. I appreciate the urgency of this matter and the sense of frustration in his constituency. Therefore, I promise that we shall give this matter our particular attention when we next review the programme and our priorities within it.

  Police Houses (Gateshead)
  8.16 pm
  Mr. John McWilliam: I wish to raise the problem of the acquisition of police houses by Gateshead metropolitan borough council. A total of 31 police houses were declared surplus to the police authority's requirements. Because of the problems of housing being left empty and of vandalism, the council and the Northumbrian police authority agreed that Gateshead should acquire them. To combat vandalism, it was also agreed that tenants would be put into the houses as quickly as possible and that the transfer value would be the value ascribed to the houses by the district valuer.
  Nineteen of those houses were satisfactorily transferred to the council and are fully occupied. A further 12 were applied for, of which three are still vacant, five have temporary occupation and four are occupied. There is no permission to transfer any of those 12 to the council. The problem is with the four which are currently occupied in order to combat vandalism. The district valuer took so long to come up with a valuation for those houses that the Government moratorium on housing intervened. Those four houses are now occupied by people who would have to be evicted if the Government did not agree to the transfer of the houses at valuation.
  Two of those four houses are occupied by people with medical priority for council housing and one was even slightly modified by the borough council to enable its disabled occupant to use it as effectively as possible. It seems that the civil servants in the Department have not fully appreciated the effects of a simple transfer being stopped. A little flexibility would have allowed those four houses to be accepted. In present circumstances, those four families could become homeless almost overnight—and two of them are the families of disabled people.
  My hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) was the chairman of the Gateshead district housing authority at the time of the decision to acquire the 31 houses and I am sure that he will supplement the historical reasons why we felt it important to bring them into local government ownership.
  The object of the exercise was, first, to relieve the police authority of the responsiblity for empty houses, for which it had no further use, and, secondly, to guard against vandalism.
  I respectfully ask the Minister to consider fully the implications of the decision not to allow the transfer of those four houses to Gateshead at valuation. I ask him to think carefully about the consequences of that decision on the four families involved. I ask my hon. Friend the Member for Newcastle upon Tyne, Central to enlighten the House about the historical reasons for the houses being acquired by the local authority.
  8.20 pm
  Mr. Harry Cowans: I am grateful to my hon. Friend the Member for Blaydon (Mr. McWilliam) for raising this matter. I have the honour to represent Newcastle upon Tyne, Central, but for many years I was chairman of the Gateshead metropolitan district council housing committee. We have listened to many debates about vacant properties and have heard

  721
  many remarks about local authorities in that respect. I could argue that case, but it is not the matter now before the House.
  The historic position is that certain houses were unoccupied, overgrown with weeds, and radically vandalised at a time when there were long housing waiting lists. As chairman of the housing committee, I visited many of the houses. There was great justification for what was being said about them. The local authority took the view that it should open negotiations with the Tyne and Wear county council, the police authority for Northumbria. It agreed to take over all 31 houses. That presented some difficulties, because a small number were still occupied. However, it was informed that they would soon become unoccupied. The local authority thought it best to deal with the problem by phasing the taking over of the houses by first taking over those that had been vandalised, were unoccupied, or were unkempt. By that time the remainder would have become vacant. It carried out that programme succesfully in respect of about 18 or 19 houses. But Gateshead being what it is, and with the time that it takes the district valuer to assess a situation, it was inevitable—although this was not known at that time—that it would be caught in the moratorium on housing.
  To save money, the local authority reached an agreement with the Tyne and Wear county council to move in tenants prior to the actual taking over of the houses. That policy prevented further vandalism because people were looking after the premises. By the time the houses were taken over the programme would cost the district council less money because people had occupied the houses and looked after them. That arrangement worked well until the local authority was caught in the moratorium.
  The local authority could grant only temporary tenancies to those moving into the properties in advance of it actually taking over the houses. That was acceptable, provided that the houses were eventually taken over. Due to the delay of the district valuer—I am not placing blame on him as such matters take time—the subsequent moratorium and the delay of the Department of the Environment, the local authority had granted temporary tenancies for houses that it did not own. If nothing is done about that, and the previous decision is not now honoured, two problems will arise. The local authority is in a dilemma because it has tenants for houses that it does not own. If the police authority now says that the local authority cannot buy those houses, what will happen to the tenants? The local authority gave an undertaking and fully expected the full transaction to take place. It will have to rehouse those tenants. With the greatest humility, I suggest to the Minister that those houses will become vacant again, will be vandalised and will become unkempt. While the decision-making process is taking place, the amount of money subsequently involved in making the houses habitable again will be out of the question.
  I plead with the Minister to consider the matter sympathetically. The decisions taken were caught up by subsequent decisions. Unfortunate people are involved, even though they were not parties to those decisions. The matter does not involve millions of pounds, but it does involve ordinary people. If the Minister looks favourably
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  on the matter, he will not only help the local authority but will ease the minds of the tenants temporarily accommodated. He will also save a great deal of money by usefully utilising the houses rather than returning them to their unoccupied state.
  8.26 pm
  The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): I congratulate the hon. Member for Blaydon (Mr. McWilliam) on his good fortune in obtaining an additional Adjournment debate. That happens from time to time. It has one snag. As someone who has raised such a debate, I am fully aware of it. If the Minister does not know about the subject until six o'clock at night, he does not have much information at his disposal. He does not have a detailed brief to study, and he must take a judgment and act on his initiative. That does not upset me in the least. All I hope is that I can give the hon. Gentleman enough information to make him feel that it has been a worthwhile exercise. I am grateful also to the hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) for filling in those historical points.
  From the limited amount of information that I have been able to obtain, I believe that the case is not as straightforward as the two hon. Gentlemen suggested. I accept the remarks of the hon. Member for Newcastle upon Tyne, Central in his historical analysis of the events that took place, and the reason why Gateshead followed a certain practice with the Tyne and Wear county council, the police authority for Northumbria. There is, perhaps, only one matter that divides us tonight on his historical analysis, and that is the fact that time has moved on. A new Government are now in power with a new policy on municipalisation. The days when it was simple to acquire scores of properties—I am not necessarily referring to the hon. Gentleman's authority, but to authorities in many parts of the country—frequently unsurveyed and without proper financial consideration, are over. They ended in June 1979. The facts in this case were known fully to the Gateshead council because the ban on municipalisation took effect from June 1979.
  Gateshead, like all local authorities, was told of this fact, and it was reaffirmed in the HIP allocation letter issued on 21 February 1980—more than a year ago. I repeat that all these facts were known to Gateshead. It has, however, proceeded as though the situation had not changed. I can only say that the local authority has either been naive or has wilfully chosen to disregard the fact that we specified when we sent out the HIP allocations, the categories of municipalisation that were to be permitted.
  Mr. Cowans: I accept what the Minister says. One fact stands between us, however. The information to which he refers was not known when the original decision was taken. That is the crucial point. Had it all been available before the decision was made I would agree with him, but it was not.
  Mr Finsberg: I was coming to that point in the course of my reply, which I stress is based on the limited information that I have. I strongly believe that municipalisation adds nothing to the housing stock. It merely transfers from one public body, or, sometimes, from a private individual, to a public authority, an existing house or flat. It does not add to the total stock of housing. The Government are strong believers that what matters is

  723
  not the division but the totality of that stock. Our policy is clearly to advise all public authorities which own accommodation that is surplus to their requirements, that they should dispose of it.
  Both hon. Members made a very fair point about the difficulties caused when properties remain empty and become vandalised. I have seen some of the vandalism in Gateshead because until I was transferred to my present position I visited Gateshead about every second month. I therefore know the problems. I have seen them elsewhere. Leaving aside local authority property, there should be no reason, when a public authority is disposing of its property, for it not to do pre-planning so that it will know that in, say, five months' time it will be ready to dispose of a property. At that stage it should start the process of valuation through the district valuer, getting a price, instructing an agent or getting ready for auction so that people can view the property while it is still occupied and the transaction can take place almost the moment the property is vacated.
  That is what the two hon. Gentlemen and I would do if we were contemplating getting rid of the homes we might be fortunate enough to own. We would not wait until we had moved out before starting the process. But that is what happens in the case of too many public authorities. I leave aside the local authorities, which are in a separate category.
  Again, with my responsibility as a Minister for the Property Services Agency I am trying to impress upon all Government Departments that if they have properties that are surplus to their requirements they should let us know well in advance so that we may be ready to dispose of them and avoid what the hon. Gentleman rightly says are the problems caused by empty properties—broken windows and vandalism.
  I have not seen the properties in question, but I know this part of the world. I am told that they are good quality inter-war houses which are highly marketable. There should, therefore, be little or no difficulty in disposing of them. The hon. Member for Newcastle upon Tyne, Central said that much of what he has recounted happened before the rules changed. I hope that I have the right dates, because a photocopy of some pencilled figures is difficult to read. My information, however, is that of the four properties we are discussing, which are tenanted properties, the property in Southend Road, Beacon Lough, was not tenanted until October 1979, after the June ban on municipalisation. Crawley Gardens, Whickham was tenanted in February 1980 and Duckpool Lane, Whickham in November 1979.
  They all occurred after the ban on municipalisation. The house in Lobley Hill Road, Gateshead, was acquired in December 1978, under the previous Administration.
  Mr. McWilliam: The hon. Gentleman makes a fair point. However, I am sure that he will accept that it is also fair to say that, permission having previously been given to this agreement—and in the case of Whickham modifications having been made to accommodate a disabled person—there is the likelihood that there may have been an overrun. I should stress that permission had previously been given. Although the circular had withdrawn that permission, the local authority in the meantime had reviewed the housing stock. The housing allocation machinery had taken its course and people were allocated accordingly.
  Mr. Finsberg: I am trying to be helpful. June 1979 was the time when local authorities were told that municipalisation as it had been known had come to an end, and no local authority should have assumed that properties would still be available to it. However, it was after that date that the houses were tenanted and that is the important point.
  The local authority knew full well that it would not qualify for municipalisation permission as a result of the change of rules. Yet it put in the tenants in the full knowledge that different rules were now operating. I must go by the dates which I have been given, even though I have only had a chance of studying them for an hour-and-a-half, and they are written in pencil.
  However, the Lobley Hill Road tenants were put in by the local authority in December 1978. In that case, provided that the transaction does not take place in this financial year, I am prepared to agree exceptionally that, because there was a hangover and because it was tenanted before the change, that property can be acquired out of Gateshead's HIP allocation for the next financial year.
  Mr. Cowans: I am grateful to the Minister, and I know that he is trying hard to be helpful. I accept the date of the circular. However, he will recall a phrase in the speech relating to the phasing-in of tenants as property became available and as there was agreement. I accept the validity of the argument that if a circular emerges from Government subsequent to that date, one should not do other than what the Government document says. I am grateful to him for accepting my argument in relation to the 1978 acquisition. However, our reasonable point is that we had already obtained agreement for these houses prior to the putting in of tenants. No other houses were acquired following the June 1979 circular. The properties had already been acquired. The tenancies were part of the phasing-in operation. I would fully accept what the Minister is saying had we acquired houses following the June 1979 circular.
  Mr. Finsberg: The hon. Gentleman and I must remain somewhat apart on this one. I can only try to put myself in the position of the chairman of the Gateshead housing committee. Like the hon. Gentleman, I spent a long period in local government. I would like to think that I would have seen the circular in June 1979 and I would have asked my chief officer "What effect will this have on the outline agreement that we obtained with the police authority?" He would have said "Well, sir, I think that this is now going to stop us acquiring but I shall find out." That was not done. If it had not been done, I should have said "We had better play safe. We shall put people in on a temporary basis, but we shall not asume that they will be there permanently." I am not speaking only as a Minister. I spent a quarter of a century in local government and I dealt with housing for a long time in a stress area—namely, the London borough of Camden. I do not believe that I would have acted as Gateshead acted.
  However, I am prepared exceptionally to agree to the one property being acquired in the next financial year out of Gateshead's HIP allocation. My Department will write to Gateshead to confirm the decision that I have reached. I do not think that I can go any further with the other properties.
  Mr. McWilliam: The Minister is being very fair. However, will he accept that the accident of a delay in a

  725
  decision by the district valuer that caused three families to become homeless is not one which he and I, as officials in housing administrations in the past, can accept as inescapable? I suggest that if the hon. Gentleman or I were officials in the same housing administration, we would in fairness grant tenancies to the other three tenants in the circumstances. We are worried not about the 12 houses but four houses, two of which are occupied by disabled tenants.
  Mr. Finsberg: I hope that I have demonstrated that I am prepared to be flexible in considering the rules. However, there has to be some limit. To proceed until 1980 and to put in tenants at that stage demonstrated a total disregard and disbelief in the Government's policy. I do not know about the delays of the district valuer.
  Mr. Cowans: They were substantial.
  Mr. Finsberg: The district valuer does not come under my Department. If there were substantial delays, I am sure that my right hon. and learned Friend the Chancellor of the Exchequer will want to hear about them. Even if there had
  726
  not been delays that caused the properties, or some of them, to be caught in the moratorium, permission would not have been given because the situation differed once the June 1979 position had been adopted.
  I think that responsibility must rest squarely on the shoulders of Gateshead and certainly not on my Department. I can only suggest that urgent negotiations take place between Gateshead and the police authority to ascertain how quickly Gateshead can rehouse the tenants in the three properties for which I do not find it possible to give permission. Gateshead will have to accept that they are a priority upon their housing resource allocations. They will have to be rehoused by Gateshead.
  I am extremely upset that this has to happen to individual tenants. However, it is an inescapable consequence of Gateshead not accepting that there was a policy change and proceeding to implement policy that was perfectly acceptable under the previous Labour Government but unacceptable under this Government. I fear that I can go no further than giving my agreement to the one property to be acquired.
  Question put and agreed to.
  Adjourned accordingly at sixteen minutes to Nine 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 Rochester.

Club Christmas Funds: Income Tax
Lord Boyd-Carpenter: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they were consulted by the Inland Revenue in connection with that department's decision to demand payment of income tax on contributions to club Christmas funds and whether they will identify the new statutory power which gives the Inland Revenue legal authority to make this demand.
The Minister of State, Treasury (Lord Cockfield): My Lords, the law on the subject is I fear quite clear. Payments of this kind constitute "emoluments" and are chargeable to tax. If payment is made through the employer he is required to deduct tax under PAYE in the ordinary way. There has been no change of policy: the Inland Revenue have simply been enforcing the existing law. No question of consulting Ministers would therefore arise.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the view of the law which he attributes to the Inland Revenue is plainly contrary to the view expressed by Lord Donovan, who I would accept was a very great authority on revenue law, a few years ago? Is it not a fact that this demand for tax on Christmas presents is a new development introduced in the last few months by the Inland Revenue?
Lord Cockfield: My Lords, although I can understand my noble friend's feelings on this matter, I fear that I cannot agree with what he says. The law has been in the present form for very many years, and Section 183 of the Income and Corporation Taxes Act 1970, which is simply a consolidation measure, says:
"the expression 'emoluments' shall include all salaries, fees, wages, perquisites and profits whatsoever".
The clear view of the Inland Revenue is that it is wide enough to cover the gratuities in question. On the second part of my noble friend's question, the position is that from time to time the Inland Revenue audit the records of employers and if they find, as in the present case, that the law has not been properly applied, they ask the employer so to apply it.
Lord Boyd-Carpenter: My Lords, is my noble friend suggesting that the existence of club Christmas funds came as a startling surprise this year to the Board of Inland Revenue, which has not previously made such
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demands? Is he simply brushing aside, on the advice of some lawyer in the Inland Revenue, the view of Lord Donovan?
Lord Cockfield: No, my Lords; this is not so. I do not think that it came as a surprise either to the Inland Revenue or to anyone else that gratuities were paid to club servants at Christmas time. If these gratuities were not brought under the PAYE system, there was an obligation on the employees concerned to include them in their annual income tax returns. I am assured that no change in practice has taken place in this matter.
Lord Kinnaird: My Lords, on what my noble friend the Minister has told us, can he say whether—and, if so, when—the Inland Revenue intend to put a tax on tips to taxi drivers and railway porters?
Lord Cockfield: My Lords, the position there is quite clear. Tips of that nature are liable to income tax and it is the practice of the Inland Revenue to endeavour to ensure that tax is paid upon them.

Local Authority Services: Contracting-Out
2.40 p.m.
Lord Gainford: 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 steps they are taking to encourage efficient private enterprise to carry out services at present undertaken by local authorities.
Lord Skelmersdale: My Lords, Ministers have stressed in speeches and articles that it is important for local authorities to consider how contracting-out can produce useful economies in the provision of services. The Department of the Environment has commissioned a study of service and pricing decisions for a range of local authority services in England. More specifically, regulations implementing Part III of the Local Government, Planning and Land Act 1980, which will require a wide range of the work of local authority direct labour organisations to be the subject of competitive tender, will shortly be laid before Parliament.
Lord Gainford: My Lords, I thank my noble friend for that Answer. Can he give any information as to what assurance ratepayers may have in the future—bearing in mind the reductions in staff of local authorities? Can he say as regards the rumours of considerable increases in rates which are circulating whether ratepayers may look forward to value for money?
Lord Skelmersdale: My Lords, the profit motive of course promotes efficiency and thus potential cost-savings for a given level of service. Other potential benefits would include savings on capital investment, less administration and management, and flexibility

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to respond to variations in work load. Thus I am satisfied that ratepayers will get good value for money from this service.
Lord Wells-Pestell: My Lords, can the noble Lord give the House some indication of the local authority services to which he referred and which were implicit in his reply to his noble friend, and say whether he is in a position to know to which local authority services his noble friend referred?
Lord Skelmersdale: My Lords, the most normal services which we envisage in this area are the environmental health services, which, of course, include such services as public conveniences, the control of air pollution, cesspool-emptying, and so on. The other particular one we have in mind is refuse collection.
Lord Avebury: My Lords, will the Minister consider the particular case to which public attention has been drawn recently of the local authorities with more than 1,000 dwellings lying vacant at a time of severe housing shortage, while the local authorities concerned are refusing to hand these dwellings over to responsible housing associations which are willing to run them for the benefit of the community?
Lord Skelmersdale: My Lords, I am not sure that this is implicit in the Question, but I shall of course bring the noble Lord's point to the knowledge of my right honourable friend.
Lord Brockway: My Lords, would not the Minister agree that there is very great danger in this proposal? Will it not mean that, when they are not under the authorities in the public service, the motivation of these services would, under free enterprise, become profit?
Lord Skelmersdale: My Lords, as I said to my noble friend Lord Gainford, the object of the legislation on direct labour organisations is that they must be seen to give ratepayers and taxpayers value for money. They must be accountable, make efficient use of their assets, and face real and direct competition from the private sector. Our legislation will achieve that.
Lord Wells-Pestell: My Lords, may I ask the Minister whether he is aware that we on this side of the House, and I am sure his noble colleagues behind him, congratulate him on the way in which he has answered what I believe is his first Question at the Dispatch Box?
Lord Skelmersdale: My Lords, the noble Lord, Lord Wells-Pestell, is very kind. I shall remember his words when we get a little busier later on in the Session.
Viscount St. Davids: My Lords, will the noble Lord agree that the motivation of profit which some noble Lords, including the noble Lord, Lord Brockway, fear may have the effect that a number of people will apply their brains, hitherto not adequately applied, to these activities and actually do them better, even at the cost of a certain amount of profit? Where the
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thing is not done so well by private enterprise, the noble Lord, Lord Brockway, will there be proved right, but this is the sort of test which we want to take place.
Lord Skelmersdale: My Lords, I can assure the House that my brain has been considerably exercised over this matter in the last few days, but basically I would agree with the noble Viscount.
Lord Leatherland: My Lords, will the noble Lord advise local authorities to set up costing systems as a result of which they could probably save a great deal of money, as the Birmingham Corporation did 60 years ago when I was put in charge of their costing system for a big department?
Lord Skelmersdale: My Lords, local authorities are always very aware of costings, and it is partly as a result of some rather loose costings that have been carried out in the last few years that we have enacted this legislation.

Small Businesses in Rural Areas
2.46 p.m.
Baroness Sharples: 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 encouragement is being given to local authority planning committees to help those wishing to set up small businesses in rural areas.
Lord Skelmersdale: My Lords, my department's recent circular on Development Control—Policy and Practice gives local planning committees clear policy guidance always to grant permission for small businesses, particularly in rural areas, unless there are specific and convincing reasons for refusing it. The circular also asks them to make sure that their development plan policies provide them with the opportunities to encourage small-scale enterprise.
Baroness Sharples: My Lords, I wish to thank my noble friend for that encouraging reply. Would he agree that sometimes country-dwellers do not always understand that small businesses which may comprise of lathes, et cetera, are considerably less offensive than, say, a pig farm?
Lord Skelmersdale: Yes, my Lords, I would agree with that. The only convincing reasons that come readily to mind are intrusion into open countryside, noise, smells, safety, health, or excessive traffic operation. Very often these small rural industries are not affected by any of these reasons.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that the chief obstacle to the establishment of small industries in rural areas, where they are badly needed, is not the planning authorities but generally the economic policies of Her Majesty's Government,

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and specifically the continuing high interest rates which make it difficult for small industries to think of branching out anywhere?
Lord Skelmersdale: My Lords, high interest rates are common to the whole economy, and I do not think to direct them specifically to small industries does us any good in this connection.
Lord Oram: My Lords, is there not a somewhat strange contrast between this Question and the preceding one on the Order Paper? The noble Lord, Lord Gainford, seems to want local authorities to provide fewer services, whereas the noble Baroness, Lady Sharples, wants them to provide more. Would the noble Lord be prepared to arbitrate in this philosophical dispute between his two noble friends?
Lord Skelmersdale: My Lords, so far as I am aware there was no collusion between my two noble friends. If there was, I am sure I would have been able to get to the bottom of it.
Earl Grey: My Lords, would the noble Lord agree that there is a large number of farm buildings not in use, and could not small businesses be encouraged to utilise these buildings for workshops, et cetera?
Lord Skelmersdale: My Lords, I am indeed aware that there are many farm buildings, but unfortunately they are often in isolated sites and without services such as sewerage, electricity, and telephones, which would need to be brought to them before they could be so used. The other problem is that very often they are with inadequate access, and the fire brigade, particularly, is concerned in the planning application for them. However, having said all that, Yes, they can be used and frequently are used for such purposes.
Lord Mackie of Benshie: My Lords, is the noble Lord aware that there are Government agencies which actually give loans at lower rates of interest to small businesses?
Lord Skelmersdale: Yes, my Lords. My noble friend Lord Long dealt at length with this subject about a fortnight ago, and I did not think it was necessary to go into his answers now.
Baroness Sharples: My Lords, could my noble friend tell us whether the time for appeals against adverse decisions by planning authorities has been speeded up?
Lord Skelmersdale: My Lords, I am afraid I have got no information on that subject. I shall write to the noble Baroness.

