Sitting of 28 November 1983

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

    Alternative Sources of Energy
    Mr. Chapmanasked the Secretary of State for Energy what major research projects into alternative sources of energy are presently being undertaken through financial resources made available by the Government both in the United Kingdom and as part of any United Kingdom contribution to the European Community.
    The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith): The United Kingdom, both on its own behalf and as part of the Community programmes, supports a wide range of research projects into alternative sources of energy. Currently the largest expenditure is on the joint European Torus work at Culham, the geothermal experiments in Cornwall and the Orkney windmill.
    Mr. Chapman: I thank my right hon. Friend for that information and recognise the significant increases in grants that the Government have made for research into alternative forms of energy. Will my right hon. Friend assure the House that there is no duplication of research work undertaken by different members of the European Community? Does he agree that it is essential that the most effective use is made of the grants available, by ensuring close co-ordination between member Governments?
    Mr. Buchanan-Smith: I cannot guarantee that there is no duplication, but I agree with my hon. Friend that this is an appropriate matter for co-ordination throughout the Community. I hope my hon. Friend will be encouraged by the fact that the results of all research work supported by the Community are available to member countries. Therefore, we benefit from what happens in other countries.
    Mr. Orme: Will the Minister give the figure of proposed Government expenditure and break it down into solar, wind and other forms of alternative energy sources?
    Mr. Buchanan-Smith: Yes. The money that we are spending on alternative and renewable sources of energy amounts to £12 million a year and is increasing. It is now four times more than was spent by the Labour Government.

    National Coal Board (New Enterprises)
    Mr. Marlowasked the Secretary of State for Energy whether he will reorganise the National Coal
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    Board in such a way as to permit workers in different geographical areas to acquire shares in their respective newly formed enterprises.
    The Under-Secretary of State for Energy (Mr. Giles Shaw): I am always willing to consider any ideas that give miners a participation in the fortunes of the industry in which they work.
    Mr. Marlow: Would my hon. Friend be in favour eventually of a system of miners' co-operatives with access to private capital? If so, could he get the support of Mr. Arthur Scargill? If not, would that be helpful?
    Mr. Shaw: The National Union of Mineworkers has not so far expressed much interest. I am aware of the report of my hon. Friend's working party, which recommended that loss-making pits should be handed over free of charge. However, that has not resulted in much support.
    Mr. Mason: Will the Minister assure the coalmining industry that he has no intention of embarking on privatisation of the National Coal Board's operations, especially deep-mined coal output? Secondly, will he discourage the National Coal Board from devolving its regions into regional commercial economic entities?
    Mr. Shaw: I can give the right hon. Gentleman the first assurance for which he asks. The Government have no plans for the privatisation of deep-mined coal. My right hon. Friend the Prime Minister made it clear during Question Time recently that privatisation within The coal industry would primarily involve the disposal of ancillary industries.
    The second question is a matter for the NCB, but there are discussions within the board about structural reorganisation.
    Mr. Skeet: My hon. Friend will recollect that mines with fewer than 30 workers already exist in the private sector. Will he consider extending the number to 100 workers?
    Mr. Shaw: My hon. Friend is right to remind the House that there is a thriving small private sector, producing about 1 million tonnes of coal, but he will recall that the Monopolies and Mergers Commission's recommendations about that are being considered.

    Gas Bills (Payment)
    Mr. Fisherasked the Secretary of State for Energy how many consumers are paying their accounts to regional gas boards by means of pan-payment arrangements.
    Mr. Buchanan-Smith: I am advised by the British Gas Corporation that the number of customers who have special arrangements for payment through the corporation's budget and other schemes is just over 2 million.
    Mr. Fisher: Does the Minister not consider that a very large total? Does he accept that the reason is that people cannot afford gas at present prices? Therefore, will he reconsider the proposed January increase in price, which is bound to threaten those on low incomes, the sick and the elderly, and may in a hard winter put some people's lives at risk from hypothermia?
    Mr. Buchanan-Smith: Apparently the hon. Gentleman did not listen to my reply. The budget and other schemes, which cover a whole series of arrangements for

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    payment, are for the convenience of customers and are welcomed by them. As for any hardship, I hope that the hon. Gentleman will welcome the fact that the Government this year will pay out £350 million to help consumers with gas and electricity costs.
    Mr. Kenneth Carlisle: Does my right hon. Friend accept that the reform which really helps the small consumer, was initiated in the last Parliament, under which the standing charge will never be more than half the total bill? Does he agree that it will help the elderly especially?
    Mr. Buchanan-Smith: I am grateful to my hon. Friend. The decision of the British Gas Corporation and most of the area electricity boards was to make the standing charge no more than 50 per cent. of smaller bills. That was at the initiative of the Government, and it has generally been welcomed.
    Mr. Hannam: How many gas disconnections were there in 1982–83 compared with the preceding year?
    Mr. Buchanan-Smith: I am afraid that I cannot supply that information without notice.
    Mr. Rowlands: In view of the impending large increase in gas prices in January and the imposition of a £550 million gas levy every year, which is also passed on to the consumer, how many more people will need special assistance next year with their fuel bills?
    Mr. Buchanan-Smith: There is a later question about fuel prices. The amount of help that the Government are giving to the less well off—I mentioned the sum—means that more than 2·25 million consumers benefit, and it is greatly appreciated by them.

    China (Ministerial Visit)
    Mr. Adleyasked the Secretary of State for Energy if he will make a statement on his recent visit to China.
    The Secretary of State for Energy (Mr. Peter Walker): My visit to China was in response to an urgent invitation from the Chinese Minister of Petroleum during his visit to this country in September.
    I was able to assess at first hand the important opportunities for United Kingdom companies to compete for business in China, in the offshore supplies industry, the coal machinery industry, the electrical power industry, the gas industry, and industries involved in energy efficiency.
    Mr. Adley: I thank my right hon. Friend for that reply and congratulate him on what was obviously a most beneficial visit. Does he agree that, in addition to the advantages for Britain and China, the technology, transportation and financial services skills available in Hong Kong should also benefit that territory from the arrangements that he has announced today?
    Mr. Walker: There is no doubt that the magnitude of energy developments in China is substantial. It is likely that the offshore oilfield, which is in the discovery stage, will be as big as the total discoveries in the North sea. The plans of the Chinese for increasing the size of their coal industry mean that eventually it will be six times the size of the British coal industry. Likewise there are big investment programmes in gas and power stations. It is obvious that the commercial skills and the many connections of Hong Kong will play an active role in all these developments.
    Mr. Douglas: Will the right hon. Gentleman concede that, notwithstanding the important overtures that he has been making in China about offshore engineering activities, it would reflect much better on our export potential there if we could ensure the delivery and prospective construction of rigs such as the one in Scott Lithgow at present?
    Mr. Walker: The important feature of any developments in the offshore industry is that contracts are competitive in cost terms compared with other nations and that delivery should be on time. That is what the Chinese will be looking for with any orders that they place.
    Mr. Orme: This may have been a fruitful visit by the Secretary of State, but he was absent when the Cabinet decided to increase gas and electricity prices. How did the consultation take place? Did the right hon. Gentleman agree with the increases before he went? The House is entitled to be told.
    Mr. Walker: I look forward to answering a later question on gas and electricity prices. I am interested to hear the right hon. Gentleman's report of what happened in the Cabinet, which is rather different from the minutes of the meeting.

    Combined Heat and Power (Report)
    Mr. Rostasked the Secretary of State for Energy when he expects to respond to the third report of the Energy Committee, H.C. 314, 1982–83, on combined heat and power.
    Mr. Buchanan-Smith: Assessment of this report is almost complete, and my right hon. Friend hopes to respond as soon as possible.
    Mr. Rost: As my right hon. Friend will be aware, a number of the most promising urban areas, such as Sheffield, London and Tyneside, are anxious to proceed with full feasibility studies so that they can prove the cost effectiveness of providing cheap heat and overcome fuel poverty. Will my right hon. Friend not just speed up the assessment of the report, but give guidance to those local authorities and private enterprise industries which want to go into partnership with local authorities and the electricity supply industry on how the financing and the institutional structure can be organised?
    Mr. Buchanan-Smith: This is a very important matter, in which the Government are extremely interested. We have had a study carried out by W. S. Atkins, which looked into the use of these schemes in cities, and so on. We are studying the report of that consultancy as well. It is sensible to look at the two together. As soon as we have completed our study of them, we shall make the announcements.

    Energy Prices
    Mr. Strawasked the Secretary of State for Energy what representations he has received in respect of the increase in gas and electricity prices.
    Mr. Hal Millerasked the Secretary of State for Energy what representations he has received from the gas and electricity industries about the future level of prices.
    Mr. Maddenasked the Secretary of State for Energy what representations he has received in the past six months urging that the price of gas and electricity be increased.
    Mr. Dykesasked the Secretary of State for Energy if he has replied to the letter sent by the chairman of the National Gas Consumers Council to hon. Members of this House on 10 November concerning future gas price increases.
    Mr. Peter Walker: I regularly receive representations on gas and electricity prices. The gas and electricity industries will announce any increases in the normal way.
    I have arranged for my reply to the chairman of the National Gas Consumers Council to be placed in the Official Report.
    Mr. Straw: Since the Secretary of State is no amateur in self-publicity—[Interruption.] I say that as a compliment—may we take it as rather more than a coincidence that the right hon. Gentleman has remained as silent as a Trappist monk since the announcement of fuel price increases was made by the Chancellor of the Exchequer? Leaving aside what happened in the Cabinet, will the right hon. Gentleman take this opportunity to express what we are told by the Lobby is his private view, namely, that he wholly disagrees with the change; or is his silence explained by the fact that he cannot quite find the superlatives to reflect his respect and admiration for the Chancellor of the Exchequer?
    Mr. Walker: I thank the hon. Gentleman for that rather wandering supplementary question. Gas and electricity prices will be decided and announced by the industries. The Government have no powers to fix gas and electricity prices. I suggest that the hon. Gentleman waits to see what the gas and electricity industries finally decide. Perhaps it was different during the period in office of the last Labour Government, when gas prices for the industrial user went up by 288 per cent. and for the domestic user by 73 per cent.
    Mr. Miller: Does my right hon. Friend agree that it makes neither economic nor political sense for the Opposition to talk of electricity price increases when the economy demands that a state monopoly should become more efficient, which is what its managers are trying to do? It makes no political sense to try to put the wind up pensioners before Christmas about increases which are not being imposed.
    Mr. Walker: It is unlikely that any increases of any description will be imposed this year. That will mean that we will have had a 21-month freeze on electricity prices and a 15-month freeze on gas prices. That compares very favourably with what happened under Labour Governments.
    Mr. Madden: Will the Secretary of State confirm that neither the gas industry nor the electricity industry is pressing for increases? Does he understand that many people, especially pensioners, have to choose between heating and eating each day? Does he also appreciate that there is no reason why such people should be the victims of the Government's economic incompetence, which is compelling industries to introduce fuel taxes?
    Mr. Walker: The Government's alleged incompetence is as nothing compared with the incompetence of the hon.
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    Gentleman's supplementary question. In reality, the British Gas Corporation is pressing for price increases. It has suggested that they should be introduced, under no pressure from the Government. Before the hon. Gentleman makes allegations of that kind, he should try to discover the facts.
    Mr. Dykes: Does my right hon. Friend agree that we do not need sanctimonious lectures from the Opposition about gas prices policy, in view of their record? Bearing in mind all future priorities, including the long-term investment programme and the fact that the Treasury take from the gas levy last year was, I think, £523 million, what does he think would be a fair figure for the levy over the next few years?
    Mr. Walker: I shall not make a prediction without knowing the world conditions of prices and the finds from the North sea. We must consider the returns on capital of the two nationalised industries and their performance in keeping down prices recently. As I very much doubt that any increase in the foreseeable future will be as much as the increase in inflation in general, it can be said that industry and domestic users are benefiting to that extent at present.
    Mr. Wilson: Does the Secretary of State realise that the fuel tax increases proposed for next year will attack most heavily the sick, the unemployed, the elderly, and particularly people in those categories who live in areas such as Scotland, where it costs much more to heat houses? What proposals does the right hon. Gentleman have to ease the problems of those people?
    Mr. Walker: I thank the hon. Gentleman for giving me the opportunity to point out that, since the Government came to power, assistance to people in the categories that he mentions has increased three and a half fold. Moreover, the additions to help for those people has increased 40 per cent. more than inflation and energy prices.
    Mr. McCrindle: I accept what my right hon. Friend has just said, but does he agree that one of the main burdens of pensioners and people on low incomes and social benefits is the relationship between standing charges on gas and electricity accounts and the amount of gas and electricity actually consumed? Will my right hon. Friend take the opportunity of any proposal to increase the cost of fuels to talk to the undertakings to see whether a fairer relationship can be created so that people who economise actually save on their bills?
    Mr. Walker: I understand my hon. Friend's view. I believe I am correct in saying that the British Gas Corporation, in any price increase that it may be contemplating, is considering making the standing charge a lower proportion of the total cost.
    Mr. Orme: May we assume from the right hon. Gentleman's reply that if the chairmen of the corporation and the electricity supply authority refuse to put up prices the Government will do nothing, because it appears from his answer that the decision is now for them? Does he agree that if the levy were removed there would be no need for any increase in gas prices? Will the Secretary of State say what effect on employment these increases will have in some of the major industries that use up to 40 per cent. of their costs on energy?
    Mr. Walker: I categorically repeat that the statutory power on prices is totally with the nationalised industries

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    and that the Government have no such powers. In answer to what the right hon. Gentleman said about loss of jobs, may I point out that, under the Conservative Government, the industrial price of gas has gone up by 89 per cent., whereas the Labour Government put it up by 288 per cent. Did the Labour Government think about jobs then?
    Following is the information:
    Miss S. P. Black
    Chairman
    National Gas Consumers' Council
    5th Floor: Estate House
    130 Jermyn Street
    London SW1Y 4UJ 22 November 1983
    Miss Black
    You wrote to me on 10 November about press reports that gas prices might rise more than the British Gas Corporation considered necessary.
    These stories were misleading. Pricing decisions are a matter for the industry, in the light of its costs and financial constraints. The Government has no powers to impose price increases on the industry. I understand that the Corporation have not yet taken any final decisions about next year's price, and that they are presently in the process of consulting you about their proposals. I would expect any price rise which results to be within the rate of inflation.
    Prices to the domestic consumer have not risen since October 1982. After allowing for inflation the price of gas to the home is still about the same as it was in 1970. Gas is still the cheapest fuel for most consumers and United Kingdom prices are still amongst the lowest in Europe. The Corporation have made clear their view that a modest increase is necessary to reflect rising costs, particularly the cost of new gas supplies, which are rising much faster than inflation. We must avoid a return to the situation under the last Labour Government where artificial holding down of prices led to the Corporation making losses on sales of gas to the home. The Government supports the case for a steady and consistent approach to pricing in order to avoid the need for large catching up increases of the kind which no-one likes, but which have been necessary in recent years.
    You also mentioned the gas levy and the sale of the Corporation's oil assets. There has been much misunderstanding of the purpose of the levy. The position is simply that BGC will continue to purchase some gas from early North Sea discoveries, which are exempt from Petroleum Revenue Tax (PRT), at well below its current market value. If the Government had taken no action the Corporation would, as a result, have made large excess profits. The Government therefore decided to introduce a levy to transfer this windfall from British Gas to the nation as a whole, in much the same way as PRT does for oil and newer gas supplies. The levy has had, as the Government promised when introducing it, no effect on prices, since BGC's financial target was reduced specifically to take account of the effect of the levy on BGC's profits.
    Nor is there any reason to believe that the sale of the Corporation's oil assets will lead to an increase in gas prices. Gas prices would only be affected if BGC would otherwise have used profits from oil operations to finance its gas operations. Such cross-subsidisation would have been quite wrong both from an economic and commercial point of view. The extraordinary provision which BGC made in their 1982/83 Accounts to cover the disposal of the oil assets is merely an accounting device to write the assets out of the Corporation's books. It is not in any real sense a "cost" borne by gas consumers, and is marginal when set against the Corporation's retained profits of over £1·5 billion.
    Finally, may I say that I agree with everything you say about the importance of maintaining incentives for the industry to increase its efficiency. We are working closely with the Corporation to follow up the Deloitte's Report, and I hope soon to be able to announce that agreement has been reached with the industry on a new Performance Objective which will build on their previous successes in cutting costs.
    Peter Walker
    Mr. Skeetasked the Secretary of State for Energy what is the Government's policy on energy pricing.
    Mr. Greenwayasked the Secretary of State for Energy by what amount he expects gas and electricity prices to rise over the next two years; and if he will make a statement.
    Mr. Peter Walker: In those areas such as electricity and gas, where there is a monopoly supplier, the Government consider that prices should reflect the cost of producing the energy and the need to achieve an adequate return on capital. Gas and electricity prices are determined by the industries concerned. I believe that gas and electricity prices will rise by less than the rate of inflation over the next two years.
    Mr. Skeet: Will my right hon. Friend bear in mind that some industries, such as chemicals, steel, paper and the metallurgical industries, will suffer heavily from increases? Will he therefore exempt them from the increases? Will he further bear in mind that chlorine producers in the United Kingdom have to pay twice as much for electricity as is paid by producers in France and that that will ulitmately mean that many chemical interests will have to transfer to France?
    Mr. Walker: Many negotiations have taken place on this matter with the heavy users over the past six to nine months. Arrangements and new facilities have been made available, which I think have been of considerable benefit. I have had expressions of gratitude from some of the heavy users. France has, of course, an overall advantage in electricity prices, because it has a much larger nuclear contribution to its electricity supply, which is cheaper.
    Mr. Greenway: I welcome my right hon. Friend's assurance that energy prices are likely to rise by less than the rate of inflation over the next two years. Will he give the comparative figures for the rise in domestic electricity prices under both this Government and the last Labour Government?
    Mr. Walker: Under this Government domestic electricity prices have risen by 81 per cent. Under the previous Labour Government they went up by 170 per cent.
    Mr. Wrigglesworth: In view of the real fear and misery among lower paid people when there is speculation about an increase in energy prices, will the Secretary of State stop looking backwards over the record of the Labour Government and of the present Government and look to the future? Will he look, in particular, at the first three months of next year, when the cold weather will hit the energy bills of the old and the low-paid particularly hard? Will he say when energy prices will be increased, and whether they can be delayed until after the likely period of cold weather?
    Mr. Walker: I understand the hon. Gentleman's reluctance to look back to the period of Government that made him leave the Labour party. I do not share his reluctance. The Government recently announced that heating allowances would be increased by 8 per cent., and that is well above any of the suggested price increases of either utility.
    Mr. Beaumont-Dark: Does my right hon. Friend nevertheless agree that one of the great problems, particularly in foundaries and in industries which are big users of electricity and gas, is that our prices seem to be

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    rather higher than those of our competitors? Does my right hon. Friend agree that we must keep in line if we are to compete in this difficult world?
    Mr. Walker: I agree, but I should point out that recently our prices have not increased as fast as those of our competitors. In a number of European countries the increases have been much greater than in this country. We have had a freeze for about 21 months in one industry and 15 months in the other, with no prospect of increases other than below the rate of inflation.
    Mr. Norman Atkinson: The Secretary of State has reiterated for the second time that the Government have no jurisdiction over electricity and gas prices. Why has he said today for the second time that the British Gas Corporation is now pressing him for an increase? Who is it pressing, and why, if the Secretary of State has no jurisdiction?
    Mr. Walker: I did not mean that it was pressing. I knew that BGC was interested in obtaining an increase. It will announce it when it wishes to do so.
    Mr. Wallace: As the Secretary of State attributed cheaper energy prices in France to the use of nuclear power there, can he explain why energy costs in Scotland are higher than in France, although Scotland has a higher contribution of nuclear power? Is it not a contradiction of Government economic policy that, to make industry more efficient and in an effort to make industry more competitive, the Government have apparently made industry less competitive as a result of the increase in energy costs that has just been announced?
    Mr. Walker: There are a number of things wrong with the hon. Gentleman's supplementary question. First, no increase has been announced. That supposition is totally unfounded. In answer to what he said about Scottish electricity costs, I suggest that he looks at Scotland's capacity for electricity generation compared with its use, and also the use of coal. I should like to hear his observations on that.
    Mr. Winnick: The Secretary of State knows that there is no justification whatever for any increase in fuel prices. Is he aware that there will be much disappointment that he did not put up a stronger fight in the Cabinet against the proposals of the Chancellor of the Exchequer? What provision has the Chancellor of the Exchequer made in public expenditure next year for the increases that we all know are coming? Is the Secretary of State aware of the damage that these proposals will cause to many people on low incomes and to British industry?
    Mr. Walker: It is nothing like as damaging as the 170 per cent. increase in domestic electricity prices under the last Labour Government. I have been more successful in the battles in which I have been involved than the hon. Gentleman.
    Mr. Orme: Will the right hon. Gentleman now give the reasons for these increases, which will hit both industry and the consumer? Are these not merely public expenditure cuts which will affect the unemployed and the socially deprived?
    Mr. Walker: The right hon. Gentleman talks as if vast increases have taken place, but he knows full well that any increases in either industry will be below the rate of inflation. Those on low incomes have already been
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    protected. The gas industry and the Government consider that there is justification for an increase because gas from the cheaper fields is running out and more expensive gas must be purchased. That is a good, valid reason for some modest increase in gas prices.