Fish: Subsidised Imports
2.50 p.m.
Lord Boothby: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will now prohibit the import of cheap subsidised foreign fish.
The Minister of State, Scottish Office (The Earl of Mansfield): My Lords, Her Majesty's Government are bound by the Treaty of Rome, which prohibits quantitative restrictions and tariffs on trade between member states of the European Community. Fisheries Ministers have however set up a small team of industry representatives and officials which has been charged with the task of investigating allegations of unfair and illegal imports. This team will report its findings to Ministers and to the bodies which represent the industry for consideration. All concerned will want to see this work completed as quickly as possible. Fisheries Ministers have also told the European Commission that in their view the system operating to prevent cheap imports entering our market from outside the Community is not working effectively. The commissioner responsible has given a firm undertaking to examine this problem.
Lord Boothby: My Lords, are the Government aware that in 1980 we imported 109,000 tonnes of fish from the EEC countries, much of it subsidised in one form or another, and no less than 132,000 tonnes from other countries, making a gross total of 241,000 tonnes, valued at £18 million? Is the noble Earl aware that many Scottish fishing boats are now tied up because it no longer pays them to go to sea, that our distant water fishing industry is dead, that our home fishing industry—the inshore fishing industry—is rapidly dying, and that if Her Majesty's Government allow the entire British fishing industry to crash, public opinion will never forgive them?
The Earl of Mansfield: I will deal with the various parts of the noble Lord's supplementary question one by one, my Lords. He talks about subsidised imports, but so far there has not been the cogent evidence of subsidised imports that would enable the Government to take the necessary action, and it is to that end that we have set up this small team representing the catchers which we hope will investigate and report on the facts very soon indeed.
As for the totality of imports, total imports in 1980 were 6.4 per cent. up by volume on 1979. The increase in imports in 1980 was greater from other European Community member states than from third countries, mainly fresh and chilled supplies. So far as the state of the fishing industry is concerned, the Government are only too aware that it faces difficulties on a scale unparalleled before. It is for that reason that twice last year we came to their aid financially; it is for that reason that we have advanced to now a review which was due to take place in March of this year; and it was only last week that the industry, in response to an invitation from fishery Ministers, reported to my right honourable friend the Minister of Agriculture and me, among others, setting out the sort of immediate aid they would consider most appropriate in their present very difficult predicament.
Lord Beswick: My Lords, when the noble Earl is looking for evidence of subsidies, may I ask whether he

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is taking into account the fact that the exchange rate at the present time gives a 30 per cent. advantage to the importer? What are the Government doing about that?
The Earl of Mansfield: My Louis, it is true, as the noble Lord alleges, that the present strength of the pound gives importers a price advantage so far as foreign sources of fish are concerned. I hesitate to go into the age-old argument, as it is now becoming, but we believe that the first battle for this country is against inflation and that as it is won—and it shows every sign of being won at the moment—interest rates will then come down, and I have no doubt that in due course of time the pound will settle to its appropriate level. To that end we hope indeed I am quite sure—that the present price advantages which other countries enjoy will diminish.
Lord Gladwyn: My Lords, do we export any fish to Common Market countries?
The Earl of Mansfield: I am afraid I missed that question, my Lords.
Lord Gladwyn: My Lords, do we export any fish to our colleagues on the other side of the Channel?
The Earl of Mansfield: Very little, my Lords, because they tend to eat rather different fish from us.
Baroness Elliot of Harwood: My Lords, is there a time limit on the investigations of this group, commission or whatever it is called, remembering that the problem of timing is vital? How soon has this committee been asked to report on what is a desperate situation?
The Earl of Mansfield: My Lords, the preliminaries were completed last week and the group is having its first meeting next Wednesday afternoon. No time has been given for its deliberations and, with respect to my noble friend, I do not think such a time limit is necessary. As I said, it consists of representatives of the catchers' organisations and officials from the various agricultural departments. They know only too well the urgency of the task and I am sure they will devote themselves to their inquiries as quickly as may be.
Baroness Phillips: My Lords, will the Minister be able to ask this group to follow up this very simple and perhaps mundane question: whatever happened to the cod?
The Earl of Mansfield: My Lords, there are lots of cod in various different directions and if the noble Baroness wishes to eat, cod, there is nothing to stop her except the depth of her purse, but that is another matter.
Lord Mowbray and Stourton: My Lords, did my noble friend in answer to the noble Lord, Lord Gladwyn, say he understood that there were very few imports? Am I wrong in recalling that some time
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ago the Daily Express printed some photographs of lots of illegal imports coming from French ports by night?
The Earl of Mansfield: My Lords, the noble Lord, Lord Gladwyn, was asking about exports of fish from this country to the European Community and I said that by and large we did not. My memory has now been jogged; we have a healthy and indeed burgeoning export trade in salmon and smoked salmon, and a small Scottish firm has recently been given the Queen's Award to Industry, but of course in volume terms that is a small quantity.
Lord Boothby: My Lords, if other countries keep our fish out of their markets, why should we not keep theirs out of ours?
The Earl of Mansfield: My Lords, the basis of everything the Government are trying to do at the moment is to establish a fair and equitable common fisheries policy which will enable our fishermen to pursue their traditional calling in a state of what I might call peace and profit. All our energies are directed to that aim. It really would not help either us or the fishing industry if we were to abandon our traditional stance of moderation and legality.
Lord Goronwy-Roberts: My Lords, does the noble Earl believe that the conclusion of an equitable fisheries régime with our neighbours in the European Community would go a long way indeed towards solving the problems of the British fishing industry, if it did not solve them all? Is he aware that it is good news that this committee has been formed, and even better news that it is moving so swiftly? Can it look at the general question of quotas and subsidies as part of its deliberations?
The Earl of Mansfield: I am grateful to the noble Lord for that helpful supplementary question, my Lords. I think the answer to both parts is, yes. As for the last part, the whole question of subsidy and aid for other nations' fishing industries is both complex and indeed fraught. Different countries aid their fishing industries in different ways, and therefore I do not think this body would deliberate and come to any conclusions of fact with the speed with which we should like if we entrusted it with inquiries which were probably more appropriate for the Department of Trade.
Lord Lovat: My Lords, may I ask the Minister to give the inshore fishermen an assurance that the 12-mile limit round the British Isles will be maintained?
The Earl of Mansfield: My Lords, I think my noble friend knows as well as the rest of the House the extremely firm stance which my right honourable friend the Minister of Agriculture has maintained throughout all the long and difficult negotiations; and, yes, the various heads which we originally settled on as being appropriate and suitable for our fishing industry will be maintained.

House of Commons Members' Fund and Parliamentary Pensions Bill
Brought from the Commons on Friday last and printed pursuant to Standing Order No. 47; read la.
Water Bill
Brought from the Commons on Friday last and printed pursuant to Standing Order No. 47; read 1a.

Forestry
3 p.m.
Lord Sherfield Lord Sherfield rose to move, That this House takes note of the report of the Select Committee on Science and Technology on the Scientific Aspects of Forestry (2nd Report, Session 1979–80, H.L. 381).
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. This report on the scientific aspects of forestry in the United Kingdom, of which I am asking your Lordships to take note, is the 2nd Report of the Select Committee on Science and Technology which was set up about a year ago. The Select Committee has two sub-committees, and each has now completed a report. The first report, on electric vehicles, was debated in November. The second report was published in December. It was prepared under the shadow of a policy Statement on forestry which was thought to be imminent a year ago, but which, by coincidence or design, was made on the very day that the committee's report came out, and the report and the policy Statement are being taken together in this debate. The noble Lord, Lord Dulverton, is to speak to a Motion on the Statement after I sit down.
The committee in fact anticipated that there was likely to be approval for an increase in the amount of afforested land in the coming decades, and we recognised the need for the United Kingdom to reduce its dependence on imported timber. This can be done in two ways: by increasing production, and by reducing the predicted rate of increase in demand by better utilisation. To each of these tasks science can make a contribution. The focus of our inquiry was scientific, but the evidence and the subject matter inevitably drew us on to issues of economics and policy. We pursued them only as far as was necessary. We say that policy on research and development must be largely dependent on national policies for forestry and other uses of the land, and that policy should be capable of reacting to the findings of research and development.
But we did not, for example, suggest what the size of the forest area should be; we did not make recommendations on finance, though we suggested sources from which finance might come; and we obviously made no reference to the disposal of Forestry Commission land to the private sector. Those broad policy issues will be dealt with by the noble Lord, Lord Dulverton, and I shall try so to frame my remarks as to lead naturally up to his Motion.
I now direct your Lordships' attention to the report. It is a fairly slim volume, but it is backed up by a fat
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volume of nearly 400 pages of oral and written evidence. The sub-committee was reinforced for this inquiry by the co-option of the noble Lord, Lord Dulverton, and the noble Earl, Lord Lonsdale, who are both leading forestry authorities and practitioners; but other members of the sub-committee also had some practical experience of forestry management. In the sifting of the evidence and the production of the report we were greatly indebted to our specialist adviser, Professor Duncan Poore, Professor of Forestry Science in the University of Oxford, and to him I record our warm thanks.
I take this occasion to thank our witnesses for their assistance, and perhaps I may mention in particular the Forestry Commission, which spared no effort to help us, and the representatives of the Centre for Agricultural Studies at Reading University, whose 1980 report, together with the Forestry Commission's 1977 review of the projected demand for timber, provided an excellent background to our inquiry. But to all our witnesses, including the noble Earl, Lord Mansfield, who is to reply to this debate, we are most grateful.
The committee identified three main areas for inquiry: the role of fundamental research; the adequacy of current applied research; and the environmental impact of current forestry practice. It was our purpose to investigate the inter-relation of research and development with practice and policy in these three fields: what was being done; whether this was satisfactory in quality, originality and coverage; and whether the results of the scientific effort were being sufficiently utilised.
A Bill at present before your Lordships' House defines forestry as
"The growing of a utilisable crop of timber".
We defined forestry more broadly, to include plantations and woodlands, hedgerow trees and shelter belts. During our inquiry we kept constantly in mind the fact that the current import bill for timber in the United Kingdom is nearly £3 billion; that we import 92 per cent. of our domestic requirements; that the European Community as a whole imports 60 per cent. of its requirements; that the amount of afforested land in the United Kingdom is about half of that in the Community; and that tropical forests are being depleted at an alarming rate. We then went on to analyse and assess the evidence on research and present knowledge, relating to forest production, including pests, windblow and ecological sustention. We dealt with end use, with the ecology of woodlands and broad-leaved plantations, with the problems of land use and extension of the forest area, with water and fisheries, with landscape and recreation, and with wildlife, especially deer.
We included tropical forestry principally in order to lay stress on the importance to the United Kingdom and to tropical countries that the level and quality of British research in this field should be maintained and encouraged. Productivity in tropical forests will have a direct effect on British timber markets and therefore on British forestry.
From there we move on to the functions of the departments and other bodies which contribute in one way or another to forestry policy and practice, and to the dissemination of information, which the

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Forestry Commission does well. Then we deal with the funding of research, and finally, since so many of the scientific questions raised by the evidence bear strongly on forestry policy and practice and the best use of the country's resources of rural land, we deal with policies for forestry and land use. We conclude with our opinion and recommendations.
My Lords, considering the national importance of the forestry industry in the light of our huge import bill for forest products, the committee was struck by the absence of a well-co-ordinated policy-making system and the lack of a coherent approach, especially to research. Three Ministers share the responsibility for forestry policy, including research and development. They are advised by the Forestry Commission, of which more later.
In the research field the Forestry Commission is concerned only with applied research. Basic research is the responsibility of the Natural Environmental Research Council and its institutes terrestrial ecology, hydrology and virology; but only 3 per cent. of the NERC's resources are allocated to research in any way connected with forestry. The research councils and their advisory board come under the Ministry of Education and Science. The exceedingly important problems of the end use of timber come under the Building Research Establishment, which is part of the Department of the Environment. Other departments which have an interest in forestry are the Ministry of Agriculture, Fisheries and Food, the Department of Industry and the Department of Energy, and among statutory authorities there are the water authorities, the Nature Conservancy, the two Countryside Commissions and the Red Deer Commission, all of which undertake or commission some research. So do the Royal Society for the Protection of Birds and the Agricultural Research Council.
The situation in regard to the universities is not reassuring. Only four have forestry departments, and there are very few courses which integrate forestry and agriculture. The total amount of research done in universities is not great, partly because of a shortage of funds and partly because of the essentially long-term nature of forestry research. Liaison with the Forestry Commission is weak, partly because the commission has no Rothschild money for commissioned research. We were also struck by the divide between forestry and agriculture. If you cross a fence from a farm into a plantation, you move from the jurisdiction of the Ministry of Agriculture (or the Scottish or Welsh Agricultural Departments) to that of the Forestry Commission—two completely separate entities linked only by a Minister. The advisory services for agriculture and forestry are completely separate, yet the importance of integrated land use increases year by year.
There is a sense in which forestry is nobody's child; it falls between all stools. Apart from some very emphatic evidence on the point, the committee stumbled across some significant illustrations of this. They received evidence that the advisory board of the research councils has not, in the eight years of its existence, specifically considered the scientific aspects of forestry. Secondly, forestry was not even mentioned in the advertisement for the secretaryship of the NERC, though fortunately the choice fell on Professor
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Bowman, formerly of the Centre for Agricultural Strategy in Reading. It is perhaps symptomatic that on the 26th January last the other place held its first full-dress debate on forestry for 30 years. Your Lordships' House, however, has done a good deal better than that.
The position really is that nearly everything to do with forestry is left to the Forestry Commission. They are Pooh-Bah, and they do a good job given the circumstances, their resources and their terms of reference. But the committee did not find the situation satisfactory. The responsibility for forestry research and co-ordination of land use is too fragmented, and it was to this point that the committee principally addressed itself. The committee was assured that in practice this apparent fragmentation was repaired through the excellent personal relationships of all concerned. My Lords, nobody has a firmer belief in the merits of the "old boy" net than I, but in this case my credulity was strained to breaking point.
Turning to the recommendations, I shall leave the detailed questions relating to various aspects of research, including its organisation, to later speakers. But on organisation I must mention two matters to which I attach particular importance. First, in order to give the Director of Research in the Forestry Commission more authority, and to encourage him to go out and promote research elsewhere, we recommend that the commission should have on its establishment a chief scientist, advised as at present by a research advisory committee. But rumour now has it that the post of chief scientist in the Ministry of Agriculture, Fisheries and Food may be abolished. It is a matter of serious concern if the position of chief scientist in departments is to be called in question. I may say in passing that this whole question of the provision of scientific advice to Governments is now under consideration by the sub-committee of the Select Committee under my chairmanship, and that the chief scientist system will be one of the matters for early scrutiny.
The second point relates to research in the end use of forest products. The committee found that this was at present inadequate, that putting the Princes Risborough Laboratory (formerly the Wood Products Research Laboratory) under the Building Research Establishment had been a step in the wrong direction, and that since then the Princes Risborough Laboratory has been forced to reduce its research effort in wood products to a dangerously low level. We consider that it should be removed from the control of the Building Research Establishment and associated more closely with the Forestry Commission, while keeping up its links with the building industry on the customer/contractor relationship.
I now turn to the funding of research and its adequacy—a subject on which the committee received much conflicting evidence. The total from all sources spent on forestry-related applied and basic research is rather under £5 million a year, and is broken down and analysed in our report. The Forestry Commission was reasonably satisfied with its own level of research—a satisfaction not shared by any of the other organisations concerned. The committee concluded that the present level of funding is not generous, and the weight of the evidence suggested that further research was

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required in many fields. Certainly the amount spent on research is small in relation to the value of the forest estate—it is under 1 per cent., in fact—and if the size of the import bill is taken into account it is much smaller. The committee indicate areas in which they consider more ample provision should be made, and in particular they recommend that more research should be commissioned in universities and make suggestions as to how this should be done. The committee felt that the improved co-ordination of forestry research and development, which they recommend, should enable a better appraisal of research requirements to be made in relation to the national importance of forestry.
As I have said, the committee also indicate ways in which further research money could be raised. In particular, they recommend that the Rothschild principle should be applied to forestry research, with the Forestry Commission as the main, though not the only, customer. It is again perhaps symptomatic that forestry science was left out in the first place.
Had the committee been aware that parts of the Forestry Commission's estates might be sold off, they would, I am sure, have been concerned about the impact of this policy on the research effort of the Forestry Commission and other bodies, which, as I have suggested, is already too low. Without expressing any opinion on its merits, it is clear that the new policy could adversely affect a number of the committee's recommendations. To give a couple of examples, how will the new policy affect the committee's recommendation that the Forestry Commission should diversify the species and age classes of forests and the Forestry Commission's stated intention of doing so? Secondly, the Government say that they want a steadily increasing proportion of our resources of timber to come from our own resources. Enough research on end use must therefore be supported to ensure that our timber in the United Kingdom is useful. For example, sitka spruce is a reasonable structural timber if grown slowly, but it can be too weak if grown vigorously in some of the more fertile parts of the country. I hope that the Minister can confirm that this new policy will not lead to any reduction in Forestry Commission research but that, as forest authority, the commission will still be able to carry out research for the whole industry This is an important matter and I hope that in his exposition of the policy the Minister will be able to reassure the House upon it.
Before concluding my remarks, I wish to call your Lordships' attention to two suggestions which have emerged from the committee's deliberations and which have already attracted some favourable notice. The system of tree preservation orders is a negative control which is quite often abused by local authorities. The committee suggest that they should be replaced by tree management orders which would be positive in their operation and likely to be much more acceptable to the owners of the woodlands in question. The second suggests that experiments in community forestry should be undertaken. Many of us know of areas of copse or woodland too small for exploitation which could be managed and improved by local bodies on nominal lease or purchase. There are a number of
900
ways in which this activity could be arranged for local benefit, amenity and even profit.
The Forestry Commission bulks large in this report. As forestry enterprise and forest authority, they dominate the forest scene. The committee found that some aspects of their management objectives and statutory terms of reference are becoming out of date in the context of present conditions and the way in which forestry practice is evolving in the Forestry Commission itself and elsewhere. The committee recommends that consideration should be given to the amendment of the commission's management objectives and terms of reference. A convenient opportunity to update these terms of reference will occur when the Forestry Bill reaches your Lordships' House. But this is a more general question which might better be elaborated in the context of the Motion of the noble Lord, Lord Dulverton, as might some of our other recommendations relating to integrated land use and conservation.
In its conclusion, the committee ended on a confident and optimistic note. We say:
"…with a sensitive lead from the Forestry Commission and the private sector, Britain's forests can be productive, varied and beautiful. The yield from existing forests can increase and an extension of the forest area should be possible without damage to or conflict with other land uses".
It goes without saying that this desirable result would be furthered by acceptance of the committee's recommendations. Obviously, I have been able to mention only a few of these. Later speakers will, I hope, be able to fill some of the gaps; but many of the recommendations in the report can hardly be expected to receive detailed consideration in the Minister's reply. I understand that in another place reports of the Select Committee on Science and Technology received the Government's considered comments in a White Paper. I do not suggest that we need slavishly to copy the practices of another place, but this seems to be a good precedent and I invite the Minister to follow it and to publish in due course a White Paper giving the Government's comments on the committee's recommendations. My Lords, I beg to move.
Moved, That this House takes note of the report of the Select Committee on Science and Technology on The Scientific Aspects of Forestry (2nd Report, Session 1979–80, H.L. 381).—(Lord Sherfield.)
3.25 p.m.
Lord Dulverton Lord Dulverton had given notice of his intention to move the following Motion:
To call attention to the Government's Statement on forestry policy of 10th December 1980 with its emphasis on the expansion of forestry on the basis of the continuing partnership between the public and private sectors; and to move for Papers.
The noble Lord said: My Lords, I am instructed on the best authority that in the order of things this afternoon it is not appropriate for me formally to put the Motion which stands in my name; but it is difficult not to refer to it and, in doing so, I should like to make it very clear that I have much in mind that the Motion just moved by the noble Lord, Lord Sherfield, deserves the undivided attention of your Lordships' House. Having served on Lord Sherfield's Select Committee, I should like immediately to pay tribute to the quality of his leadership and guidance from the chair and to

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express the belief that the report and recommendations of the committee are of an excellence and importance that merit the most seriousconsideration and subsequent action.
There are a large number of points in it to which this remark would refer and which have pertinence to the subject of my own Motion. In saying that, I should like to pay a further tribute to the noble Lord, Lord Sherfield, on the very clear exposition that he has just given us and the salient consideration of his report which, I suggest, is a masterly synopsis of the situation. The pity is that the report is not in the hands of Ministers so that they could themselves have given it consideration before releasing the Statement on forestry policy on 10th December—which was the same day as the publication of the Select Committee's report. It is this circumstance of timing which makes it almost inevitable that our thoughts today will spill over into matters arising from the Government's Statement. My Motion really only bows to the inevitable and puts it on record.
In welcoming the intent of the policy Statement—which, for ease of reference, I will refer to subsequently as "the Statement"—to bless the expansion of forestry and the partnership of public and private sectors, I fear that it is not possible to give an unreserved welcome to some parts of it. There are matters of broad principle which have been questioned by many and many matters of detail that call for a lot of thought and discussion; but besides what the Statement does contain, there are numerous matters brought forward by the Select Committee which are vitally relevant to its entirety and which cannot have been fully considered before the Statement emerged. Last March we debated the need for a long-term forestry strategy. I must admit that, in our enthusiasm, we wandered rather widely round this particular theme on that occasion, and I hope that it is no discourtesy to the House to hope that we may today concentrate our thoughts upon the Motion. I venture the thought that the Select Committee report offers the basis of a strategy that could be, and needs to be, worked out transcending party politics and immediate circumstances and demands.
The Statement seems this year to be much more of a tactical dimension than a strategic one. There is no need for me to repeat the broad considerations which we discussed in March and of which the noble Lord, Lord Sherfield, has just reminded the House so clearly—our dependence on foreign timber and all those alarming figures. Does the Statement, changing, as it does, so many of the existing rules, take us far along the road suggested by, for instance, the Centre for Agricultural Strategy Report; and, behind the proclaimed intent towards expansion and partnership, which again I welcome, can we find the stature of a well-laid strategy?
If some would question this, it must be realised that the forestry Ministers have had to do their best in the face of pressures and adversities. The general economic climate and the gravity of the need to reduce Government expenditure has obviously loomed large; and the Treasury, with all its immense power and influence, has never been enthusiastic about the long-term investment which forestry entails. The catastrophic collapse of at least three home-supplied pulp mills, not from inefficiency but under outside cir-
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cumstances—largely the strong pound and the high costs of energy in British industry—and the difficulties of the other sections of the home-grown timber trade during the world recession were in fact used by some to discredit the protagonists of a stronger forestry industry. Besides these factors, the clamorous anti-forestry attitudes of some of the conservation and amenity organisations—and I belong to some of them—not infrequently overstated, but enlisting the sympathy of a lot of voters, must have made ministerial decisions towards a vigorous support for a really expansionist policy extremely difficult.
It would be churlish not to recognise that these influences surely did exist, and among them that of Treasury is powerful indeed. Yet, without repeating the basic figures and the forecasts which the noble Lord, Lord Sheffield, has given us and about which he has reminded us, as a background against which his committee went to work, I cannot help setting the cost of £29 million, which is what the Forestry Commission drew from Government last year to balance its own budget, including the support given to the private sector, against the benefit to come from the investment in a growing national asset which the national forest is.
The year 2025 may seem a long way ahead, but by then it is forecast that the converted value of the product of the forest, per annum, and at today's prices, would be £800 million. That is if we planted no more. If we were to plant on the maximum scale of options mentioned by the Centre for Agricultural Strategy—and the Government Statement does not seem to go anything like this far the annual figure, and thus the saving of imports, would become £1,700 million per annum. I repeat, "at today's prices". Goodness knows what the prices will be by then. Really, against these figures, and even more when measured against the total of Government expenditure, £29 million seems a rather trifling figure.
Reduction of expenditure seems paramount and is sought in two ways, through the streamlining or simplification of administrative measures, relating to the support of private forestry. This is the recommendation of the Rayner Report. No quarrels with the principle of that, though the suggested methods will call for scrutiny. The other way, which is more drastic and certainly controversial, is the sale of Forestry Commission land and plantations. I for one (and I know quite a number of others would agree with me) find no fault with the intention to sell off areas that are so detached from its main forests (and there are examples of these) as to present some difficulties of management.
I should not like to see it going much further than this. I utterly fail to see the sense of the commission selling off its plantable land—and I repeat "plantable land"—which it has acquired over the years (and the cost of land is going up all the time) even though it is only to be allowed, as I understand it, a paltry 5,000 hectares per annum in future. I hope that I may have that wrong. It looks most lamentable. I am sure that the Minister can say something about that. If I have it wrong, I shall be very glad. What I would call for—and I hope other speakers will support me in this—is that the commission should clearly be permitted by Government to retain the proceeds of any sales to finance its future operations, and that these should not

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be grabbed by the General Fund. I should like to emphasize that.
The Commission stands high in the reputation it has earned at home and perhaps even more abroad. The Select Committee, while recommending some changes here and there, pay tribute to this; and throughout the forestry world, which includes the processing industries and the private sector, there would be grave regret if the viability or the authority of the Forestry Commission were to be weakened or damaged.
Passing to other matters contained in the Statement, I do of course welcome Government's hope that the private sector will play a vigorous and increasing part. They will if we get the infrastructure right; and a most important part of this, to which I would only now refer in the briefest manner, includes the need for Government to give some necessary help and encouragement to the timber processing industries, which are collapsing or struggling. The modern British timber industries are as a young and tender plant, striving to grow to strength in the jungle of the long-established world timber-trade. I hope very much that other noble Lords will develop this theme and I leave this important matter to them otherwise I should feel that I was not dealing with it properly, but I know that other speakers will refer to it.
The other most important thing of all perhaps is to offer and establish an infrastructure of stability in the rules, especially but not exclusively of the fiscal regime. These latter, as some will know, were called in question again only last summer in the Public Accounts Review, less than three years after the Interdepartmental Review Committee set up by the previous Government had decided upon the points concerned. The continual messing about and calling in question of the fiscal rules, which has beset private forestry inside of the past 10 years, is now followed by dismemberment of the dedication schemes. That is another matter of serious concern.
The Select Committee, quoting five impediments to forestry, says in paragraph 21 that one:
"troubles the private sector, and so seriously that it seems to take priority over the other three, namely, uncertainty of national support (in the legal, fiscal and financial senses)".
How are we to strive for stability here other than by working for an agreed strategy between the major political parties? We have mentioned this before in this House, but I fear we may not achieve that in the context of the present Government Statement.
I am sure that in seeking to end dedication the Government have it in mind that the growth of silvicultural know-how among private foresters and their advisers makes the supervisory powers and duties of the commission less needful than it was 30 years ago when the dedication schemes were brought in. Certainly there is a lot of truth in that though there is still need for the kinds of expert advice which the Select Committee wishes to increase the power of the Commission to generate and give.
However, there is another point to dedication: the passing of which really is gravely to be deplored. Dedication is a solemn and binding contract between the nation and the dedicated grower to work together with some obligations on both sides. Forgetting for the moment that Governments can and do renege
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on legal contracts in a way that citizens cannot do—and there was only last year a reneging on the undertaking to review the level of planting grants—there has been a tangible value to the system in this wise.
To establish, or re-establish, a national forest after centuries of dispoliation will take about 100 years, starting in 1920. We are just over half way; and during the next 40 years or so I would suggest that there is a need for Government, represented by the forestry Ministers and the Forestry Commission, to stand by those who are investing in this long-term undertaking, in some manner that is enshrined, as the dedication schemes did in fact enshrine, with legal force, the partnership, which the Statement itself refers to. I pray that Her Majesty's Government will not disregard this message, and will work out, in consultation with foresters, some practical formula to deal with the point.
I would just add that, just as the agricultural industry has its own powerful and highly respected representative organisations—the NFUs—private forestry has been lately reorganising its own representative bodies the better to be able to respond to Government's wish to see their increasing participation. I hope that Government will recognise this effort and the responsible stature of Timber Growers of Great Britain, which replaces—in fact, it is their new name—the old Forestry Committee of Great Britain, which continually got muddled up with the Forestry Commission. When I was chairman of the Forestry Committee of Great Britain I kept on being taken to task by the press for pretending to talk for the Forestry Commission. I see the director-general sitting in this House. We are now calling it the Timber Growers of Great Britain.
To conclude, I would pick upon two of the points among the many made by the Select Committee which must not be neglected during our deliberations on this Statement. They both relate to the very important, and often complex, considerations of land use. I will try to do this briefly and only by way of underlining what the report has said about them. We have been talking for years now about the integration of forestry and farming in the hills, but do not seem to get much further. Paragraphs 48 and 54 of the Select Committee's report have something to say about this and the noble Lord, Lord Sherfield, also made reference to it with some emphasis just now. There are also important recommendations in paragraph 124. May we hope for some action? There is a recent interesting and relevant report and survey which was carried out by Edinburgh University and published by the East of Scotland College of Agriculture which is worthy of attention in this context.
The only other point I would pick upon relates to the long-established woodlands of hardwoods, often over-standing now neglected coppice. These, which have been disappearing, having been cut down and ploughed up in many cases over the years, or sometimes replaced by conifers, are of very special concern and interest to the Nature Conservancy Council. There are about 300,000 hectares of them, of which some are already nature reserves, about 40 per cent. are SSSIs and most of them are in private ownership. If the nation values them, these woods really do necessitate a completely different silvicultural treatment from

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woodlands in which timber production is paramount, or newly-established plantations. They can still produce useful timber, but they are a different class of goods and call for a different set of rules in relation to grant incentives and tax treatment. Also, they should be completely exempt from capital taxation. People cannot he expected to look after them when it is realised that with those old hardwoods it is a hundred years or more before you get anything back out of them, especially if you have three or four capital transfer tax impacts during a lifetime. As I said, it would take too long here fully to develop all the arguments but the Select Committee has some important things to say about them. I am hoping that my noble friend Lord Cranbrook will be referring to the matter later and I also hope that the Government will grasp this nettle—or perhaps I should say "bramble"—and work out some appropriate rules with the Forestry Commission, the Timber Growers of Great Britain and the Nature Conservancy Council.
I am only too aware of having had to pick and choose between so many facets of the subject before us and I shall look forward to others covering the areas that I have left quite untouched. I also look forward with hopeful anticipation to the response to some of those points and problems by my noble friend Lord Mansfield, who is himself such a knowledgeable and successful forester in Scotland. To him, I need not say, "Have a mind for those who will come after us". Nor need I repeat the opening words of that concluding paragraph of Lord Sherfield's report which he has just himself quoted which I shall not forego the pleasure of quoting again, hopeful and wise as they are:
"With a sensitive lead…Britain's forests can be productive, varied and beautiful".
3.47 p.m.
Lord Tanlaw: My Lords, we from these Benches must thank the noble Lord, Lord Sherfield, and his Select Committee and the noble Lord, Lord Dulverton, for bringing our attention today to the whole position of forestry, both scientific and political. I think it is right to say at this stage that one can only congratulate the members of the Select Committee under the direction of the noble Lord, Lord Sherfield, on the quality of the reports before us. They are remarkable documents, and I believe that for many years to come they will be used as a reference or as a handbook by all of us who declare an interest in forestry. The present report is particularly useful in showing the very large number of organisations, universities and Government departments which are making scientific studies into and contributions to forestry and its related industries and skills. I think there is absolutely no question of our support for the noble Lord, Lord Sherfield, in asking Her Majesty's Government to reduce this report to a White Paper with their very clear-cut views on the implications contained in the views put forward by the Select Committee.
I also think it is worth repeating what has been said by the noble Lords, Lord Sherfield and Lord Dulverton, and also what we have said from these Benches; that is, to repeat a call for a general recognition by Her Majesty's Government and their departments of the long-term nature of forestry and its treatment as a
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50-year crop. Why does it have to be said again and again in order that the Government of the day and Government departments can appreciate the fears, both in the public and private sectors, that foresters have of any sudden or rapid change in policy which could affect the confidence of the whole industry? We all know this has happened on more than one occasion in the past five or 10 years, with near-disastrous effects on forestry investment of all kinds and also, far more seriously, on those who are employed in the industry.
The noble Lord, Lord Sherfield, mentioned also the effect on science and forestry. Now it seems, unless one is going to be contradicted by the noble Earl, Lord Mansfield, that the Government are putting some questions and some doubts in the public sector of forestry; that is to say, the Forestry Commission, where it stands and where its future stands. It is worth saying now—and we have said this before—that the interests of foresters in both the public and private sectors are identical in their commitment to their 50–year crop and their 50-year thinking.
With a report of such detail and excellence, whose contributors are experts in the specialist fields in which the submissions have been made, it would be quite wrong to question their conclusions, certainly in the debate today. However, there is one area, which has been mentioned by the noble Lord, Lord Dulverton, which the report admits it has been unable to cover in the detail which it would have preferred, and that concerns integrated land use. Some of the reasons were given by the noble Lord, Lord Sherfield. My intervention today is concerned primarily with the integration of hill farming and forestry, from a practical and commercial point of view. It is also to suggest to Her Majesty's Government how, perhaps, further studies can be made more effective, which could make a major contribution to land use in the hill and upland areas of Britain.
As regards Government departments, one can see how the situation has arisen today where there is no cross-fertilisation of ideas, of grants or, indeed, of forms. It is worth saying at this stage that I fill in my own form as integrated hill farm hill/forest, but it goes only to the Minister of Agriculture. It makes not the slightest difference. But there are areas now, especially in the case of those of us who are stocking inside the trees, which need clarification, because they can lead only to misunderstanding when looked at from one Government department's point of view.
One of the problems with integrated hill farm/hill forest I have already mentioned; that is, the lead time that forestry investments require. Therefore, I appreciate that very few such integrated units have been in existence long enough to provide proper data for any change in Government policy. In my own case, it was only after 12 years of planting and development of such an integrated hill farm/hill forest that I was in a position to know whether it was worthwhile going on any further. This will give the noble Earl some idea of the problems in encouraging this kind of investment, which could be based on insufficient data.
However, I hope from experience gained to be able to suggest that, along with the report on page 25, volume 1, the evidence that I have acquired confirms that, although 50 per cent. of the farmland was con-

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verted to forest use, agricultural production has increased by more than 30 per cent. In terms of employment, the farmland concerned had been abandoned before purchase. It was, therefore, not contributing anything towards employment, but it now provides permanent employment for at least six men and their families.
The case for integrated land use should be judged primarily not on scientific grounds but on fiscal grounds, because people have to make a living off the land in this way. In particular, there is a need in this case to distinguish revenue from capital, plus the lack of a capital input to a normal hill farm without a forestry content. In simple terms, this means that a working hill farmer can, if he is both skilful and fortunate, obtain a living for himself and his family from marginal lands, but only with the help of his bank to which those lands have been committed. The problem arises when capital investment is required to improve the land or to modernise the farm buildings. This, again, has to be achieved through further borrowing from the bank, unless there is another source of capital forthcoming from outside and beyond his farming operations.
The fiscal argument for including a block of forestry on a hill farmland is that it will inject a capital sum into the unit every 35 years or so. Therefore, there is a very strong case for special afforestation loans to be made with low interest to those who are classified as working hill farmers, in order that forestry blocks of between 50 and 100 acres can be planted with a suitable road system. This suggestion is not new from these Benches, nor is it new from the noble Lord, Lord Dulverton. We have always maintained, and still maintain today, that there is a case for a land bank system to fund all capital requirements of this nature. However, I am only arguing today that if farm/forest integration is to work at all, it can be done only if such special loans are available for this particular type of planting, which can be limited to a sum adequate to cover up to, say, 100 acres of forestry.
I am going into some detail here, because I feel that the data is insufficient, as the report says. Once a small block of trees has been planted and has become established, there are immediate other side benefits to the farmer/forester which will increase his revenue more than if he were just a straight hill farmer. It has been found quite clearly that, if stock not only have access to the trees for shelter but are fed in them as well, their food intake drops considerably in the winter months and a higher stocking rate can be maintained without detriment to the farmer's summer grasslands.
I should have hoped that in the Select Committee's report on farm/forest integration the point about making better use of a forest road system would have been made. I ask your Lordships to bear in mind that when a forest is planted the roads are laid out and constructed at that time. The road system remains virtually dormant for the first 20 years or so, until the thinning starts. Then, again, it remains dormant for another 20 years until the main crop is harvested. Throughout the 50-year life of a forest, the road system is, for obvious reasons, grossly under-utilised. However, in a farm/forest unit, the forestry roads, provided they have been properly planned and integrated into the
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farming operations, can be used every day, as they are on my farm, for feeding and moving stock. This is just one more area which justifies recognition that farm/forest integration is efficient in terms of both land use and income/production benefits to the owner.
The report goes on to say that computer studies and further information gathering will take place to provide Her Majesty's Government with more facts and figures. This is all very well, but, as I have tried to indicate from my own experience, the feedback in real terms on the ground can take at least 10 or 12 years. If the Government wish to establish—let us say, tomorrow—a trial unit of this kind, I am afraid that with the period of time they will require before they are in a position to report to the House or to the departments, to prove any of the points that have already been proven by existing farm forests that are in private hands, it will be too late.
I am, therefore, suggesting that it may be a much quicker and more productive experiment to obtain information from these existing integrated farm/forest units, in order that integration may become part of all Governments' policy and thinking for the future. I, and I am sure any other proprietor, would be very happy to co-operate in any such scheme, provided there was adequate compensation given for the time and effort taken to provide this information, which must cover at least one full season.
I want to add just one small point. University grants and studies have been mentioned in the report and will, no doubt, be mentioned in today's debate. But I ask your Lordships to bear in mind that, when an enthusiastic student, who is bent on gathering information for a thesis or a report, turns up on a working hill farm, he can take up an interminable amount of time with questions and so on, often based on a non-understanding of how a hill farm works in the first place. So I ask that if this information is to be given and is to be accurate, proper arrangements should be made before such visits occur.
It is my guess that some of the information given to students is totally inaccurate because it has been given by a very irritable, overworked farmer who just wants to get the man off his property. That information will go into a computer study and it will be a case of rubbish in, rubbish out, with a really rotten report at the end. So I would say that, if these information-gathering visits are to be made, they will be welcomed if they are properly arranged. Indeed, I ask that people are properly compensated, because I should like to see information-gathering on the spot, or even on a semi-resident basis, so that people can fully understand our problems and rewards in this industry.
I shall now switch briefly to conservation and wildlife, again in the context of farm/forest integration, because I believe that, with the incorporation of a fire protection loch and adequate clearings in the forestry areas, a farm forest will provide an increase in the resident and seasonal wildlife which can be an added source of income to the farmer himself. If he is not a shot, he can let it out. I also think that this will require little management and no extra trouble. In the wider context of forestry investment, wildlife can be protected and vermin controlled professionally if it is done by such units as that which is managed by Economic Forestry (Scotland) at

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Eskdalemuir. They have a proper wildlife unit which is highly scientific. It is used for vermin control, for roe deer and for sporting interests. Those noble Lords who have visited Eskdalemuir will have some idea of the work that Mr. Ronnie Rose is doing there. It is units such as this which should set an example both to the Forestry Commission and to other private forestry companies as to the role of professional vermin control, combined with wildlife and ecological management.
I may now be slightly controversial, but it was noticeable that most of the complaints against forestry in the report came from respected conservationists, ecologists, ornithologists and other interested parties, but I have rarely observed a conservationist, an ecologist, an ornithologist or a rambler on our hills during the winter months. It is only in these months when some of the worst weather of Britain is experienced that the role of standing timber can be seen at its best and how it shelters not only the stock but the wildlife. All too often these experts disappear off the hills as soon as the first flakes of snow begin to fall. They get into their cars and drive to their very comfortable towns and suburbs where they write very aggressive reports against forestry. I do not mind aggressive reports against forestry being written, but I do ask that the experts should stay and see the area they have been studying all the year round.
The forest is what we call the byre on the hill. My point is that there would be a far higher death rate of all the species which these experts wish to see protected if these trees were not there. Furthermore, it should be recognised that those of us who feed stock in the forest are introducing a new life source into these areas, for a hill cow is a mobile eco-system in itself. The stock feeding areas in the trees become focal points for small birds and rodents. Roe deer come and use the same salt and mineral licks as the stock itself and thus get protection from some of the risks of disease associated with mineral deficiencies.
Finally, the management of the hill and upland areas of Britain, and in particular Scotland, depends upon the men and women who are prepared to live in these isolated districts and suffer the long winter months, with little opportunity to travel very far from their homes. Hill and upland farms, or forests, normally exist in areas where populations do not exceed 200. This has created a new problem for those of us who live in these areas. Because of the terrain, the homesteads are often on the periphery of the television transmission signals. In Eskdalemuir in particular we are unable to receive television at all unless the house is situated on top of an exposed hill. Because the population is below 200, this gives the district one of the lowest priorities, as seen by the IBA, for rectifying this situation. This is perhaps not, on the surface, a very important point, but now it has become an issue which is starting to affect employment in these outlying districts. How can one expect a young family to put up with the difficulties, the hardships and the challenge of living and working in these kinds of areas when there is the added disadvantage of not receiving a television signal? Television is not an amenity; it is an essential element in maintaining a population devoted to working in some of the most difficult conditions in Britain. I should have liked to
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see this aspect of employment mentioned in the report.
Furthermore, the present position is aggravated by the little known scientific fact that as forests grow in height there is increased attenuation of UHF television signals. This means that you get the "snow storms" as the trees grow bigger. This becomes more noticeable in wet weather rather than in dry, if the foliage lies in the signal path. As is well known, Eskdalemuir is not the driest part of Britain but one of the wettest and, like most forestry areas, depends upon a high rainfall. This kind of interference is beginning to affect households which were not previously affected by the terrain and therefore is adding to the problem of employment at this time.
In conclusion, I should like the Minister in his reply to consider what action is being taken to acquire more information for the pursuance of a policy on integrated land use throughout the marginal areas of Britain. In connection with this, is he prepared to say whether, while the Government are reviewing their forestry policy part of that review will contain the possibility of encouraging small forest blocks to be planted by working hill farmers through access to special low interest loans created for the purpose? Thirdly, will the Minister kindly take note of the seriousness of the lack of television signals among the small populations to which I have referred, and will he consider that these areas may be chosen as pilot areas for the use of small satellite receivers, as they are in France? Or, alternatively, will he be prepared to encourage more self-help deflector schemes to ensure that the working population remains to work these huge investments which have been made in both farming and forestry by both the public and the private sectors?
4.6 p.m.
Lord Flowers: My Lords, I am no forester. Although over the last few years I have had planted a goodly number of new trees at Imperial College, our campus remains more of a glass and concrete jungle than a bosky extension of Hyde Park. But if I do not follow the noble Lord, Lord Dulverton, and the noble Lord, Lord Tanlaw, at least the will is there. What I can perhaps contribute to your Lordships' debate—and I am grateful to the noble Lord, Lord Sherfield, for giving me the opportunity to do so, as I am indeed for his splendid chairmanship of your sub-committee—is a few words about the nature and organisation of research funded from the public purse, especially as it relates to forestry.
My first point concerns policy. We are talking about scientific activity relevant to forestry—in other words, programmes of applied research and development. I do not intend to reopen the whole issue of the Rothschild Report, but it is perhaps relevant to mention two points which arose in it and which have received pretty general acceptance over the years. The first is that a programme of applied research and development should have clear objectives set by the user. The second is that much of the scientific content of applied research and development is rooted in basic research not necessarily performed with any immediate objective in view. I state no paradox. I merely emphasise that the organisation of research must be such that it fosters basic research on a wide front and

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yet can direct and expand some of it, when the time is ripe, to meet policy objectives.
To judge the efficacy of a programme of applied research in forestry, we must therefore ask: what are the policies for forestry that the research is intended to meet? What are we growing the trees for? Is it to improve our environment? Is it to produce timber for the construction industry or for the paper industry? Is it to meet some of our fuel requirements? Or is the research intended to help us to make better use of our enormous imports of timber or to prevent sad events such as that which has so grievously changed the appearance of the ceiling of this House? Because, depending on the answers to such questions, the research programmes should be different. Even the trees, maybe, should be different—or, at any rate, the planting programme. In our investigation of these matters your sub-committee was unable to find a clear statement of forestry policy which would really have enabled us to judge the efficacy of current forestry research. And that, it seems to me, is the main reason for our conclusion in paragraph 109 of the report that,
"research to support the forest industry lacks the coherent approach that is a feature of research in agriculture and medicine".
Scientists, any more than anyone else, cannot work at their best in a policy vacuum.
My second point concerns organisation. Any programme of applied research and development requires an intelligent focus which interprets policy in terms of the research that is desirable and which develops that policy in the light of the research that has been achieved. As the noble Lord, Lord Sherfield, has made clear, we found no such focus.
I should like to pay tribute to the work of the Forestry Commission within the limits it has set itself, which are concerned with its role as a producer of wood and of wood products. I should like also to pay tribute to the work of the research councils, especially the Natural Environment Research Council, and within it the Institute of Terrestrial Ecology, which I have visited, for the excellence of their work in many relevant fields of basic research. I should like especially to commend the institute for having initiated the European study of ecological forestry management through the European Science Foundation. I should like also to pay tribute to the work of several universities whose evidence to us was very influential. It showed that there certainly exists a body of independent scholarship which can readily be exploited for forestry research. The proof is in the volume of published evidence.
We may have been a little hard on NERC in paragraph 110 by suggesting that they take their forestry resonsibilities too lightly. The Institute of Terrestrial Ecology does valuable work on tree growth, physiology and genetics which has been developed and expanded as recommended by the former Forestry and Woodlands Committee. It has been fully supported since then, so I understand, by the Terrestrial Life Sciences Grants Committee of NERC. It is not necessary, in order to foster basic research in forestry, that it be singled out from other contiguous disciplines and separately funded. That might even be a disadvantage, leading to a narrowing of the base of
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knowledge. What is important is that there should be persons expert in forestry research involved in the work of the relevant grants committee, and that appears to be the case. Nevertheless, it remains true that NERC have not given the public impression that research relevant to forestry is as important to them as agricultural and medical research is to others. Nor is it likely that they will be able to do so effectively until such time as there exists an intelligent focus for forestry research within Government.
We were concerned, too, at the relative weakness of forestry products research. As the report says in paragraph 110:
"Each of the changes which have affected the organisation of the Forest Products Laboratory since the disbandment of DSIR has carried it further from the needs of timber producers and the timber industry ".
We are here dealing not only with home-grown timber at an annual value of several hundred million pounds but with the import bill amounting to several thousand million pounds. We were influenced here by the evidence of Dr. John Levy, who proposed to us that the unique and important Princes Risborough Laboratory should be removed from the Building Research Establishment, where it has withered somewhat, and put under the aegis of the Forestry Commission. It should become a forest products research laboratory, concerning itself with wood and its end use and at the same time integrating the requirements for both homegrown and imported timber. Some, no doubt, would like to "privatise" it for good measure. In my view, that would be wrong. It should remain within the public service to ensure the continuity of effort over long-term projects, to give authority to the development of standard test and evaluation procedures, to become the accepted storehouse of knowledge on all aspects of wood as a material, and to act as an advisory body for industry and the general public.
To be sure, the universities and the research councils have a very considerable innovative role to play in both forestry and forest products research, but they need a central body into which their ideas can be passed for further practical development. Conversely, a strong co-ordinated programme of research on forest products would help to focus the more basic work of the universities and research councils on tree biology, pest control, environmental matters, including land use and the properties of wood as a material. Especially it could provide much-needed feedback between end use and the management of commercial forests.
Finally, I come to the proposal that a chief scientist should be appointed to the Forestry Commission. A chief scientist would be the intelligent focus, the absence of which I lamented in my earlier remarks. I know that the Forestry Commission in their evidence to us were not keen on the idea but I hope they will think again about it. The duty of the chief scientist would be to ensure that forestry research was in accordance with policy objectives, and conversely that policy objectives took into account the results of research. He would play an important part in guiding the basic research of the universities and the research councils and he should be able to commission additional research wherever it can best be carried out. He would need to work in close contact with departments

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of Government and other agencies where there are mutual interests. He should be at all times in close personal contact with forestry research (and researchers) wherever it is being carried out and this means that he would have to be a person of recognised and considerable scientific stature. I do not think that this task could be carried out by the present staff of the Forestry Commission given—from the point of view of research—their narrow remit.
I am aware that there is an economic recession and a desire to reduce the volume of the public services. The appointment of a chief scientist and a small supporting staff would of course be an additional drain on the public purse. But in return one could be sure that moneys devoted to forestry research were more effectively used than they appear to be at present, and one could hope that there might be a considerable saving in the total cost of wood and the uses to which it is put. The role of the chief scientist has been laboriously built up to great effect in a number of Government departments. I am alarmed to have learned that there are proposals to abandon this concept in some. I would urge the Government not to do this without very good reason. I hope the noble Earl the Minister can give us some reassurance today on that score. We can all agree how important it is to harness the results of scientific research for the good of the nation. The chief scientists have an essential part to play in this process, in forestry as elsewhere. They should not be abandoned through bureaucratic bumbledom.
There is here a great opportunity for public service. I hope that the Government, having embraced their chief scientists, will not behave like Vivien who, as Tennyson tells us in The Idylls of the King, overcame Merlin, the great Enchanter, stripped him of his charms, and left him sleeping:
" Then crying 'I have made his glory mine,'
And shrieking out 'Oh fool!'the harlot leapt
Adown the forest, and the thicket closed
Behind her, and the forest echo'd fool
'".
4.20 p.m.
Baroness Jeger: My Lords, I had the honour and pleasure of serving on this committee and I should like to add my congratulations to our chairman, not only for the marvellous summary he has given the House today of what was a very complicated report but for his wise and patient chairmanship through our many sittings. I must confess I was overwhelmed with the distinction of my colleagues on the committee. They either seemed to be FRS or very experienced foresters, and I am neither of those things. But I listened very carefully and I learned a great deal. When I got too tired and could not understand anything more, I lay back and thought of Edmund Blunden who wrote:
" I am for the woods against the world
But are the woods for me?"
and I said to myself "Yes, the woods are for the world as well".
I think it has been a very important report. Not only were the members of the committee distinguished and wise—and I am sure Members who have taken the trouble to read the report will agree with that—but there was a very high calibre among the witnesses who
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came to us from many parts of the country. I came to the conclusion that people who understand about trees are really the wisest and most agreeable of people, and I think their voices should be listened to in high places.
But I must say that had our Committee had before it the House of Commons Statement of 10th December and the disastrous Forestry Bill, we should have had to have—I may speak only for myself—other thoughts and perhaps some other suggestions in our report. I feel that we were severely disadvantaged by not having that information before us. I recognise that there are problems in the timetables of these things but I must say a word or two about the present situation.
Of course, we all agree that we need a long-term programme for increased forestry, but I was appalled to read in the Hansard of another place of 26th January, col. 650, that the Government propose to sell up to a third of the commission's reserves of plantable land. That is about 20 to 25,000 acres. Surely that must disrupt, must cripple any central concept of long-term planning by the Forestry Commission. It will not benefit forestry, because it appears that any income from these sales is to go not to the Forestry Commission but into the Consolidated Fund. Ministers may say that the use of the money may be a matter for negotiation, but in negotiations between the Treasury and the Forestry Commission we know who will win, and it will not be the trees. In fact constitutionally the Forestry Commission is answerable to forestry Ministers and the commission's agreement or consent is not constitutionally required.
Worse still, the new Bill says that the Minister
" may dispose for any purpose of land acquired by him ".
I have to ask noble Lords what good does that do forestry? There is not even any undertaking that land sold by the Forestry Commission must be planted and must remain in forestry, albeit in private hands.
I think there are two ways of increasing the production of our forests. One is by increasing the productivity of the existing acreage, and we had much evidence of how, through more scientific work and more training and by other means, this could happen. Secondly, I think we should of course be bringing more land into forestry, and I very much agree with the noble Lord who spoke from the Liberal Benches about the desirability of doing this on a mixed basis. Neither of these objectives can be reached by dividing up our present resources. At present the cake, if I may use that word, of our forestry is divided about half and half between the Forestry Commission and private owners, and in my view it works very well. Dividing the cake differently does not increase the size of the cake; that seems to be the result of present policy.
What assurance will we have that the new owners would plant at all on the land now awaiting planting by the Forestry Commission? Because of the long-term nature of investment in forestry, commercial interests are much more likely to buy up ready-made forests grown at public expense. Some new owners may buy precious land just for privacy and prestige, and as we are winding up the dedication and grants system they do not want to ask for grants. There seems nothing to stop them just walking through the bluebells and shooting birds and never planting a tree for the rest of their ownership. How are we going to ensure that