    Belvoir Coalfield
    Mr. Jannerasked the Secretary of State for Energy when he last met the chairman of the National Coal Board to discuss new investment in the Vale of Belvoir.
    Mr. Giles Shaw: I have discussed the board's proposals for a new mine at Asfordby with the chairman on several occasions. As the hon. and learned Member will know, Mr. MacGregor has now stated publicly his support for this project and the Government are processing the board's application for investment approval.
    Mr. Janner: Is the Minister aware that last week the chairman gave me a firm assurance that the Asfordby pit work would begin in time to dovetail into the rundown, redundancies and closures of other pits in the Leicester area so that the miners, including many of my constituents, would not be out of work and the industry would benefit? Will he confirm that assurance? When will the sinking of the shaft at Asfordby begin?
    Mr. Shaw: I remind the hon. and learned Gentleman—I recall that I wrote to him on this subject—that the Government must give investment approval to the sinking of a new mine. I also remind him that we must carefully consider the scale of investment involved—about £360 million. The detailed decision has still to be taken and, thus, I cannot give him the direct answer that he seeks.
    Mr. Latham: Will my hon. Friend confirm that ultimately only the Government can approve the investment for this pit, which is in my constituency, not in Leicester, West? Will he ensure that the decision, one way or the other, is taken as soon as possible so that uncertainty can be removed?
    Mr. Shaw; I give my hon. Friend the assurance that he seesk on both counts. There will be no unnecessary delay in dealing with this matter.
    Mr. Ashby: Is the Minister aware that the miners in my constituency—I am not aware of any miners in Leicester, West—are anxious that this investment should go ahead and that the mine should be opened as soon as possible?
    Mr. Shaw: I have already given my hon. Friend the Member for Rutland and Melton (Mr. Latham) the assurance that this matter is being dealt with as speedily as possible. We recognise that the House welcomes the view taken by the chairman of the board.

    Energy Prices
    Mr. Hayesasked the Secretary of State for Energy what information he has as to the average price of electricity per kilowatt hour in 1982 to customers in the United Kingdom, the United States of America, West Germany and France.
    Mr. Giles Shaw: Information on overall average prices is not available. However, in 1982 a typical industrial customer paid prices in the following ranges in pence per

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    kilowatt hour: in the United Kingdom—3·49p to 3·97p; in Germany—3·66 to 4·76; in France—2·73; and in the United States—3·83 to 7·21.
    Mr. Hayes: I am grateful to my hon. Friend for that answer. Is he aware of the devastating effect that gas and electricity prices will have on heavy users, particularly on beleaguered industries such as the glass industry? In my own constituency of Harlow we have United Glass, and on a projected increase of 6 per cent.—I sincerely hope that it will not be that—it will have to pay an additional £120,000 a year. Does my hon. Friend accept that the heavy users have a raw deal, and will he do something about it?
    Mr. Shaw: I warmly welcome my hon. Friend's firm defence of United Glass, which has a substantial plant in his constituency, including the cullet processing plant, which is essential to the glass recycling schemes for London. My hon. Friend will be aware that special provision has been made for heavy users. Indeed, only those with a fuel usage of 80 per cent. have not enjoyed some of the benefits that have occurred. I also remind him that the CBI is examining the position closely and I have no doubt that it will make representations.
    Mr. Rowlands: In that case, may we have an assurance that the Electricity Council will not increase industrial electricity prices in the new year?
    Mr. Shaw: The hon. Gentleman will be aware that that matter has been adequately and splendidly dealt with by my right hon. Friend.
    Mr. Fatchettasked the Secretary of State for Energy what representations he has received from industry in relation to energy costs.
    Mr. Kirkwoodasked the Secretary of State for Energy whether he has received representations from industry on the current costs of electricity and gas.
    Mr. Peter Walker: I have received various representations.
    Mr. Fatchett: Have not Conservative Members this afternoon made the Secretary of State aware of the fact that energy prices for British industry are higher than in most European competitor countries and the United States? As a result, are not competitiveness and jobs lost? Will he therefore reassure the House than any increase in energy prices will not lead to further losses in competitiveness and increasing job losses in British industry?
    Mr. Walker: The hon. Gentleman cannot have heard the reply given by my hon. Friend the Under-Secretary to the last question, when he said that energy prices in Germany and the United States were higher than in this country. Only in France, with its substantial nuclear electricity power industry, are energy prices lower. We are well aware of the importance of energy prices if industry is to remain competitive, and in no way will we allow industrial energy costs to go up in the alarming way that they did under the last Labour Government.
    Mr. Kirkwood: If the right hon. Gentleman's friends in the CBI can persuade him that export-led industries will suffer from any price changes that may occur, will he seek to change the Government's policy?
    Mr. Walker: Industry has applauded the Government's policy, which has meant a freeze on the price of one major source of energy for 21 months and a freeze on the other for 15 months.
    Mr. Rost: Will my right hon. Friend remind the House that not all of industry is moaning about possible increases in energy prices as, thanks to the Energy Act, it now has the ability to go it alone? Does he also agree that there is enough room for improved efficiency within the electricity supply industry to make any price increases unnecessary and allow the industry to meet the Government's capital return requirements?
    Mr. Walker: There is also considerable scope for improving energy efficiency in industry. We estimate that energy use by industry and domestic users could, with proper methods, be reduced by about 20 per cent.
    Mr. Eastham: In view of the massive energy profits last year—£660 million for gas and £330 million for electricity—is the right hon. Gentleman aware that people now call them energy taxes rather than energy prices? Will he differentiate between a tax and a price?
    Mr. Walker: I suggest that the hon. Gentleman has a closer look at the figures. For example, gas profits were £188 million on a turnover of £6 billion and a capital of £12 billion. That is hardly excessive.

    Continental Shelf (Oil Licences)
    Mr. Lilleyasked the Secretary of State for Energy when he proposes to invite applications for the ninth round of licences on the United Kingdom continental shelf.
    Mr. Buchanan-Smith: I am currently considering arrangements for the next licensing round.
    Mr. Lilley: In view of the great success of the belated introduction of auctioning into the allocation of licences in recent rounds, will my right hon. Friend extend the use of auctioning in future licences? Will he recognise that the Labour Government's doctrinaire hostility to the market process persuaded them to give these valuable assets away to the oil companies as an uncovenanted benefit rather than selling them at their fair market prices, thereby gaining considerable revenues for the consumer?
    Mr. Buchanan-Smith: I shall obviously look at these various issues in considering the next licensing round. It must also be remembered that what my hon. Friend advocates is not welcomed, particularly by a number of the smaller companies. The discretionary part of the last two rounds has enabled a considerable number of smaller British companies to become involved in exploration, which I welcome.
    Mr. Douglas: Does the right hon. Gentleman accept that it is now desirable to have a continuity of the regime and that the Government's record on tax changes has not been conducive to developments in the North sea? Has that ended and are future developments likely to sustain self-sufficiency will into the 1990s?
    Mr. Buchanan-Smith: I certainly support the need for continuity. Indeed, it was for that very reason that the Government introduced the various fiscal changes which, this year, resulted in drilling activity in the North sea at the highest level we have ever had since North sea oil was

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    first discovered. I assure the hon. Gentleman and the House that the need to maintain continuity is an important aspect of our licensing arrangements.

    Coal Industry (Investment)
    Mr. Hannamasked the Secretary of State for Energy what is the total value of Government investment in the coal industry since May 1979; and how this compares with the corresponding amount of investment in the French and West German coal industry's.
    Mr. Giles Shaw: Since May 1979 the National Coal Board has invested £3,500 million in coal production. Estimates from the European Commission indicate that over the same period the coal industries of the Federal Republic of Germany and France achieved only one third and one twentieth respectively of the level of investment in Britain.
    Mr. Hannam: Does my hon. Friend accept that those figures show our level of investment in the coal industry to be higher in relation to output than in France and West Germany? Should not priority now be given to achieving greater productivity and lower prices, so that we can capture the available coal markets?
    Mr. Shaw: I agree with my hon. Friend that the task before the industry is to increase its competitiveness by every means possible.

    Coal (Demand)
    Mr. Barronasked the Secretary of State for Energy what are the future energy demand projections for British mined coal.
    Mr. Giles Shaw: The Department's projections for long-term United Kingdom coal demand were given in the Department's proof of evidence to the Sizewell inquiry, copies of which were placed in the Libraries of both Houses on 7 October 1982. The projections envisaged a range of 100 million to 140 million tonnes in the year 2000.
    Mr. Barron: Is the Minister aware that it was estimated in 1974, in "Plan for Coal" that about 120 million tonnes of deep-mined coal would be extracted in 1985, and that the industry is now producing about 105 million tonnes? Will the Minister come clean over the Government's attack on the National Union of Mineworkers for not being willing to run down the coal industry by 3 million to 4 million tonnes per annum, when they have fallen short of the targets set out in "Plan for Coal"? Surely the Government should be even-handed in their approach to the industry.
    Mr. Shaw: The hon. Gentleman will recognise that the 1974 targets were established against a given set of circumstances and that such circumstances can easily be overtaken by events. The hon. Gentleman would be the first to claim that that must be so. He must now accept that the main task is to increase the volume of sales by competitively pricing coal at the level that the market demands.

    North Sea Oil (Orders)
    Mr. Coombsasked the Secretary of State for Energy what percentage of orders for the North sea oil industry were placed with British companies in 1982–83.
    Mr. Buchanan-Smith: In 1982 British companies gained 73 per cent. of a total of £2·2 billion in orders placed for goods and services for the United Kingdom continental shelf.
    Mr. Coombs: What are the prospects in this area in the current and future financial years?
    Mr. Buchanan-Smith: There is a high level of activity on the United Kingdom continental shelf because of the fiscal changes introduced by the Government, and for other reasons. Prospects are extremely good because of the orders that have been placed and new developments, not only where North sea oil exploration takes place, but throughout the rest of the economy.

  HOUSE OF COMMONS

    Chancellor of the Duchy of Lancaster (Parliamentary Questions)
    Mr. Robert Atkinsasked the Lord Privy Seal if he will list in the Official Report the responsibilities of the Chancellor of the Duchy of Lancaster in respect of which he answers parliamentary questions.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I shall answer questions on behalf of my noble Friend the Chancellor of the Duchy of Lancaster that relate to his Duchy of Lancaster responsibilities.
    Mr. Atkins: I thank my right hon. Friend for his copious answer. May I pursue with him a question about the magistracy? Bearing in mind the unique way in which magistrates are appointed by the Duchy, is my right hon. Friend entirely satisfied that people living in the area are fully aware of the ways and means of becoming magistrates in the county palatine?
    Mr. Biffen: If they are not, I very much hope that this exchange between my hon. Friend and myself will enable them to be so aware. I can assert that the system of appointment is very similar to that operated by my noble Friend the Lord Chancellor throughout the rest of the United Kingdom.

    Office Accommodation
    Mr. Dormandasked the Lord Privy Seal if he will make a statement on the progress being made in providing new office accommodation for hon. Members.
    Mr. Biffen: I refer the hon. Gentleman to the debate on 22 November.
    Mr. Dormand: Will the right hon. Gentleman confirm that what he said in the debate last week about the new building means that in no circumstances will the money set aside for that project be withdrawn? What is he doing to try to expedite the completion of phase 1? Does he agree that the five years before hon. Members will be able to use those offices is a long time?
    Mr. Biffen: I should like to say at once that the figure of £23 million that was mentioned in the debate as being available for expenditure on this project is committed in principle, and although it is subject to the normal PESC disciplines, I very much hope that it will be available to ensure that the project is completed in the time scale that has been set out.
    Mr. Crouch: Has my right hon. Friend had second thoughts about the proposal for preserving the undistinguished nineteenth century facade on 31 to 47 Parliament street? Has he had further thoughts about my protest last week that this should not be done and that, instead, we should give our architects an opportunity to design something to represent us in the twentieth century?
    Mr. Biffen: I thought that my hon. Friend put his argument with all the elegance of a preservationist rather than as someone seeking some monstrous new development in the facade of this phased development. Of course I have given thought to it, but I have come down unshakably on the side of the prejudice that I expressed at the commencement of the debate last week. If I were to do anything else I would not have been able to give the answer that I have just given to the hon. Member for Easington (Mr. Dormand).
    Mr. Shore: May I urge the right hon. Gentleman to be equally unshakable in his determination to see that the money is spent?
    Mr. Biffen: I cannot add to the answer that I have just given.

    Legislative Programme
    Mr. Adleyasked the Lord Privy Seal how many officials for whom he is responsible are involved in his function of planning and supervising the Government's legislative programme.
    Mr. Biffen: There are no departmental staff for whom I am responsible as Lord Privy Seal, but I am able to draw upon official advice as necessary.
    Mr. Adley: Is it not a fact that, in previous cases where British dependent territories have changed their status, legislation has been required? As, presumably, an amendent or annulment of the treaty of Nanjing will be proposed at some stage, may I ask whether my right hon. Friend's officials have yet turned their minds to this subject?
    Mr. Biffen: I am prudently advised to reply that while these talks are in progress it would not be appropriate to speculate about any future legislative requirement.
    Mr. Winnick: Whatever may be the number of officials involved in framing the legislative programme, is it not important that stupid Acts, such as the Act that has caused the present industrial dispute and brought the courts into industrial relations, should not be passed by the Government? Will the Leader of the House persuade his Cabinet colleagues to repeal the Act that has caused so much difficulty?
    Mr. Biffen: As I cannot recognise the hon. Gentleman's absurd premise, I cannot even offer an answer.
    Mr. Bottomley: Will my right hon. Friend consider setting down in advance the times that the House will rise for recesses and, if necessary, have some flexibility on the times that the House returns?
    Mr. Biffen: I appreciate my hon. Friend's point, but on the whole recess times are concluded without regard to the advice of officials.
    Mr. Dykes: As China and Hong Kong have suddenly been put on my right hon. Friend's agenda, notwithstanding his answer does he agree that in general terms it would be better to start making preparations for future decisions so as to get the best results for Hong Kong rather than wait too late, as 1997 approaches?
    Mr. Biffen: It is always flattering to be addressed as the Foreign Secretary, but I must tell my hon. Friend that I cannot go outside the terms of the reply that I gave to my hon. Friend the Member for Christchurch (Mr. Adley) on his original question.

    Disabled Visitors (Facilities)
    Mr. Hannamasked the Lord Privy Seal what plans he has for the improvement of facilities in the House of Commons for disabled visitors; and if he will make a statement.
    Mr. Biffen: The Accommodation and Administration Sub-Committee of the Services Committee is to review the matter in the near future.
    Mr. Hannam: Is my right hon. Friend aware that there is increasing frustration that the House fails to provide proper access for disabled people, especially to the Committee Rooms of Westminster Hall? Is he further aware that there is a piece of mobile equipment known as the Gimson Stairmate, which enables wheelchairs to go up and down stairs? If he is unable to find the funds to provide this piece of machinery, the cost of which would be less than half the cost of the stair rails that are being proposed, is he aware that we have an offer from the Royal Association for Disability and Rehabilitation to lend us free of charge a Gimson Stairmate for the use of diabled people?
    Mr. Biffen: I recognise the anxiety to which my hon. Friend refers. I am certain that the mobile equipment will be considered by the Accommodation and Administration Sub-Committee and that it will take account of the factors that have been mentioned.
    Mr. Meadowcroft: Will the right hon. Gentleman consider sympathetically the possibility of the Galleries that are currently reserved for special visitors being made available to disabled people, particularly where there is a need to translate into sign language for the deaf and when people need to keep their guide dogs close to them?
    Mr. Biffen: There should not be any difficulty about the provision of facilities for sign language transmission. As to the other point, which has been the cause of some difficulty in the past, I am certain that the Accommodation and Administration Sub-Committee will wish to consider that.
    Mr. Dormand: Does the Leader of the House agree that not only should the physical facilities for the disabled be improved, but that hon. Members' facilities for debating such problems should be improved? Will he give an assurance that there will no repetition of the scandalous unofficial three-line Whip that took place recently?
    Mr. Biffen: The hon. Gentleman will know that this matter has been raised several times in the House. I do not think that on this occasion I can go very much beyond what I have already said.
    Mr. Wrigglesworth: Have the Services Committee and the Leader of the House considered the possibility of

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    introducing some form of closed circuit television facility in another part of the Palace, not only for the disabled, but for the many others who cannot see our proceedings from the Chamber?
    Mr. Biffen: I am sure the hon. Gentleman will be the first to acknowledge that his question goes very much wider than facilities for the disabled and that, therefore, within the terms of this question, I cannot helpfully answer his point.

  CIVIL SERVICE

    Trade Union Representatives (Meetings)
    Mr. Canavanasked the Minister for the Civil Service what subjects he expects to discuss at his next meeting with trade union representatives of the Civil Service.
    The Minister of State, Treasury (Mr. Barney Hayhoe): Plans for my next meeting with the Civil Service unions have not yet been made.
    Mr. Canavan: Why are the Government hell-bent on destroying another 37,000 Civil Service jobs by 1988, which will mean a job loss in the Civil Service of 139,000 since 1980? How can the Government justify staff reductions in Departments such as the Department of Employment and the Department of Health and Social Security when over 3 million are unemployed, over 7 million are dependent on supplementary benefit and about 9 million retirement pensioners and many other deserving cases on low incomes depend on the services of those Departments?
    Mr. Hayhoe: The planned reduction of 6 per cent. between 1 April 1984 and 1988 is a net figure. There will be some staff increases in the prison department, for example. The objective is to obtain improved efficiency and better value for money.
    Mr. Eggar: What is the response of trade union representatives to the proposals in the financial management initiative, especially the important step of devolving decision-taking to more junior managers?
    Mr. Hayhoe: I have not had a meeting with the Civil Service unions about the financial management initiative.
    Mr. Kirkwood: Bearing in mind the concern that is being expressd within the confines of the trade union movement over the representations of forestry workers, will the Minister give an assurance that he will give early consideration to arranging a meeting with those involved?
    Mr. Hayhoe: I imagine that that will be a matter for my right hon. Friend the Secretary of State for Scotland or, perhaps, my right hon. Friend the Minister of Agriculture, Fisheries and Food. Responsibility will lie with one or other of my right hon. Friends in the first instance.
    Dr. McDonald: Is the Minister aware that cuts in DHSS staff have already meant that visits to pensioners to ensure that they have all the benefits to which they are entitled have been reduced to one call every three to four years and that the unemployed are not visited until nearly the end of their first year of unemployment? Does this not mean that pensioners and the unemployed are subsidising the cuts in the Civil Service and that they are in receipt of much poorer and much less efficient services as a result?
    Mr. Hayhoe: I do not accept that description, which is highly exaggerated and extremely partisan. The hon. Lady should address detailed questions on the DHSS or the Department of Employment to the responsible Ministers.