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there is any real interest in forestry by the purchasers of these lands? How are we going to ensure that there is the concern for conservation and the environment which has been such a distinguished feature of many of the present owners of private forests? In many cases these forests have been in family ownership for generations, and I think the public is indebted to many of those owners for all they have done to keep their woodlands available to the public and in good shape.
What are private purchasers going to do about the training of forestry workers, which is a vital part of the Forestry Commission's work? What part are they going to play in research?—and because that is largely the subject of our debate today I shall come back to that. I was confirmed in my fears by the Statement in the House on 10th December, which included these words:
" The Forestry Commission will continue to have a programme of new planting in the more remote and less fertile areas where afforestation will help maintain rural employment".
That to me can mean only a selling off of the good land, the more prosperous and profitable land, and leaving to the Commission the difficult sites, the remote areas and the areas more expensive to develop. When it comes to their account keeping, I am wondering whether there is going to be any help for them in that element of maintaining rural employment, because if it is Government policy to push the Forestry Commission out to places in order to maintain rural employment there ought to be some consideration of the money made available.
The Centre for Agricultural Studies states on page 263 of its publication, Strategy for the United Kingdom Forestry Industry, which I am sure not quite everybody has read:
"Institutional investors have shown less interest in afforestation than in buying large blocks of semi-mature conifer plantations".
So now are we to have an invasion of oil companies, multinationals, Japanese pension funds, buying up acres of our forests over which we are to lose control? Then, in a few years' time, are we to receive reports not of an increase in the forestry products of our country, but of a decrease? If there is a clamour by the private sector to put money into woodlands I would welcome it, but I suggest that there is new land which might benefit from their attentions and from their investments. Moreover, by investing in land at present not planted, they would be adding to the afforestation of our country and benefiting the nation.
I speak very humbly on this subject, as I have already explained to your Lordships, because I do not know much about these matters. However, I have tried to find out about them. It was suggested in The Times that there were about 5 million acres in this country which were available, plantable and suitable for development, outside the land owned by the Forestry Commission, and that therefore the development of that land would be a real addition and not just a transfer as the present proposals would appear to be. But, of course, the market will obviously want planted land, leaving to the Forestry Commission the poorest and most expensive land. I suspect that that will give the Government an excuse to decry public enterprise once more, having made the job of the
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public sector infinitely more difficult.
Moreover, to me the proposals do not even make capitalist sense. The Government will be selling off assets in which public money has already been invested and from which the benefits have not yet been realised. The taxpayer is thus denied the fruits of his investment in this increasing asset. It is like cashing in an insurance policy before maturity, for it seems, on present trends, that the Forestry Commission might well be self-financing by the end of the century, but the nation is to be denied the benefits of the potential profit.
I ask noble Lords to remember that our imports today—already about 90 per cent. of our requirements (which I think is a disgrace)—would have been even higher but for the benefit we are reaping from trees often planted in the dark economic days of the 'twenties and 'thirties. If in those difficult days the Government had told the Forestry Commission that they could not afford expansion and planting, we would be in an even worse plight today. In my view it would be an absolute disgrace and future generations would not forgive us, if because of the day-to-day troubles we ensure that there are more difficult problems for the future. Forestry should be isolated from day-to-day economic pressures because days are insignificant in the life cycle of a tree.
The Centre for Agricultural Studies suggested that the Forestry Commission needed to acquire land for planting at an average rate of about 20,000 hectares per year for the next 50 years. So why should it dispose of what land it has, if it seems advisable to a very expert body that it ought to be acquiring more land? Nor am I influenced by suggestions that there might be some arrangement of leasing back. It seems to me that it would save a whole lot of paperwork if, instead of letting land and leasing it back, the land stayed in its present ownership.
I turn to research. I do not think that we can look to the private sector for substantial assistance as regards research. I say that advisedly because it was a subject to which we paid careful attention. In the evidence given by the Department of Forestry and Natural Resources at the University of Edinburgh it was stated:
"There is virtually no investment in research in tree crops by the private sector which has a general policy of leaving all research to the Forestry Commission. This is historically very much at variance with agricultural research for which associations of growers started a number of the research stations run today by the ARC";
and they gave East Mailing as an example. So we have the Select Committee establishing that we are spending on research at present about 1 per cent. of the value of the annual United Kingdom timber consumption—0·1 per cent. of our import bill. We seem to be getting into a situation where research will be more difficult because of the fragmentation that threatens this industry. I cannot see how research is to be encouraged by transferring assets from the Forestry Commission to the private sector. We heard evidence from the Institute of Foresters which stated:
"It is noticeable that the private sector has initiated and conducted very little development work (and less research work) on their own account".
The submission by the Royal Forestry Society included these words:

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"To plant on land long bare of trees involves biological changes, and fundamental ecological and edaphic research is only sensible".
But how do we know that private owners will do these sensible things?
Of course, the results of research should be made publicly available. I am not saying that we should try to keep research outside the knowledge of serious foresters in the private sector: it should belong to the public. But I do suggest that there may be a case for considering a levy on private owners, and I personally think that it should be directed towards new private owners because the present private owners have, as I have already said, a long tradition of care for their woodlands. But at least new buyers under the proposals could well be asked to make a research contribution through a levy. Indeed, that would not be very unusual because something similar occurs as regards, for example, the wheat levy in Australia, and there is also the set-up at East Mailing. If they are serious foresters they will be glad to contribute to research.
It may be suggested that any financial contribution might be a further disincentive. However, we must remember that already these people are enjoying tax reliefs—and again I am thinking more of the companies and of the investment schemes that are being thought up at present than I am of individual forest owners—and it seems unfair that ordinary taxpayers should further contribute to their prosperity.
The Forestry Commission and private owners have worked well together for about 60 years. I thought that we had got the balance about right with roughly 50 per cent. each way. I got the impression from listening as carefully as I could to the committee and to all the witnesses who came before us, that what this industry needs more than anything else is a period of stability. The trees want to be left alone to grow. Nothing is more distracting in an industry where the results are by nature very long term, than for people to feel unsure, unconfident about the future of forestry.
I must ask: why disturb this unique relationship? It has managed to stagger along under all sorts of Governments, and I very much regret that it should now be disturbed. I can only think that the answer must be in some sort of fiscal dogma that has nothing to do with trees, and which at the end of the day will not even make fiscal sense. It is part of a theological commitment to dispose of public assets. I very much regret it. I am sorry if I have introduced a discordant note, but it is because, through my membership of this committee, I have come to care so much about the future of forestry in this country that I am deeply worried.
I shall conclude by recollecting that when I was at school we used to have to sing a dreadful sentimental song that ended:
"Only God can make a tree".
I must say, I do not think that this Tory Government are doing much to help him.
4.40 p.m.
Lord Lovat: My Lords, I cannot think of a better place for a backwoods Peer to emerge from the undergrowth than in a forestry debate. I am a descendant of a long line of foresters who have made their mark in the timber world. In view of the very interesting
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speech that opened this debate—which deals with technical skill and ability, research and the whole study of silviculture—without in any way wishing to boast, I should like to tell your Lordships in passing that in 1823 my great grandfather went, with his head forester, to Germany and from Germany he brought back European larches and established them in the Highlands north of Dunkeld. When he was an old man he arranged for Douglas fir trees to be collected by some of his clansmen in Canada from the Fraser River. They were brought back to flourish in the Highlands. As noble Lords know, my father was the first chairman and progenitor of the Forestry Commission, and I think that he would have liked the speech that has just been made by the noble Baroness, Lady Jeger.
Forestry is long-term. Trees are my livelihood; I have worked with timber since my father, who was a stern man, sent me out to plant every spring in the school holidays, from 1933 onwards, 48 years ago. The only time that I have disagreed—and I did not even disagree—was when I ventured to have the audacity to ask in my maiden speech in 1933—and I am sure that everyone of your Lordships knows the fear and trepidation that goes into a maiden speech—whether the Forestry Commission or the Government would pay a little more than £1 an acre to help meet my death duties. That is a staggering thought if you consider that today the worst kind of plantable land is £150 an acre. Yet we have made little or no progress in profit over the sales of timber. I am astonished that nobody, including my noble friend Lord Dulverton, has stressed the disastrous economic state of the timber industry today. Timber is practically unsellable on the West coast, and on the East we do it only with the greatest possible difficulty.
When I was a young man and was selling quite a lot of timber after the war, there were conventional markets. There were pit props for the mines, railway sleepers of Scots fir and wagon bottoms of a better class of timber, such as larch, Today, all those are almost unsellable. Several speakers have mentioned the closure of the big pulp mills at Fort William and Port Ellesmere. They dealt with thinnings which were no longer wanted in the mines, and those closures are a tragedy.
The extraordinary situation has now developed in my part of Scotland, which is close to Inverness, where I cut down young timber—thinnings again—tie it into bundles and send those bundles on a pontoon, towed out into the Moray Firth; they are then loaded into boats which go to Gothenburg in Sweden, where they are dumped into a fjord and pulled ashore. One would normally only associate that practice with logging operations perhaps in the Amazon Valley or the hillsides of New Guinea. They are then drawn into the pulp mills in Sweden, processed into pulp and sold back at a profit to this country. That is a truly staggering state of affairs, but it is symptomatic of the timber industry.
I hope that everyone who will read today's Hansard or Hansard of last week of another place will remember how little is known about the parlous state of the home-grown timber industry. We all know that 90 per cent. of our timber is imported; we all know that this is a country the climate and the soil of which is ideally suited for timber production. We are producing

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only 9 per cent of our timber requirements, and we have difficulty in selling that. There must be some terrible error between ourselves or the Government and the Department of Trade. This has nothing to do with the finer points that several speakers have made about improvements to the woods themselves. This is a case of selling the end product, and surely it is the end product that really counts. I think that this is what this debate is all about. It was the humorist, Mark Twain, who once remarked:
"Buy land, they ain't making it no more".
That is so very true.
It is just as easy to distinguish between a good area of woodland and a bad area of woodland as it is to distinguish between a bad hill farm that tries to grow wheat and a good arable farm that obtains three tonnes an acre. There is a dangerous school of thought which seems to say, "Keep on growing trees, regardless of the cost ". I want to grow trees, just as the Forestry Commission wants to grow trees, and we do not want to have the conception of growing trees broken up; but, as the noble Baroness said, it is also true that the Forestry Commission may well be left with its less viable areas, which are still unplanted. I am told that at present there are 70,000 hectares of unplanted land in the hands of the Forestry Commission. Nobody is likely to want to buy all that land. This is a problem. There has been talk about institutions and pension funds buying it, but do they have any idea what it costs to plant an acre of Highland hill today? Deer fencing costs £1 a yard. The cost of drawing that woodland out would be prohibitive, taking into account freight and transport charges and the cost of road approaches.
Noble Lords know all the dangers to which timber is subject. There is gale damage and fire risk. Even various caterpillars have reared their ugly heads and destroyed forests in the Highlands. There are the encroaching risks of vermin, which will not be controlled without great difficulty. I see my noble friend Lord Bradford in the House. I sold him some land where the trees were all devoured by short-tailed voles, for which I was very sorry. In another part of the House I see the noble Earl, Lord Seafield; in the severe snows of four years ago he had the timber ring-barked in some of his woods 12 feet above the ground by hares coming in on top of the snow, ring-barking and killing his trees. Those are some examples of the risks we run in growing trees, which have nothing to do with the more scientific approach to the facts of life. With great respect I think that earlier speakers rather lost sight of that.
I think that I have said enough. The Government must find a way to get a fair price for the timber that we are trying to grow. When Sir Walter Scott, who was a great forester, bought Abbotsford, he said:
"I hope to see the day when a hooded crow will be nesting in the top of an oak tree which I have planted".
I have lived to see that; Sir Walter Scott did not. I end on that note.
Lord Dulverton: My Lords, before my noble friend sits down, would he accede that there was possibly a slip of the tongue in referring to deer fencing when he said it cost a pound a yard. I believe it costs £3 a yard.
Lord Lovat: My Lords, I thank my noble friend for that correction. I have not been able to afford it.
4.50 p.m.
The Earl of Seafield: My Lords, I should first like to declare my interest in so far as I own woodlands in the north of Scotland together with a sawmill. First of all, I should like to congratulate the noble Lord, Lord Sheffield, and also my noble friends Lord Dulverton and Lord Lovat, on their excellent speeches. In the face of such expertise and eloquence, I very much doubt that I shall be able to add anything to what has been so admirably expressed. However, I am more than grateful for the opportunity to take up a small amount of your Lordships' time in making one or two observations which I consider have a bearing on this debate.
The Select Committee on Science and Technology's Report on the Scientific Aspects of Forestry comes at what I consider is a crucial time in the forest industry in general. I am delighted to see that the committee have not restricted their remit to the purely scientific aspects of forestry, and have commented on some of the more far-reaching problems facing us. They have used as part of their background in the context of their inquiry the Forestry Commission's report in 1977 on the projected demand for industrial wood in the United Kingdom, and also the report from the Centre for Agricultural Study in the University of Reading, Strategy for the UK Forest Industry.
They have quite rightly reiterated facts such as the bill for imports of wood and wood products now standing at over £2,800 million, and also the uncertainty of national support, which is so strongly felt in the private sector, from a legal, financial and fiscal point of view. Their comments in conclusion deserve careful scrutiny, and I feel that many of their recommendations are valid, although I believe that the position of the Forestry Commission should be upgraded much more vigorously, over and above dealing with the lack of a coherent approach as mentioned in their report under Organisation of Research. I would go so far as to say that the Forestry Commission should be upgraded to a Ministry of Forestry controlling all aspects of forestry at Government level and answering to only one master.
Turning now to the Government's statement on forestry, together with the consultative paper on the administration of felling control and grant aid, while I welcome the part of the statement which refers to the continuing expansion of forestry, there are some aspects, or lack of them, which concern me, and it is to these and those not mentioned that I wish to turn my attention. Referring to the comments made over the recent difficulties in the pulp and paper sector, and the almost rosy picture painted by the phrases "adjusting to changed markets" and "exploiting export markets", I can only say—and now I am speaking about Scotland —that the export market to Scandinavia is nothing short of a miracle, and without it there would hardly be a market at all for timber in any area north of Perth and a very limited one south of Perth.
While I am in full agreement that a harmonious relationship between the private sector and the Forestry Commission is essential if forestry is to have any future at all, it is neither desirable nor essential to sell land or

921
woodland belonging to the Forestry Commission. I suggest that the Government turn elsewhere to cut their public sector borrowing requirement. The effect on the morale of workers in the Forestry Commission will be nothing short of disastrous and, most important of all, I very much doubt that any more trees will be planted as a result. In short, the theme put forward for reducing the Forestry Commission's grant-in-aid is completely incompatible with that put forward for the continued expansion of forestry in the United Kingdom.
My Lords, it is high time therefore for the Government to pay more heed to the excellent proposals put forward not only by the Select Committee on Science and Technology but also by what has become known as the "Reading Report". The Government would also do well to heed the exhortations of some noble Lords from both sides of the House. How much longer will it take for the forecasts of scarcity and the effects of an increasingly high import bill to sink home?
After mentioning some of the problems facing forestry as an industry and voicing some of the complaints from it, I should like to make some constructive suggestions, though they may not be original and could doubtless be put over in a more professional manner by many other noble Lords who have far more experience than I.
Much of the feeling of insecurity felt by the private sector has been caused by inconsistencies, to put it kindly, in the fiscal and legal areas of forestry administration. CTT was introduced. That, needless to say, contributed to the fact that planting in the private sector fell from some 23,000 hectares in 1973–74 to 8,000 or so hectares in 1977–78. The dedication basis was changed. The popular Basis 2 was restricted and a by and large unpopular Basis 3 was introduced for new areas to be planted. The level of grant aid increase is spasmodic. Yet again, the Schedule B and D taxation arrangements are attacked—in this case by the Public Accounts Committee.
My suggestions, for what they are worth, are as follows: CTT should be abolished, or at the very least be altered so as to have no worse an effect than death duties did prior to 1975. When payment is deferred, why could the assessment not be made at the date of death and not at the date of payment? Grant aid: this should be increased annually by the rate of inflation. What could be more simple? Dedication: this we now hear is to be changed, but unless the main aim (that is, the growing of timber) is kept in mind, there will be far too much interference from outside bodies.
As I have mentioned earlier, the Forestry Commission must be upgraded and in its new form it should be the only body to exert control over the growing of timber. Under no circumstances should local authorities have any statutory powers over timber growing. Bodies such as the Countryside Commission, the National Conservancy Council, and the NERC would merely advise the Forestry Commission. Lastly, taxation, Schedule B and D: I am greatly relieved that the Government have left this provision alone, as to remove this incentive would be disastrous. The Treasury must realise that tax incentives are an essential prerequisite to getting anyone to invest—as my accountant put it—in what almost
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amounts to a bond which is unsaleable in the interim, and redeemable after approximately 60 years.
To sum up, a committee should be formed with a remit to investigate and change where necessary the fiscal and legal aspects of forestry, using as a guideline the aim of encouraging the private sector to plant on a scale commensurate with that suggested in the Reading Report—that is, a total planting of over 1·86 million hectares over the next 50 years. And when it has finished its deliberations the legal and fiscal decisions made as regards forestry should be left completely alone by tacit agreement between the major parties, and here I only echo the words of my noble friend Lord Lonsdale, who said the same thing when the Reading Report was debated last March.
I want to take a quick look at the industrial and marketing side of the timber industry, and what I say here applies in the main to Scotland, which, as it has the largest productive forest area of any part of the United Kingdom, is probably an appropriate choice. It also deals mainly with the smallwood market, which I am reliably informed accounts for about one-third of the whole timber market in Scotland. As noble Lords will know, Wiggins Teape ceased taking any smallwood into their mill at Fort William; that amounted to a loss of about 250,000 tons per annum in intake. Bowaters at Ellesmere Port ceased taking in any home-grown timber, and that had the effect, I am told, of a loss of 100,000 tons from the Scottish market. About 12 months ago, Weyrock of Annan ceased taking in any timber at all; I am afraid I do not have the figures for the loss there. The existing home market for smallwood in Scotland therefore centres on the Scotboard chipboard mill at Irvine and a similar mill at Stirling owned by Caberboard. Their intake is about 200,000 tons per annum between them. As long as the export market to Scandaniva remains, the situation is not a complete disaster, but it does not alter the fact that there is no home-based industrial smallwood factory of any consequence north of Perth. It is an appalling state of affairs.
What is the solution? I have said that the Forestry Commission's status should be up-graded to Ministry level and that it should cover all aspects of forestry. I consider that its duties should include the investigation, encouragement and promotion of investment for the middle and end users in the area where the timber is grown; I would term this horizontal and vertical integration in the production areas. We should have the provision of interest-free loans for industrial users such as pulp, chipboard mills and so on, with an assurance of the marketability of home-produced material providing the costs were competitive at international level. Protection against dumping would be necessary. Together with private growers, there should be guaranteed supplies to raw material users with the necessary price review safeguards. The Forestry Commission in its new state should have on its specific committees representatives of various private growers' and timber merchants' organisations, and so on, and, where necessary, representatives of the NCC, NERC, PRL and any other organisations it felt were included in its remit.
I have spoken for long enough and would say in conclusion that the successful future of forestry in the United Kingdom rests on three words: incentive,

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stability and confidence. There is much that the present and succeeding Governments could do to achieve that end.
5.4 p.m.
Lord Taylor of Gryfe: My Lords, like other noble Lords who have spoken in the debate, I have to declare an interest: I am the chairman of a company that is concerned with the attraction of investment to forestry. I apologise at the outset to the noble Lords, Lord Sherfield and Lord Dulverton, for being absent at the beginning of the debate. Monday is not the best day to travel from Scotland to London and I hope that when we come to debate the Forestry Bill, some concern will be paid to the difficulties of travelling such a long way, and perhaps it will be possible to have those debates mid-week.
We are indebted to the noble Lord, Lord Sherfield, for what is all immensely valuable report. He was good enough to invite me to become a member of his distinguished committee, but when he supplied me with the evidence which was being submitted by the various organisations it was obvious that I had not the time to study that mass of material. I am therefore indebted to those noble Lords who participated in that committee's deliberations for doing a very valuable job. The forestry industry owes a debt to all of them for their application, and to the various organisations which offered advice and comment to the Sherfield Committee.
We in this House have had a number of debates on forestry in recent years. I notice that, when they discussed the Second Reading of the Forestry Bill in another place, it was pointed out that it was the first debate on forestry in 50 years. As I look at our programme, I see that we have today the Select Committee on Science and Technology with a Report on the scientific aspects of forestry; we have the Government Statement on which the noble Lord, Lord Dulverton, spoke; and presumably in the near future we will have before us the Forestry Bill. I suspect that much of what is said today in connection with forestry policy will recur in the debates on that Bill, which simply carries forward into legislative form the Government Statement on forestry.
On reading the Official Report of the debate in another place and listening to the comments on forestry offered today in your Lordships' House, I would say that it may be extremely difficult for the Government to take that Bill through this House. There has already been comment on the powers given to the Secretary of State to dispose of Forestry Commission assets and in forestry circles there are considerable doubts about the wisdom of dispensing with dedication agreements, which offer some guarantees for the continuity of forestry planting. It might be well therefore for the Government to anticipate some of the criticisms that may arise when the Forestry Bill reaches this House.
When we are discussing Government forestry policy in relation to their Statement and the Bill which will shortly arrive here, we must answer the question which was posed by Mr. Benyon, the Member for Bucking-hamshire, in another place when he asked:
"…the question that I ask myself and my right honourable and honourable friends is: will the Bill, in conjunction with the
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measures to assist private forestry which we shall be debating later this year, produce more trees in sufficient numbers to make a major impact on imports of timber and timber products? That is the crunch. [Official Report, Commons, 26/1/81; col. 668.]
Will the Government's policy, their assurances that they are committed to an expansionist forestry policy, the proposals they have announced in their Statement and in the Forestry Bill, in fact contribute to an expansion of forestry? I ask that question because the figures quoted in the debate in another place indicate that the Government's target falls very far short of the Reading Report, the CAS report. On page 241 of the report, after an examination of the case for further planting, it is stated:
"Country-wide statistics imply that there is sufficient space for water gathering, amenity, conservation and improved farming activities to coexist, without difficulty, with an additional 1·1 million hectares of forests".
The Government's proposals fall very far short of achieving anything like that objective. In fact the more I look at the Bill and at the Government's Statement, the more I see it as a product not of a forestry Minister, but of a Treasury Minister.
Perhaps some of your Lordships, like myself, recall a previous exercise some years ago when the Treasury carried out a cost benefit analysis of forestry. The analysis was a curious document. It bore no relationship whatsoever to forestry. It was related more to computers than to trees, and it tried to devolve a system of evaluating amenity, the countryside, a beautiful view, and to add those values into some kind of cost-benefit analysis. I remember discussing the matter with the Minister at the time and we agreed that it was not a sensible or relevant contribution to forestry policy. The Minister agreed, we sat down, and I asked, "Should not our civil servants hear our judgment?" We brought in the civil servants, and my civil servant said to me, "Really, Lord Taylor, it is all very interesting, and I have heard what the Minister has to say, but my boss is not the Minister of Agriculture; my boss is the Treasury ". I think that there has been a good deal of that kind of thinking behind what is now before us in the Government's Statement that we are discussing.
If the present Government have made one major mistake in economic policy—and this goes far beyond forestry—it has been in the failure to distinguish between revenue expenditure and capital expenditure; and that has had a serious effect upon the whole economy. Revenue expenditure involves money that people spend, and it can contribute substantially to inflation. Capital expenditure involves money that people invest to create assets that are wealth-producing. If we look at this particular Statement of Government policy, we see that the total investment is about £43 million as grant-in-aid to the Forestry Commission. We are not talking about large sums. Over the years the contribution of these small sums to the Forestry Commission's activities in acquisitions, development and planting, has created an asset of £1·2 billion. That is a great national asset. It must be one of the greatest investments in which the state has ever engaged. So I think that it is quite wrong for the Government to look at this small sum of £43 million and say, "Let's apply monetarism to this small sector of Government activity".
I should like to say a few words on the question of