    Redundancy
    Mr. Chapmanasked the Minister for the Civil Service what is the redundancy policy in the Civil Service.
    Mr. Hayhoe: In reducing the size of the Civil Service, it is the Government's policy to rely on natural wastage to the greatest possible extent. By 1 April 1984 we shall have reduced Civil Service manpower by over 100,000, of which about 10 per cent. will be accounted for by redundancies.
    Mr. Chapman: I am grateful to my hon. Friend for that information. Will he confirm that the 14 per cent. reduction in the manpower of the Civil Service over the past four and a half years has been secured with few forced redundancies? Will he use his good offices to ensure that the further planned reduction of 37,000 which was referred to by the hon. Member for Falkirk, West (Mr. Canavan), is achieved, if possible, without any forced redundancies?
    Mr. Hayhoe: The reduction of 100,000 has been achieved with about 2,500 non-industrial civil servants being retired prematurely on the ground of redundancy along with about 8,000 industrial civil servants. Every effort will be made in future to avoid compulsory redundancy. The Civil Service is a large employer and resignations and retirements provide a great deal of elbow room for reducing the number of jobs within the service.
    Mr. Wilson: If the Minister is determined to pursue that policy in the terms that he has mentioned, will he take on board events in Dundee, where the local vehicle licensing office has been given a sentence of death and where there are no alternative Civil Service jobs because it is an area of high unemployment? Does he accept that the great volume of civil servants is to be found in plusher areas such as London, where there is no unemployment problem? When circumstances arise, such as those in Dundee, will he ensure that alternative work is brought into the area to secure jobs for those concerned? The civil servants at the vehicle licensing office at Dundee secured their jobs only four years ago.
    Mr. Hayhoe: The hon. Gentleman is wrong to suggest that the great majority of civil servants work in the London area. The details, which I have provided on many occasions, show that only about one in four or one in five civil servants work in the Greater London area. The hon. Gentleman should direct his specific remarks about redundancies in Dundee to the Minister concerned. Efforts will be made to provide jobs elsewhere for those in mobile grades within the Civil Service. Some redundancies have taken place among non-mobile grades.
    Mr. Leigh: Is my hon. Friend aware that one of the most popular policies of the Government in my constituency is that which has led to the prospect that we shall soon have the smallest Civil Service since the war? Does he understand that many of my constituents ask 'why the Civil Service should be the only section of the community that is immune from compulsory redundancies?
    Mr. Hayhoe: My hon. Friend does not have to wait for the news that we have the smallest Civil Service since the

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    war. That has already been achieved. As I have explained, the Civil Service is an extremely large employer and it is possible, by changes in recruitment policy and by using the processes of natural wastage, retirements and resignations, to achieve the elbow room that is necessary to obtain job reductions.
    Mr. Ioan Evans: Does the Minister realise that the public service is weakened by cuts in the Civil Service? In my constituency there is talk about closing the local tax office. If the closure takes place, many taxpayers will have to travel a great deal further to deal with their tax problems. Such a closure would be a false economy.
    Mr. Hayhoe: We must have a public service that is efficient and gives value for the taxpayer's pound. It is the Government's intention to continue to introduce measures to achieve that. If we have an inefficient service that fails to give value for money, there will be a burden on the economy which, at the end of the day, will cost jobs rather than maintain them.
    Mr. Wrigglesworth: How many of those involved in the planned reductions of manpower within the Civil Service have been transferred to other parts of the public sector?
    Mr. Hayhoe: With notice, I could try to provide that figure for the hon. Gentleman.

    Civil Servants (Performance Review Form)
    Mr. Eggarasked the Minister for the Civil Service if he will revise the annual performance review forms for civil servants.
    Mr. Hayhoe: Yes. We are currently discussing with Departments and the Civil Service unions major revisions to the procedures for staff reporting and appraisal.
    Mr. Eggar: As almost 90 per cent. of civil servants are judged to be above average in their performance, is the revision not long overdue? Will my hon. Friend confirm that any such revision will absorb the introduction of merit pay?
    Mr. Hayhoe: The reform is a useful one to be introducing. I fear that my hon. Friend may have misunderstood figures that I gave earlier this year, including the 90 per cent. rating. The 90 per cent. figure could represent those civil servants who are shown on the appraisal form to be working competently or better. Merit pay is under consideration.

Ophthalmic Services
3.30 pm
The Secretary of State for Social Services (Mr. Norman Fowler): With permission, Mr. Speaker, I shall make a statement on opticians and competition following the report of the Office of Fair Trading published earlier this year.
At the end of 1981 the Office of Fair Trading was asked to report on the effects of the Opticians Act 1958 upon competition in the supply of opticians' services. It found that the requirements imposed under that Act led to restricted competition and resulted in unnecessarily high prices. In particular, the Office of Fair Trading criticised the rules limiting opticians' advertising and the monopoly on the supply of glasses granted to opticians and doctors. The Government accept these conclusions and believe that the interests of consumers would be better served by acting upon the OFT report. Accordingly, the Government intend to bring forward legislation to deal with two main areas.
First, we propose to take action on advertising. At present, the rules made by the General Optical Council allow no general advertising of the prices of glasses or advertising on such matters as the speed of service. This handicaps the consumer who wishes to get the best value for money and also holds back the optician who can provide a better deal or wider choice. The General Optical Council reviewed its rules in the light of the report by the Office of Fair Trading, but the changes that it proposed came nowhere near to those needed. Legislation will therefore be introduced to enable the rules operated by the General Optical Council to be amended to allow freer advertising. These powers will be used carefully. In particular, we will draw a distinction between the professional function of sight testing and the commercial activity of selling glasses. The aim will be to ensure that the public are provided with more information about the prices of glasses.
Secondly we propose to take action on the monopoly to dispense and sell glasses. There is still a need for public protection in certain areas such as dispensing to children and fitting contact lenses. However, all laws which create a monopoly have to be examined to see whether, under the cloak of public protection, there is not simply too much protection for the seller. We have concluded that this is the case with opticians. The legislation which the Government will introduce will therefore allow non-opticians to sell glasses under carefully prescribed conditions. The conditions laid down will ensure that no risks are taken with people's sight. All sales will have to be made against a recent prescription, following a sight test by an appropriately qualified optician or doctor, and no one other than a qualified optician or doctor will be able to sell glasses for children or to fit contact lenses. It is our intention to maintain the present arrangement for the registration of qualified opticians and the public will therefore be able to make a choice between the services of a registered optician and those of other competitors.
The action that I have announced on advertising and the end of the dispensing monopoly will, I believe, bring down the price of glasses. This will have an effect on the general ophthalmic service. At present, it provides free sight tests by either an ophthalmic optician or a specially qualified doctor. We intend to continue this arrangement. It also provides a range of frames and lenses free to
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children and families on low incomes. This free provision will also continue. But other people who currently buy NHS glasses will in the future be able to obtain a wider selection of non-NHS glasses at reasonable prices. Although the NHS will continue to provide free sight tests and to supply glasses to the present exempt groups, there will no longer be any need for the general supply of NHS glasses. The legislation I shall shortly introduce will give effect to this.
My right hon. Friends the Secretaries of State for Scotland and for Northern Ireland will also bring forward proposals to give effect to these changes. We believe that the changes I have announced will enable greater competition to take place, provide greater choice and, above all, have the effect of bringing down the prices of glasses for the public.
Mr. Frank Dobson: I assure the House that the Opposition share the general concern about the high cost of non-National Health Service frames. However, we are worried about certain aspects of the right hon. Gentleman's statement, although we welcome the fact that the dispensing of glasses must still be preceded by a sight test carried out by a qualified practitioner. We are worried that the advertising changes and the relaxation of the rules so that non-qualified people may sell glasses will result in small business opticians, especially those in rural areas, losing out to the major multiples, who can afford the cost of advertising.
Will the staff of a shop selling glasses be properly trained to interpret prescriptions which are given them by the person who brings in the prescription? If not, mistakes could occur, and they could be serious. What procedures does the Secretary of State propose to provide a redress for customers against a shop that sells glasses that are different from those that were prescribed?
More importantly, does the Secretary of State's statement about the general supply of NHS glasses mean that there will no longer be a general supply of NHS glasses and that NHS frames and lenses will be provided only to those poor groups and under 16-year-olds who are described in the statement as exempt groups? If that is so, it is a severe curtailment of the area covered by NHS provisions and means the introduction of privatised marketing into a sphere where it does not now exist.
Does the Secretary of State agree that if that is the import of his statement it will mean that people who cannot afford to go outside the NHS because they are poor will demonstrate that they are poor, or are receiving supplementary benefit or family income supplement, by the nature of the glasses that they wear?
Mr. Fowler: The hon. Gentleman's last point is not a very good one. I am grateful for the limited support: that he has expressed for the measures that I have announced.
Virtually the only advertising at the moment is for frames, which appear in the windows of opticians' premises. Opticians cannot advertise in the press or on television on such matters as price and speed of service, or even on whether they are open. They cannot, for example, display an advertisement that says, "Never knowingly undersold". We believe that that area needs reform, and that is why we have brought forward these other proposals.
There will be checks and conditions on non-optician sellers. Clearly, they should be able to read the

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prescription, and we shall consult the profession on this matter. Remedies will be open to the public under the Sale of Goods Act, but we shall have further talks about any additional protection that is required. This will become part of a Bill that will be put before the House shortly, and therefore we shall have time to go into all these aspects.
On the hon. Gentleman's point about general ophthalmic services, free sight tests are now provided and that will continue. Free glasses are provided for exempt groups—children and low income families—and that, too, will continue. It is the provision of glasses for nonexempt groups that will be withdrawn from that market. We believe that the present non-exempt customer will be able to obtain a wider range of glasses at comparable prices as a result of the proposed deregulation of the market.
The fundamental change is that we believe that the most important person is the customer. Customers should have the right to make an informed choice and to have more information and lower prices.
Mr. Robert McCrindle: Is my right hon. Friend aware that he seems to have found a good compromise between maintaining the professional status of the optician and opening up the benefits of competition for the consumer? Will he confirm that there is no intention of moving towards the North American system in which spectacles can be purchased without prescription over the counter of a department store? Secondly, how recent will the prescription need to be for glasses to be obtained under the new arrangements outlined in his statement?
Mr. Fowler: I hope that what my hon. Friend has said will be noted, as it is absolutely correct. With regard to checks, sales will be made against recent prescriptions, by which we mean prescriptions made within the last two years.
Mr. Willie W. Hamilton: Is the Secretary of State aware that the Opposition welcome the possible reduction in the price of glasses so long as we have an absolute and unqualified assurance that the quality of service to the patient will not be jeopardised? On the point raised by the hon. Member for Brentwood and Ongar (Mr. McCrindle), will the Secretary of State make illegal the sale of glasses by retail outlets such as Woolworth's, as anyone who has seen that kind of treatment must be appalled by it? Will he also assure the House that there will be separate Scottish legislation and that Scotland will not be tacked on to a United Kingdom Bill?
Mr. Fowler: The legislation covers the whole of the United Kingdom, but my right hon. Friend the Secretary of State for Scotland will make a separate statement about the position in Scotland.
Mr. Hamilton: When?
Mr. Fowler: Very soon, I hope.
Mr. Hamilton: In the House?
Mr. Fowler: The hon. Gentleman also made an important point about checks. As I have said, any sale must be made against a recent prescription and it will be a condition on the non-optician seller that he must be able to read the prescription. We shall consult the profession on that aspect. It should be pointed out, however, that
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about two thirds of prescriptions are now made up by prescription houses where staff do not need to be qualified in the way that professional opticians are. The aim is to preserve the medical checks that both the Government and the Opposition want, while producing a better service and lower prices for the public by the introduction of competition.
Mr. Peter Viggers: Does my right hon. Friend agree that the present system has two grave shortcomings, neither of which has much to do with maintaining standards? First, the interlinking of sight testing with the sale of glasses and frames maintains high prices. Secondly, restrictions on advertising the services offered help to maintain high prices and prevent proper competition. Is my right hon. Friend aware that the measures announced today will undoubtedly reduce prices for the consumer?
Mr. Fowler: I am grateful to my hon. Friend for his comments. There is no doubt that the present restrictions on advertising prevent full competition and to some extent discourage new entrants. I believe that our proposals will lead to more competition, better services and lower prices.
Mr. Lewis Carter-Jones: Will the Secretary of State give a firm promise that routine examinations for possible glaucoma will in no way be reduced either for the rich or for the poor as a result of the Government's legislation?
Mr. Fowler: Eye tests will continue to be free, as at present. That will remain unchanged.
Mr. Tim Eggar: As there has been such a wide welcome for my right hon. Friend's statement, one wonders why previous Governments did not introduce similar reforms. Will my right hon. Friend consider other professions, with a view to similar reforms? In the present case, will he explain why there are to be any restrictions at all on advertising?
Mr. Fowler: I am grateful for my hon. Friend's comments, but I know that he would not wish to push me into areas for which the DHSS is not responsible. As for restrictions on advertising, the important distinction is between the selling activities of the optician and the sight testing function. That is the distinction that we seek to make.
Mr. Michael Meadowcroft: Does the Secretary of State accept that the present two-year definition of a recent prescription may not be justified if the rules are changed? Does he accept that the difficulties of having separate dispensers may be far more acute in the future, because, although two thirds of prescriptions now come from prescription houses, the position may be very different when an optician is no longer responsible for final delivery of the spectacles? Will he therefore consider registration of dispensers rather than more general proposals about bringing in certain rules to test them?
Finally, when the Secretary of State says that there may no longer be any need for the general supply of National Health Service glasses, does he agree that in some instances people may feel unable to enter general prescribing because of their lack of funds? Does he accept that there will be severe difficulties unless there is a better standard of NHS provision?
Lastly——
Mr. Speaker: Order. I think that three questions are plenty.
Mr. Meadowcroft: Perhaps I may just finish the point, Mr. Speaker. As the hon. Member for Holborn and St. Pancras (Mr. Dobson) said, there is a danger——
Mr. Speaker: Order. That is unfair.
Mr. Fowler: We shall certainly look at the hon. Gentleman's point about the two-year definition of a recent prescription. No doubt that will be dealt with in Committee when the legislation providing for the change is considered. In view of the hon. Gentleman's comments, I hope that he supports the general thrust of the changes.
Mr. Meadowcroft indicated assent.
Mr. Fowler: I am glad to see that the hon. Gentleman nods his assent to that.
Im making regulations for non-opticians, we shall wish to consider the matter very carefully before going along with the hon. Gentleman's suggestion. Clearly, there must be a checking process, but we do not wish to end up merely pursuing the monopoly in a different way.
Mr. Chris Smith: Is the Secretary of State aware that there is an increasing tendency for small independent ophthalmic practices to be taken over by large conglomerates, many of them with other than optical interests, and in one case a tobacco company? Is he aware that that trend is a matter of great concern to professional and academic circles in the ophthalmic world? Is he further aware that his proposals may lead to an increase in that trend and cause great anxiety about the quality of service provided for the public?
Mr. Fowler: I am sure that it would be out of order for me to make any comments about eyesight. It is a point, however, that we shall bear in mind. It is for the public to decide. They will have a free choice. Registered opticians will be able to put their case. Many people will continue to go to registered opticians—there is no doubt about that. We are saying that there should be greater choice than there is at the moment.
Mr. Ioan Evans: While we welcome this measure if it means a reduction in costs to the consumer, will the Secretary of State look more positively at the possibility of increasing the range of National Health Service spectacle frames, so that people need not go to the private sector?
Mr. Fowler: No, we want to go the other way. As I said in my statement, and as the hon. Gentleman recognises, we are keeping to the National Health Service supply of National Health Service frames for children and other exempt groups. We may ultimately be able to reach a position where people are reimbursed or are given a cash voucher so that they can go into the market if they choose. If that were to develop, it would be a better way of proceeding.
Mr. Charles Kennedy: I welcome the Secretary of State's concern for the consumer, which is plainly right, and the lower prices to which his proposals will lead, but at the end of his statement, he talked about there no longer being a need for
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any general supply of NHS glasses. If his proposal means introducing some form of means testing, that will be a retrograde step.
Mr. Fowler: I have made it clear that we intend to keep the present exemptions for children and low-income families.
Mr. Dobson: May I remind the Secretary of State that this matter arises because of anxiety about the high cost of frames produced privately and supplied outside the National Health Service? Therefore, why has the Secretary of State announced the abolition of NHS supplies of frames and lenses, which are already the cheapest on the market? What is the average cost of a pair of NHS glasses, and the average cost of a pair of privately supplied glasses, with privately produced frames and lenses? If the right hon. Gentleman is so confident of the private sector's price-cutting abilities, why will he not allow the NHS to continue to provide glasses so that it can compete? Is it that his friends in the industry are frightened of competition from the NHS?
Mr. Fowler: The hon. Gentleman's first question was rather more impressive than his summing-up question. He must be aware that the DHSS does not produce frames and lenses. They are produced, under contract, by the private sector. As we have announced a change in advertising and the end of the dispensing monopoly, that clearly has implications for the general ophthalmic service. I do not believe that it is reasonable to continue in the way that we have in the past and ignore the fact that these changes will take place.
There is no way in which I can give the hon. Gentleman the average cost figure, for the good reason that there are so many differences—[Interruption.] Labour Members may laugh, but there are many differences in prescriptions. The DHSS is involved in the design of National Health Service glasses. It may be the hon. Gentleman's vision of the brave new world, but I am bound to tell him that I am not sure that a Government Department is the best body to be involved in the cosmetic design of spectacles. I believe that competition will bring the prices down, and I think that the hon. Gentleman will see that.

Ophthalmic Services

  NORTHERN IRELAND COMMITTEE
  Ordered,
  That matters arising from the Energy Discussion Document issued by the Department of Economic Development in July 1983, being matters relating exclusively to Northern Ireland, be referred to the Northern Ireland Committee.—[Mr. Donald Thompson.]

  STATUTORY INSTRUMENTS &c.
  Mr. Speaker: With the leave of the House I shall put together the Questions on the three motions relating to statutory instruments.
  Ordered,
  That the draft Pneumoconiosis etc. (Workers' Compensation) (Payment of Claims) (Amendment) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &c.
  That the Education (Approval of Special Schools) Regulations 1983 (S.I., 1983, No. 1499) be referred to a Standing Committee on Statutory Instruments, &c.
  That the British Gas Corporation (Transfer of Shares of Subsidiaries) (No. 2) Order 1983 (S.I., 1983, No. 1667) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Donald Thompson.]

The Royal Navy
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
3.55 pm
The Minister of State for the Armed Forces (Mr. John Stanley): It is a pleasure to open our debate on the Royal Navy.
I think that it would be fair to say that, of the three services, the one that has engendered the greatest controversy in recent years as to its role—and therefore as to its size and shape—is the Royal Navy.
If one accepts our NATO obligations on the central front, and our remaining defence commitments outside the NATO area, the roles and dispositions of the Army leave little room for debate.
Again, the requirements for the defence of the United Kingdom's air space and our combat aircraft obligations on the central front largely predetermine the role of the Royal Air Force.
However, the role of that remarkable and unique synthesis of tradition, skill, experience, and steely endeavour that are the Royal Navy and Royal Marines continues to be a matter of debate.
Almost until the first world war, the British Navy reckoned to be able to match the navies of any two of the leading naval powers of the day. By the beginning of the second world war those days had clearly gone for good.
By 1945, the Royal Navy was well outnumbered by that of the United States, and since the 1950s our Navy has for the first time for centuries been outstripped in size by that of a potential aggressor—the Soviet Union. Against that background, many have asked the question, "Whither the Royal Navy?" The answers at the two extremes are clearly non-starters.
The old policy of Dreadnoughts, or their modern equivalent of strike carrier battle groups, in every ocean of the globe is way beyond the country's economic grasp. Equally, the suggestion at the other extreme that Great Britain can now simply make do with a coastal Navy would represent a wanton waste of one of NATO's key defence assets—as the Royal Navy most certainly is—while manifestly failing to meet Great Britain's own maritime defence needs. That option, too, should be discarded.
The right course for the Navy clearly lies between those two extremes, and I should like to set out how the Government see that midway role for the Royal Navy—within the NATO Area and outside.
The starting point for any consideration of the Navy's role within the NATO area must be the simple inescapable fact that sea control remains critical to the defence of our islands and to the continent to which they belong.
A sufficient measure of sea control in the Atlantic, the Western approaches, the Channel, the North sea and in the Norwegian sea will be vital to NATO's ability to counter aggression by Warsaw pact conventional forces with conventional means.
Sea control is therefore one of the factors that bears on the issue of the nuclear threshold. In any conventional war, the Warsaw pact would enjoy a significant geographical advantage. The Soviet Union is in a position to reinforce its troops in central Europe swiftly and easily by land,
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whereas NATO suffers the significant handicap of being separated from its most powerful ally, and from the bulk of that ally's material and equipment, by a major ocean.
NATO's reinforcement planning rests on many millions of tons of equipment and war stocks having to be transferred across the Atlantic by sea.
In mid Atlantic the ship-borne reinforcements will be exposed to the very substantial numbers of Soviet submarines, most of which are nuclear powered. In the Channel and the North sea, the Soviet submarine threat remains, but, in addition, the threat from Soviet mining markedly increases as does the threat from the air.
The Royal Navy, as the largest navy of the European members of NATO, has a key contribution to make to NATO's vital sea-borne reinforcement. It has to be able to intercept Soviet submarines before they break into the Atlantic, and for this purpose the Royal Navy contributes two anti-submarine warfare groups to NATO—each including an Invincible class carrier. It contributes also to NATO's mine clearance requirements in the Channel and the North sea.
Within the NATO area, the demands on the Royal Navy are not only to help protect the sea routes along which American, and indeed British, reinforcements need to flow into continental Europe; it has other crucial roles as well. It has the vital task of safeguarding the exits from our home ports of key naval assets—especially our own strategic deterrent force, and also the United States' submarines based at Holy Loch.
The Royal Navy has to take the initial lead in protecting NATO's northern flank from seaborne attack. The Navy also provides the United Kingdom component of the United Kingdom-Netherlands amphibious force—NATO's only readily available amphibious capability—with its sea transport, its amphibious landing ships and its essential support and supplies.
The Royal Navy's NATO roles all add up to a very considerable catalogue of responsibilities.
Sir Patrick Wall: Is my hon. Friend aware that the hon. Member for Sheffield, Attercliffe (Mr. Duffy) and I recently toured the Atlantic bases, and on each occasion we were told that there were insufficient assets to carry out the tasks that he enumerated? Why does my hon. Friend's statement therefore talk about reducing our frigate force in future years?
Mr. Stanley: I shall deal with that matter in some detail later.
The Navy's clear ability to discharge those NATO responsibilities bears directly on our whole deterrent posture.
The Soviet Union will be as aware of NATO's dependence on seaborne reinforcement as we are. Any perception by the Soviet Union that NATO was unable to safeguard that reinforcement would only weaken deterrence and perhaps lower the nuclear threshold.
For NATO, the simple geographical fact of the Atlantic ocean makes deterrence on land and deterrence at sea indivisible. As a lynchpin of NATO's deterrence at sea, the Royal Navy must without question be shaped predominantly around its NATO role.
With the Royal Navy's NATO commitments being so extensive, it is, not surprisingly, asked whether the Navy should have an out of area role at all. The NATO area

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undoubtedly has to come first. But if it has to be predominant, it does not have to be exclusive. Nor should it be.
The offensive capabilities ranged against us are certainly far and away the greatest in Europe. But, mercifully for nearly 40 years now, peace in Europe has been preserved.
Mr. Dick Douglas: Before the Minister moves away from the issue of Europe and the north Atlantic, will he comment on the strains that the Falklands operation imposes on the Navy?
Mr. Stanley: I think that the hon. Gentleman is referring to the matter to which my hon. Friend the Member for Beverley (Sir P. Wall) referred. I shall refer to destroyer and frigate numbers later.
Outside the NATO area, the historical pattern is very different. The offensive capability ranged against us is certainly far less severe than in Europe but the likelihood of our having to use our Navy in earnest seems far greater.
Since 1945 the Royal Navy and Royal Marines have been involved in well over a dozen conflicts ranging from the Korean war to the Falklands. It has also taken part in seven service assisted evacutions from overseas countries. None of these operations was connected with our NATO responsibilities.
The events of the whole of the post-war period, reinforced by those of the last year or two, make it clear that Britain cannot sensibly or realistically plan on confining its maritime role solely to its NATO tasks.
Britain has formal defence responsibilities for a dozen dependent territories, all of which, with the exception of Gibraltar and Bermuda, are outside the NATO area. There are groups of British people all over the world who might on some future contingency require a service assisted evacuation.
There is no doubt at all that worldwide—and particularly perhaps in the Caribbean, Africa, the Gulf, and as we are seeing right now with our current task group deployment to the Indian ocean, south Pacific, and the far east—the visible presence of a Royal Navy ship serves Britain and British interests extremely well. For all these reasons, the Government believe that the Royal Navy, even though its out of area operations will have to be undertaken by ships whose primary role is a NATO one, should continue to perform a role outside the NATO area. That calls for a balanced Navy that can continue to perform a multiplicity of tasks—the strategic nuclear role; the anti-submarine role from the air, the surface and from under the surface; the anti-surface role again from the air, the surface and from under the surface; the mining and the mine clearance role; and the amphibious role.
I shall now set out how we see these tasks being met in terms of numbers and types of ships. My hon. Friend the Under-Secretary of State for Defence Procurement will deal with a number of shipborne weapon systems and procurement issues and the dockyards that are, I know, of interest to the House when he winds up.s
In considering the Navy's requirements, I want to start with submarines. In terms of the sea denial that can be exercised by a single vessel, submarines have no equal. Today's torpedoes and submarine-launched missiles give a degree of precision and certainty of destruction of another ship or submarine that are at least as good as—
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if not better than—the weapons carried on a surface ship; and submarines have a higher degree of invisibility and therefore of invulnerability than surface ships.
It is ominous, but not at all surprising, that the Soviet Union has been devoting prodigious resources to submarine construction. The Soviet Union now has the largest fleet of nuclear powered submarines in the world. Since 1970, the Soviet Union has acquired about 100 nuclear powered submarines and nearly 30 diesel powered submarines.
By way of contrast, though the United States has substantially improved the missiles on its SSBNs, it has brought only three additional SSBNs into service compared with about 50 by the Soviet Union. Again, since 1970, the United States has brought only 38 new SSNs into service compared with about 50 by the Soviet Union. The United States has built no new conventional submarines—indeed, it no longer has any operational—compared with nearly 30 new ones brought into service by the Soviet Union.
Given the scale of the Soviet submarine menace and the unique characteristics of submarines, I am in no doubt that the decision taken by Sir John Nott and by the Government in 1981 to increase the proportion of the Navy's resources going to submarines was entirely right. The potency and relative invulnerability of nuclear submarines, their sea denial capability—demonstrated so convincingly in the Falklands conflict—and the fact that we are only one of three countries in the West that are willing and able to build them puts a particular onus on the British Navy to establish and maintain a significant nuclear submarine force.
Mr. A. E. P. Duffy: Does the Minister agree that that also puts an onus on the Government to improve on the ordering of SSNs by the previous Labour Government? Why have the Conservative Government ordered only one, and that only a few weeks ago?
Mr. Stanley: The hon. Gentleman is mistaken. We now have 12 SSNs in service, with four more on order. We shall be ordering another within the next few weeks.
Mr. Duffy: It is important that the House is clear on this matter. The Minister will appreciate that the nub of the debate is the number of ships. We intend to join the Minister on this battle ground. The Conservative Government have ordered only No. 18.
Mr. Stanley: The hon. Gentleman is incorrect—he is referring to No. 17. We are ordering No. 18 within the next few weeks. My speech will make it clear to the House that the Government are doing far more than the previous Labour Government did for conventional expenditure on the Navy.
Important as nuclear submarines are, conventional powered submarines should not be regarded as their poor relation in any way. In the shallow waters and acoustic conditions of the continental shelf and the Mediterranean, our diesel submarines have a degree of invisibility that is equal to, and indeed sometimes greater than, a nuclear powered submarine.s
We attach much importance to making progress with the new class of 2400 conventional submarine to replace the Oberons, the newest of which has been in service for

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16 years and the oldest for 23 years. We were, therefore, very glad to announce the order for the first of class 2400 boat earlier this month.
I wish to refer to the Trident programme. It is a matter of regret, and indeed of some surprise, that Trident continues to be opposed by the Opposition parties. It is a matter of surprise because the NATO and British defence case for Trident, which the Opposition parties oppose, is essentially the same as the defence case for Polaris and for Chevaline, which they supported. The threat and the defence realities have not changed—it is simply that the Opposition parties have changed.
Since June I have, of course, been reflecting on the whole rationale of the possession of nuclear forces, and especially on the possession of strategic nuclear forces. The best exposition of that rationale that I have found is as follows:
"Strategic nuclear forces constitute the ultimate deterrent. Without them NATO's other forces would not present a credible deterrent to the Warsaw pact, with its strategic nuclear arsenal. Thus they help to deter attack at any level, and would also deter attempts to escalate a conflict should one begin.
But the possession of nuclear weapons is not in itself sufficient to ensure deterrence. It must be made evident to a potential enemy that we would be prepared to use them if we had to. Therefore, as an essential part of its defensive strategy, NATO has developed plans and procedures for the use of nuclear weapons.… At the strategic level, recent changes in American targeting policy give the President a more flexible range of retaliatory options against Warsaw pact military targets, thereby making the threat of NATO retaliation more credible than if the only option available were to strike cities. NATO can, therefore, use its nuclear weapons in a controlled and effective way. Deterrence becomes more credible, and as a consequence it is less likely that NATO would ever have to use nuclear weapons at all.
This strategy and these forces not only deter aggression against western Europe; they also protect members of the Alliance from attempts at coercion by the threat of attack, and from other forms of direct and indirect political pressure deriving from military power. In this way, the Alliance preserves for all of its members the right to pursue their own destiny."
I could not improve on that exposition. Those are the words of the 1976 defence White Paper, published by the Government of which the right hon. Member for Lewisham, Deptford (Mr. Silkin), who leads for the Opposition on defence matters, was a member. It was published by the Government of which the right hon. Member for Plymouth, Devonport (Dr. Owen), who now leads the Social Democratic party, was a member. It was published by the Government about whose policies the leader of the Liberal party was sufficiently enthusiastic to perpetuate in office.
The case for the NATO strategic deterrent and for Britain's contribution to that deterrent is as compelling today as it was in 1976, and, although others may find it necessary to put expediency before responsibility, that is not the case on the Conservative side of the House.
Mr. John Silkin: The Minister did me the courtesy of mentioning my name. I had not intended to intervene in his soliloquy, but now feel that I should. What percentage of new naval equipment does the Minister think the cost of Trident will average in its peak years? Does he agree that it is 50 per cent? The Secretary of State's predecessor agreed that figure.
If that is the figure, and if the choice is between a strong conventional Navy and a strategic nuclear weapon already in the possession of our allies—nothing in the defence
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White Paper that the hon. Gentleman quoted states that Britain should have it, simply that NATO should have it—why are we wasting our money on a status symbol that is not of the slightest use to the Alliance?
Mr. Stanley: I am grateful to the right hon. Gentleman for confirming his endorsement of NATO possessing nuclear weapons. Having endorsed that, it is not possible to pursue an argument of principle against Britain having nuclear weapons. The next part of my speech deals with the practical question of the relationship between the cost of our nuclear programme and the cost of our conventional programme.
I wish to touch on one aspect of the Trident programme. I hope that we shall not hear in this debate, as we have heard in the past—although I may be disappointed, having listened to the right hon. Gentleman's intervention—Opposition Members saying that Trident should be scrapped to increase Britain's spending on conventional defence. Coming from the Opposition, that line is particularly rich.
The fact is that the Opposition campaigned at the last election for a massive slashing of Britain's conventional defences. They committed themselves in their manifesto to bringing Britain's defence spending down to the average of the major European members of NATO. That would have meant that Britain's defence budget would have to be cut by at least one third, which would be a cut of about 10 times the cost of Trident over its procurement period.
What is quite clear is that the Opposition are firmly committed to a defence policy of both depriving Britain of her nuclear deterrent and of slashing Britain's conventional defences at the same time. Both would be equally irresponsible.
I come now to the issue of surface ships.
Mr. Silkin: Will the Minister answer my question? He said that in his speech he would deal with it.
Mr. Stanley: I have already answered an important aspect of the right hon. Gentleman's question. I have shown that the degree of cuts to which he and the Labour party committed themselves at the last election was about 10 times the cost of the procurement of the Trident programme.
The overall cost of the Trident programme, over the whole of the procurement programme, represents about 3 per cent. of the total defence budget and about 6 per cent. of the equipment budget. Those are the figures over the procurement period.
Mr. Silkin rose——
Mr. Stanley: I have already answered the right hon. Gentleman.
Mr. Silkin rose——
Mr. Speaker: Order. I am not sure whether the Minister is giving way.
Mr. Stanley: I shall give way.
Mr. Silkin: The Minister obviously did not hear what I said; otherwise he would not have claimed to have answered me. I asked him whether he would corroborate what Sir John Nott said, which was that new naval equipment during the peak years of Trident—that is five peak years, not spread over 100 years, 40 years, or 80 years—equalled 50 per cent. of new naval equipment. Is that correct? Was Sir John Nott speaking the truth?
Mr. Stanley: I should have to examine what Sir John Nott said. Nevertheless, I can point out to the right hon. Gentleman that it is completely misleading to try to articulate a point of policy that is based on the most extreme manifestation of the profile of cash flow. It must be judged over the entire procurement period in relation to total defence and equipment spending. As I have already said, the burden of the Trident programme is relatively small on those two counts and it is a fraction of the total reductions in conventional spending to which the right hon. Gentleman committed himself at the general election.
I shall now deal with surface ships and begin with what has been and remains the most problematical area—destroyer and frigate numbers. It might be concluded from what I have been saying about submarines that we could, with advantage, put still more of our Navy below the surface. However, I believe that that would not be right. Potent as submarines are, they have their own limitations. They can complement, but they cannot replace, surface ships.
The Royal Navy needs its surface ships to maintain its balanced capability. The question is how many and in particular, how many frigates and destroyers, which comprise 90 per cent. of the hulls of the major units in the surface fleet?
My right hon. Friend the Secretary of State and I have, of course, considered most carefully, following the Falklands conflict, what is the optimum long-term size of the destroyer and frigate fleet within the finite limits of the defence budget. We have concluded that the judgment made in 1981—that a fleet of about 50 should be the aim—was the right one. Significantly more destroyers and frigates could be accommodated only by making substantial cuts in either numbers or capabilities elsewhere in the naval programme and that would not be justified.
I ask those who think 50 is too few to consider these points. First, the numbers business ignores the impressive qualitative improvements that are being made. The new ships that are replacing those coming out of service and those which were lost in the Falklands war represent a major advance in capability.
Take the type 23, the approved design of which was announced in October, and compare it, say, with the Leander that it will replace. The type 23 frigate will have far greater offensive power and will be a much more efficient ASW platform than the Leander. It will have a markedly reduced radar "signature" due to its unique design features. It is planned to have an EH101 helicopter, of a vastly more advanced capability than the Leander's Wasp. It will have greater sustained speed, and longer endurance between refuelling. It will also have an electronic warfare, sonar, and communications fit greatly superior to those on today's Leanders.
I could go on, but I think that it is clear that a destroyer/ frigate force of 50 in the 1980s will have a hugely improved capability compared with the same force of even a decade ago.
Mr. Paddy Ashdown: I am grateful to the Minister for giving way, as he has already done so several times. Before he leaves the issue of numbers, and as he has drawn comparisons with the building programme under the Labour Government, does he accept that the Conservative Government have built only three major ships as compared with Labour's 15? Bearing in mind the
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average life expectancy of a modern ship—20 years—does he agree that, unless the building programme is significantly increased, a surface fleet of about 20 ships rather than 50 can be predicted? Furthermore, does he agree that if he now speeds up the programme to reach the levels of which he is talking he will have to do so during the peak period of Trident expenditure—towards the end of this decade? Does he agree that that is why the fact that Trident will represent 50 per cent. of expenditure at that point is so vital for future naval procurement?
Mr. Stanley: I assure the hon. Gentleman that his figures as to the direction of the destroyer and frigate fleet are without foundation. Our aim of 50 ships is fully capable of being accommodated within our programme. A substantial volume of orders is in progress.
The second point that the House should bear in mind is that we are looking at ways of supplementing our present destroyer/frigate fleet. There are certain peace time tasks that are traditionally carried out by destroyers and frigates but that do not necessarily have to be carried out by a ship of such sophistication. I am thinking of certain facets of sea training such as navigation. There is some scope for having those tasks carried out by non-RN vessels. Thus we are, for example, currently chartering MV Northella to carry out navigation training and trials in the Clyde area. We are also deploying three offshore patrol vessels to the Falkland Islands.
I have asked the Navy Department to investigate whether that use of less sophisticated ships to carry out certain destroyer and frigate tasks could sensibly and cost-effectively be extended.
Thirdly, we have the option of running on for short periods existing destroyers or frigates that are due to come out of service. I can announce today that we have decided to run on for one further year two Rothesay frigates that were due to pay off in 1984. That will give us a total of 55 destroyers and frigates in the running fleet next year.
Mr. Peter Viggers: I do not know whether my hon. Friend intends to deal with merchant shipping and the widely felt concern that that fleet should be considered part of our surface defences in times of emergency. Is he aware that we can offer patronage to civilian ships by offering them work in runs to the Falklands? Are all of those contracts being offered to British ships? If not, why not?
Mr. Stanley: We are offering the maximum possible number of charter opportunities to British ships. We always use British ships if our requirements can be met satisfactorily by a ship in the British merchant marine. I shall refer to the merchant marine's contribution to naval support later. My hon. Friend is right to say that it is important.
The constraints on the numbers of destroyers and frigates are not created simply by our submarine commitments. They are also created by the need for other specialist surface ships that are imperative for a balanced Navy.
More than 15 years ago, the then Secretary of State for Defence, the right hon. Member for Leeds, East (Mr. Healey) said—he will not like to be reminded of this:
"we would not be justified in prolonging the life of our carrier force after 1975 with a new ship in the light of our likely overseas commitments in the longer term."—[Official Report, 5 July 1967; Vol. 749, c. 1802.]

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Fortunately, the Navy, having lost the carrier battle with the right hon. Gentleman, eventually won the war. Without Invincible and an adapted Hermes, the recovery of the Falklands could not have been contemplated. The Government's policy is to have two carriers operational at any one time. That remains our position.
The Falklands campaign also demonstrated the immense value of HMS Fearless and HMS Intrepid in launching and supporting amphibious operations. We plan, therefore, to maintain HMS Fearless and HMS Intrepid in service for the foreseeable future. The great value of these ships is being demonstrated again right now. HMS Fearless has arrived off Beirut today. She will provide invaluable logistical support for our British contingent.
Another element of the Navy's amphibious forces, the logistic landing ships, also proved of the utmost worth in the Falklands. We are hoping that it will be possible to repair the Sir Tristram and we plan to order a replacement for the Sir Galahad.
Mr. Edward Leigh: Will my hon. friend comment on the lessons of operation "Corporate"—that there is an urgent need for a point defence system for Royal Navy ships? Will he also comment on the Ministry of Defence report, which was published earlier this year, showing that there will not be royal dockyard space for such refitting until 1986? Does he intend to implement the recommendations of the Speed report, which suggested that there should be a substantial and systematic expansion of work placed in the commercial sector?
Mr. Stanley: I entirely agree with my hon. Friend about the importance of point defence. He will be aware that we have significantly enhanced point defence on our major ships, especially on the Invincible class carriers, since the Falklands conflict. Another key aspect is airborne early-warning radar. I shall refer to that soon when I deal with the Fleet Air Arm.
The other key specialist ships in the surface fleet are our mine countermeasure vessels. The Soviet Union continues to devote much effort to bringing in new types of offensive mine, which may be laid by aircraft, submarines, or surface ships. The Soviet Union is thought to have some 26,000 mines, and has far and away the largest offensive mining capability of any country in the world.
The Royal Navy cannot deal with the Soviet mining threat in European waters on its own, but it has to make a significant contribution to NATO's mine countermeasures forces. Mine clearance is vital to the protection of our own high-value naval assets and to the protection of the high-value reinforcement ships.
I am glad to tell the House that six of the new Hunt class multirole mine countermeasures vessels have now entered service. A further five are under construction and more vessels of this class are planned. We hope also to place, in about 12 months' time, an order for the first of class of the single-role minehunter which will be capable of operating in deeper water than earlier classes of minehunter. In addition, the first four vessels of a new fleet minesweeper for the Royal Navy Reserve are under construction and orders have been placed for a further six.
Vital to the Navy's surface ships today are its integral aircraft provided by the Fleet Air Arm. The Sea Harrier
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proved in the Falklands that it is an aircraft of exceptional capability, and unique versatility. Since the Falklands conflict, we have placed orders for replacements for the seven that were lost, and have ordered seven more.
The Fleet Air Arm's Sea Kings are still the most capable ASW helicopters at sea in any navy. The House will be glad to know that the introduction of airborne early warning into the Fleet's capability is proceeding. Two Sea King helicopters have already been equipped with a modified searchwater radar and are available for the carriers. Each carrier will have a flight of AEW Sea Kings. That will do much to improve the fleet's defences against low-flying aircraft and missiles.
I wish particularly to mention the Fleet Air Arm's ground crews. They work all hours and, when at sea, sometimes in grim weather conditions. Without the skill, determination and dedication of those ground crews, the Fleet Air Ann would never achieve the remarkable performance that it does.
Finally, the ships of the Royal Navy could scarcely operate at all without the lifeline represented by the civilian-manned Royal Fleet Auxiliaries. Just how vital the RFAs are was made vividly clear by the events of 1982.
The role of the RFAs, supplemented by chartered merchant ships, is expanding rather than contracting. Next February, we shall be adding a helicopter support and supply ship, the Reliant, to the RFA fleet for the first time, using the Arapaho helicopter support system leased from the US Navy.
We now have a forward repair ship permanently in the Falklands, and we are currently using a total of 27 merchant ships taken up from trade, the so-called Stuft ships, to supplement the RFAs. The replacement for the one Stuft ship lost in the Falklands, the Atlantic Conveyor, is being built in such a way as to make her easily adaptable for use in support of the Royal Navy if required. I should like to express my appreciation of the continuing support that the Navy receives from the Merchant Marine and from our merchant seamen.
I have devoted much of my remarks to the Navy's ships. I want to conclude by referring to the Navy's other outstanding asset, which is its people—the men and women in the service. Writing to the First Sea Lord about 200 years ago, Nelson said:
"It will be found, and I know it is, that whenever a large convoy is assembled at Portsmouth and our Fleet is in port, no less than 1,000 men desert from the Navy; and I am sure one third of this number, from loss of clothes, drinking and other debaucheries, are lost by death to the Kingdom."
We have come some way since then, I hope, particularly in Portsmouth.
In the Navy of the age of missiles, ultra-sophisticated electronics and sonar, satellite communications, VSTOL aircraft and nuclear power plants, every ship and submarine at sea has to be a veritable floating college of advanced technology.
Never has the decision-making process on board ship and on naval aircraft been more intellectually demanding or, in the guided weapon age, more instant. But in responding so capably to the intellectual demands of the electronic age, the Navy has lost none of the shipboard spirit, the sense of service and the personal courage that have been its sinews and its hallmark for so long. Those enduring qualities could not have been demonstrated more vividly than in the south Atlantic last year. Those qualities