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disposal of Forestry' Commission land, which is incorporated in the Government Statement. There is a very strong case for disposing of small parts of the Forestry Commission estate. Inevitably in the building up of an estate for 65 years there are small areas of land in different parts of the country. One hopes that a neighbouring estate will be for sale at some future date. It never really comes on the market, and one is left with a certian amount of fragmentation in the Forestry Commission estate that ought to be rationalised. There is a very strong case for the rationalisation of the Forestry Commission estate. That does not involve the dismemberment of the Forestry Commission estate. It does not involve the large-scale disposal of the commission's assets. It is simply a sensible piece of land management, and that has to be supported.
However, that is not enough. The Treasury is suggesting not only that the Minister be empowered to sell off Forestry Commission land, but that sale-and-leaseback arrangements should be entered into with City institutions. Obviously anyone who enters into a sale-and-leaseback arrangement, whether it involves a piece of land, a building, or some other property, expects a return on the investment. So what will he look for? He will look for the best land that can be included in such arrangements, since that land will offer the greater yield. Unlike the Forestry Commission, such an investor will not be desperately concerned about amenity, recreation, and the various other activities that the Forestry Commission accepts as a public responsibility. Forestry is not entirely a matter of making money or of capital appreciation. It is also a matter of enhancing the beauty of the countryside, recreational facilities, public access and of sensible planting, too, in order to improve the amenity of the countryside, which is not always justified in purely economic terms. Therefore, to suggest that Forestry Commission land should find an attractive market in sale-and-leaseback, where the major concern will be the return to the investors, be they institutions or insurance companies, might not be in the best interest of good public forestry.
I understand from what was said in your Lordships' House when the Government Statement was originally made that the cash realised from the sale of Forestry Commission assets will not be returned to the commission for further development. I think that the noble Earl, Lord Mansfield, made a statement to the effect that under Treasury rules it was impossible to make such an arrangement. However, as I understand it, in the privatisation measures relating to certain nationalised industries, that are at present proceeding through the House, the sale of assets of certain of the nationalised industries are to be ploughed back into the industries concerned. I would suggest that the forestry Minister considers the precedents that have been established by ensuring that, at least if Forestry Commission assets are sold, the cash realised should be used for further development of forestry.
As has already been said in the debate, we are talking about an import bill of £3 billion, and we are talking about cutting back in grant-in-aid of £43 million. I suggest to your Lordships that it is not quite sensible to cut back on that small national investment. Of the £43 million in grant-in-aid, £8 million is for the forest
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authority responsibility, and £2 million is paid out in the form of grants for private planting.
Nothing has been said today—and I am happy that this is so—about the question of integration of forestry and agriculture. There used to be great debate on the subject; and I should like to read a quotation from what was said during consideration of the Forestry Bill in another place on 26th January, as reported at column 698 of the Official Report. Mr. Lang referred to the drawing of attention
"to a study of possible forestry integration with farming that was carried out by Edinburgh university last year on 13 hill farms totalling about 43,000 acres. The report found that after 26 per cent. of the land surface had been planted, skilful management led to an increased stock-carrying capacity. The number of lambs weaned rose from 8,678 to 11,321, and livestock units, including cattle as well as sheep, rose by one third. Still more important, although farm jobs fell from 35 to 32, an extra 26 jobs were created in forestry".
This is a very important statistic, because it shows that forestry is not the enemy of agricultural development, and sensible integration and land use can create greater wealth and more job opportunities.
Lord Dulverton: My Lords, may I interrupt the noble Lord for one very brief moment? The report which the noble Lord, Lord Taylor, has been talking about was one to which I myself referred earlier, before he was able to be here, but I called it by a different name. He was quite right in saying that it was carried out by Edinburgh University, but it has been published by the East of Scotland College of Agriculture.
Lord Taylor of Gryfe: My Lords, I thank the noble Lord, Lord Dulverton. I know that, in addition to the Edinburgh University studies, the noble Lord himself has instituted independent studies on his own estates, which have borne out the figures that I have just read. Let me say just a word about tax incentives, because there has been a good deal of misunderstanding on this. I am in favour of tax incentives to private planters who take the long view of an investment and are prepared to accept a 3 per cent. return on investment in forestry as against the current rates, which can be attractive to private investors in the market. I think there have got to be incentives for private investment, and this is one of the fine things about forestry. We established a partnership in forestry. The Forestry Commission was not simply an instrument for state forestry; the Forestry Commission is a forest authority with a research department, with its grant facilities and with its dedication schemes, all designed to encourage private forestry. We should get that kind of partnership in other sectors of the British economy. Here are two sectors in the same industry working together in harness for mutual benefit, and I would be very sorry indeed if any measures which the Government introduce in the Forestry Bill should upset that kind of partnership.
I was delighted to hear the noble Baroness, Lady Jeger, saying that she had joined this committee with little knowledge of forestry and had become converted. May I say that there is a provision in the new Forestry Bill that a businessman be appointed to the Forestry Commission. Some years ago the Secretary of State for Scotland, the noble Viscount, Lord Muirshiel, came to me and said, "Tom, I wish you would join the Forestry

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Commission; we need a businessman on the Forestry Commission, because these silviculturists are concerned about growing trees and not very much about economics". That balance has now been redressed; the Forestry Commission is not only a group of dedicated silviculturists; it is also a well-organised and well-managed organisation. So I hope that anything which is done by the Government will not upset the happy relationship which we have all enjoyed, private and public, in the forestry industry.
5.24 p.m.
The Earl of Cranbrook: My Lords, perhaps I may draw your Lordships' attention from the broad perspectives that the noble Lord, Lord Taylor, has just illustrated so well, and bring your Lordships down from the great open spaces of the Highlands, where most of the noble Lords on this side of the House have their experience, to the problem of small wood-lands in rural lowland England. Here I declare an interest. The scope of my interest is 28.5 hectares of dedicated woodland, and I consider from that standpoint I am reasonably well acquainted with the problems that are faced by the small farmer and landowner in the English countryside.
As a member of the Select Committee I wish to be associated most warmly with other noble Lords who have spoken of the very formative and distinguished chairmanship of the noble Lord, Lord Sherfield; of the guidance provided by Professor Poore; and also of the high quality of the papers and the oral evidence that we received to support our conclusions. In this report paragraphs 39 to 44, the recommendations in paragraphs 125 to 129 and the conclusion in paragraph 145 all relate to broadleaved woodlands. The great importance attached by many people to aspects ranging from amenity and landscape values to conservation were well brought out in the pages of the report. I also believe that we must find some commercial potential for such woodlands. I believe that the survival of these woodlands into the future depends on a commercial background, just as does the survival of a successful forestry industry in the Highlands of Scotland, about which we have heard so much so far.
From Forestry Commission data which your Lord-ships will find in the report it will be seen that 394,000 hectares of productive broadleaved woodland and coppice exist in Great Britain, about 87 per cent. of which is in private ownership. In addition, from Forestry Commission figures there are 294,000 hectares of scrub and felled land, which I presume is hardwood in the main, of which 98 per cent. is in private ownership. The Nature Conservancy Council, in their evidence, refer to something like 250,000 to 300,000 hectares of semi-natural woodland, which is said to be some 20 per cent. of the total broadleaved woodland of the Kingdom. From another source I have read recently that there are about 450,000 hectares of somewhat unspecified woodland in Great Britain not under any system of planned management. About half of this is made up of blocks of less than 10 hectares in extent, and by inference it is all in private ownership. The Timber Growers of Great Britain, in correspondence with me, claim that there are about three-
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quarters of a million hectares of broadleaved woodland in private hands, of which only about half is under proper management.
Your Lordships will appreciate that there are some incompatibilities in these statistics, but the point which is clear to me is, first, that the involvement of the Forestry Commission as a forestry enterprise in the broadleaved woodlands of lowland England, or of Great Britain at large, is negligible compared with the involvement of the private sector; and, secondly, that all quarters agree that roughly half of such woodland is under no system of planned management whatsoever.
As a forest authority, the Forestry Commission has, through the various Forestry Acts, influenced management in two principal manners. First, there has been a carrot. This has been grant aid through the dedication schemes which were initiated in 1947 and have been modified several times subsequently. In this respect we have heard today, I think, more or less uniform expressions of regret from both sides of the House, and having myself dedicated woodland I, too, regret that I entered into an agreement which I considered certainly solemn and binding for my part upon myself and my successors. This, we are told, is now to be dismembered (to use the phrase of the noble Lord, Lord Dulverton), to be dispensed with (to use the phrase of the noble Lord, Lord Taylor) or scrapped, which was the word I had in mind myself. The forestry authority has also had a stick in their hands, and this has been felling control, which is now to be relaxed.
So I ask: How successful have these two influences, the carrot and the stick, been in protecting the existing stands of broadleaved woodland in the lowlands of Great Britain and in promoting the regeneration of our national resource of broadleaved woodland? I ask also: What is the outlook for this particular type of forestry under the new proposals? As to my personal view, I look around in Central and South-East England and I form the opinion that a great proportion of the trees in the broadleaved woodland are dead, dying or doomed if they are elms; mature or overmature, in the main, if they are other species.
In the report of our Select Committee you will find, first, the evidence of the Nature Conservancy Council and that of Dr. Oliver Rackham claiming that since 1947 up to half of the scientifically important, ancient, semi-natural woodlands have been lost—lost, that is, to agriculture or to other developments or replaced by plantation forestry. You will find also the Countryside Commission expressing concern over the progressive loss of small farm woods and copses which are exempt from felling control under existing arrangements and, in the main, are being converted to agricultural land. Thirdly, you will find Professor Roche of Bangor emphasising the downward trend year by year in the supply of roundwood from broadleaved trees that is coming on the market; and (I quote):
"a massive shortfall in the present planting programme of broadleaved species in relation to what is required to replace the amount logged each year".
He goes on:
"The conclusion seems inescapable that Britain is liquidating its indigenous broadleaved resource wherever it is to be found, in hedgerows, farm woodland, parks and in plantations".
This is a serious indictment and I regret to say that

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it is my opinion that it is substantially true. The broadleaved woodland owner or manager today faces massive problems. First, for longer than the producers of softwood in the Highlands of Scotland, he has been subjected to economic pressures of the most appalling forms. As a timber producer, he has been progressively swamped in the last decades by competition from the enormous volume of imported hardwoods, chiefly from tropical regions where exploitation forestry is practised so that the only cost incurred by the timber industry is that in felling and extraction. In the report, you will find a few murmured asides from the Countryside Commission who see an end to this import, presumably through the end of viable forestry in the tropical regions. I have travelled fairly widely in the forestry-producing regions of the Far East tropics and, although there are problems there, I am not convinced that the sources of hardwood will dry up soon enough to save the hardwood industry of this country. The gross returns from British hardwood timber extrapolated over the lifetime of a tree are derisory. It makes me weep to see the price tendered for an oak which has stood for 150 or 200 years. It must be taken into consideration by all in authority that the returns from hardwood plantations, compared with any other form of managed land use, are utterly inconsequential in any financial terms.
For products other than timber, the underwood and the coppice, which once were of great economic importance—and one has only to read Thomas Hardy's The Woodlanders, to realise the type of community that was supported very largely from these woods by underwood rather than timber exploitation—the traditional markets have disappeared. Substitutes have been brought in but these are mostly of an industrial nature—pulpwood, hardboard, chipwood and so on—and they yield ridiculous returns in relation to labour costs compared with other traditional uses.
Now I come to the scientific aspects. As far as I could discover, as a Member of the Select Committee, until recently there has been no research at all into the economics of pure hardwood management. The economic section of the Department of Forestry at Oxford publishes summarised data drawn from the accounts of a random sample of private, mixed forestry estates that arc managed in accordance with an approved plan of operations under a dedication scheme. These figures are illuminating. Losses have consistently been shown. In 1977 (the latest year of available figures) the average deficit, net, was £8·43 per hectare (without grant). Considerably higher deficits of £21·20 were recorded by the smaller estates. There is little wonder that about half of our broadleaved woodlands in lowland Britain are left unmanaged. One can see clearly that benign neglect saves money: planned management costs money.
From the report, although there is some pessimism, I feel that in the main the scientifically important woodlands can be safeguarded through the efforts of the NCC, the National Nature Reserves, the voluntary conservation bodies and other non-Governmental bodies that are concerned with scientifically important broadleaved woodlands. This I applaud. But these woodlands exist in a matrix of woodlands which are not of scientific importance. If only the scientifically important woods are secure, then they exist as minute
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isolated islands in a landscape totally devoid of comparable habitat and, as any student of island biology knows, in the end, the animals and plants which survive in them are destined only to extinction. What is needed is a more or less semi-contiguous, more or less continuous habitat of woodland of (let me say) not non-scientific importance but ordinary broadleaved woodland covering the country in order to confirm the security of the scientifically important woodlands.
I am in touch daily with working farmers, my neighbours, who rely on the land for a living. In the main, they tolerate woodland. Some of them enjoy shooting and those in this class will respect their woodland and keep an eye on it. But, to them, the commercial value of the woodland is the land on which it stands. They and their advisers, when farmland changes hands, put on to the woodland a price which reflects that land plus the cost of converting it to arable land. This is the attitude of the ordinary farm working landowner who relies on the land for a living.
The second main problem faced by the broadleaved woodland owner is the problem of disease. The unchecked progress of elm disease has demonstrated clearly that, as a nation, we are incapable of protecting our trees from an imported pathogenic micro-organism. Dr. Kenneth Ashby, in the report of the Select Committee believes that countermeasures were available and believes that the failure to apply these with sufficient ruthlessness and their premature withdrawal contributes to the northward spread, unchecked, of elm disease. Thirdly, there are the pests. I believe that the seriousness of the grey squirrel as a pest has been under-stressed. Mr. Roderick Nicholson in the report points out:
"This squirrel attacks a vast range of tree species just after the great costs of establishment have come to an end, and has rendered valueless literally thousands of acres of young hardwoods. Most foresters in Southern England have come to regard its presence as incompatible with the continued existence of hardwood woodlands in the long term".
There are other difficulties faced by the broadleaved woodland owner or manager. These include the difficulty of getting good stock of hardwood seedlings. As far as I can find, there is in this country no production of young plants of native hardwoods or known genetic constitution and, hence, of uniform and predictable characteristics. This is indispensable for proper plant husbandry. We do not plant fruit trees or roses in our gardens—in fact, we do not plant conifers—unless we know what strain the seeds are from. This is available for the softwood industry. If you wish to get plants of known characteristics, I believe that you can find them abroad. In this country, so far as oaks are concerned, I believe that there is such widespread pollution by Turkey oak pollen—certainly in lowland South-East England—that you cannot guarantee that an acorn you plant yourself in your nursery will in fact come pure. That is the picture and I find it excessively gloomy.
I propose a few remedies. I reaffirm my strong support for policies outlined in paragraphs 125 to 128 of the report. In amplification of these, I add a few personal views. First of all, economics. The dedication under Basis III provided for a higher establishment grant for broadleaf wood than for coniferous

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wood. I have no idea whether this was intended to be an incentive or whether it was based on some comparison of the relative actual costs. So far as I know and can discover, the figures have not hitherto been available. I have only lately seen some figures from Oxford which suggest to me that if identical operations are performed, whether planting hardwoods or softwoods, the costs are not significantly different.
The figures also show me that the costs per hectare for small plots, plots of one hectare or less, can work out on average at up to £2,000 per hectare. Against figures like this the possibility of providing economic grants seems somewhat remote. I believe there must be an incentive element to encourage broadleaf plantation. I sincerely hope that the grant levels, when they are proposed, will take account of the true costs involved in establishing broadleafed woodlands.
I have spoken of the swamping of our market with imported hardwood from the tropics. I believe that there should be import control. I do not favour unilateral control. I believe that the fullest discussions are needed with our European Community partners who face very much the same problems in their own countries. I also believe—and perhaps these discussions should take place through an international agency—that there should be discussions with exporting tropical countries.
From my own experience in the timber-producing regions of South-East Asia, I believe that the more thoughtful Governments would heartily welcome a tightening up of import control. So far as they are concerned, it would have the effect of supporting the prices they get on the export market, and would also encourage commercial exploitation of a greater variety of tropical species and thereby would lead to a less wasteful exploitation of what to them is a very vital national resource.
Lord Somers: My Lords, may I interrupt the noble Earl for one moment? Would he agree that one of the great problems on the rare occasions when one can buy English hardwood is that it is only half seasoned?
The Earl of Cranbrook: My Lords, I am sure that the timber marketing industry is more geared to importing exotic hardwoods nowadays than to dealing with our native species.
For roundwood and underwood, I should like to see research into small scale conversion plants for use on site to produce combustible materials, whether alcohol, charcoal or dried compressed cellulose residues. I believe that research into such products is necessary. The log market for stoves in rural areas, which has been mentioned, exists but the transport and distribution costs are uneconomic.
Finally—if your Lordships will excuse me for going on rather long—I want to revert to the subject of grey squirrels. The Forestry Commission have kindly made available to me their latest thinking in the form of a paper entitled Appraisal of Squirrel status in the United Kingdom, which was produced jointly by the Forestry Commission Research and Forest Management divisions this month. This document advocates no special steps to be taken against grey squirrels at present in anticipation of a peak in population levels
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(and hence damage) which is thought to come on a cyclical pattern and is predicted to be due again in the next few years. If it does not seem ungrateful and discourteous to them for kindly making this paper available to me, I find this approach gloomy in the extreme, inadequate and also unrepresentative of the acute concern felt by the private sector of broadleafed woodland owners.
The Forestry Commission's research has concentrated on surveys of distribution of squirrel species for damage done and also on control by poisoning. The Forestry Commission's paper points out the difficulties—and the word that they actually use is "impossibility"—of organising a systematic, concentrated control over large areas. The document advocates localised control in and around vulnerable crops just before and during the damage periods.
I believe that research is needed to establish the reasons why grey squirrels damage trees especially at certain seasons of the year. I understand that research projects of this nature are being carried out particularly at the Institute of Terrestrial Ecology at Monks Wood in England and also at Edinburgh University. I hope and ask whether these are adequately funded, staffed and supported.
Ultimately—if the House will bear with me for a minute longer—I believe that the grey squirrel must be eradicated. I say this with regret because it is a pretty animal, particularly in urban parks, and it was for this reason that it was introduced. I believe that the Forestry Commission were right in their appraisal referred to on paragraph 23 that shooting (coupled with drey poking) is an effective method. They say (if I do not misquote them) that they were surprised at its effectiveness. This is infinitely preferable to poisoning, because I dislike poisoning animals. If it is coupled with a seasonal attack on grey squirrels at an appropriate time of the year, which is in the coming months before full leaf flush, it can be useful. It can also be used when both grey and red squirrels are present.
I should personally like to see the grey squirrel proscribed, perhaps first on a trial basis, initially in one or a group of adjoining counties, so that it became the duty of all owners or occupiers of land to control themselves or to permit other persons to enter their land for the purposes of control; otherwise I do not believe that any lesser measure will rid our shores of this unwelcome pest.
5.47 p.m.
The Earl of Bessborough: My Lords, we are so often in debates of this kind on the work of subcommittees of Select Committees of your Lordships' House indebted to the noble Lord, Lord Sherfield, not only for his able chairmanship but also for the manner in which he introduces the debates, that I feel it almost superfluous to repeat the many praiseworthy remarks that I have made in the past about his work and the way he conducts our proceedings.
We must also be grateful to my noble friend Lord Dulverton for drawing our attention to the Government's recent Statement on forestry. My noble friend is of course quite exceptionally well qualified to speak on these matters for he is (as he told us) a former president of the Forestry Committee, now the Timber

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Growers of Great Britain, to say nothing of his being trustee of the World Wildlife Fund among many other related organisations of which he is a member, including the Nature Conservancy Council in Scotland.
I agree very much with everything that the two noble Lords said in introducing this debate or at any rate what they have so far said. I should also like to join with other noble Lords in giving thanks to our clerk Mr. Paul Hayter for all he did for us, and our specialist adviser Professor Duncan Poore and indeed the numerous witnesses who gave evidence before us. In so far as my own remarks are concerned, I propose to confine them largely to the report of the Select Committee and indeed to certain aspects of it since I do not wish to be repetitive and I know that other noble Lords have covered or will cover other aspects of the report.
I found work on this subject quite fascinating and of very great interest. I say that for good reasons, in so far as I, too, have interests in the subject, as president of a prestigious society concerned with the planting and preservation of trees in various parts of the world—a society of which we are proud to have His Royal Highness the Prince of Wales as Patron and a societywhichwas founded by that famous nonagenarian, Richard St. Barbe Baker, who now lives at Mount Cook Station in New Zealand, whence he still continues to travel the world. It was of course he who, among many other things in his long life, saved the redwoods in California and has helped to reclaim parts of the Sahara.
I have a more modest personal interest, as an owner (like the noble Earl, Lord Cranbrook) of woodlands, but also mainly of plantations which have been planted by my father and myself over the past 60 years. These are plantations in West Sussex and part of the ancient Forest of Bere. I also employ 10 men in the woods department, and I may say this is presenting major financial problems. We are having a general review of the situation now. I agreed very much with what my noble friend Lord Lovat said and with what was said by my noble friend Lord Seafield on the general economic situation so far as the home-grown timber industry is concerned. I also support strongly what my noble friend Lord Cranbrook said on hardwoods.
As your Lordships may well have observed, and as I think members of the committee concluded, the whole subject turned out to be much wider and deeper than some of us anticipated. I have never had the honour of taking part in a forestry debate in your Lordships' House before because I have been interested in other matters; but I now have to study with some care the various interrelated problems that arise. Certainly the whole subject has been much wider and deeper than some of us anticipated, as witness the scope of the report and also the wealth of evidence given in the second volume.
The noble Lord, Lord Sherfield, has dealt with the report in a general way and other speakers have covered specific points. I should like to concentrate my few remarks, in order not to be repetitive, mainly on pests and diseases and the risks mentioned by my noble friend Lord Lovat. I should like also to say a word on ecological sustention: that is, the need to make sure that our forest land will grow not just one crop but two, three, four or more crops. I agree with what the noble Earl, Lord Cranbrook, said about
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grey squirrel damage. I do not know whether I would not go quite so far as to say that they should be proscribed, but I go very nearly as far as he did on this subject. We have suffered terrible damage from this pest, which incidentally I do not call a squirrel but a rat.
I also take a gloomy view, as has my noble friend Lord Cranbrook, in regard to pests. A very gloomy view, but, I suspect, a fairly realistic one, was expressed by the University of Edinburgh. They said that reports of new insect pests on forest trees in the United Kingdom suggest that
"…British forestry may be entering a phase of development where such attacks are the norm rather than the exception, as in the past ".
It is to be expected that the introduction of exotic species will be followed by a temporary lull while native and indeed exotic pests and diseases adjust to the new hosts; but the lull has to end some time. Maybe the adjustment has taken place—I do not know—and the ravages, for example of the pine beauty moth on the introduced lodge pole pine in Northern Scotland will be followed by other cases. If so, we must concentrate an important part of our research on preserving our existing production. When attacks by the pine beauty moth reached epidemic proportions in 1977, the Forestry Commission quite rightly took emergency action in spraying with fenitrothion. I do not suggest they were wrong to do so because it was an emergency; but we must think for the future and, in general, I cannot believe that aerial spraying with pesticides is the best means of pest control on the large scale of our forests.
As many of your Lordships will know—those who have suffered, as I have in West Sussex, from windblown herbicides or agricultural pesticides—spraying is not always as selective as one would like. There is often a risk of killing the good with the bad and in forestry this could mean that certain pesticides will harm the natural flora and fauna of the forest. In my case, the use of an agricultural herbicide in a wind, browned off a row of cedar trees in an arboretum for over a year, although I am glad to say they have now recovered.
There is a second risk: to make control effective, spraying may have to be repeated yearly, with the chance of building up resistence in the pest until the pesticide ceases to have effect. When you may have to spray several square miles of forest—which I hasten to add does not apply in my own case—the risk and the cost are considerable. That is why the Select Committee urge, and I am glad they do, that there should be resolute research to find methods of pest control which do not involve annual spraying. One promising avenue is the work on insect viruses which is being developed by the National Environment Research Council's Institute of Virology.
An attempt, I believe, should also be made to alter the ecological conditions that make trees liable to attack. Having lost all our elm trees at home and suffered severely from beech bark disease or even deformed acorns—though not yet, I am glad to say, oak wilt—I feel very strongly indeed on the matter. Again, I agree very much with what my noble friend Lord Cranbrook had to say on this and I hope that my noble friend the Minister of State will be able to assure us, when he comes to reply, that the Government