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are still necessary. The rigours of serving at sea are certainly less severe than they were, but no one should be under any illusion that life in the Navy of today is soft, even in peace time.
Those who serve in the small ships—the minehunters and the fishery protection vessels—may be tossed about by the elements with almost as much violence as ships have been down the ages. A particular mention is warranted of those who serve in submarines. They may be able to insulate themselves from the elements, but, even in today's submarines, living and working conditions are extremely confined and have to be coped with for months at a time. Our SSBN crews can never, for obvious reasons, have their patrols lightened by visits to foreign ports. Both in our SSN and in conventional submarines, the problems of confined space are tending to increase rather than to ease as more and more sophisticated additional equipment, along with the personnel to operate it, is having to be squeezed into them.
Service in the Royal Navy still very much has its rigours. There is no single group in the Royal Navy more closely associated with rigour than the Royal Marines. Having found a half-mile yomp without a pack across those killing Falklands tussocks quite a sufficient constitutional bit of exercise for myself, my admiration knows no bounds for those who went 60 miles with 100 lbs. or more on their backs.
The Royal Marine commandos are the key components of our amphibious forces; they are our specialists in Arctic warfare and they provide, through the Special Boat Squadron, a very important element of our special forces. We see a continuing and full role for the Royal Marines.
In the Army debate, I said that our reserves were vital. The same is equally true of our Royal Navy and Royal Marine Reserves, both the ex-regulars and the Volunteer Reserves. On being called up, they would provide approximately 11,500 additional naval and Royal Marine personnel.
Those reservists would have key roles to play in the naval control of shipping, in naval command and communications, in providing additional aircrew and groundcrew, and in providing valuable reinforcements for the marine commando component of the United Kingdom-Netherlands amphibious force. I can tell the House that we are planning to expand the Royal Marine Reserves by 400 men.
I am sure that the House will agree that we are exceptionally well served by those who have dedicated their careers, or in the case of reservists their spare time, to the Royal Navy. Whether they serve in the surface ships, the submarines, the Fleet Air Arm or the Royal Marines, they deserve our gratitude and our admiration.
I believe that the Government can fairly claim that they have done well by the Navy. Since May 1979, 34 warships have been ordered to a total value of about £2,000 million. War stocks have been improved, as have communications equipment and electronic warfare capability.
Those improvements and many others reflect the fundamental importance that the Government attach to Britain maintaining a balanced and highly effective Navy. Our Navy today is both proud and capable—rightly proud and deservedly capable. At the end of the last century a naval historian wrote:
"Throughout our long history there have been periods in which the gifts of the sea have been flouted, entailing in some cases a swift nemesis."
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The House can be assured that as far as this Government are concerned, the gifts of the sea, far from being flouted, are highly prized.
4.39 pm
Mr. A. E. P. Duffy: The Chancellor of the Exchequer's recently announced cut of £280 million in next year's planned defence spending came on top of the £250 million cut for this year. which he sprang unceremoniously on the Secretary of State for Defence in July. There is widespread expectation that the Chancellor will seek further savings. Britain will not continue its pledge to its NATO allies to increase its defence spending by 3 per cent. a year in real terms after the commitment ends in 1986, as the Minister confirmed earlier this month. There are also doubts about the adequacy of the funding currently projected, because present cash limits have been set on assumptions about the future rate of inflation and the future cost of military hardware, which remain controversial.
The escalation of equpment costs is horrifying From one generation to the next the cost of new equipment shoots up: for frigates by a factor of two and a half. The annual rate growth of defence technology costs exceeds the rate in growth of resources available. The first is rising by 10 per cent. a year and the second by 3 per cent. a year. There is no arithmetical way in which we can both contain real increases in costs of that order within our present defence policies and take on Trident. It is impossible and one day we shall see the effects of this on the Royal Navy.
With the defence budget still under pressure on two fronts—spending and costs—the Minister may face another major defence review. If he does, the piecemeal approach of the past will not suffice. Britain's forces committed to NATO are already too thinly spread to be truly effective, and a thorough reappraisel of British defence policy is required.
Since the formation of NATO in 1949, successive British Governments have striven to maintain a balance of defence capabilities within the framework of the Alliance. During that period there have been several major defence reviews and each time the Royal Navy has been the chief victim. Cost-cutting by the Government and interference by the Treasury in technical aspects of warship design have often led to ships being built without the armaments which they were designed to have. The performance of HMS Sheffield and HMS Coventry in the Falklands conflict are cases in point.
The 1981 review proposed that the Navy's budget should be cut by as much as 57 per cent. and, therefore. not for the first time, when difficult decisions had to be made about the nature of forces that could be sustained within a budget, it was Britain's maritime capability that was sacrificed.
I shall consider the way in which the constraints on defence costs and spending are impinging on naval procurement and increasingly calling into question the operational concepts that underlie the weapon systems involved, and thus shall point out the need for a reappraisel of priorities.
Because of Britian's geography and our demonstrated maritime capability, the United Kingdom is accepted as the maritime leader of NATO in the eastern Atlantic. No other navy could meet that requirement. The United States navy is fully committed. NATO is thus mainly dependent upon the Royal Navy providing as much as 70 per cent.

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of the immediate ready forces in that area. We provide it at a cost of 23 per cent. of the defence budget. That compares with our provision of 10 per cent. of the allied forces in the central region for 41 per cent. of the defence budget. The British forces committed to Germany are absorbing a growing percentage of our defence costs—it will be as much as 50 per cent. by the late 1980s. It will become increasingly difficult to defend that order of priorities, especially if the present shortfalls in naval force levels continue.
The hon. Member for Beverley (Sir P. Wall) was right to remind the Minister at the beginning of the debate that he, I, other NATO parliamentarians and hon. Members from both sides of the House undertook a tour around the Atlantic basin a few weeks ago. We are aware, as are his ministerial colleagues in the Ministry of Defence, of the shortfalls in many NATO countries of naval force levels, in addition to the one that the hon. Gentleman mentioned. It is not in the public interest for either of us to mention them, but the Minister must be aware of them. In the light of what we learnt, the section of his speech that followed the first intervention this afternoon was complacent in the extreme.
The Navy will be unable to maintain its contribution if the reductions in fleet strength proposed in the 1981 defence review are implemented in full. The then Secretary of State for Defence, Sir John Nott as he now is, defended his review on the ground that it merely proposed a switch of maritime resources from the surface fleet towards submarines and maritime patrol aircraft, as we heard again from the Minister today. Sir John Nott insisted—presumably it was the tenor of the Minister's argument—that Britain's maritime capabilities would improve as a result of the review.
To support that, Sir John Nott, and certainly by inference the Minister, said that the number of SSNs would increase by 1990. In my intervention I said that the previous Government had been responsible for the ordering policy down to No. 17 and that this Government only recently placed an additional order. I do not know whether the Minister is aware of that. He said that I was wrong, but other hon. Members know that I am right, and no doubt he will take an early opportunity to check that matter. Some of his hon. Friends know that, apart from SSNs, all that Sir John Nott could promise us in addition were three MPAs.
Does any Conservative Member believe that one more SSN and three MPAs are sufficient recompense for the cut in the fleet that was envisaged in 1981? We understand why the cut is not yet discernible, but it will be from 1986–87 onwards. In return for the loss of about one third of the Navy's operational surface fleet, a large part of its afloat support, and the closure or rundown of two major fleet bases, we shall receive an additional three MPAs and one further SSN.
The present Secretary of State said in The Times on 24 August this year that, if he had carried out the 1981 review, he would probably have taken similar decisions. Yet Sir John Nott's long-term plan, unaltered by the right hon. Gentleman, was to halve expenditure on new naval construction in real terms by 1985–86. That is equivalent to the loss of 16,000 jobs on warship and auxiliary vessel building, and more than twice that number in the supporting equipment industry. The Minister said nothing
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about jobs, but he must know that the loss of jobs on that scale will threaten the existence of famous warship building yards, with a loss of skills and facilities that can never be recovered once lost.
Analysis of the Soviet's recent military growth suggests that it has been systematically acquiring capabilities that are relevant to more than the continental European conflict. The right hon. Gentleman only touched on that subject. He could have gone further, and other speakers in the debate might do so. There is no time for me to do so, but I am well aware of the extent and changing nature of the threat. To counter the threat effectively, the military resources of the entire Western Alliance must be much more co-ordinated than they have been so far. I hope that the Under-Secretary of State for Defence Procurement will say something about progress on the long-term development programme when he replies to the debate.
Occupying as it does a crucial geographical position as the bridge between the North American and European components of NATO, Britain has a vital role to play in ensuring the effectiveness and cohesion of the Western Alliance in this new military era. Furthermore, as one of the two most densely populated industrialised islands in the world, Britain has many different and often interrelated maritime interests. Most have declined to seriously low levels in recent years, and continue to do so.
Over the past eight years the British merchant fleet has decreased by about 41 per cent. and has now dropped to eighth place in world tonnage, with about 19 million tonnes. We are losing seamen at the rate of 5,000 a year, and we are also losing facilities for training. In the same period during which Britain's mercantile fleet decreased by 41 per cent. the Soviet merchant fleet increased by 31 per cent., and that comes under the Soviet Ministry of Defence. The fleet reduction proposals of the 1981 review implemented in full would mean that the Navy would become incapable of fulfilling its tasks in NATO or beyond its boundaries in any protracted non-nuclear conflict.
One might be tempted to believe that the Falklands conflict had vindicated Sir John Nott's review, because it demonstrated the vulnerability of warships. Surface warships are undeniably so much more at risk from air or missile attacks than they were, but not unacceptably so when the right balance of defences is provided. Tanks, aircraft, and even submarines are also vulnerable if not properly protected.
In reality, the 1981 review, entitled "Way Forward", was but a continuation of the policy that the United Kingdom should view the support of a continental European strategy as a first priority, rather than continuing the maritime strategy that had served the country effectively over the past 200 years. It is worth noting that that was not the position in 1954, when the Brussels treaty was signed, for the commitment to 55,000 men in Europe was not at that time the primary test or commitment for British forces. It has only grown that way over the years because of the apparently mystically held view of that figure of 55,000. An original commitment of 12 per cent. of the United Kingdom's defence resources has grown to 43 per cent. today and it is still growing.
On the other hand, the Falklands campaign demonstrated once again the flexibility of maritime power by its presence and the wide range of options that it offers diplomacy. This, presumably, is also the view of the United States, for no longer does that country see the

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central front as the primary risk area, and no longer are its carrier battle fleets automatically available to the Pacific or Atlantic fleet commanders. These are all now deployed from the defence department and priority is now given in Washington to the establishment of a worldwide rapid deployment force and the building up of the United States navy. The role of the Royal Navy in these changed circumstances, when we can no longer depend on the United States navy being in the east Atlantic—if ever we should go on to reinforced alert the United States navy will be at sea, but it might be anywhere in the world rather in the east Atlantic—is even more critical to the credibility of the Alliance's maritime strategy.
This development serves to remind us that it is primarily the maritime forces that can support a flexible global strategy, but those maritime forces have been consistently run down. While the gradual degradation of naval and long-range air capability has continued, forces committed to Germany have absorbed a steadily increasing share of defence resources. The Times summed it up well over a year ago, on 5 November 1982, in an article that said:
"The hallmark of the 1981 Defence Review was inflexibility, born of an obsession with the Soviet threat in Central Europe. Britain and her NATO allies seem unaware or unconcerned about the threat to their wings and to their rear. It was strange for a country with such a well-tried maritime tradition, and maritime forces incomparably larger and more effective than the rest of Europe put together, to convert the watch on the Rhine into a case of tunnel vision."
Admittedly, the Government published a post-Falklands defence White Paper, Cmnd. 8758, but that did not amount to a major reversal of policy. Both Sir John Nott and his successor have consistently argued that the Government's defence policy remains based on the 1981 review, and we heard that again from the Minister this afternoon. The Treasury has released some extra money, but much of it will be used simply to replace war losses. However, we are still waiting, and there was no word this afternoon about the fourth frigate or about the further ordering of the type 22 to complete the replacement of four destroyers or frigates. Perhaps we shall hear something later tonight.
Apart from that, we have Invincible, for which we must be grateful. Despite the fine words that we have heard from the Minister about the role of carriers, that view was not popular at the top of his Department two or three years ago. I remember the right hon. Gentleman's predecessor saying that no one in his position would again order a carrier. He wanted to take steps to dispose of Invincible, but at least we still have her, and we must be grateful for that.
The amphibious assault ships, Fearless and Intrepid, have been retained, but that is no thanks to Ministers or their predecessors. All thanks are due to the hon. Member for Beverley, who did more than anyone else to argue the case for the retention of Intrepid and Fearless. No ministerial colleague of his supported him.
AEW Sea Kings are being converted, and there will be some improvements in some weapons systems on ships. All are welcome and necessary, but they do not amount to much. They do not materially affect the basis of United Kingdom strategy or the final planned rundown of the thinking on the support organisations. They do not amount to much because the plain facts are——
Mr. Stanley: I am listening to the hon. Gentleman's remarks with interest, and he clearly feels that there is
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insufficient expenditure on the Royal Navy. What is his estimate, if the Labour party had been returned to power last June—committed as it was to reducing defence expenditure by one third—of the extent of the reduction of the fleet necessitated by his policies?
Mr. Duffy: I can refer the Minister to a headline saying "A bigger Navy under Labour", which was about a speech that I made on the campaign trail as Opposition defence spokesman in June, in Plymouth, Devonport, as well as in Portsmouth and in Barrow. My right hon. Friend the Member for Lewisham, Deptford (Mr. Silkin) made similar speeches in other parts of the country.
Mr. Stanley: I am grateful for that clarification of the Labour party's defence policy. Would not reconciliation between his campaign speech and the Labour party's manifesto commitment to reduce defence spending by one third mean that a Labour Government would mean no Army and no RAF?
Mr. Duffy: We never said one third. That is the construction that the Conservative party puts on our defence posture. As I have said before from the Dispatch Box, for example during the debate on the defence estimates in July, the treatment by some Conservative Members, particularly Ministers, and the press, of Labour's defence policy was scandalous and at times scurrilous, and not in the public interest. The Minister's intervention this evening was not scurrilous, but it echoed the other comments.
Let me join the Minister in the numbers game, because he promised at the beginning of his speech that this would be at the heart of what he had to say. I am sure that he did not satisfy all of his hon. Friends, and he did not satisfy some of us. The plain fact is that the United Kingdom is already about 40 per cent. undersubscribed to our NATO naval force levels. It is easy to say, as Ministers do, that we contribute 70 per cent. to the maritime ready forces in the eastern Atlantic, but they never stop to say what those requirements are. It is 70 per cent. of what? We are never told what the "what" is.
We are contributing as little as 40 per cent. of what we should be contributing. This explains why the supreme allied commander, Atlantic said during a visit this spring that he needed another 65 escorts in the North Atlantic. I am sure that the right hon. Gentleman will not quarrel with Admiral Wesley MacDonald, who said that in late August. We have been aware of this shortfall for some time. Yet we find in paragraph 3.30 of the defence statement:
"Numbers are expected to decline to about 50 later in the decade."
Could any statement be more complacent?
According to Admiral of the Fleet Lord Hill-Norton, speaking in the other place on 25 October, numbers by that time will be about 40, and he went on to describe them as "mostly obsolete and unreliable". That is confirmed by Admiral Sir Anthony Griffin, former Controller of the Royal Navy. His analysis is critically dependent on the assumption that the Leander class frigates have an operational life of 20 years. He also assumes that at any time about one third of the escorts will be undergoing service in the dockyards—the dockyards that are left—or possibly deployed elsewhere. This could leave the numbers actually available in the Atlantic as low as 20.
The Minister did not reply very convincingly to a similar argument from the hon. Member for Yeovil (Mr.

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Ashdown). He did nothing to reassure us when he went on to say that the Royal Navy would be running on two Rothesays for a further year. We all expect that all the Rothesays will be gone, anyway, by the end of the decade.
Mr. Robert Atkins: I cannot listen any longer to the hon. Gentleman wriggling in response to this question. I shall pose it again. How does he justify the cuts that his party talked about during the last election campaign, together with his assertion that he would curtail defence spending to that of an average of NATO, and yet argue, as he is now, that we should keep dockyards open and spend more on ships and equipment throughout, when the answer that he may give about Trident represents about 7 per cent. of the overall defence budget? It does not add up.
Mr. Duffy: I appreciate why the hon. Gentleman does not understand Labour's defence policy. It never got a proper airing. It never got fair treatment. It never got objective coverage. It did not get through to the hon. Gentleman up in Lancashire. I can only repeat that on the campaign trail I was in no doubt that, under Labour, we would have more ships and a bigger Navy. That was always the view of my right hon. Friend the Member for Deptford.
The Minister said nothing about a NATO frigate. I hope that his colleague will do so later. In the new edition of "Jane's Fighting Ships", Captain John Moore refers to the "wholesale emasculation" of the Royal Navy and says that it lacks
"the necessary balance for general maritime operations."
These are men of unquestioned integrity, objectivity and professional knowledge. I do not know of anyone outside the House acquainted with this subject who takes any other view and who would support what the Minister said today.
Mr. Richard Ottaway: The foreword in "Jane's Fighting Ships" takes no account of the financial implications. The author assumes that there is a bottomless pit. He is totally glib and does not accept reality.
Mr. Duffy: It so happens that the hon. Member for Nottingham, North (Mr. Ottaway) and I were queuing in the Reference Library last Thursday night to Xerox copies of that preface. We looked at it together. I must ask him to check what he has just said.
In face of such charges, the Secretary of State usually points to the current level of spending on warship construction. That is his alibi. He never qualifies his assurances by saying how much the present building programme is dependent on orders placed by the Labour Government or that it is critically dependent on the withdrawal of ships from active service and disposals. The previous Minister of State for the Armed Forces said in reply to the hon. Member for Ashford (Mr. Speed) a year ago that 10 destroyers and frigates then in the active fleet were to go by the end of this year, by which time only a destroyer and two frigates then building would have been added to the fleet. Coupled with the loss of four ships off the Falklands and four sold earlier last year, the Royal Navy's surface fleet by the end of this year will have been reduced by 18 destroyers and two frigates in two years, in which time only six comparable new ships will have been completed.
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These global assurances about the volume of spending, or, as we heard at the end of the Minister's speech, about the volume of ships under construction never take account of the movement of ships out of the fleet as well as in, out of it for reasons of disposal as well as dispersal. We are never given the picture that really matters. I can never recall the House being given that kind of picture by Conservative Ministers. I do not know whether they have it, but I invite them, in the interests of their own awareness as well as that of their colleagues, to look at the ships that we have now and at a possible complement by the end of the decade in all the categories mentioned by the Minister. He will see that, far from having an operational fleet of 55, as he claims, on any showing the most that we can hope for by the end of the decade is 40. Then, if we remember what Admiral Griffin warned us about—the possibility of some ships being held in dockyards longer than expected or being deployed elsewhere—the number available for assigned NATO roles may be, as both Lord Hill-Norton and Sir Anthony Griffin claimed, as low as 20.
It is no wonder that on these matters the Government were accused in The Times last year of sleight of hand.
Naval manpower, which was to have been reduced by 10,000 by 1986, is also declining. Why is no further mention made of the redundancy plans outlined in the 1981 White Paper? In the period 1 April to 31 December last year the Royal Navy was permitted to recruit only 1,665 officers and men compared with 3,001 during the same period in 1981. The number leaving the service in the same period was 3,404. What is manning policy today, and how is it affecting the manning of ships?
What effect is all this confusion having on the dockyards? The warships depend on support from the royal dockyards. Assuming that all dockyard work can be predicted accurately, and assuming an increase in productivity, the resultant load of the reduced fleet might just fall within the theoretical capacity of Devonport and Rosyth, supplemented by the restricted services available at Portsmouth.
Experience has shown that both those assumptions are unlikely to be realised. It is the belief of many who are in a position to know—again, people outside the House who know and whose judgment cannot seriously be challenged by any Minister—that the dockyards may have already been run down below a level that would enable us to deal with another Falklands emergency.
What effect is all this having on British shipbuilders? British shipbuilding stands at the crossroads. The merchant shipbuilding yards are unable to compete on equal terms with far eastern yards for the few orders available. The warship building yards are under the threat of privatisation, and the offshore, ship repair and engine building divisions have little prospect of survival in today's bleak economic climate. How are we to preserve the essential core of men and yards without urgent Government help? There was no mention of that by the Minister.
What of ships taken up from trade? The role of such ships for the support of future naval operations, as was demonstrated so magnificently during the Falklands war, is scarcely mentioned in the defence statement. Their availability is not discussed. The availability of reliable British crews to man them is not mentioned. That is understandable if the defence Estimates are to be considered in isolation, but it is, none the less, unrealistic

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to omit them from the equation. Have the Government considered subsidies for specific ships, as they did in the case of the QE2?
Who ensures that merchant ships of the type required for defence purposes are available and suitably equipped to meet all contingency plans? Who funds what is needed? Who is responsible for the availability of crews? The trend in the decline of the British merchant marine is alarming economically, and it is alarming politically and militarily.
If Britain clearly needs an adequate Royal Navy—the Minister did not once use the word "adequate" when he dealt with naval force levels—to protect our vital trading links, it also has other essential maritime needs. They comprise: first, a healthy deep sea Merchant Navy; secondly, a short sea and coastal trading fleet; thirdly, a fishing fleet to supplement maritime forces; fourthly, an efficient offshore capability to take the best advantage of those rich natural resources lying on the seabed, as well as under it; and, fifthly, an efficient shipbuilding and ship repair capability.
Labour would establish clear strategic priorities, with political and economic realities marching in step. That is our policy. It means taking a long and hard look at the spectrum of maritime activity. Warships, merchant ships, ports, dockyards, lead shipbuilding yards, the fishing fleet, offshore energy resources and pollution control are all interconnected. We would examine our maritime activities and their security, along with our basic defence priorities, against the background of NATO objectives and priorities. Not least, we would avoid any arbitrary reductions in our surface fleet which would threaten our credibility with our NATO allies and which would be saddening.
5.12 pm
Sir Patrick Wall: I am happy to speak after the hon. Member for Sheffield, Attercliffe (Mr. Duffy). He and I had a happy relationship when he spoke from the Government Bench and I was speaking from the Opposition Front Bench, and also in the North Atlantic Assembly, where I am the leader and he is the deputy leader. I agree with him to the extent that the 1981 cuts were a disgrace, and I hope that we shall never go back to them. I agree with him, too, that the Navy was saved by the Falklands campaign. I shall leave the matter there.
The hon. Gentleman wants a large Navy. So do land so, probably, do most hon. Members, if we could afford it. However, the majority of Labour Members do not want that. That was quite clear in the Labour manifesto. I know that the hon. Gentleman is sincere, but it is not the view of the majority of his party.
The hon. Gentleman implied that his party would save money on Trident by cancelling it and spending the money on the conventional Navy. It has already been said that, at the peak period, Trident would cost only 5 per cent. to 7 per cent. of our total defence expenditure. That is far less than the Tornado programme, which the Labour party backed. What guarantee is there that money saved by scrapping Trident would be spent on conventional defence? Certainly, if the Labour party were in power, it would be spent on social services, or something of that nature. In my opinion, Trident is essential for our strategic deterrent. If the hon. Gentleman does not believe that, he should ask the French. If he did so, he got an answer that he did not expect, but that I would.
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I want to say a word about the visit that the hon. Gentleman and I paid to the Atlantic bases. We learnt many lessons, and it is right that we should tell the House about them. Maritime strategy is of great importance to this country, and it is not always fully appreciated by Governments, of whatever party. In Washington, we talked to the Secretary of State for Defence, Mr. Casper Weinburger. He stressed the importance of NATO cooperation and the continuance of the 3 per cent., in real terms. I hope that the Minister takes that into account, because it is vital. Mr. Weinburger pointed out that latent American isolationism was growing, and that it would grow if Europe—and particularly this country—did not pull its full weight. He spoke of out-of-area NATO operations, already mentioned by my hon. Friend. We know that today we have ships in the middle east, the Indian ocean and on the way to south-east Asia.
In Norfolk, Virginia, we were received with military honours by SACLANT and his staff. He said that, in spite of the fact that the US navy was increasing its fleet by about 200 ships, he—SACLANT—could not carry out his requirements. He had to decide priorities. If he carried out one operation he might not be able to carry out another. For example, he would need three carrier air groups in the north Atlantic in time of war. Would they be available, or would they be in the Indian ocean or in the Pacific? There simply are not enough ships to go round to support the strike fleet and the convoys. The key area, as the hon. Gentleman said, is in escort vessels and, above all, their helicopters. Those helicopters are perhaps the main antisubmarine weapon today. One cannot have helicopters in the GIUK gap unless they are carried on ships. That is the argument for not scrapping any excort vessels until they are replaced by the type-23, which is taking an appallingly long time to complete. I know that the Government have done all that they can to hurry it up. I hope that they will have a good look at the Admiralty at Bath, which I visited on behalf of the Select Committee on Defence. It needs a good sorting out and reorganisation. The work there should be speeded up, because it is far too dilatory because there are too many committees.
In Keflavik, Iceland, we appreciate the importance of small island bases, which we have given away all over the world, like Gan and Masirah. We realised how important the GIUK gap had become. That gap can be defended only with a sufficient number of escort vessels, their helicopters, and, above all, maritime patrol aircraft, which SACLANT also said he was lacking.
My hon. Friend has already mentioned minelayers and minehunters. When we went to the Azores, another island air base vitally important in the battle of the Atlantic, we realised that there was not a single minesweeper in the whole of that island group. As my hon. Friend said, the Soviet Union is expert is minelaying and has the largest stock of mines in the world. Also, Oscar class guided missile submarines can fire their guided missiles from under the surface, at a range of more than 250 miles. How will they be tackled without adequate number of MPAs, SSNs and surface vessels?
In Portugal, Communism is only just below the surface. In my opinion, Portugal needs a boost from its allies, particularly its NATO allies. She needs new frigates. She cannot afford them. In any case they would take three, four of five years to build. The three Tribal frigates that are due

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for disposal could well be given to Portugal to augment her navy. That would be a great boost to the Portuguese, both to its navy and to its people, and to the NATO Alliance.
We saw what the Canadians and the French were doing in their efforts to co-operate with NATO. The tour ended with the other major NATO command, CINCHAN at Northwood. There again, it is the same story—too few ships, too few SSNs, too few MPAs, and a growing Soviet menace which could not be met except by a system of priorities.
I have been associated with the North Atlantic Assembly, the NATO Parliament, for about 12 years. Each year we go to NATO headquarters, either ashore or afloat, and we are told that the balance is tilting against NATO. I am beginning to wonder how far it can go on tilting, and how dangerous the situation would be if the third world war were to start.
I come now to what could happen. It is not beyond the bounds of possibility that the Soviet Union would try to pinch off northern Norway, and not attack central Europe. There could be a naval war without a major conflagration in central Europe. The Royal Marines, the Royal Netherlands Marines and the United States Marine Corps would bear the brunt of the fighting. But it could be a wholly naval war, and we in the EASTLANT would have to defend against 190 Soviet submarines based on Kola, of which 30 or 40 might be at sea. We might have to do so alone for at least the first few days until the American navy could get over to reinforce.
At the height of the anti-submarine campaign in the last world war, the Germans had a maximum of about 40 U-boats at any time at the peak of the battle of the Atlantic. They, of course, were not true submarines. Then, every ship was vital, and I beg my hon. Friend to remember how the purchase of the 100 obsolete American destroyers saved the situation in the last war. The Government should not scrap any surface ships until the new type 23 comes into operation. Old ships can be of use, just as they were in the last war. We need only think of the use that the Americans are making of their battleships, which are now about 40 years old. They are proving effective. Therefore, no escort vessel should be scrapped until it can be replaced.
The next few years are critical, and we must equip our ships with Sea Wolf. There are now many versions of Sea Wolf. Vulcan Phalanx is all very well, but it is a short-range weapon. Lightweight Sea Wolf should be positioned on each quarter of our aircraft carriers, otherwise they will be sunk either by Oscar class submarines or aircraft missiles in the first few days of any major war with Russia. Our ships must have defence against sea-skimming missiles.
Smaller ships must be equipped with surface-to-surface missiles such as Sea Eagle. I hope that permission will soon be given for a sea-based Sea Eagle. Our new frigates will have towed arrays, and our helicopters will be armed with Sting Ray torpedoes. That is probably the best way of dealing with the submarine menace.
Provision should now be made for our merchant ships, which are bound to be used, to be equipped with chaff dispensers. Helicopter platforms should be made available and these ships should be capable of being fitted with lightweight Sea Wolf. That system weighs only 6¼ tons, and I hope that preparations are going ahead to fit it to our
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merchant ships. The Minister has already referred to the Arapaho project and to the fact that container ships will make good auxiliary aircraft carriers.
All these matters should be discussed much more in the House. In the American Senate and Congress they are discussed for months on end, both in committee and on the Floors of both Houses. I commend Lord Hill-Norton's suggestion of a Cabinet Committee to co-ordinate maritime policy.
Like any hon. Member, I appreciate that our defence expenditure must be related to the development of our economy. The next three to four years will be the most dangerous. There is a power struggle in the USSR. Its economy is declining, it cannot feed its own people and there is unrest, not only in the satellites but in the component parts of the USSR. Mr. Andropov's successor may well have to choose between the disintegration of the Soviet empire and, indeed, of the Soviet Union itself, or aggression. If he thinks that he can get away with it, he may well choose aggression. It is up to us to ensure that he does not do so.
That is why there can be no cuts in BAOR. We cannot sacrifice BAOR as a means of increasing our maritime defence. If we do so, other NATO allies will follow and there will be disintegration of the central front. That would be utterly disastrous. Therefore, money must be found from elsewhere.
I firmly believe that money spent on defence in the next two or three years can avoid world war three. That is worth doing, because with world war three there will be no social services, education or pensions. Surely it is worth paying now to avoid that. We must therefore continue the 3 per cent. increase in real terms in defence expenditure. In fact, we should go further—General Rogers has asked for 4 per cent.—to increase our conventional capability and, thus, to make nuclear war less likely.
I know that the Prime Minister will be torn between the needs of the economy and the needs of defence, but, unlike the disasters of the 1930s, if defence gets priority world war three will be avoided. I am sure that that is the objective of every hon. Member.
One gap in our defences has already been closed by the deployment of cruise missiles and Pershing 2. We must now close the gap in the maritime sector. There is a great need for escort vessels, SSN and MPA as well as minehunters.
As a maritime race we neglect our sea defences at our peril. Last time we survived—just. Next time we may not.
5.26 pm
Mr. Paddy Ashdown: It is a particular pleasure to follow the hon. Member for Beverley (Sir P. Wall). The first time that I did so was in his career in the Royal Marines. I was not serving at the same time as the hon. Gentleman, but his name was still something of a legend when I was training as a young officer at Lympstone.
The hon. Gentleman and I are aware of the pleasure and privilege of participating in a debate devoted to the profession that one has followed before entering the House. The Royal Navy is at the heart of my constituency, which has long and valued traditions with that service. There is the Royal Naval air station at Yeovilton and we also produce Westland helicopters, the finest maritime helicopters in the world.

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Against that background, the policy of my party—
Mr. Douglas: Which party?——
Mr. Ashdown: Both the Liberals and, more lately, the SDP. There is a strong belief that we must make a contribution to NATO based on a strong, conventional Royal Navy. Both parties are agreed on the utter folly of the Trident decision. In our judgment, it is bad not only for what it will do to the defence procurement budget, particularly as it affects the Royal Navy, but for the spirit and political will that holds NATO together. All Governments must recognise that this essential mechanism of collective defence is held together not just by treaties, but by political will.
By taking the view that we cannot trust our NATO partners and, therefore, that we must have our own independent nuclear weapons system, Britain undermines that political will. It must be remembered that the beginnings of the French move away from NATO had their origins in precisely the establishment of an independent front. That is a great folly. Not only does it increase the arms race, but it undermines the political will that holds NATO together.
Sir Nicholas Bonsor: The hon. Gentleman could not be more mistaken. Does he not realise that the independent nuclear systems of Britain and France are essential to holding NATO together? That is in no way divisive. The Americans cannot be expected to carry the entire nuclear burden on their own.
Mr. Ashdown: We must argue that case separately. However, the French and Trident decisions operate outside NATO and are independent of NATO. If the Conservative party believes in the fantasy that Britain can independently defend herself outside the collective defence system, it is perfectly entitled to believe in the fantasy of the independent nuclear weapon system. But if it believes in a system of collective defence, it must accept that that depends on the will of the defence mechanism to hold itself together and to operate collectively.
Mr. Jonathan Sayeed: Will the hon. Gentleman give way?
Mr. Ashdown: I have already given way once, and there is much that I want to say. I hope that the hon. Gentleman will forgive me for not giving way on this occasion.
Trident is therefore a dangerous political fantasy, but I should like to deal now with its effect on the defence procurement budget.
Trident will take up only 2 to 3 per cent. of the budget over the period, but it has been calculated in a number of recent articles that it will take between 8 per cent. and as much as 12 per cent. of the procurement budget, particularly in the peak period towards the end of this decade. That is a key point.
The Government's plans to replace the surface Navy will also reach their peak at that time. It is not insignificant that at the seapower conference recently the Secretary of State for Defence made it clear that the Government were not intending to spend more than approximately 29 per cent., which is the current spending level, on procurement for the Navy. Out of that, 10 per cent. would be available for new building. I should like to parallel that figure with the 8 to 10 per cent. that is calculated for Trident at the peak period.
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The hon. Member for Sheffield, Attercliffe (Mr. Duffy), who is the Opposition spokesman on these matters, said that the figure was predicted to be about 50 per cent. of the procurement budget during the key years when we will be replacing our surface fleet. I believe that it may be considerably higher. I hope that the Minister will tell us how Trident is to be financed. Is it to be paid for out of the strategic reserve, or is it, as most people now recognise with considerable dismay, including senior officers of the Royal Navy, to be paid for out of the Royal Navy Vote? I hope that the Minister will make that crystal clear when he replies to the debate.
We have been talking about the current strength of the Royal Navy and about force levels. The naval staff recognise that, to fulfil our NATO and worldwide tasks, we would need 65 operational escorts. They have set an irreducible minimum of 50 escorts to fulfil those tasks. We have deployable at present perhaps 34 or 35 escorts—a little under 50 per cent. of what has been calculated is required to carry out that task, of which six are in long refit or maintenance at any given time and eight are in reserve. That falls significantly below what the naval staff believe is required to do the job and is a measure of the Government's inability to provide a Navy suitable for the task that they set for it.
The Controller of the Royal Navy said at the recent equipment exhibition that the Government had made some vague statements about their intention to build corvettes. I am not certain what he means by corvettes, but I recognise that the names that are given to some of these vessels have become somewhat meaningless. I hope that the Minister will make it clear whether it is the Government's intention to build extra ships. It is vital that we begin to recognise that the Royal Navy's surface fleet is being diminished, has been diminished and will continue to be diminished. Indeed, I have heard it said by a senior naval officer that the relative strength of the surface Navy today is weaker than it was in 1939. He went: further and said that he doubted whether the surface strength of the Navy had been weaker since Samuel Pepys first came to work at the Admiralty.
The story does not end there, because this factor has had a large impact on the merchant fleet. I remind the House that in the past year alone the United Kingdom merchant fleet fell from sixth to eighth position in the world. We lost 3·38 million gross registered tonnes, 256 ships and 5,000 men. That flies in the face of the Royal Navy's experience during the Falklands campaign, where it was proved time and again that merchant shipping had a capacity at a cost-effective level and base to be able adequately to reinforce and support the Royal Navy. In the face of that, the merchant fleet is now declining and will continue to decline. The right hon. Member for Leeds, East (Mr. Healey) said with some justification that the Government had managed to sink more ships in the past year than the Argentines managed to sink during the Falklands conflict. All this is of great concern to Britain, but it is also of special concern to the defence industry.
I should now like to refer briefly to various pieces of equipment about which I hope the Minister will be able to give further information. I refer first—I make no apology for it—to the vital and important new helicopter, the EH101, which is under development. All the indications are that the EH101 will be a remarkable

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aircraft, not only for its service uses, but for its enormous civilian and foreign sales potential, but, unhappily, the final go-ahead for the development has not been given.
I know that the Government have been active in trying to persuade our Italian partners to come to the starting gate and that it is our Italian partners who are holding things up. I recognise the Government's efforts in this area, but I must make it clear to them that, unless the go-ahead to continue this vital project is given within the early months of next year, it is likely that the project will not achieve its full sales potential in foreign markets. It needs to hit those markets at the right time, towards the end of this decade, but the programme is already slipping. Perhaps it will not be ready for equipping the new type 23 frigates. We hope that the Government will ensure that the decision to go ahead is given and that it is transmitted to Westland Helicopters by the early months of next year.
I hope, also, with reference to Westlands, that the Government will pay some attention to the use of hovercraft in a mine counter-measures role. It is bad that a number of foreign navies appear to have taken a greater interest than the Royal Navy in the unique capabilities of hovercraft in a mine counter-measures role. The Royal Navy is now taking more interest, but it is somewhat late in the field.
The Minister mentioned the vital nature of torpedo development. It is true that that is an important part of the defence procurement industry, but I must tell the Minister—I am sure that he knows, although he would not admit it in the House—that the torpedo development programme is a mess. We have spent about £15 million on updating the Tigerfish, about £1,200 million on updating the Spearfish and about another £1 billion on updating Sting Ray—a total of about £2·25 billion, which was the initial figure given for the Trident missile programme at the beginning of the decade. Yet there remain severe doubts whether Sting Ray has an explosive power sufficient to be able to crack the second hull of an Alpha class submarine.
Sting Ray and Spearfish are still suffering considerably from the lack of an adequate propulsion unit. Indeed, that is a matter of considerable concern to experts in this area, particularly those involved in the Spearfish programme, where the development with the Americans of the propulsion unit has come up against considerable blocks. I echo completely what the hon. Member for Beverley said about the need to be able to adopt the Sea Eagle rather than the Harpoon. I hope that the Minister will have some messages of hope on that score.
Finally, I should like to deal with the role of Fearless and Intrepid in assault landings. The Minister said that they proved to be of immense value in the Falklands, and indeed they did. As a Royal Marine officer commanding a special boat section on the northern flank of NATO in Norway, I sailed there to do a job, as the hon. Member for Beverley said, should the Russians come along and try to nip off northern Norway. When we had Fearless and Intrepid we were capable of carrying out that operation, and we remain capable of doing it thanks to the fact that those two ships have been reprieved.
In the interim period, when both ships were for scrapping, I had a sight of the operational plan to deploy special boat sections and commando units in northern Norway. In the absence of Fearless and Intrepid, the
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operational plan was to place those units in northern Norway using a Sealink ferry. It appears extraordinary that we would ask a Royal Marines' commando unit to go into battle against the Warsaw pact using that type of ship to carry them. The answer is that we would not. The nuclear option would be closer and by that process we would positively have lowered the nuclear threshold.
I hope that the Minister will come clean on what the Gvernment will do to replace Fearless and Intrepid. That decision will determine the future existence or nonexistence of the Royal Marines. It is impossible to conceive a Royal Marines' force unless it has the landing ships and the assault craft to do the job. It was Lord St. Vincent who said more than a century ago that the Royal Marines were a unit which, if ever the hour of real danger should come to Britian, would prove the country's sheet anchor, and so they have on a number of occasions. They will be capable of doing so in future if they have the right equipment, the most vital part of which is HMS Fearless and HMS Intrepid.
It is regrettable that in many instances our service personnel—this is something that I see in my constituency—are significantly discriminated against in two areas. First, they are discriminated against in the provision of council and community housing. It is possible for service personnel to have served their country and to have lived in Yeovilton, for example, for 13, 14 or 15 years, only to find when they leave the service that they become ineligible, as their civilian counterparts are eligible, for council housing in the area. They are transported back to the district council area from which they came, in which they may not have lived for 20 or 30 years. That is a significant area of discrimination which I hope the Government will take to heart and act upon.
Secondly, service families who have served abroad have found themselves discriminated against when seeking access to education grants within the county council system. I hope that the Minister will address himself to that area of discrimination.
I agree with Admiral Sir Henry Leach, the First Sea Lord, who a year ago described the Government's intention to run down the Royal Navy as
"irresponsible, involving prejudgment … driven by short-term expediency rather than long-term strategic sense."
I agree with the supreme allied commander of the north Atlantic who said—it was disgraceful that this had to be said by a senior naval officer—that we were incapable of fulfilling our duties and roles in the north Atlantic. What a disgrace for this Government especially to have to admit to that charge.
At the heart of this incapability lies the spectacular folly of the Trident decision. The purchase of Trident succeeds in creating two dangers from the same action. It will accelerate the arms race and make the world more unstable and dangerous. Secondly, it will diminish our capacity to defend ourselves within that world by weakening the Royal Navy and, therefore, weakening the strength of NATO. It is a decision which the Government will live to regret and which those on the Liberal and SDP benches will continue to oppose.
5.44 pm
Mr. Robert Rhodes James: It gives me great pleasure for many reasons to be called after the hon. Member for Yeovil (Mr. Ashdown). First, one of the few people in public life I admired unreservedly was the hon.