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are watching the position in regard to the importation of oak from North America.
This question of diseases is one of the reasons why the Select Committee encouraged the Forestry Commission to diversify both the species in their forests and also the age classes within those species. Some species are more prone to attack than others and they are also prone to attack at different stages of their life cycle. If we can avoid extensive monocultures—applying, of course, mainly to conifers—we shall reduce the threat of an epidemic attack by pests or diseases. I do not claim that diversity is doing something to prevent local damage but it should help to insure against widespread losses.
Some of the same considerations arise from the need to ensure the long-term sustention of forest soil. We shall do no good at all if our forestry methods leave the soil impoverished, or even useless, after a couple of rotations. This is not expected to happen; indeed, the initial results of Forestry Commission research suggest that there are no swift or irreversible changes taking place in forest soils. But our knowledge of this is incomplete and firm data are, I understand, not likely to be available for 15 to 20 years. Therefore, we must take care that our cultivation and drainage methods do not result in washing top soil, for example, into the rivers.
We must also take care that our fertilisers do not produce faster growth than the soil can stand; and we must take care that harvesting methods do not leave the soil exposed to widespread erosion. I hope that research will test the effects of clear felling in order to assess whether it is desirable to keep a continuous canopy of trees within the forest. It may be that by felling smaller irregular plots, as we do at home, erosion can be avoided and, at the same time, the natural flora and fauna of the forest can be encouraged to keep a foothold.
I realise that changes in pest control, disease control, cultivation and harvesting methods may all involve some expenditure, though I do not think that extra expenditure is a foregone conclusion. But if this is the case, we must recognise the long-term effects of our forestry methods and not sacrifice the long-term benefits for short-term gains. Here I must quote from paragraph 144 of our report, where we say:
"…it is clear that maximum tree growth is sometimes the enemy of integrated land use and good forestry".
We must remember that some allowances in forestry practice have to be made for other land uses, including, as we have heard, agriculture, water gathering, nature conservation and amenity, and that the changes which benefit other land uses may eventually work to the advantage of forestry itself. That is why I welcome this remarkably comprehensive report which is, I think, the first of its kind.
I should like to add one word about incentives. Several noble Lords have spoken about incentives. I should not like the Government to forget altogether the kind of suggestions that have been put forward by, for example, the EEC, in regard to planters of plantations receiving some kind of annual payment in the same way as they do for their agricultural crop. I know that some thought is being given to this matter; indeed, it arose during the course of our deliberations in
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the Select Committee. But 1 think it would be interesting to know—though I am sorry that I have not given my noble friend the Minister of State warning of this question—whether further thought is being given to this, perhaps, very radical and rather way out idea. In conclusion, I also hope that the Government will produce a White Paper on the Select Committee's report, or perhaps, as it will be a paper about trees, it should be green.
6.4 p.m.
Lady Saltoun: My Lords, I have to declare an interest in forestry as an owner of small woodlands. I should like, first, to congratulate the noble Lord, Lord Sher-field, and his Committee on the very interesting, farsighted and readable report which they have produced and to thank them for it. I hope that the Government will pay it the attention it deserves.
Britain produced in 1979, only 8 per cent. of her timber requirements. The remaining 92 per cent. were imported at a cost of £2,750 million. The present area of forest woodlands is slightly over 2 million hectares. The highest estimate of possible future levels of planting is the addition of another 1.96 million hectares by the year 2030, enabling us to become 26 per cent. self-sufficient by the year 2025. It is impossible to increase timber production quickly, and it must be remembered that trees planted in 1981 will not yield thinnings for at least 25 years, even in favourable areas, or a crop for 50 years in similar conditions, and in both cases where trees planted are of fast-growing varieties. So it will be 2031, at the earliest, before trees planted this year can be harvested, and it will be 100 years or more from now before trees planted in 2030 reach maturity. Not all existing woodlands are on favourable sites, and future expansion is bound to be in less favourable areas. It is therefore vital to make the right decisions now.
Britain cannot expect to buy timber from abroad for ever, even if she can afford the price. A world shortage has been predicted, according to the Sherfield Report, "largely caused by depletion of tropical forests". I should like to add that it is not only tropical forests which are being depleted. Some years ago, I visited a non-tropical forest which was being felled for industrial purposes. I asked whether there were any plans for replanting and was told there were not, because there was such a huge area of virgin forest that it would never run out! As I was a guest in that country, I do not wish to give further particulars in this debate, but can supply anyone who is interested with details. But it is certainly not only in the tropics that trees have been plundered and not replaced.
The European Community is already a net importer and, in fact, over one-half of the world's timber exports are imported by European countries and, of them, we are the biggest, importing 15 per cent. of world exports. In 1950, European timber imports and exports were roughly equal. By 1980, their imports were around 50 million cubic metres equivalent, and they are expected to increase to between 85 million and 115 million cubic metres by the year 2000, even assuming that there are substantial increases in timber production, waste paper recycling and wood residues. Moreoever, developing nations are increasing their demand for timber; world population is increasing and, with it,

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world timber consumption.
New uses are being found for timber. We have heard of some this afternoon and, for example, methane gas is one. Consequently, shortage, combined with the present trend to add value to timber at source, will push up prices and a conservative forecast estimates that world prices in real terms will increase by 30 per cent. by the year 2000 and a further 150 per cent. by 2025. But Denis Crawford of Scottish Woodland Owners' Association Commercial Company, author of the British submission to the Confederation of European Agriculture General Assembly at Innsbruck last October, considers that the price increases will be nearer 30 per cent. in the next decade and 100 per cent. by the year 2000. It therefore seems to me that we and our timber importing friends have no time to lose. Whatever we do, it will be a case of too little too late, but that is no excuse for not making a start and quickly, too.
I also hope that the Government will do all in their power to encourage the expansion of forestry, as new forests create new employment, and, in this case in rundown country areas where it is so badly needed. This will be permanent employment, because new plantations need work from before the actual planting until the final crop is harvested, whether by direct labour or contractors. According to the Reading University Report, in 1979 United Kingdom forestry employed about 15,000 people in the forests and about 8,000 in supporting services. A further 15,000 jobs in sawmills, pulp and panel mills and servicing industries, such as haulage and nurseries, were dependent on British forestry. So that made 38,000 jobs in 1979. It is not difficult to calculate the number that could be created by expansion. In the years 1971 to 1975 inclusive, the private sector was doing very well in the direction of increasing area, and during those five years new planting averaged over 19,000 hectares per year.
On 28th June 1972 the Government undermined confidence by producing a consultative document, out of the blue, and that year the Basis III dedication scheme replaced the Basis I and Basis II schemes for new entries. In 1975, capital transfer tax replaced estate duty. The following year, new planting by the private sector dropped dramatically to about 9,600 hectares and by 1978 it was down to 6,300 hectares. Due to some CTT allowances to private growers, which still do not adequately take into account the long-term nature of forestry enterprise, the area of new planting for 1979 and 1980 averaged about 8,000 hectares, but that is not satisfactory.
The administration of the Basis III dedication scheme, far from being less costly and complicated, has become a procedural nightmare, involving long-drawn-out consultation with planning authorities and agreements regarding public access and recreation. This last has been disastrous, particularly in dry years, and has led to appalling fire damage caused by a public which no longer drinks its tea out of a thermos flask but finds it necessary to light a stove and boil a kettle and which does not know that an incompletely extinguished cigarette or even a piece of glass can cause a holocaust.
In the Forestry Commission's consultative paper, published last December, we read in the first paragraph:
"The control of tree felling began during the second world war
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to maintain the supply of timber and continued afterwards in order to build up a strategic reserve of standing timber",
and, later:
"The concept of a strategic reserve has changed. Control today is wholly exercised to safeguard amenity".
That is a shocking state of affairs. The devil driving us is economic necessity. Amenity is a luxury, and if we can combine it with the demands of necessity, well and good. But it is not always possible to do so. Circuses are not much fun without bread.
The consultative paper does not represent forestry thinking in any way. It is merely a collection of suggestions, forced on the Forestry Commission by an internal governmental committee under Sir Derek Rayner, as to how forestry may be squeezed in order to save cash to tide the Government over a bad patch. It will do nothing to bring about the expansion of forest area and production which the ministerial Statement on 10th December, some of which we welcomed, mentioned as desirable.
As the noble Lord, Lord Dulverton, said, by all means sell a proportion of the Forestry Commission's planted woodlands, provided the proceeds of those sales are ploughed back into the acquisition and planting of more forest land, including some or all of the 287,000 hectares of scrub and unproductive land in this country, and also into the provision of adequate planting and maintenance grants to the private sector to encourage extensive further afforestation. And this should be done by the Forestry Commission, and by them alone, because they have the knowledge and expertise to do it and the ability to acquire more knowledge, which local authorities do not. Moreover, their relations with the private sector are, on the whole, excellent and they are trusted, which local authorities are not—and with good reason. If the Government are going to allow the Forestry Commission to get rid of some of their responsibilities as regards forest ownership, they should strengthen their position as forest authority.
To plant a tree is an act of faith. Unless you are very young and are planting fast-growing species in a very favourable area, you are unlikely to live to see your trees grow to maturity and be harvested. Planting is expensive, and so is the after-care necessary to their establishment. But no return can be looked for for at least 25 years. Few, if any, private owners can nowadays afford that kind of expenditure, particularly when they have little prospect of even being able to pass on their forests to their heirs, which is one of the strongest incentives to make expensive improvements. Private growers are human beings, not altruistic saints, and unless it is made worth their while by increased and adequate planting and maintenance grants which keep up with inflation and capital tax allowances they will not plant.
In March 1974 the Minister of State, Treasury, said:
"…in an industry with the long term horizons of forestry, the prospect of further change can only be unsettling and I hope the arrangements I have announced will restore confidence and provide a durable basis for the operations of the industry for many years to come".
He was quite right and the suggestions in the Forestry Commission consultative paper as regards grants, felling licences, public access and so forth are very unsettling indeed and will do untold damage, if imple-

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merited, by further undermining confidence in the future, confidence which it will not be easy to restore.
That future may not be our future. It will not be the future of most of us here today. It is our children's and grandchildren's future. If we make the right decisions now, they will look back and bless us. If we make the wrong ones, they will look back and curse us. The choice is ours, and the Government's but mostly the Government's. I hope they will make the right one.
6.16 p.m.
Lord Burton: My Lords, I, too, should like to thank the noble Lords who introduced this debate. Certainly it has come at a timely moment. The situation is serious. First, I must declare an interest, as I have been responsible for planting in the region of 4,000 acres or, to be more modern, about 2,000 hectares.
In time gone by, the emphasis has been on planting to restock the areas devastated in two world wars. This planting was not always done with an eye on marketing. The story was always, "There will be a shortage of timber within a few years, so we must get planting". However, there have been vast developments in extraction techniques in recent years, but even so we are now told that our timber is too expensive.
Most of my woods are within 60 miles of Fort William, but our net return on pulp timber was 50p per metric tonne—surely not too expensive. The men employed on felling and extraction are mostly on piecework and work hard for a wage far less than the miners, let alone the wages being sought by the water service employees. They were getting a wage on a par with the boys who swept the pulp mill floors. The haulage costs are entirely competitive and certainly no greater than general haulage rates. How, then, can our wood be said to be too expensive, as was said when the Fort William mill closed?
The question must be asked: With current wage rates, haulage costs, local government rates and necessary overheads, can forestry be economic in Britain today? That 50p which we were receiving in no way covered the cost of plants, planting, clearing and fencing, let alone interest on expenditure. Now, with the Fort William mill closed, we are getting a net return nine times as great by exporting by sea to Scandinavia. However, £4.50 per tonne is little enough and still does not give an economic return.
The larger timber market has been very hard hit by the recession. We are still importing the greater portion of our requirements. The noble Lord, Lord Taylor of Gryfe, gave us the exact amount. But why do we import such a high proportion? Is it not because the home-grown timber cannot compete with cheap imports from Iron Curtain countries, with pulp wood grown in very favourable conditions, such as in South Africa, or with wood cut by giant machines from natural forests, or, as my noble friend Lord Cranbrook said, from the tropical forests?
I have opened with a brief comment on the financial implications because a healthy forestry industry, as with most other industries, depends upon the proceeds which can be secured for the produce of the industry. There can be incentives in the way of grants and subsidies and in tax remissions and benefits, but the
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fundamental need is a satisfactory end price for the product.
In the short term there seem to be two necessary requirements. First, a market, such as chipboard, to use our smallwood is urgently required. Secondly, there seems little alternative to an import tariff—probably an EEC régime. Let me give one comparatively small example. Quite a large quantity of timber, mostly small cuts, easily produced by ourselves, is used throughout British schools in the instruction of carpentry. I understand that all, or almost all, of this timber is Russian imported and sold through a firm in central England. If this wood has to be imported, surely something is wrong.
Partly, I feel, because of the financial squeeze upon the Forestry Commission, a problem is arising over forestry fencing. I gather that the National Farmers' Union has secured a gentleman's agreement with the commission over the fencing of their plantations in England and Wales, but in Scotland there is an increasing problem. It will be appreciated that many of the Scottish plantation fences need to be deer fences. Once the initial fence has deteriorated—after 12 or 15 years—the trees are big enough no longer to require fencing. The fencing then becomes an unremunerative burden upon the Commission. However, had the land not been planted in the first place, no fence would have been required, so the liability must remain a forestry one. In this respect there is a growing problem because it has become fashionable to fertilise plantations from the air when they are perhaps 12 to 15 years old, just when the fences are beginning to deteriorate. The fertilising of the ground is, of course, a bait which lures in animals from outside. Before my trustees could secure the second instalment of grant on their plantations they were compelled to fertilise. The following year more deer broke into that plantation than ever before and consequently more damage was done than ever before, which probably overruled any benefit that was done by the fertiliser.
With regard to the Government's consultative paper on felling and grants, I should like to make two brief points. The lifting of the restriction on felling more than 30 cubic metres per quarter, most of which had to be used on the farm, is a very dangerous amenity proposal. Farming today is placed in a severe financial straitjacket. Farm borrowing increased 30 per cent. last year. What easier method of finding a little badly needed cash than to fell the farm spinney? Those of your Lordships who have taken part in the Wildlife and Countryside Bill will know that some money is to be made available for conservation but in no part of that Bill can I find anywhere to indicate that the minute cost of retaining controls on felling these small woods would be better spent.
My last point concerns the proposed loss of the inspector from the Forestry Commission who comes round once every few years to see that the country's money, given in grant aid, has been well spent and is being put to good use. A reminder that thinning is due often comes timeously and I fear that if we no longer get these visits from the Commission, neglect of many woods will become prevalent. A little jog to one's memory is sometimes a good thing.
Finally, my noble friend Lord Bessborough mentioned the question of virology. I am afraid that the

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Commission are rather frightened of this. The conservation lobby is such that the Commission are frightened that if they use these techniques they may rebound. There is, I believe, a very good virus for that damaging little pest, the sawfly, but the Commission are frightened to use it. I think that anything which we can do to lift that fear which they have upon them would be most auspicious.
6.24 p.m.
Lord Gibson-Watt: My Lords, I confess an interest, both as an owner and as a Forestry Commissioner. It is indeed fortunate for the forestry industry as a whole that so many of your Lordships are interested in, and have knowledge of, this particular subject. It was of particular interest today to hear the noble Lord, Lord Lovat, speak, having only 10 days ago heard his brother speak in another place on the Forestry Bill. I think it was significant that the Select Committee under the chairmanship of the noble Lord, Lord Sherfield, in general commended the research work of the Forestry Commission. I may say that the Commission took this Committee extremely seriously—as it was right that they should do—and there were many occasions when the general director and the head of research attended your Lordships' Committee to give evidence. It is a matter of considerable pleasure to the Commission to hear such comments as those made by the noble Earl, Lord Cranbrook, this afternoon, when he said that the standard of oral evidence was of a very high order. Indeed, one would have expected such from the general director and the head of research of the Commission but it was good to hear it in public.
This debate has divided itself into two topics: first, the Select Committee's report and, secondly, to some extent a general debate on forestry. If I may take up one aspect of the Select Committee's report, which was the integrated use of land for forestry and farming, we spent a great deal of time discussing this aspect in various ways. In some areas it is very well carried out. Many of your Lordships have the experience of having done it yourselves. Indeed, I have been privileged to see the experiments carried out by the noble Lord, Lord Dulverton, in Scotland in this respect. But I think there is something that we often overlook.
We automatically take it for granted that farmers will and should go in for the integration of forestry. If we look at the average life of the average farmer, certainly in the uplands, he does not think much upon forestry lines. He is thinking about his stock; he is very undermanned with regard to labour and when he goes to the market he does not hear a single word spoken about forestry from the time he goes in until the time he comes out. It is all farming and it is fair to say that there are very few people in this country who are both good foresters and good farmers. I remember the late Sir Richard Cotterill, chairman of the English Forestry Commission—a great forester but he would not have called himself a great farmer any more than I would. I know very many other examples of people who have made a great contribution in one field but, because of the very complexity of the subject, do not do so in the other. So what I am saying on
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this matter of integration, on which universities and others have spent an immense amount of time and trouble and money, is that the time will come where there is profit in it. I do not necessarily mean money profit—there are many other forms of profit, such as shelter to stock. An excellent remark was made by the noble Lord, Lord Tanlaw, earlier on when he referred to the new ecosystems in the forest. There are profits of that sort which can and will come, but it is not easy to get the replanting of the type that many people want. There is a shortage of capital and there are the other problems to which I have referred.
In discussion of the whole question of the forestry industry, I think the remark which stuck in my mind was that made by the noble Lord, Lord Flowers, who asked what are we growing trees for? Quite right. What are we growing them for? It is possible that the general answer is that we are growing trees in the long term for import substitution so that we shall not be so dependent upon other countries to send timber to us in its raw state. Indeed, I noticed only today in the newspaper that somebody in the Malayan Parliament said that it would not be for ever that Malaya would be sending timber in its raw state to this country, and this we shall have to expect from an increasing number of countries.
As the noble Lord, Lord Lovat, said, we have lost a great number of the old uses and demands for timber in this country; wagon bottoms; less pit wood is required; and now even the match industry is having to find new markets. Curiously enough, even in these difficult times—and times are difficult in the forestry industry—new processing plants and new uses are being created all the time. Only the other day a sawmill, put up by Western Softwoods, was erected only four miles from my own home in Wales. This is encouraging. Although I think things are difficult at the moment, I believe, as indeed the noble Lady, Lady Saltoun, said, that prices are very likely to rise as the century goes on. I believe times will come again for our forestry industry.
There has been criticism of the steps that Her Majesty's Government are taking in regard to the Forestry Bill, and no doubt we shall have other opportunities to discuss that in your Lordships' House. I would only say this. At times of financial difficulty, when all parts of the state and all parts of the country are asked to make some contribution, I do not think it unreasonable that the Government of the day should say to the Forestry Commission, as indeed to others, "Here is an industry where the British taxpayer has invested a great deal of money over the years, and it is not unreasonable that we should now say to you that we do not think we can continue to find large sums of money for the state enterprise, but instead we know that there are certain sources of private investment "—if indeed one can call pension funds private investment. If these sources are there, it is not unreasonable that they should tell the Forestry Commission to sell some of their woodlands.
I would just say this to Ministers. I think that, while a Bill of this kind is going through, there is, of course, a good deal of apprehension—I do not put it higher than that. Anyone who is employed in the Forestry Commission, whether it is high up at a senior level or simply in the forest, really does want to know how it is going to turn out. I am not asking Ministers to make

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an amendment to Clause 1 of the Forestry Bill; of course they cannot do that, despite the large number of amendments which will undoubtedly be put down. What they can do, and I think they did do during the Second Reading in another place, is to make assurances of some kind which will make it clear to those who get their living from the industry that these new steps are not a threat to the forestry enterprise; they are, in fact, something which in the long term will and must strengthen the forestry industry.
Lord Taylor of Gryfe: My Lords, I wonder whether I may interrupt the noble Lord for one moment. While accepting that pension funds and insurance companies may wish to invest in forestry, there is nothing to stop them investing in forestry now. It is a free market. Why is it necessary to dispose of Forestry Commission assets to do this? Pension funds and insurance companies can buy the land now and invest if they so desire.
Lord Gibson-Watt: Yes, indeed, my Lords; the noble Lord is quite right. Pension funds and other organisations can go abroad and they can invest in other countries, as we very well know. It is a free market in that respect. The point I was trying to make, and perhaps did not make well enough, was that if we have a situation where Her Majesty's Government are producing from taxpayers' money something of the order of £32 to £34 million a year, and if it is quite clear that funds are available from other sources, it is not unreasonable for a Government, faced with severe economic problems, to take the steps which Her Majesty's Government are now doing.
I come back to the question of the reassurance, because there are so many young men today who are trying to get into the forestry industry, for it is a good life, it is a healthy life. There must be many noble Lords who have received letters from aspiring young men who wish to get into the industry, and indeed it is extremely difficult to find homes for them. When one is able to do so, it is very reassuring. But it is an industry which is an industry of the future, and I think this is important.
One of the things I hope the noble Earl, Lord Mansfield, will be able to say when he winds up is that that land which is sold by the Forestry Commission will remain in forestry management. I think this is very important indeed. I think, if this was said, it would remove one of the causes of apprehension. There is no reason at all why these new employers, these new owners, should not wish to employ qualified forestry expertise. I feel quite certain they will. These are gentlemen who look at their assets in just as detailed a way as we all do. I feel certain that is not a reason for fear.
I am a little bit concerned about the giving up of the dedication scheme. I can see that it has got to be done. The cost of administration has grown as the dedication schemes have become more detailed. If you look at the figures—I have not got them with me today—of the amount of official time which is used in this administration, I am quite certain it is right to bring the dedication scheme to an end, although there is no doubt that it was an anchor in the past and a great source of agreement between the state and private
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owners.
I would touch on one or two things which the noble Earl, Lord Cranbrook, said during his very excellent speech. First, he referred to the large amount of virtually untended forests in this country. I think the figure he gave was 290,000 hectares. Most of it is in England—not a great deal in Scotland. With respect to the Scots, they do not always win on the Rugby field but they generally win on the forestry field. Their forests as a whole do not contain these neglected woods to which I refer. But I am afraid there are a great number in England. There may be one or two in Wales. I do not see any easy way of putting this right. I think that the undedicated private woodlands on the whole, or some of them, are very sad to see. This question of maintenance is something which is very often neglected. It is one thing to talk about planting trees, but very often the question of maintaining trees is neglected. This is as true in motorway planting as in other forms of private forestry.
I want to make reference, also, to two further remarks made by the noble Earl, Lord Cranbrook, in his speech. First, although I agree with him about the menace of grey squirrels, I am not certain I go all the way with him with regard to the method of killing. Like many other noble Lords, I have suffered from grey squirrels. I believe you have got to attack them all the time. I believe you have got to attack them with every weapon at your disposal. If you happen to wish to go out on a fine afternoon and poke the drays out and shoot the grey squirrels, all well and good. It is very good for young men to learn how to shoot in that way. Secondly, I believe that the use of Warfarin is by far the most effective way of killing them, and it must be done, I believe, in the period from April to the middle of June; that is when it must be done in an intensified way in hoppus. It is not a pleasant way to kill any animal, but the fact remains it is probably no more cruel than any other. There is no doubt that the grey squirrel is a pest and particularly in those hardwood areas to which the noble Earl referred.
One further point on the hardwood side. Much of what the noble Earl said was true, but if he is short of a seed source let him go to Herefordshire; he will find no problem in finding good oak trees there. If he wants to go to Caroline's copse he will find the best source in the country. As I have said, these are difficult times for forestry. Prices are lower than they were a year ago and wages are higher and going up. I hope that export substitution from Scandinavia will be only temporary, and I hope too that new firms will come along to strengthen the industry. However, like other noble Lords I am an optimist, otherwise I would not be a forester.
6.40 p.m.
Lord Hale: My Lords, I shall with your Lordships' permission remove my hearing aid, which means that if anyone wants to interrupt me he will have to give me a moment to replace it before I can hear the interruption. Immediately after the war when I returned from Canada where I had been engaged in the business of buying not merely timber but readycut houses, I saw my friend Nye Bevan and said: "Nye, it is true that you keep on saying that you cannot get any timber and the world is very short of seasoned timber, but there is ample

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timber available for your requirements in a very friendly British dominion with a fine organisation". Nye in his high-pitched voice used when he was feigning indignation said, "Do you think that I am going to swim the Atlantic with an axe in my mouth to bring back some timber?" This report shows that, on the whole, we have to do even more than that. It shows, as I previously learnt abroad, the complexities that have to be faced.
The terms of the Motion are put in the most modest possible terms and calls on the House to take note of the report. One can hardly fail to take note of it—indeed, one can hardly fail to profit by it. It was presented by the noble Lord, Lord Sherfield, in a speech of admirable clarity and admirable audibility and I was able for once to hear every word of the opening of a debate without difficulty, and even with my limited faculties I was able to understand and appreciate it.
There are some facts of life that I think we are not really ready even now to acknowledge. One of them is that the Forestry Commission was, in a sense, conceived in sin as we all were, because it arose out of German submarines. The war was over when it was established but it took over the improvised organisation of trying to find wood anywhere and providing stockage places anywhere. Inevitably it started in difficulty and on the wrong foot.
I can recall quite clearly—because my father was engaged in the manufacture of engine carriages and wagons—going out with him at weekends and visiting a very charming little estate on the Leicestershire and Nottinghamshire Border of a noble Lord who today is very prominent in this House, hoping to try and find trees which would keep the works going. Of course, it was heartbreaking to part with some of them and a great sacrifice. But it is not easy now to recall that time in our life when we were perhaps as near defeat as we could be.
You do not fight wars for nothing. The noble Lady, Lady Saltoun, referred fairly to "too little and too late". We are too little. One of the matters we must consider in relation to the many other claims upon our resources is how far such an industry can produce the timber which will meet our requirements. I do not profess to have any expertise whatever about timber, and in so far as I have personally taken part in timber conservation schemes, those schemes have been abroad. Some reference has been made in the speeches to the problems of tropical agriculture. Indeed, immense schemes covering five or six large countries have been undertaken, normally under United Nations auspices. In one case in which I took an interest they were proposing a scheme which would embrace the eradication of blindness in that area. The type of blindness was onchocerciasis of which there are two kinds and which is wholly incurable from the moment that the vector fly has delivered its goods and the venom gets into the eyeball. In that connection the complexities show all too often the problems that we have never had to face—and I hope that we never shall—but which sometimes are slightly mirrored when we read about the pine moth and the problem of the damage which it causes and the problem of its destruction.
As ignorant as I was, I was also puzzled about the
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oak, for the oak is England. The oak is England's history. Although I know the problems which it presented it was not until I heard the speech of the noble Earl, Lord Cranbrook, which recalled some questions put by the noble Earl, Lord Bessborough, in the course of the report, that I realised that here again there was evidence which put some doubt upon the future of our greatest tree.
On my knowledge of it, steps to control Dutch elm disease were not only too few but too late, and it was ignored in the area in which I live. Time after time it was reported, because we are a country of tree enthusiasts, and it was the experts and the advisers who ignored it and who delayed so long in tracing its origin and its transmission when it had already threatened the elms of at least half of England or more. This is one of the major problems, and until Dutch elm disease I do not recall a similar epidemic in this country. One noble Lord said that we should try to monitor many of the goods that we import from tropical countries which suffer from these problems. But I believe that problem to be quite insuperable so long as shipping transportation continues.
I now live in a garden suburb a few miles from here, in a house which was condemned as uninhabitable about 30 years ago and which we are still trying to rebuild. But we have a number of disadvantages. We have the grey squirrel. I appreciate that the damage caused to the countryside by the grey squirrel can be enormous. From the woods nearby the grey squirrels have been sharing my house with me for a considerable time. They can travel between the floors, between the lower and the upper floors; they can bore into virtually anything. There is a large attractive sycamore tree which now clearly shows signs of damage. In the debate on the Wildlife and Countryside Bill I heard people express doubts about the sycamore. I have a sycamore that can be seen by all and sundry. Year after year I have received assurances from the Front Bench that this and that can be done. It cannot be done. I dare not experiment with Warfarin with all its experiences even if I wanted to. It is a cruel poison because animals of all sorts, including pets, can be endangered. Indeed, it could make life unbearable. The squirrels are not confined to my premises; they are confined to the woods and to the area which leads to the local station, and they can be seen in their numbers all about.
In what I thought was a brilliant speech, the noble Earl, Lord Cranbrook, speaking with vast knowledge and at great speed, raised a number of these problems and I shall not attempt to repeat them. I have gone further than I intended—I nearly always do—and I shall come to a close. I should like to say a few words to the noble Lord, Lord Tanlaw, and to the two noble Lords opposite who spoke in quick succession.
I do not know what the ecology lobby is. The Forestry Commission has been using, quite extensively, a poison which is described by those distinguished scientists who monitor it as the most dangerous poison in the world. In their very long report, which I have not yet read, they say that they have now reduced the dose by half and that one part in 2 million distributes this poison, which arouses fear, animosity