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Gentleman's predecessor, John Peyton, now Lord Peyton, who in war and in peace was one of the bravest, finest and, in this House at least, one of the most underestimated persons in public life. Secondly, shortly before the Falklands conflict broke out I was in the constituency of the hon. Gentleman before he represented it, flying Sea Harriers at Yeovilton with the young men who within weeks were engaged in battle in the south Atlantic, two of whom did not return. That worried some of my colleagues until I said that I was flying simulators rather than the real thing.
I am not entirely convinced of the case for the EH101 but I agree with the hon. Member for Yeovil that Westlands is a superb company and that a replacement for the Sea King is one of the most crucial decisions which Ministers will have to make over the next few months.
Politicians should always take heed, although few of them do, of the wise words of the fifth Earl of Rosebery—the hon. Member for Yeovil will know that he was a Liberal Prime Minister—who wrote:
"No one reads old speeches any more than old sermons. The industrious historian is compelled to explore them for the purpose of political history, but it is a dreary and reluctant pilgrimage. The more brilliant and telling they were at the time, the more dolorous the quest".
In the circumstances, it is with some trepidation that I draw
the attention of the House to a speech that I made in a debate on the Royal Navy on 19 June 1980. I draw attention especially to column 1894 of Hansard, in which I addressed myself to the alarming absence of a point defence system for the new Invincible class of ASW aircraft carriers. This concern stemmed from a visit that I paid with other colleagues to HMS Invincible during her pre-commissioning trials in the channel. I said:
"The absence of a point defence system on a ship which, when fully equipped, will cost about £300 million, represents an extraordinary and an alarming deficiency."
In the book entitled "Sea Change" the then Under-Secretary of State for Defence for the Royal Navy, my hon. Friend the Member for Ashford (Mr. Speed), wrote:

"I replied in terms of sympathetic agreement."
In fact he did not, for he did not reply to my speech. In his opening speech he said:
"In view of the threat, and the capability of this missile system, we shall be considering a much wider fit"—
of the Sea Wolf system—
"including the Invincible class."—[Official Report, 19 June 1980; Vol. 986, c. 1818 and 1894.]
That was over three years ago and the consideration still continues.
I found it astonishing and deeply alarming at that time that a warship of about 18,000 tonnes with a complement of 1,000 which, when equipped with Sea Harriers, Sea Kings, crews, armaments, fuel and spares represented an investment of over £1 billion, was, in effect, defenceless. It had one Sea Dart installation, its nine Sea Harriers, which are limited aircraft, and anti-missile chaff, and that was all. The argument used against me was that ships of that class were part of an interlinking force which would be formidably equipped with anti-submarine, surface-to-air and surface-to-surface sea weapons which would protect the central asset. I make the appeal that we forget about the appalling Americanism "asset"; we are talking about ships and their crews.
What, I inquired at the time, would happen if any key element in the protecting force were itself crippled or eliminated? To that question I received no response. As I explained to the House then and subsequently, my
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dominant concern was surface-to-surface missiles or air-launched missiles. The answer has been found in the GWS25 Sea Wolf system. It was my argument three years ago that it should be installed in the Invincible class. However, HMS Invincible went to war in April 1982 in a condition that was one of constant alarm to me throughout the Falklands conflict, and of even greater alarm to those who served in her and to other members of the task force.
In this month's edition of "Defence Communications and Security Review", Colonel Dodd referred to the dismal history of attacks from the air against our warships and experience in the Falklands. It was with remarkable moderation that he wrote:
"It is indeed suprising that after all these previous experiences of aircraft and missile attacks the Royal Navy, and the supporting merchant ships, were so ill-equipped to deal with them when many suitable weapons were, in fact, available."
He observed that the Sea Wolf missile system was commissioned in 1969, and went on:
"Development of the Sea Wolf commenced immediately and the system was ready for operations before the Falklands campaign but because of economic restrictions and…lack of decision in high places, only two of the ships in the Task Force were equipped with it. The system proved to be highly successful, five enemy aircraft were shot down and a Sea Wolf is also believed to have destroyed an Exocet missile."
It is significant that the then Secretary of State for Defence and the then Government proposed to dispose of HMS Invincible to the Royal Australian navy and accordingly saw little purpose in investing about £50 million in a point defence system for this ship. I was one of those Conservatives who vehemently opposed that proposal, which would certainly have taken effect had riot the Falklands conflict intervened. The narrowness with which the Navy achieved its great victory was frightening, and a far greater tribute to the officers and men, their skill, courage and discipline than to those who have held responsibility for decisions on equipment and armament issues in the past 15 years.
Since the Falklands conflict, which was the first fighting engagement experienced by the Royal Navy since 1945, substantial measures have been taken to provide the Invincible class—Invincible herself, Illustrious and the new Ark Royal—with a vastly improved defensive system, which last week I had the opportunity to see in operation on Illustrious. As our debates are heard and read by those who are hostile to our national interests, I shall not give any details, although I confess to experiencing a certain glum sense of vindication. I make the one point—because this is public knowledge—that one part of the defence system is the Vulcan Phalanx which is capable of firing 3,000 rounds per minute. Unfortunately, there are only 1,000 rounds in the magazine, and it takes between five and seven minutes to replace the magazine. None the less, the improvement has been remarkable.
The Invicible class still lacks the Sea Wolf system, the sophisticated GWS25 or the much smaller VM40. I know that either system must be integrated into the ship and cannot simply be bolted on and that, even in ships of the size of the Invincible class, there would be problems of space, although, in my judgment, they would not be insurmountable. I do not underestimate the technical and logistical problems any more than the cost, but I am convinced that the development could make this class one of the most powerful and effective surface vessels in any navy, and that it must be done.

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The Falklands conflict demonstrated the oldest of lessons of war—that it never occurs in the place or in the circumstances that the so-called experts predict. In 1914 and in 1939, we had a fine Navy prepared to fight a very different type of war from those that occurred. Even Winston Churchill publicly dismissed the threat from submarines and air attack on capital ships, which turned out to be the most deadly threats that we faced throughout the second world war. We suffered severe losses in the south Atlantic because several years ago the experts had written off the value of the aircraft carrier and its complement of supersonic strike and defence aircraft.
Between 1914 and 1918 and between 1939 and 1945 we learned at terrible cost some important and fundamental lessons, but between 1945 and 1982 we seemed to forget them again. Flexibility must be the keynote. The unexpected must always be expected. In this process, one element in a much larger picture must be to ensure that our capital ships have the best possible defensive, as well as offensive, equipment. Forbearing to say "I told you so" to Ministers and others, I emphasise to them that I am saying it again. This time, please listen.
5.55 pm
Mr. Dick Douglas: Everyone on both sides of the House will agree that the speech of the hon. Member for Cambridge (Mr. Rhodes James), coming from a historian—historians usually engage in hindsight—showed that he had foresight, which he has demonstrated on previous occasions. The hon. Gentleman made a powerful case.
I, too, was impressed by Colonel Dodd's article, which states:
"It is indeed surprising that after all these previous experiences of aircraft and missile attacks the Royal Navy, and the supporting merchant ships, were so ill equipped to deal with them when many suitable weapons were, in fact, available. Lack of funds and the pressure to provide good living quarters for volunteer officers and ratings may be two of the reasons but the principal one is probably that the Royal Navy, guided by Government directives, had expected to operate as a part of NATO task forces. These would be well protected by shore and carrier based aircraft and under cover of the NATO airborne and fixed radar screen."
The interrelationship between our NATO commitment and our out of NATO commitment is at the centre of the debate. The strain on the Navy of the continuing Falklands commitment was pointed out by the Select Committee on Defence arising from its extensive investigations of and visits to the Falklands. It is not sufficient at this juncture for the House to accept the rather curt reply from the Secretary of State for Defence to our overtures. I am not convinced that the suggestion in paragraph 3 of the White Paper in response to our overtures is acceptable to the House. Paragraph 3 states:
"Forces deployed to the south Atlantic particularly remain committed to NATO."
It further states:
"Inevitably, the distances involved mean that they are not as readily available in Europe or the eastern Atlantic as would otherwise be the case."
That is a superb statement of the obvious. The House would not expect me to go into the number of frigates that we have in the Falklands area—although, if pressed, I can do so—but there is a considerable commitment of naval forces in terms of ships, back-up facilities and personnel. It is no use the Government saying that we shall
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have about 50 destroyers and frigates without subtracting the numbers that will be held in reserve and committed to the Falklands and other operations.
I was impressed by the statements made by the British Maritime League. Paragraph 51 of a document issued by the league before the general election states:
"The present RN fleet of major surface war vessels could be maintained only if at least 2 new ships entered service every year, assuming a 20-year life. Since mid 1979 only 3 ships have been ordered instead of 9. Yet further shortages will occur since an annual order rate of 3 Type 23 frigates is unlikely to be achieved this decade. By 1990, therefore, it is estimated that the RN fleet of major surface war vessels will have been reduced to less than 40 per cent. of its 1970 strength, and a high proportion of it will not have been modernised."
Those strictures on the Government's understanding of naval requirements were made not by Left-wing Labour Members but by people with supreme knowledge. Of course, admirals never have enough ships and Members who represent dockyard constituencies—I take a great interest in Rosyth—never have enough dockyard personnel. Although I have never been a Minister, and am unlikely to become one, I realise that Ministers have to stand back and question the proposals made by the experts. Nevertheless, the Government have a responsibility to answer those points today.
I wish to consider the strain imposed on procurement by the Trident commitment. First, however, I shall deal briefly with the strategic and geopolitical elements in the Trident decision. The Government's concept is of a weapon which will come into service just before the 1990s with a life span of 20 to 30 years, so it will take us well into the next century. That being so, it is rather hypocritical to suggest that we might be able to link the START and INF talks in some other forum while suggesting that we have a weapon—the D5—far more powerful in range and delivery than Chevaline or Polaris. Those considerations must be kept in mind. Moreover, in relation to any commitment to build Trident, the Government failed to consider the amount of money and resources that would flow across the exchanges to the United States for equipment and for refurbishment of the missiles, and perhaps even of the submarines.
On the interrelationship between the Navy and shipbuilding, I declare a longstanding interest in shipbuilding. We are told that reasonable, if not rapid, progress is now being made with the type 23. As a Scottish Member, I know that Yarrow is the leading yard. It is not necessarily the yard's view or British Shipbuilders' view, but my view is that it is essential to have a production run for these vessels. When I visited Italy with the Select Committee on Defence, we did not visit shipyards, but I was impressed by the Italian defence industry's export capabilities, especially for frigates. Without going into costs, I see no reason to doubt at this stage that the type 23 will be a superb vessel. Is it likely to be "the" NATO frigate? Are we committed not to diversify because of political constraints? I appreciate the political pressure from other parts of the country and other yards, but to achieve export orders production of this frigate may have to be concentrated on a particular yard. I hope that the Minister will answer that point today.
In relation to mixed yards, we know that the Government plan to privatise parts of British Shipbuilders, but it is not enough for the Government to say that they are concerned merely with the capability of specific yards to produce naval orders. Other mixed yards have

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additional capability. I have considerable background in this. I note, too, that my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) is present. He knows far more about this now than I do as he is more intimately connected with it. I refer to the Scott division of Scott Lithgow, where it is essential to preserve the capability to build conventional submarines. I await the Minister's comments on the prospects for accelerating the order programme there.
Little has been said about the interrelationship between the Navy and the dockyards, although some comment was made in the debate in another place. The Secretary of State has a Ministry information system. A three-pronged attack is being launched on the dockyards. The first—having served on the Public Accounts Committee, I do not criticise this—is the need to get the optimum return to the public purse through maximum efficiency.
The second attack relates to cuts in the Civil Service and privatisation. May we have assurances that the remaining two and a half dockyards will continue in operation? In the past few weeks, highly speculative rumours at Rosyth went so far as the absurd suggestion that the yard was to close in a couple of weeks with more than 6,000 people being thrown out of work. I imagine that the Minister, through his office, directed the general manager of the yard to issue a statement giving reassurances. Nevertheless, the phraseology used suggested that there was pressure not just for efficiency and the ability of the yard to compete with outside tenders, but for the yard to be more efficient than outside competitors. If that is so, what will be the measure of dockyard efficiency?
The pressure to privatise and to put British yards capable of naval production into the private sector might tip the balance unjustly and unjustifiably in favour of putting work into those yards and thus subventing the balance sheet when those yards attract private capital or go entirely into the private sector. It goes without saying that the Opposition regard it as deplorable that the sector which is to lead the move into the private sector is the sector which the public purse subvents with naval and defence orders. The Government's posture on that is absurd.
The third prong of the attack is the navalisation of the dockyards. If the Government cannot win with the other two prongs, they will say that there is more flexibility in switching from the present civilian manpower to naval manpower. That is a serious attack on the stability of a yard such as Rosyth. We are rightly moving away from the old Rothesay type of frigate. The Government have promised the Leander refits and the type 42s, both of which—especially the type 42—are less labour intensive than the older class vessels and do not require the same mix of skills. If they are to embark on that, they must guarantee the labour mix and try to achieve increased flexibility of the labour force. I understand that perfectly, but if that is to be done, the labour force must be told in which direction the country is going and what the future programme will be. I have made those points because I am interested in having a viable Navy.
I shall make a small point about dockyard management. When we discussed the so-called Speed report, we had to consider the decentralisation of management and an end to what I called "peripatetic" management. Rosyth has had one general manager over the past four years. I shall not embarrass him by saying how highly or poorly I regard my discussions with him. He is leaving this week. I think that
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it is absolutely absurd that a Government Department—I shall be happy to be corrected—does not know who it is putting in his place. We are talking not about a small tuppenny-ha'penny organisation, but the employer of 8,000 people. The Government talk about planning resources. I do not believe that they are so incompetent as not to be able to find someone to take his place during the period in which they had notice of his retirement. There must be some reason for it. Perhaps the person that the Government designated did not want to take the job.
I concede that it is difficult for the Government, faced with the present economic problems—mainly of their own making—to build, refit and repair every ship that they want. However, we are an island, maritime nation, and if we cannot do well in maritime defence and shipbuilding, how can anyone believe that we can do well in other manufacturing industries? That is the key industry in which we must do well. I do not say that there have been no difficulties with labour relations and shipbuillding techniques in the past. I am well aware that the industry has been backward in those respects. However, if we cannot take a lead in producing naval and merchant ships efficiently, not many people will believe us capable of manufacturing other goods.
6.13 pm
Mr. R. Bonner Pink: I am happy to follow the hon. Member for Dunfermline, West (Mr. Douglas) on two points. The first is on the subject of type 23 frigates. I understand that Yarrow is to be the lead yard on this project and that tenders have been invited for a number of these new ships. I further understand that the hon. Gentleman is appealing to the Government to place a string of orders with Yarrow to ensure continuity. I appeal to the Government to place at least one order with Vosper Thornycroft in Southampton. I appreciate that we are, perhaps, dealing with local politics here.
Warship construction is highly specialised and it is important that we have a number of yards capable of building warships. If Vosper Thornycroft does not obtain an order, it will have no further major warships under construction and will be building only a few countermine fibreglass vessels. Over the years the company has built up vast experience and has a highly trained body of men at Woolston capable of building warships. If the company does not obtain one of these orders in the near future, that assembly line will be completely shattered. It would be virtually impossible to rebuild it should an emergency occur. I appeal to the Government not just to take the price tendered by various yards into consideration, but to ensure that at least one ship goes to Vosper Thornycroft so that the number of yards capable of building these sophisticated vessels is maintained.
The hon. Member for Dunfermline, West spoke about what he called the navalisation of dockyards. I believe that he has misread the position. We have a similar problem in Portsmouth, although it is probably more intensive than at Rosyth because, with the reduction in the dockyards, Portsmouth will be confined more and more to minor refits and repairs that are beyond the capacity of the ship's company. When ships come in for training, leave or any other purpose, on most occasions it will be necessary for civilian dockyard workers to work alongside the naval ratings in the ship so that repairs can be carried out satisfactorily.