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and anxiety all over the world. We are not told that it performs any job that cannot be done by anything else, but just that it does it a little better. I think that there would be much better relations with the Forestry Commission if this could be done. But the ecologists switch on John Evelyn who was President of the Royal Society and who, according to Sir Arthur Bryant, called into being 10 million trees and made possible the maintenance of our fleet in those years of difficulty. I beg leave to apologise for speaking so long. I am most grateful for a patient hearing.
6.58 p.m.
Lord Gisborough: My Lords, I also should like to state an interest, as I am a private forester. As the great forests of the Americas are felled, and it is only recently that any thought has been given to replanting those vast areas, and Canada has made it clear that it will not be able to maintain its supply to the United States after the end of this decade, by 2025 the world is expected once again to be facing a timber shortage. Vast areas of South America and Nepal are being levelled and overnight the sparse forest soil of milleniums is washed away never to be replaced. What damage to the planet is being caused by the release of all the carbon can only be guessed at. By the time it becomes apparent it will be too late to reverse.
Meanwhile, as the Amazon forests disappear, so does the plant life that has so often provided the basis of so many medicines, quinine being the best known, and with it the prospects of further discoveries. Little wonder then that people are beginning to see the end of cheap timber and forecast a shortage in 40 years' time. The Food and Agriculture Organisation has suggested that large-scale extensions of European forests are vital to close this impending gap in supply. With that in mind the Minister has expressed the wish to see more British forestry and a larger private sector, but the present method of levying CTT—Capital Transfer Tax—on forestry is a direct and strong disincentive to private planting.
A crop takes a minimum of 50 years to mature, and that would be a very fast-growing crop. Eighty years would probably be more realistic over the country as an average. Either way it is unlikely that the man who plants the trees will ever live to harvest them as a mature crop. The man who plants certainly obtains tax relief on planting and the long years of maintenance, but he still forfeits considerable net income with no hope of any return to himself. He can enjoy amenity planting, but the only incentive he has for growing forestry is the prospect of leaving value for his family to inherit. He hopes to leave not only value but an all-age group enterprise that can be managed as a rotation by his descendants as a thriving business. Without that incentive he would be far better off to enjoy the net income himself that he forfeits by growing forestry.
Let us see now if the heir benefits after transfer tax. On inheriting he has two options as to how he pays. One option is for him to pay immediately on the value of the crop on succession. The eventual sale of the crop is then totally free of tax, but in the interval between succession and harvest the capital sum paid in capital transfer tax has been costing him bank rate, while the timber has been growing at only 3 per cent.
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a year. At 16 per cent. bank rate he is losing 13 per cent. a year on the rate that he paid. Thus, he is soon on a hiding to nothing and every year he delays felling makes him worse off until the value of the timber on felling cannot possibly equal the financial outlay of CTT plus cumulated interest on that amount.
Also, having paid for the timber he takes a risk of it being destroyed by fire, pest, or loss of demand in the market, and many other problems which have been mentioned in this debate. I myself lost 40 acres by fire from a man who dropped a cigarette.
The heir's second option is to delay payment until harvest, and this may be 30 or 40 years on. In this case he pays transfer tax on the full sale price in spite of the fact that the value will by then have increased by 30 years' growth and by the good maintenance and good management of his own stewardship, none of which management cost will he have been able to set against tax. Therefore, economically it is essential for an owner to fell all his timber before death or for the heir to do so immediately on succession, and this is quite opposite to the needs of the country and quite opposite to any inclination that a private forester will have.
The method of levy is a strong and direct disincentive to private planting and is in direct opposition to the Minister's desire for increased private forestry. This disincentive is reflected in the level of private planting, which has plunged from an average of 20,000 hectares a year up to 1975 to somewhere around 10,000 hectares a year since 1976. It is vital that CTT should revert to the system under death duties whereby the duty is paid not on harvesting but on the value at succession. It is also vital that the party opposite, who altered the rules, should try to understand the position. It is of equal importance to both parties that there should be a strong forestry enterprise, and it is vital that the good friends of forestry on the opposite Benches, which there are, should use their influence to promote a common all-party policy to give the confidence that is needed.
It is furthermore totally dishonest for the nation to encourage people to plant under one set of rules over a period of 50 years and then to change the rules just before much of that planting is coming up to harvest. Even if the present CTT rules are to stay, the least that should happen is that the old rules of death duty valuation should apply to those woodlands planted in good faith before the rules were changed. Further, CTT inevitably breaks up estates and forestry land, yet the ever increasing cost of machinery demands large acreages to justify their use. Smaller forest enterprises are unable to afford big machinery and will suffer from reduced maintenance and poorer final crops.
The main point in the Minister's statement in December seemed to be as regards the sale of Forestry Commission woodland. I believe it must be good to try to tie up private rather than public money in timber. However, as the whole object of the Forestry Commission and the Minister is to grow more timber, it is essential that the proceeds of sale be reinvested in new planting elsewhere—this is a statement that has been made by almost every speaker—each acre of sold woodland paying for the planting of several acres elsewhere. In this way the commission can retain its labour force and achieve its object of increased planting

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for the future without cost to the Treasury, and these new plantings can be sold off in their turn.
I therefore support the view that the profits of sale of growing timber should be reinvested into planting, but I see no reason why unplanted land should not be sold off to the private sector provided that the land is planted by private enterprise, and this must be ensured by dedication or conditions of sale.
Lord Burton: My Lords, may I interrupt the noble Lord? I think that the Forestry Commission—and other noble Lords will bear this out—have a lot of land which is not plantable, and I am sure he would not object to that being sold. There is a lot of high ground, particularly in Scotland.
Lord Gisborough: My Lords, I am sure that that sounds eminently sensible. There are some peculiar worries expressed over the sales of the forests; that a forest is going to be taken away. When they are bought by private or institutional buyers they will still need managing; they will still need a labour force. It is silly also for the users to complain that they will no longer be able to buy stocks of timber. The growing timber will still have to be sold but the users may have to compete a little more for what they want, and this will do nothing but good to them and to forestry.
The forestry will often be better and more economically managed when in private hands, with traditionally far more attention to amenity than by the bureaucracy of the Forestry Commission.
Noble Lords: No!
Lord Gisborough: I should like to go on with this point. One sees this very often when one compares private and Commission planting side by side. The drawback is bureaucracy, and does not reflect against the individual foresters within the Commission. I do not expect that to appeal to the party opposite. However, the Minister must not at this time of high interest rates expect an immediate demand to buy. This will come over the years and particularly at times of lower interest rates.
The worry has been expressed that the Government will not reap the fruits of their planting. But this is of course nonsense. Forestry will be sold at its present day value for cash, which is worth 15 per cent. per year; far more valuable than waiting years for the value of felling after an annual increase of 3 per cent. I should like to see substantial sales if buyers are available.
Turning now to thinnings, there is great difficulty of securing an adequate market, and consequently many forests are getting under-thinned. This will have far-reaching effects on the crop, and the quantity and quality of harvest will be seriously impaired. The Swedes have developed techniques for using wood waste in automatic feed boilers, and introduction of these boilers could help the problem of disposal of thinnings. The waste wood available in the United Kingdom is estimated to equal annually the equivalent of 1·5 million tonnes of coal, and it would surely be well worth while the Government doing all they can, even including grant aid, to encourage greater use of this sophisticated wood burning apparatus along with
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all the other efforts to increase sales of thinnings. Any national investment in research for the profitable use of thinnings would soon pay off through exploitation by the commission, quite apart from the benefit to the private sector.
The problem for the commission and for private planting on any scale is to find adequate suitable marginal land. Farmers first wish to retain their high land for sheep. However, as I think has already been explained, where farmers have sold off their sheep strays to forestry they have often found that the capital re-applied to their inby land has enabled them to get a much greater return out of their sheep and on a much smaller acreage.
The Select Committee report, and various noble Lords, have recognised the need to integrate forestry with farming, and have repeated this. It would be ideal for a sheep farmer in the hills to have a few acres of forestry of different age groups that he would tend at slack times of the year. The problem is to get rotation going, and even a grant would be unlikely to encourage him to plant forestry that would show no return, even for fencing stakes, for such a long period.
It occurs to me that small private investors might be persuaded to finance hill farm plantations which could later be bought back by the farmers at a time when they could start to use the crop. It is difficult to visualise a workable scheme, but once a rotation was established and once the farmers became forestry-minded, as they are in Scandinavia, it would run itself, and the forestry income would then help to reduce the need for hill farm grants. It would be a long-term business, but we must remember that in Scandinavia it works.
Secondly, there are large areas of moorland hillside that are unusable for forestry because they are technically commons. These commons are not open to the public and refer purely to grazing and peat-cutting rights. Surely legislation should affect forestry so that it could override commoners' rights on some of this land that is too steep for peat-cutting and of little use for sheep or even sporting purposes. Thirdly, we have the conservationists who object to the planting of timber and who equally object to the felling of timber. Apparently they want to see a status quo in the country. They often complain that they prefer hardwood and do not like the sight of softwood plantations. That opinion must be weighed against the opinion of those who like the sight of softwood plantations and whose silent opinion is just as valuable. It is, I believe, an opinion which is a great deal less prejudiced.
7.12 p.m.
Lord Inglewood: My Lords, as the hour is late, I shall be brief and I hope your Lordships will forgive me if my speech seems disjointed; I have cut out of my notes all parts which will be equally appropriate to the Second Reading debate when the Forestry Bill comes before the House. Those of us who recall forestry debates and problems directly after the war—and I am glad to see the noble Lord, Lord Peart, in his place—must have great satisfaction today in view of the great progress that has been made in the intervening 35 years, not just in rebuilding our woods which were devastated by the war but in widening the knowledge and appreciation not only of woodland management by professionals but of general appreciation through

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the country of what forestry is about; first, of course, timber production and then generally contributing to making this country a better place in which to live.
In the years between, say, 1945 and 1950 it would have been unthinkable that a committee of your Lordships' House would have been considering the scientific aspects of forestry in the way that has recently been done by the noble Lord's committee. That has happened, and its report is very valuable indeed. I regret that I did not hear the noble Lord, Lord Sherfield, because my train was half-an-hour late into Euston, so I hope he will forgive me if I misinterpret anything he may have said.
One point seems to have been underestimated, unless I have overlooked references or missed something the noble Lord said. Surely there is great benefit to be achieved from close co-operation between our scientists and researchers and those in countries in North-West Europe. There is no mention of forestry in the Treaty of Rome, which seems curious, but to avoid costly duplication or to cover gaps in research, it would seem sensible to co-ordinate the work being done at least, say, in Britain, France and Germany, even if we do not go any further. The climate and soil conditions in those countries are not so dissimilar from those here.
I hope the report will lead to this and succeeding Governments talking rather less about planting and more about improved management and marketing, and realising that forestry, like any industry, must see some profit, however small, at the end if it is to continue. It cannot be denied that in this country we waste wood, not least sawdust and what we call wood waste. Recently on the marketing side we have had very difficult times. Costs have been rising steadily over the past few years and although prices tended to rise from what was a very low level, they have, in the last 12 months, dropped appreciably, not least for good quality English hardwoods, which is hardly encouraging to those who are thinking this planting season of adding to their hardwood acreage.
We spend what can be described as a Shah's fortune every year on importing timber, pulp and paper, yet in this country we see a timber market at a level which cannot do anything except bring those who are in the industry to make a loss, in the short term, small if not big.
It is wrong to maintain that there are only a few, some would even say no, forest businesses where the woods are a normal forest and managed on the principle of the sustained yield, because they exist in this country and it would be interesting if some statistics could be obtained separately from that sample and were not just included with the rest, where of course the greater acreage is of young plantations.
Relations between the Forestry Commission and the private sector have improved enormously in the past 30 years. Today they are very good but there could be even closer co-operation in studying today's and tomorrow's market. I am sorry to hear the Government refer to sales of Forestry Commission woods in the terms they have done. Fringe sales—part of normal estate management—we would of course all support, but sales on a much bigger scale, which have not as yet been explained in any detail, arouse in most of us a measure of apprehension.
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I have said that we should pay more attention to today's market and stop repeating airily that in 40 years' time there will be a world shortage of timber which must mean a fair return, maybe to our sons. That is too much "jam tomorrow". What we are concerned with is the market today, next year and the year after that. Because our woods are small, handling costs are large, but we have a market on our doorstep as well as a very favourable climate. Be that as it may, foresters must take a long view and they must take the risks associated with a long view in any business. What we need now is a Government who will think and act on the same lines.
7.17 p.m.
Lord Mackie of Benshie: This has been a fascinating debate, my Lords, and the noble Lords, Lord Sherfield and Lord Dulverton, deserve the gratitude of the House for initiating this discussion. Speaking personally, I should have preferred to see the two debates split in two; the extremely valuable report, so ably introduced, deserved a debate of its own, not that justice has not been done to it. I cannot help feeling that the Government wanted to fog the issue a little and therefore welcomed mixing the report, with which nobody could disagree, and the second debate, although it was introduced by the noble Lord, Lord Dulverton, in able and unmistakable terms. Perhaps the Government thought that in that respect they were not on such a good wicket and therefore welcomed having the two debates together.
I find extraordinary the unanimity of feeling that exists in this House about the Forestry Commission. Apart from the noble Lord, Lord Gisborough, saying that perhaps sometimes some bureaucracy crept into it, everyone else has spoken in glowing terms about the Forestry Commission, remembering too that noble Lords opposite cannot be described as normally being great lovers of state enterprises. The Forestry Commission has caught the imagination and, by its conduct, has earned the approbation of, by and large, all the foresters in this House and the country at large.
Several noble Lords touched on a very important point when they said that of all industries, it is vital that in forestry—the same of course applies to agriculture—there is confidence and continuity. They are vital before people will begin planting for their children as well as other people's children. Since the war there have been quite a few hiccups in the build up of confidence, mostly caused, I fear, by Conservative Governments, which is extraordinary; and I must say that it appears to me that there is another such hiccup right now.
I cannot believe that the noble Earl, the Minister, has a great enthusiasm for his task at the moment, but no doubt he will deny that totally. However when politicians of some experience hear about the sale of assets, with the assets going to the Consolidated Fund, they smell a large rat in the shape of the Treasury, and they cannot feel that that will give the industry the confidence it requires. One thinks of the position of commissioners—and I thought that the noble Lord, Lord Gibson-Watt, rode his horse along the fence very nicely. He expressed doubts, but gave the Government every benefit of the doubts in regard to what

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they were doing. However, if the commission is told that it might be forced to sell to doubtful buyers, that must look as if the Government do not have confidence in the commission's ultimate objects. Handing the money over to the Treasury puts the lid on it, though probably it works both ways. If the commission keeps the money, I suppose the Treasury can say, "All right, but we shall cut the grant by that amount".
I believe that in most people's minds the solution must be that the commission should, in normal estate management terms, have the say as to what is sold. If the commission sells, it should keep the money and it should make the judgment decisions. Certainly noble Lords who know the subject backwards have said enough to show that at current prices the potential return to the country is enormous. As we know, many of the world's resources are diminishing, and nothing is more certain than the fact that forestry, timber, all over the world is one of these resources; and it is bound to go up in price. As the noble Lord, Lord Inglewood, said, that is not much comfort to the foresters of today who are making a loss on their work. However, all noble Lords in the House who have spoken in the debate have recognised that forestry is bound to pay off. Every bet is not a certainty, but it appears that this one is.
The Minister must restore the confidence of the foresters of the country, both the commission and private foresters, and show that the Government are not simply saving money and cutting back a resource that is so worthwhile. Noble Lords all over the House have agreed on this matter, and I believe that one of the great advantages of having a Second Reading debate—which is what we are really having at the moment—is that perhaps the Government can go away and think again. If I were the noble Earl sitting there with all around me warlike neighbours who had come down from Scotland to tell me what I was doing wrong—I do not mean warlike neighbours on this side of the House, but on the other side—I would go back to my masters and say, "We should think again about this. I have told you before, and I am telling you now that there are many people who are great foresters and who love forestry, who might well upset our plans". I believe that the noble Earl would be wise to think again.
7.24 p.m.
Lord Peart: My Lords, I endorse everything that the Liberal spokesman has said. I always feel that he knows a lot about forestry, since I once appointed his brother as chairman of the Forestry Commission. He was a very fine chairman, and no doubt there was good liaison there. We also had a fine chairman in the person of the noble Lord, Lord Taylor of Gryfe. Indeed, we seem to have had excellent chairmen of the commission, and I believe that that was due to Ministers having a good appreciation of the qualities of the various chairmen.
However, today is really the day of the noble Lord, Lord Sherfield, and his committee. On reading the report and the evidence, one realises how much work the committee must have put in. I have read all sections of the report very carefully and I believe it
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to be an admirable document. It puts clearly the present management objectives of the Forestry Commission:
"As Forestry Authority
To advance knowledge and understanding of forestry and trees in the countryside;
To develop and ensure the best use of the country's forest resources; and to promote the development of the wood-using industry and its efficiency;
To undertake research relevant to the needs of forestry;
To combat forest and tree pests and diseases;
To advise and assist with safety and training in forestry; "—
and that is important.
I am sorry that the noble Earl, Lord Lonsdale, whom I saw in the Chamber earlier, has not remained because I was going to pay a tribute to the work that he has done in this field. I think of what he has done in my county and in Northumbria. I have known him a long time. He has always paid careful attention to the needs of forestry. He has escorted me on visits to see some of his products, and he remains a forest lover, as do so many farmers as well as colleagues here today.
This has been a very fine debate. I do not wish to appear churlish, but I must mention that I have had sent to me a note from the Forestry Commission Whitley Council about the trade union opinion. The trade union side of the Forestry Commission Whitley Council is very worried and concerned by the implications of the recent statements by the Government and the Forestry Commission chairman regarding the future of forestry, and it takes issue with the commission's management over its interpretation of the Bill currently before Parliament. I hope that those fears will not be realised and that the Government will be very careful when they make major decisions. After all, the Forestry Commission is a very successful organisation, and I believe that all of us here, in all parts of the House, do not wish to harm the commission, which has done so much and which so often has the admiration of the world. Therefore, I hope that the Government will be very careful in whatever action they take.
The trade unionists say that there is plenty of room for both the private sector and a provenly successful public organisation, particularly in a climate of expansion. They go on to say:
"There is also an absolute need for forest policy to be agreed and operated on at a level acceptable to all shades of political opinion".
I hope that that spirit will still hold good in relation to the body itself. I shall not make a long speech—we have had a very fine debate—but I thought I would reminisce a little by quoting the autobiography of a fine Minister of Agriculture, whom I had the pleasure of serving as Parliamentary Private Secretary. I refer to Tom Williams, who said:
"Another industry I had to look after was forestry. I had scarcely settled into my chair at the Ministry after the 1945 election before Sir Roy Robinson, the chairman of the Forestry Commission, was telling me the sad story of the trees and pleading for an early Government statement of policy on forestry. The facts as he related them were that while Germany had dominated Europe, all our usually considerable supplies of timber from that source were cut off, and there has not been shipping space available to bring in timber from other sources. The consequence had been a wholesale slaughter of our own forests, both privately and nationally owned. We were now, said Sir Roy, in a very dangerous position if ever war again cut our supply lines. It was

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absolutely essential that we should control the felling of timber and prices over the next 25 to 50 years".
Tom Williams continued:
"I quickly brought the facts before my Cabinet colleagues with recommendations for action. And the Cabinet readily accepted my proposals in principle, leaving the details to be worked out later".
Indeed later he had the major support of the Chancellor of the Exchequer, Hugh Dalton, who was a great lover of forests, and this evening I should like to pay tribute to those two gentlemen for what they did for the industry. How right they were to lay stress on it when they were Ministers. I am proud to say that in my own little way I tried to do the same.
Lord Taylor of Gryfe: My Lords, before my noble friend sits down may I say that it was suggested by several noble Lords that a forestry Minister should be appointed, as distinct from the triumvirate which now operates forestry policy—the Welsh Office, the Scottish Office and the Department of Agriculture—which at times makes for a great deal of difficulty in getting decisions. I wondered whether, with his vast experience, he would like to comment on that proposition.
Lord Peart: My Lords, that is something out of the blue. It may well be because of the fragmentation of responsibility that we had in previous Governments. When first I was a forestry Minister I was in charge, but the last time I was a forestry Minister I had to share my responsibility with the Secretary of State for Wales and the Secretary of State for Scotland, so it was quite different. If they reverted back to the old system, that might help.
Lord Davies of Leek: My Lords, before my noble friend sits down finally, may I ask whether he realises that it is a fact that World War I reduced the amount of timber that we had in Britain, and that, according to authoritative sources at that time, at the rate we were then planting it would take 144 years to get the woodlands and the timber of England back into the position in which they were in 1913, or just before the 1914 war? How far we have improved on that today is another issue. I support the idea of a Minister for Forestry, and for forestry alone.
7.32 p.m.
The Earl of Mansfield: My Lords, if the noble Lord, Lord Peart, has finally sat down, I think that before donning my ministerial hat I should declare an interest, of which I think most of your Lordships will be aware. It is almost a year since the House had a most interesting and constructive debate on forestry on a Motion by my noble friend Lord Dulverton. That debate was, so to speak, a curtain-raiser for today's double bill, and it is particularly fitting that my noble friend should have been instrumental, at least in part, in bringing this subject again to your Lordships' attention. We are also indebted to the noble Lord, Lord Sherfield, who provided the other Motion we have been debating today on the forestry research report of the subcommittee of your Lordships' Select Committee on Science and Technology, which the noble Lord chaired with such distinction. Once again your Lordships
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have demonstrated the deep and wide-ranging knowledge of forestry affairs that is to be found in your Lordships' House, which therefore makes my task of summing-up that much more difficult and, I am afraid, probably rather long.
If I may turn first to the Select Committee's report, I should like to pay tribute to the noble Lord, Lord Sherfield, and his fellow Members, who have conducted a very searching inquiry into the scientific aspects of forestry and have produced a wide-ranging report backed by an impresive volume of evidence. My right honourable friends and I very much welcome the close attention which has been given to this specific aspect of forestry policy at the present time. We have asked the Forestry Commissioners to study the report with care, but until we have their considered views on the many recommendations that it contains it is not possible for me to deal with the matters in any detail. However, the report touches on some extremely important aspects of forestry research and practice, a number of which have far-reaching implications for policy in this and related fields; and many of them are matters of public concern. Questions of organisation and funding are also raised, which will require careful evaluation before the most appropriate course of action can be determined.
The two aspects of most immediate concern are perhaps the concept of a chief scientist for the Forestry Commission and the relationship between the commission and the research councils, particularly in the field of fundamental research, which the committee seems to consider has been rather neglected. On the other hand, they were obviously impressed by the way in which the applied research carried out by the Forestry Commission is planned and conducted. The Forestry Commission has not previously had a major co-ordinating role, nor been given the remit to support fundamental research on the scale now envisaged, and it will be necessary to consider whether its terms of reference should be extended so that it may take on these two functions. Such a development would require some additional funds to be placed at the disposal of the commission.
It is also open to question whether in such a relatively small research area there could be sufficient work of a suitable calibre to justify the appointment of a chief scientist, or whether this function could not be better assumed by the commission's director of research with the necessary high level scientific advice being supplied by its research advisory committee. Similarly, in view of the minor role played by forestry in the work of both the Agricultural Research Council and the Natural Environment Research Council, it may be more appropriate for the co-ordinating role to come from the Forestry Commision than from any particular research council. These are matters which clearly call for careful deliberation before any far-reaching changes are set in train.
The question of who should be responsible for fundamental and applied research into the end uses of wood and other forestry products rests largely on the future role of the Princes Risborough Laboratory of the Building Research Establishment, which is still under consideration. If its wood science capacity is to be maintained at least at its present level, it would probably be as well to leave things as they are and

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for the commission to continue with its policy of commissioning research at the laboratory. Otherwise, there would seem to be some logic in the Forestry Commission taking over the work on wood science, though other aspects of the laboratory's work in this field would have to be pursued elsewhere. This is, of course, a matter which will involve my right honourable friend the Secretary of State for the Environment. The various recommendations relating to forestry practice, intended generally to introduce greater diversity, largely concern extensions of work already in train, although some of the more extreme proposals may have to be viewed with caution. Careful account will, however, be taken of all these recommendations when the commission's research programme is being reviewed.
Two other aspects of the report are perhaps worthy of some comment at this stage. First, the appropriate management of the traditional broadleaved woodlands, which are such a feature of the landscape in lowland Britain. These woodlands are widely recognised as a valuable national asset from the historical, conservation and recreational points of view, as well as for the production of hardwood timber. A broader approach to the objectives and techniques of management may well be appropriate if their potential is to be fully realised, and we shall be looking very carefully at the recommendations in this respect, bearing in mind that over 90 per cent. of these woodlands are in private ownership. Secondly, the report has a good deal to say about the integration of new afforestation with other aspects of countryside management, and about the need for closer collaboration with other interests in the field of education and research in order successfully to achieve this objective. These are matters which we shall continue to pursue as part and parcel of our overall forestry policy, and not solely in the context of this report.
I regret that at this stage it is not possible for me to be more forthcoming about the Government's response to this stimulating and timely report, but this may be taken as some indication of the attention being given to it. The Forestry Commission are at present consulting other interested departments and agencies, including the relevant research councils, and they will also be taking account of views received from their research advisory committee and their chief advisory body, the home-grown timber advisory committee. We expect to receive the commissioners' considered advice within the next few months. Then, I know that the noble Lord, Lord Sherfield, and one or two other noble Lords, have considered that the issue of a White Paper might be the most appropriate way to proceed. As at present, we intend to announce our conclusions as soon as we can thereafter in a Statement to Parliament; but I shall keep this very much in review, and if a Statement at the end of the day becomes inappropriate then we may well take up the noble Lord's suggestion.
The noble Lord, Lord Sherfield, and also the noble Baroness, Lady Jeger, I think, in the first reference which was made to projected sales of part of the Forestry Commission's estate, hoped in effect that such sales would not lead to less research. The Forestry Commission already undertake research for both the private and the state sectors. There is absolutely no
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reason to suppose that it is intended, and certainly there is no intention, to transfer control or ownership in such a way that there will be any less research in the future, and I hope that the noble Lord will be comforted thereby.
The noble Baroness went on to say that, in effect, we are spending on research only about 1 per cent. of the annual production. I think-that, in fact, what she meant was 1 per cent. of the total value of the forest estate. Research now is running at about £5 million per annum which is about 3·6 per cent. of forestry's annual contribution to the gross domestic product or about 3·6 per cent. of the net annual expenditure on forestry by the public and private sectors combined.
Lord Davies of Leek: My Lords, does that include scholarships for students who want to follow forestry as a discipline or career?
The Earl of Mansfield: My Lords, I do not know. I will write to the noble Lord. My noble friend Lord Cranbrook was concerned about hardwoods or broadleaved trees. He said, in effect, that the hardwood reserves in this country are being destroyed. What I can say is that, first, the annual yield is likely to remain at the present level for at least 20 years and, secondly, the age-class distribution of hardwoods is very unbalanced. About three-quarters of our hardwoods are more than 70 years-old and, certainly, without a considerable planting programme, the yield must decline in the next century. So, says my noble friend, there is a need for an adequate financial incentive for planting broadleaved woodlands in the lowlands. The answer is that the dedication scheme provides significantly higher planting grants for broad-leaved species; that is, £225 per hectare compared with £100 per hectare for conifers, while the small woods scheme provides higher grants for planting small woodlands, and these are usually composed of broadleaved species.
The consultation paper issued following the policy Statement which I gave in this House last December makes it clear that similar considerations will be taken into account in determining grant rates under the proposed new scheme. Then my noble friend—and he was echoed by one or two other noble Lords—advocated the imposition of import controls on imported tropical hardwood. In this House, the Government are frequently being asked to impose import controls on a very wide spectrum of our commercial life. It is a highly contentious argument. As I have said, it can be advanced for all sorts of products. It is extremely unlikely that to interfere with the free movement of timber would do very much good. It could do serious harm to the consumer. It would certainly do serious damage to the British furniture industry which is an important export earner and which depends on imported timber for its raw material. As in other fields, I think that the salvation of British hardwood growers must lie in other directions.
Then my noble friend raised the matter of the grey squirrel, as did other noble Lords. He slightly surprised me in view of his very conservationist attitude on the Wildlife and Countryside Bill, by suggesting that they should be totally eradicated. I do not think

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it is possible. They are now, rather like foxes, in areas which can only be described as urban—and, certainly, surburban—as well as in country areas. I do not think it would be possible to eradicate them. The Forestry Commission is presently commissioning work at Reading to see if the control of breeding of the grey squirrel is an avenue which may be explored. That, I think, is probably the most fruitful line of research.
The Earl of Cranbrook: My Lords, would my noble friend agree that research directed towards the possibility of eradication might also be fruitful?
The Earl of Mansfield: My Lords, it might. My noble friend Lord Bessborough asked about oak wilt and the importation of oak from North America. He referred in particular to the dangers of oak wilt, which is known to occur only in the United States, being introduced here on oak imports from North America. The possibility of the transmission of this disease on sawn wood is considered by pathologists in Britain and America to be remote. The bark, which attracts the beetle, is the source of risk and the Import and Export of Trees, Wood and Bark Health (Great Britain) Order 1980 requires bark to be completely removed before shipment. In addition, the wood has to be further treated by one of three different methods; complete squaring, drying to prescribed limits or disinfection by hot air and water. The wood must be accompanied by a plant health certificate. These measures are enforced by Forestry Commission plant health inspectors who aim to inspect each consignment of unmanufactured North American oak arriving in this country. I hope my noble friend will agree that these measures turn what is already very small, as far as risk goes, into a matter of infinitesimal proportions.
I should like to turn now to the other part of the debate. When I made the Government's forestry policy Statement to your Lordships' House on 10th December last, a number of Lords expressed a desire to have an early debate. We are grateful to the noble Lord, Lord Dulverton for providing us with that opportunity: and I welcome the chance to develop some of the points in the Statement, to explain why we came to the conclusions we did, and hopefully to allay some of the fears which have been expressed by noble Lords this evening.
One of the important aims of our Statement was to help restore the confidence of the industry which had been waning as the result of a series of separate developments partly linked to the general economic climate. First, there was the announcement last May of the decision to close the pulp mill at Fort William, despite the strenuous efforts by the Government to keep it in operation through the offer of a very significant package of financial assistance. This was followed in August by Bowater's decision to close their newsprint mill at Ellesmere Port. Here, again, the Government offered substantial financial assistance for new investment, but the decision was one for the company to make and unfortunately they concluded that the future of the mill was too uncertain. These closures had potentially very serious implications for the forestry industry. The speed and efficiency with which it organised al-
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ternative markets, with commendable co-operation between the public and private sectors, showed, however, its underlying strength and resilience.
The private forestry sector was also concerned by the publication last May of the Public Accounts Committee report recommending the phased abolition of the Schedule B income tax option available to owners of commercial woodlands. Added to this, was the element of uncertainty about the future generated by the fact that we were reviewing forestry policy.
I should say at this point what I said in December. One of the reasons why we delayed, or appeared to delay, the publication of the reviewed policy was that we were anxious to restore confidence and anxious, so far as the private sector is concerned, to get it right. We were anxious to produce there a policy which might commend itself to both sides of the House, bearing in mind the political persuasion of those opposite. So far as the Public Accounts Committee is concerned, those anxieties and uncertainties should have been largely allayed by the Statement made by my right honourable friend the Chancellor of the Exchequer on 9th December that the present tax arrangements for forestry will continue, and should have been further allayed by our Statement on forestry policy of 10th December. I believe that these two Statements have given forestry a new impetus; they will help to restore confidence and set the industry firmly on the right road again. They are a declaration of faith in the future of forestry and its associated industries in this country.
I appreciate that there are some who would like to see a firmer target set for forestry expansion at the rate commensurate with the more ambitious proposals in the Reading Report and the Forestry Commission's own Blue Book published in 1977. This view has been expressed by some noble Lords today.
We took very careful note of these reports and, also, the many comments that we received on the subject. However, we concluded that expansion on such a scale, although desirable in terms of wood production and import saving, would be unacceptable on other grounds. It would have entailed a major increase in forestry in Scotland, where much of the suitable land is to be found, and could also have lead to an appreciable increase in England and Wales. It is our belief that this would have had an unacceptable effect on the balance between different uses of land in the countryside, and would have been strongly opposed by local authorities, and by environmental and conservation interests. As I said in the forestry debate last year—and as has been exemplified in recent debates on the Wildlife and Countryside Bill—we must understand the very real fears of farmers and environmentalists of expansion pitched at the levels that had been suggested, quite apart from the financial implications, which would have been significant. We therefore took the view that expansion broadly at the historic rate of the past 25 years, taking one year with another, was both feasible and practicable, and should not upset the traditional balance between the various countryside interests. We did not consider it desirable to set a firm long term target, since many of the factors which would determine it are outside Government control, particularly in the private sector. Nor is it possible

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to commit future Governments to a target which, for reasons we cannot anticipate, they might not be able to fulfil.
There are also those who are critical of our plans for the Forestry Commission, particularly in relation to the proposal to sell some of its lands and plantations. This undoubtedly exercised the minds of a number of noble Lords. We shall have the opportunity of discussing these matters again and in much greater detail when we debate the Forestry Bill which is at present in Committee in another place. Since there is concern, it is right that I should—I hope—try to dispel it. Among those who raised the matter were the noble Baroness, Lady Jeger, who got in a good party political point (I do not criticise her for that), the noble Lord, Lord Taylor of Gryfe, for whom I have a great respect and affection, my noble friend Lord Seafield, and then of course the noble Lord, Lord Mackie.
The main allegation seems to be that the Bill, despite its title, is not intended to help forestry but is really a Treasury Bill designed to raise money at the expense of the forestry industry in general and the Forestry Commission in particular. This places an interpretation on our objectives which has no foundation in fact. When the noble Lord, Lord Taylor, was quoting some recalcitrant Back-Bencher in another place, he could have done no better than to have quoted me in this place on 10th December in the Official Report at col. 745, where I said:
"The Forestry Commission will be totally in charge of the sales which take place. I anticipate that there may be many forests and many areas of woodland where for management purposes, environmental or commercial considerations and, not least, employment considerations, such woodlands will not be for sale or alternatively—and this particularly applies to employment—will be for sale and leaseback. So there is absolutely no danger of the jewels in the Forestry crown being sold off with only the less exciting, less profitable and less easy to manage woodland remaining".
That was in answer to a question, and not in the brief.
Lord Taylor of Gryfe: My Lords, it is a very important statement and will inevitably arise in the debate on the Second Reading of the Forestry Bill. In the event, the noble Earl said it is a Treasury Bill and therefore there are certain Treasury targets established as to the amount the Forestry Commission has to realise every year.
The Earl of Mansfield: No, my Lords.
Lord Taylor of Gryfe: No, my Lords? I apologise, but that seemed to be the interpretation of the Minister in the debate in the other place.
The Earl of Mansfield: My Lords, with respect, I think it is very much better if the noble Lord were to gain his information from the fountain of wisdom in this House and not rely on what happens in another place. May I go on, and then if the noble Lord wishes to interrupt again he is at liberty to do so.
We have every confidence in the commission and we have no intention of making it less effective nor, as my right honourable friend the Secretary of State for Scotland has said in another place of pillaging it to fill the Treasury coffers. That was the phrase used. On the contrary, this is a forward-looking Forestry Bill to give the commission a fresh impetus, so that it
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can operate more effectively in the competitive commercial world of which its forestry enterprise is increasingly becoming a part. The proportion of the forestry enterprise expenditure supported by grant-in-aid is already diminishing, but we say that it can and should be reduced more rapidly. The commission controls assets worth at market prices something of the order of £1,000 million. We consider it right to capitalise on some of those assets in order to reduce its call on public funds for the management of the Enterprise.
The money raised by these sales will not be lost to forestry as it will be recycled back into the commission through the grant-in-aid. Of course, the disposal receipts will substitute for funds which would otherwise have had to be provided by the taxpayer, hut this is entirely consistent with determination to reduce public expenditure which is essential if we are to bring down inflation.
Under existing provisions, receipts from the sale of forestry assets have to be credited to the forestry fund. In the absence of a surrender provision, such receipts cannot be transferred to the Consolidated Fund. Therefore in deciding the grant-in-aid and the cash limit derived therefrom, account would have to be taken of receipts from the disposals programme and any shortfall in such receipts in what is a rather speculative market would impinge on the main expenditure programmes. The obvious solution lies in a surrender to the Consolidated Fund with the net call by the commission on Exchequer funds being shown in the Forestry Commission's account and in public expenditure White Papers.
Within our financial objectives, the arrangement of the sales programme will be in the commission's hands; and, in selecting areas for sale, it will be guided by a number of factors which the commission itself has identified. These are extremely important. They are, first, financial considerations; second, the maintenance and development of the wood processing industry; third, the maintenance of employment and the viability of local communities, especially the socially fragile areas; fourth, the use of forests for public access and recreation; fifth, the interests of conservation, research and education; sixth, the effects on management; seventh, the market preferences having regard to other criteria; and lastly, but by no means least in importance, the rationalisation of the forestry estate. I confirm that this is a list of criteria, and I have not read it in order of diminishing importance.
As to scale, the financial figures will appear in the public expenditure survey in due course; but the Forestry Commission has estimated that it will be able to raise some £l 0 million in the first year of the sales programme and £15 million in each of the next two years. Every £10 million represents little more than 1 per cent. of the commission's estate, which I submit puts our intentions clearly into perspective. I should emphasise, however, that the market for plantations is largely an untried one, and if the demand is either much greater or much less than the commission has envisaged, it will clearly need to take this into account in drawing up its sales programme.
Lord Taylor of Gryfe: My Lords, can the noble Earl say whether the figure that he is quoting is for outright sales, and how much of that is sale and lease-

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back, or is sale and lease-back additional to these figures?
The Earl of Mansfield: My Lords, "sales" means "sales". Sale and lease-back is a rose by another name. It may be a very important one but it is still a sale. Within the broad objectives we have set, we expect the commission to adopt the most sensible and flexible approach to sales. This flexibility will also govern the method of disposal in individual cases. The lease-back alternative to outright sale which was referred to in our policy statement will, in appropriate cases, help to ensure that access and recreational opportunities and wood supplies to industry are not disrupted, and that employment, particularly in those localities where the commission is the major employer, is not unduly affected. This is a matter to which the noble Lord, Lord Peart, referred, and I have myself met union representatives of the industry.
Baroness Jeger: My Lords, I merely want to ask the noble Earl what sanctions the Government will have on land that has been sold, particularly if it is sold to investment companies and foreign buyers, including EEC buyers, to impose these conditions, particularly if these purchasers do not apply for grant, and therefore there would seem to be no room for conditions to be applied.
The Earl of Mansfield: My Lords, I do not want to be offensive, but I think the noble Baroness is a bit muddled. If the forest is more than five years old there is no question of a grant and I do not suppose that an investor who is looking for a reasonable return on his money—not a quick profit, but a reasonable return—will buy a forest less than five years old. If the noble Baroness's point is that which was echoed by several other speakers—how can we ensure that land which is in forestry remains in forestry?—then the Forestry Commission will not issue a felling licence without making it a condition of the licence that the woodland area is replanted after felling. I hope I have dealt with that particular point adequately. If not, the noble Baroness can reculer pour mieux sower and come at me again.
I believe that most of your Lordships who have had contact with the Forestry Commission would agree that it is an efficient organisation with a high reputation, and its long-standing and harmonious partnership with the private sector has been, and will remain, the foundation-stone of forestry policy. Fears for the future of the commission are unfounded. Its range of activities in the management of the forestry enterprise will not diminish, nor will its forestry authority function be impaired. It can be expected, of course, to have a somewhat smaller planting programme, because we consider that the larger share of the expansion we envisage for the immediate future can and should be undertaken by the private sector.
As we said in our statement, the commission's planting programme will help in some cases to contribute to the rational management of existing plantations, and in others to maintain employment in some of the remoter and less fertile areas of Britain. It will also help to underpin the commission's research and
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development programme in the sphere of afforestation. Thus, while our policy statement rightly stressed the importance we attach to the private sector playing a greater part in future forestry expansion, this must not be taken to imply that the commission will cease to have a crucial role. On the contrary, we shall be reviewing both the commission's planting and disposals programmes periodically and consideration will be given in the light of their achievements to expanding the forestry enterprise activities. Naturally this would be subject to the prevailing economic situation and the Government's view of competing demands and priorities of other expenditure but I hope that noble Lords will accept this intention as further evidence of our resolve to have a stable and dynamic forestry industry.
A number of your Lordships, including my noble friend Lord Dulverton, have commented on the proposals arising from the recent review of the administration of grant-aid and felling licensing carried out under the auspices of Sir Derek Rayner. Some interesting points have been made which we shall bear in mind before reaching final decisions on the implementation of the proposals. I should, however, like to make it clear that we see the proposals stemming from this Rayner study as giving the private sector the freedom it needs to get on with the increased role we envisage for it. It is not our intention that the incentives or the safeguards built into the present grant-aid régime should change to any fundamental extent, but the bureaucratic and legal complexities that have silted up the dedication scheme over the years and added to its administrative costs must be reduced. Private forestry has now come of age and should have the skills to stand on its own feet.
In our opinion, it should no longer be necessary—even if resources permitted it—for the Forestry Commission to oversee the detailed management of private woodlands. As your Lordships will be aware, the consultation period for these proposals finishes at the end of the month. Subject to the comments received, the commission will then proceed to draw up the details of the new grants scheme in consultation with Timber Growers of Great Britain, as the Forestry Committee of Great Britain is now named. The new scheme will be introduced on 1st October to replace the present grant schemes which will be closed to applications as from 1st July next. Some of the other changes proposed, particularly those relating to the felling control procedures, will take longer to implement, however, because of the need for covering legislation.
I am acutely aware of the clock and I have not begun to respond to any of the points in this part of the debate. I hope that your Lordships will be forbearing and that on consideration of the Official Report tomorrow you will see how important is the statement which I made on our policy of sales.
My noble friend Lord Dulverton raised the point near the beginning of his remarks concerning the collapse of three pulp mills. He attributed it to a mixture of the strong pound and high energy costs. I have to remind your Lordships of what I said in the Statement: that the Government continue to believe that long-term confidence in both the forestry and the wood processing industries in the country is fully justified. We look for a steadily increasing proportion

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of our requirements of timber to come from our own resources. These recent difficulties in the pulp and paper sector, which represents only one-eighth of the market for wood grown in the country, do not affect that conclusion.
Regarding the rate of expansion in the forestry industry, we indicated that we saw scope for new planting to continue in the immediate future at broadly the rate of the past 25 years. As I have already said, this is the rate we consider would promote and preserve an acceptable balance with agriculture, the environment and other interests. I have been looking at some of the points which have been put to me and I will write to those noble Lords concerned where perhaps the inquiry (if that is the word) is of a technical nature or one which broadly lends itself to a letter.
One matter to which I should respond is a suggestion which was put by my noble friend Lord Seafield and then was fairly enthusiastically adopted by other noble Lords. That was the question of ministerial responsibility for forestry. In fact my noble friend suggested there should be only one Minister for forestry instead of the responsibility being shared, as at present, between three Ministers. I was slightly surprised by what the noble Lord, Lord Taylor, said: that he thought it was difficult to get decisions timeously.
There are major implications for the countryside beyond the confines of forestry, and we do not think it is necessary to disturb the existing deployment of ministerial responsibility. The three of us who are concerned certainly work harmoniously together, and because of the very different conditions prevailing in each of the three countries of Great Britain I think that each of the three Ministers is able to devote more attention to issues of particular interest in the country for which we have individual responsibility. That is certainly more than could be done if the arrangements which my noble friend suggested were taken up.
I can illustrate it in this way. Eighty per cent. of the private planting is now going on in Scotland, and I do not think that the industry in Scotland would be at all attracted by the idea of merging matters of forestry in the Ministry of Agriculture in Whitehall Place. Equally, it is difficult to plant in Wales without treading on a number of environmental corns; and I see the noble Lord, Lord Taylor, nodding at my slightly facetious turn of phrase. But the fact of the matter is that forestry in Wales demands an extremely sensitive touch, and that can be given only by their own forestry Minister—
Lord Peart: My Lords, may I just ask when the noble Earl is going to conclude? This is a strange procedure. I think that the Government should have issued a White Paper.
The Earl of Mansfield: My Lords, I have already said, in effect, to the noble Lord, Lord Sherfield, that we are not going to issue a White Paper, as at present advised, on the very valuable report of his committee. It may be that it was a mistake to tack these two debates together. But since, inevitably, this would have turned into a debate on the Forestry Bill, whether it had been described in the Motion or not, it was thought appropriate that the Order Paper should at least try
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to be honest and should reflect what was obviously going to happen.
This has been one of the best and most comprehensive debates that we have had for many years. I have been particularly instructed by receiving a number of very different views on the report of the committee of the noble Lord, Lord Sherfield, which will be studied with care. On a broader front, I believe that the Government have provided a firm foundation for the future of forestry in Britain. This debate has strengthened my belief that our policy is soundly based, and in future debates on the Forestry Bill I am confident that your Lordships will come to agree.
8.12 p.m.
Lord Sherfield: My Lords, at this late hour, it remains only for me to thank the speakers who have taken part in this debate, particularly those in what I might describe as my half. The noble Lord, Lord Adrian, would have made a very valuable contribution, but I am afraid that he was struck down by flu, and the noble Earl, Lord Lonsdale, would have spoken but for the effluxion of time. But I should like to thank and pay tribute to the noble Lord, Lord Dulverton, and the speakers in his group for their contributions.
A number of kind and generous references have been made to me and the committee in regard to the report which we produced. I should only like to stress that this was a collective exercise and that all members of the committee, the specialist advisers, the staff and the witnesses all contributed to this report: the chairman is really only in the position of a producer. I should have stressed earlier, as later speakers have done, the value of the material in the second volume of the report. Our evidence was certainly on a very high level and I think that there is much of enduring value in this second volume.
The noble Lord, Lord Inglewood, asked what consideration we had given to liaison with European scientists and European experience. We certainly were very much aware of the contribution which could be made by the experience of European countries, with their older and more diversified forests than our own. Certainly, the members of the committee would have appreciated the opportunity for a little European travel, but we had to limit our inquiry strictly to the United Kingdom. I am sure that the Forestry Commission, in particular, have very good relations not only with European foresters but also with foresters all over the world, and particularly in the Commonwealth.
I should like to thank the noble Earl, Lord Mansfield, for his observations on the report. I quite understand that he was not in a position to reply to our recommendations in detail. In fact, I hardly expected that he would. I am very glad to hear that the Forestry Commission are giving such careful consideration to the recommendations, and that they will be communicated to us when the Government have taken their decision on them—in not too many months, I hope. As for the form in which the decisions of the Government are communicated to the House, I think that the content of the document will be much more important than its form. I imagine that a document there must be, but what form it takes is perhaps the least important part of the matter. I would draw the noble Earl's

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attention to a rather good draft of a paper on the report which has been published by the Institute of Foresters of Great Britain.
The two halves of the debate have come to one common conclusion; that forestry is a long-term enterprise which is of great importance to the future economy of this country. That underlines the importance of current research to make sure that the forestry programme is on the right lines, and that the existing estate is safeguarded from the pests and other menaces which threaten it and which have been referred to by so many speakers. This underlines the importance of ensuring that there is what the noble Lord, Lord Flowers, described as an intelligent focus for the research programme.
There will be another opportunity, as other speakers have said, to deal with the wider issues that have been raised when the Forestry Bill comes before this House in due course. I will say no more about those wider issues this evening. I will merely once more thank the Minister for his reply and thank all the speakers who have contributed to make this a very interesting debate.
On Question, Motion agreed to.

Sion College Bill [H.L.]
Examiners certificate that further Standing Orders have been complied with: ordered to lie on the Table; Bill committed to an Unopposed Bill Committee.
  YOUNG PRISONERS: RECLASSIFICATION
  YOUNG PRISONERS: RECLASSIFICATION
  PRISONER SEGREGATION
  PRISONER SEGREGATION
  PRISONS: PSYCHOTROPIC DRUGS
  PRISONS: PSYCHOTROPIC DRUGS
  CITIZENSHIP APPLICATIONS
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  CITIZENSHIP APPLICATIONS: FOR RESUMPTION
  CITIZENSHIP APPLICATIONS: FOR RESUMPTION
  NATURALISATION APPLICATIONS
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  UNCTAD COMMON FUND FOR COMMODITIES
  UNCTAD COMMON FUND FOR COMMODITIES
  HOUSING ACT 1980: DESIGNATION OF RURAL AREAS
  HOUSING ACT 1980: DESIGNATION OF RURAL AREAS
  UK CONTINENTAL SHELF: RESEARCH BY SOVIET VESSEL
  UK CONTINENTAL SHELF: RESEARCH BY SOVIET VESSEL
  ALBANIA: RESTORATION OF DIPLOMATIC RELATIONS
  ALBANIA: RESTORATION OF DIPLOMATIC RELATIONS
  STUDDED SNOW TYRES
  STUDDED SNOW TYRES