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Several hon. Members, including the hon. Members for Dunfermline, West and for Yeovil (Mr. Ashdown) and the right hon. Member for Lewisham, Deptford (Mr. Silkin), seem obsessed by Trident. My hon. Friend the Member for Upminster (Sir N. Bonsor) satisfactorily answered the hon. Member for Yeovil. The right hon. Member for Deptford confirmed the Labour party's policy on Trident. He appealed to the Government to cancel Trident in the hope that the money saved would be spent on conventional warships. The weakness in his argument is that Trident is essential to this country's security and it does not follow that if Trident were cancelled the same amount of money would be spent on conventional warships.
The essential point about expenditure on Trident is that it should be spread over the whole of the defence Estimates. It should be borne by the whole defence budget and should not fall entirely and separately on the naval Estimates. If that were done, the naval Estimates could afford more ships and more and better equipment. That is the nub of the whole matter. We need Trident, but the Navy cannot be expected to pay for it on its own.
The Minister put forward a persuasive case, but I regret that he did not reassure me on a number of points. He emphasised the need and importance of Atlantic convoys, the NATO role in a major war, and our still great responsibilities towards our dependencies. All those commitments demand a much bigger Navy than we have at present or than is envisaged.
Several hon. Members have emphasised the fact that we have too few ships. My hon. Friend the Member for Beverley (Sir P. Wall) said that that is the position not only in Britain, but also in America. The fact that the United States is short of ships emphasises our problem.
The House has been told that the new type 23 ships would be much cheaper to build than those already serving with the Fleet and cheaper than long refits. If that is so, more ships could be added to the Fleet without increasing the total cost. Will the Minister tell us the present position when he replies? I understand, however, that the cost of a type 23 frigate has increased much more than the Government ever envisaged. Thus, it seems unlikely that such developments will take place.
I am glad to learn that some of the ships due to come out of service will be retained. The Minister did not make it clear how this will affect the proposed rundown of naval personnel. If ships are to be retained, how will they be manned? Are we to assume that the Government have decided that the rundown of naval personnel will be eased? That would be an incentive and boost to naval morale.
The Minister did not tell us how such decisions would affect the dockyards. It is clear to many hon. Members and to myself that Plymouth and Rosyth, with some help from Portsmouth, will have the greatest difficulty in coping with the task of properly maintaining the fleet as well as coping with the highly sophisticated equipment in the training establishments. Will the rundown of Portsmouth be eased? Will more men be employed in Portsmouth dockyard because the Navy will be retaining ships which were otherwise to have been scrapped or taken out of service? I hope that the Minister will answer those questions.
The effectiveness of our ships has frequently been referred to. One wonders whether all the lessons learnt in the Falklands have been digested. Much criticism has been made about the ships that went to the Falklands and their
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lack of effective equipment. It appears that many of our ships are stuffed full of highly complicated and extremely expensive electronic equipment designed to guide their ineffective armament. I am told that the new 4.5 mm gun is extremely accurate and has a high rate of fire but suffers from unexpected stoppages. Criticisms and suggestions have been made that our ships should be shorter and beamier. I do not subscribe to that idea. Perhaps the Minister will state his conclusions on what would amount to a major redesign of our existing ships.
The hon. Member for Sheffield, Attercliffe (Mr. Duffy) referred to the jobs in industry that rely on the Navy. I support what the hon. Gentleman says. I hope that the Minister can initiate a more effective system to ensure that more offset orders are placed in this country. I understand that many orders have been placed in America and elsewhere. Subcontract and offset work should be placed in this country and those overseas who receive our contracts should not just pay lip service to such a principle, but ensure that our engineering companies get the work.
We need Trident, but the Navy cannot pay for it by itself. The cost must come from the entire defence budget. We need more ships and better weapons. I hope that these matters will receive the close attention by the Government that they merit.
6.26 pm
Miss Janet Fookes: I wish to start on a happy note by greatly welcoming the commitment of my hon. Friend the Minister to the future of the Royal Marines. A few years ago their future as a whole seemed in doubt. I shall certainly keep that pledge and assurance close by me for future reference. I am not making a parochial point, but probably more Marines are stationed in and around my constituency than anywhere else in the country. The Minister's decision stems from an appreciation of their invaluable role. Their Arctic warfare role, which does not always receive sufficient attention, causes them to train in northern Norway. It is important for us to remember the inhospitable northern flank where, in the event of a Soviet attack, the Royal Marines might be the only force able to conduct warfare in that region. My understanding—I hope that the Minister will correct me if I am wrong—is that not even the Americans have such a capability. I understand that they undergo little cold weather training of this type. Our reliance on the Royal Marines in that sphere would be total and we could not expect help from elsewhere.
I accept the assessment of my hon. Friend on the important role of submarines, especially in the light of the frightening and formidable build-up of the Soviet capability. I, like my hon. Friend the Member for Portsmouth, South (Mr. Pink), support fully the Trident programme as being the logical extension of our capability through Polaris. I understand those who consider Trident to be too expensive, but I disagree with their argument. I fail to understand the argument put forward by the hon. Member for Yeovil (Mr. Ashdown) in what seemed otherwise a good speech. He seemed to suggest that by having an independent nuclear deterrent of this type we were somehow contributing to a weakening or break-up of NATO. I regard that opinion as standing the argument on its head. We are contributing to NATO's strength.
We must fear, above anything else, an over-reliance on the Americans and the effect that such a reliance has upon them. They consider that, as they are contributing to

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Western defence, the Western nations should make a fair contribution. If they do not, why should the Americans bother? That argument may sound simplistic, but it is fair and important. We must play our part in the defence of the western allies and the western world generally.
Mr. Ashdown: I am at a loss to understand why the hon. Lady believes that an independent deterrent operating outside NATO—and operated as an expression of our independent capacity—somehow contributes to NATO. The previous Secretary of State, Sir John Nott, said about Trident:
"If we are to remain in this business there is only one credible deterrent at this time."
He meant that the deterrent on which we should rely in future was not the NATO deterrent, but a British independent deterrent. Surely that must undermine the will of the collective deterrent operated by NATO, on which we rely so heavily.
Miss Fookes: I was under the impression that there was a collective effort, and that we were all allies in the same cause. I simply do not understand the distinctions made by the hon. Gentleman.
I am less than convinced by the argument of the Minister in favour of a reduction of the main part of our surface fleet to 50 vessels. I found his suggestion for overcoming the difficulty a palliative rather than a panacea. We certainly welcome any qualitative improvement—as my hon. Friend said—and the use of ships other than Royal Navy ships for training and less essential roles. But I do not believe that we can shrug aside the question of numbers. If there was more than one crisis at the same time, we could not deal with them. We are, therefore, taking a major risk in hoping and assuming that we will not be asked to tackle more than one crisis at a time.
My hon. Friend used the words "qualitative improvement". It was made manifesty clear in the Falklands campaign that the surface fleet was especially vulnerable to air attack. Indeed, paragraph 310 of the defence Estimates states:
"The Falklands operation underlined the need for improving the short-range air defence of ships. The software of the Sea Wolf anti-missile system was successfully adapted during the campaign to enhance its capability against low-level attacking aircraft flying in close formation. The Vulcan Phalanx rapid-firing gun system has been fitted to the carriers HMS Invincible and HMS Illustrious."
Are we to assume that those two are interchangeable and of the same value?
As my hon. Friend the Member for Cambridge (Mr. Rhodes James) said so eloquently, we do not believe that the defence of aircraft carriers such as the Illustrious is nearly strong enough. Like my hon. Friend the Member for Cambridge, I also visited the Illustrious last week. It is an impressive ship, and also a most expensive ship. It is penny wise and pound foolish to cut short the defence of such a ship, and others like it, when we have so much at stake, both in equipment and, above all, men. Some 1,000 men serve on the Illustrious. They are valuable in their own right, and are highly trained professionals. We cannot risk their lives and risk ships by cutting short our defence of them. I look to my hon. Friend the Minister to make more firm statements about improving defence capability.
I must confess that I have nagged previous incumbents of defence posts, and will now nag the present incumbent,
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about the protection of ships from fire damage. I hope that that will be part of the qualitative improvements mentioned by my hon. Friend. We are all concerned to learn of the terrible burns caused by unsuitable clothing and bedding—especially foam mattresses that give off noxious, highly poisonous fumes. That was a menace during the Falklands campaign. I shall never forget the anger expressed by petty officers on board the Broadsword when I was fortunate enough to board her when she came into Plymouth Sound. Some of the petty officers had been directly involved in picking up burned survivors during the Falklands campaign. They made it abundantly clear how strongly they felt about needless damage and injury—and burns are the worst sort of injury—caused by unsuitable clothing and equipment and because of difficulties with the protective covering on the wiring on ships.
I understand that we are replacing that equipment, but I want to know how far that process has progressed. I know that some progress has been made on the Illustrious, but I understand that it still has foam bedding. That is wholly unacceptable in a new ship. I warn my hon. Friend that I shall nag him continuously until the problem is resolved. While that problem remains it will present danger to the men and to ships. I hope that the use of such equipment will be phased out in the short, rather than the long, term.
6.36 pm
Dr. Norman A. Goclman: I apologise to the Minister and hon. Members for my late arrival. This morning I had a meeting in my constituency with shop stewards representing the marine engineering and shipbuilding industries. I wish to make a few observations against the background of that and other meetings that I have had in Greenock and Port Glasgow. I know that some Conservative Members have been in the Chamber longer than I have, so I promise to be brief.
I come from an old fishing family, and have always recognised the need for a strong maritime defence force. Some hon. Members spoke about the fortitude, stoicism and courage displayed by Royal Navy personnel during the Falklands war. Those same qualities were admirably displayed during the nastier moments of the United Kingdom-Icelandic fisheries dispute, popularly known as the cod war.
It is because I believe in a strong maritime defence that I wish to put a few questions to the Minister. I am keenly interested in the building programme of the SKK 2400 conventional patrol submarine. I understand that 11 or 12 of those vessels will be built over a number of years, and that Vickers is building the first of them. Is there any possibility of an acceleration of that building programme?
The Scott Lithgow group was mentioned by my hon. Friend the Member for Dunfermline, West (Mr. Douglas). It is a conventional submarine refitter and builder par excellence. I have seen numerous letters from MOD personnel confirming that claim. The Scott Lithgow group has a first-class record in that area. It would appear that Scott Lithgow and its record on refitting submarines have been put to one side. Why?
Why is there such a lengthy lead-in time between the building of the first and subsequent vessels? We have been told that the delay is due to technical factors and the need to test a lead-in vessel operationally. I understand that United States maritime vessel construction programmes do not involve such lengthy lead-in times.

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It is essential that the submarine building and refitting capability at Scott Lithgow be maintained. Too lengthy a lead-in time will harm it. I have also been informed that subsequent vessel building will be put out to competitive tender. If there is a lead-in time of several years, Scott Lithgow might no longer have the capability to build submarines.
Is there any possibility of an acceleration of the building programme? If so, will subsequent vessels be put out to competitive tender?
6.41 pm
Sir Nicholas Bonsor: Defending our country must be the most important task of any Government. It is therefore extremely sad to note the state of the Opposition Benches throughout the debate. When my hon. Friend the Minister opened the debate, four Labour Members and one Liberal Member were present.
I listened with great interest to the speech of the hon. Member for Sheffield, Attercliffe (Mr. Duffy). In all respects, his was an excellent exposition of some of the shortcomings of the Royal Navy. It was sad that he should make such a speech in the absence of his colleagues—especially those of his colleagues who disagree with him profoundly. His speech had no relevance to Labour party policy. It is sad that the hon. Gentleman should still be sitting on the Labour Benches. It is sad for us that he has not joined us, as at least one of his illustrious forebears has done. I refer, of course, to my right hon. Friend the Member for Daventry (Mr. Prentice).
Dr. Godman: Where is he?
Sir Nicholas Bonsor: No doubt he, too, has important business elsewhere, but I cannot believe that the entire Labour party has the same excuse.
Appreciation and recognition of the need for the Government's restraint is not lost on Conservative Members. We applaud their efforts to provide an adequate service on the the surface and beneath it—my hon. Friend the Minister will know that my next word is "but"—but there are many lessons that we should learn from our naval past. Those of us who have an interest in the shipping world—perhaps I should declare my interest as a director of a container shipping company—must view with the gravest anxiety the rundown of our mercantile fleet combined with the weakness, in international terms, of our Royal Navy. My hon. Friend the Member for Cambridge (Mr. Rhodes James) mentioned the importance of learning the lessons of history. I mention history with some diffidence, and bow to his greater knowledge.
My hon. Friend the Minister mentioned Admiral Nelson and what he said regarding morale in the Navy at that time. Perhaps I might speak on his behalf as I am his great, great, great, great nephew. I believe that he would find other aspects of the Royal Navy, especially the number of ships and the extent to which they are sometimes equipped or otherwise, rather less satisfactory in contrast to his Navy.
Our country's survival has always depended on our naval strength. That has been especially so during modern history. It was true during the Napoleonic wars. They motivated us to obtain a fleet which was adequate to control and command the seas. That control lasted until the first world war. In 1914, we had 177 major ships of the
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line to the Germans' 77. Two lessons should be learnt from that. First, the great strength of the British Navy then must be contrasted with its sad state now. Secondly, the Germans, despite being heavily outnumbered, managed to contain us so that there was no major sea battle other than Jutland. Despite the fact that we provided adequate cover for our commercial vessels to get through, the supremacy of the Royal Navy numerically was not as significant as the Sea Lord of the day thought it would be.
Another lesson should be learnt from the Navy of 1914. Admiral Fisher believed that the answer lay in having heavily armed, lightly armoured and extremely fast battle cruisers. He forgot that a battle cruiser is good only as long as it can be defended. A ship needs to be sunk only once to be put out of action, no matter how great its fire power might be. It might appear that I am stating the obvious, but sometimes obvious lessons are not learnt.
However strongly we arm our frigates, we must have enough of them to carry out the jobs to which they are assigned and to ensure that they are not sunk in a preemptive strike by the vastly superior Soviet fleet with which we are likely to find ourselves involved alongside our allies.
There have been three principal reasons for our great sea power. First, we needed it to protect our trade routes. Secondly, we needed it for the past 80 years to keep open the strategic Atlantic link between our American allies and Europe. Thirdly, we needed it to protect our own shores.
With due respect to the Government's policy, those factors are as relevant today as they have been for the past 200 years. The question that must therefore be asked is, "Does the Royal Navy, in its present form, fulfil the need of the times and will it be up to the tasks that might be allotted to it?" No right hon. or hon. Member—not even a Minister—can truthfully answer with confidence that the Royal Navy is big enough or adequately equipped to carry out such a task.
I know the difficulties that face my right hon. Friend the Secretary of State for Defence. He is the one who must have eyeball to eyeball confrontations with the Chancellor of the Exchequer. Mercifully, I do not. I can therefore express rather freer criticism as to the amount of money that we vote for naval defence than can my right hon. Friend the Secretary of State and his colleagues when talking to the Chancellor.
Nevertheless, if I am right in saying that the Royal Navy cannot meet present needs, we have to look for a way out. Three options are usually suggested. The first is that we should increase the number of warships. That immediately brings us up against the problem of increased costs. I ask my hon. Friend the Under-Secretary of State for Defence Procurement, who is to reply to the debate, to explain more fully why the alternative type of cheaper and shorter warship, which has been mooted recently, has been dismissed by the Government. I understand that those vessels would have had much the same weapon-carrying capacity as the present frigates and would have been at least as fast and seaworthy, as well as being much cheaper. I am sure that my understanding must be wrong. Otherwise I cannot for the life of me see why we are not to have those vessels. However, no one has yet explained to me in what way I am in error.
The second suggestion is that we should rely on our NATO allies to provide our necessary defences. No doubt that suggestion appeals to the hon. Member for Yeovil (Mr. Ashdown), who certainly takes that view about

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nuclear defences. However, we cannot rely on our allies increasing their commitment unless we are fully committed. Even if we were fully committed, it is sadly demonstrable, from the efforts that the Government have been making to get our European allies to spend more of their GNP on defence and to bring their spending more in line with ours, that we would get nowhere if we tried to follow that suggestion.
I hope that the Government will continue those efforts, because it is not right that we should have to bear so much of the burden for the defence of Europe. However, it is no answer for us to cut back and render an already extremely dangerous situation even worse.
The third suggestion, which appears to be Government policy, is that we should accept the present position and recognise that the fleet is, if not good, at least adequate, that the attack that may or may not come may or may not overwhelm it, but we hope that no such thing will happen, and that there will not be a war. Such an approach is unacceptable.
The Royal Navy, in its present state, with 50 frigates by the end of the decade, will not be able to carry out the enormous task that will be placed upon it, particularly in the eastern Atlantic. That view has already been expressed by a number of my hon. Friends, including my hon. Friend the Member for Cambridge. I do not doubt that if we were faced with a Soviet attack on Norway and in the Baltic waters the present European strength would be proved inadequate. I hope that the position will be reviewed urgently.
There is another way, and it was touched on by hon. Friend the Minister of State. That is to look with much greater enthusiasm towards a contribution from the mercantile fleet in preparing for war and, in particular, in preparing to play an armed and active part in any conflict. I do not need to remind the House of the important part played in the Falklands conflict by the 54 merchant marine vessels that were taken into Government service. Without them, I doubt whether our victory would have been secured.
The present state of the mercantile fleet is abysmal. We are rapidly losing our percentage of world business. That has been caused partly by domestic reasons. Our shipyards are not handling goods adequately and our docks are not facilitating their use by international or domestic ships, with the result that much international business is going to continental docks. Problems of inflation and other domestic difficulties have contributed in the past five or six years to the substantial rundown in the percentage of tonnage carried by British ships.
However, the merchant marine is still of great strategic importance, even at its present strength. In 1982, we imported 157 million tonnes of goods and exported 108 million tonnes. It has nothing to do with a defence debate, but I wish that those figures could be reversed. About 98 per cent. of that trade has to be carried by sea, so our dependence on that form of transport is as great as ever.
The Comecon countries use their merchant fleets to build up their strategic strength throughout the world. They use their ships to take over the running of the trade routes and, therefore, to put themselves in a position from which they can blackmail the West and use their ships to avert military action. It is vital that the Government look closely at the possibility of encouraging a build-up of our mercantile fleet and using it, whenever necessary, for armed naval purposes.
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I do not believe that it would be difficult to put on our large container vessels platforms that could carry ship-to-ship or ship-to-shore missiles. After all, one of our Harriers managed to land successfully on a small Spanish ship. Therefore, it should be possible to carry such aircraft on large container vessels. We could increase the width and depth of our strategic strength at sea by making more use of the Merchant Navy.
If the Ministry of Defence, the Department of Trade and Industry and other Departments got together to subsidise and support a small percentage of the cost of building such vessels and maintaining them in this country, through giving RNVR attachment to their crews, a number of important needs would be fulfilled. We would vastly increase the number of platforms and make it much more difficult for anyone to knock out our naval forces. By encouraging the mercantile marine to expand, we would ensure that an adequate number of support vessels were available in the event of another unexpected localised war. We would enhance the standing and capability of our merchant fleet. Even in commercial terms, there is a vast strategic danger in having an inadequate merchant fleet to carry our goods. Last, but by no means least, we would provide jobs in our dockyards and ensure success in the rundown areas that used to be great shipping centres.
That is the direction in which the Government should be looking. All the other alternatives are unacceptable.
6.58 pm
Mr. Richard Ottaway: It is a pleasure for me to follow my hon. Friend the Member for Upminister (Sir N. Bonsor), especially as I agree with so much of what he said about the need to increase the effectiveness of the Royal Navy while recognising the cost limitations.
A number of comments have been made about the effectiveness of the Navy, with some of which one can agree, while disagreeing with others. I have come to two conclusions:; we have the smallest Royal Navy for many years, but the task facing it is the greatest for many years.
I share the view of hon. Members who doubt the ability of the Royal Navy to meet future commitments to NATO. We have pledged to NATO that we shall defend the shipping lanes in the Atlantic and we have pledged to our own nation that we shall protect our overseas interests and our home base. We are at a crossroads and we have to decide which way to go and which priorities to emphasise.
As the hon. Member for Sheffield, Attercliffe (Mr. Duffy) said, the editor of "Jane's Fighting Ships" has criticised the Navy's ability to meet its commitments. He said in his foreword that the Navy should expand and become a multi-role force. Earlier this afternoon the Minister made the same comment, but the editor of "Jane's Fighting Ships" spoke of a more expanded multi-rote force than was discussed today, and complained of a lack of balance. I do not accept that. The editor's remark was glib. Much as I respect him, he is out of touch with reality. Everyone will recognise that the Falklands conflict was a one-off affair and, although our Navy may be capable of embarking on such an exercise, we should not design it with that in mind.
As my hon. Friend the Member for Upminster said, the Treasury is not a bottomless purse. We must marry our limited resources to the limited role that we are trying to carry out. The size of the cake has been determined and we must decide how we shall divide it. The Royal Navy's

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fundamental duty is its commitment to NATO. We need only look at the developments in the Soviet fleet over the past few years to realise that the threat facing Britain is formidable.
Mr. Ashdown: The hon. Gentleman rightly said that our fundamental commitment was to NATO. Will he, then, explain why this primary commitment to Trident has been made outside NATO?
Mr. Ottaway: Trident is a deterrent. As my hon. Friend the Member for Plymouth, Drake (Miss Fookes) said, Trident is part of our role in NATO.
Mr. Ashdown: It is outside NATO.
Mr. Ottaway: We are concerned with the defence of Britain and of Europe. By maintaining an independent nuclear deterrent such as Trident, we are fulfilling that role. Whatever the hon. Gentleman's party's policy is on nuclear weapons, it seems to support Polaris. I am not a technical expert, but I am told that Polaris will not work. I cannot think of a more ridiculous policy than to support Polaris when it will not achieve the desired result.

In the past few years we have seen the development of a new missile on the Typhoon submarine, which is faster, larger and deeper than anything we have in NATO. Three Kiev class aircraft carriers with vertical and short take-off capacity have been launched, and another is in the pipeline. Development continues on a new type of aircraft carrier for the Soviet fleet, and 84 amphibious craft, supported by five naval infantry regiments, have been launched. There are five yards building submarines for the Soviet Union, and the new 0-class is currently undergoing trials. The new titanium-hulled Alpha class is about to enter service. That submarine can do 40 knots submerged. The Soviet fleet has introduced four new classes of surface warships, and the Soviet merchant fleet is the largest in the world, with a key role in Soviet naval strategy.
It cannot be denied that the Soviet fleet has more than a defensive role. Many hon. Members and many people may ask why, but I do not know why. Although the fleet can destroy the world many times over, it continues to grow. It is our humble duty to counteract that force.
I agree with the hon. Member for Yeovil that by increasing our conventional forces we shall increase the nuclear threshold, and thereby minimise the chances of nuclear war. It is an ironic dilemma for the Soviet planners that the weaker our conventional forces, the lower our nuclear threshold. Therefore, the Soviets may look for targets away from central Europe. A report by the Adam Smith Institute on defence policy suggests that the Soviets might aim for economic targets such as our lifelines from Africa, the middle east and the far east, and they might also aim for the north-western flank of Europe and the eastern Atlantic.
Many hon. Members will recognise that we may have the greatest difficulty in protecting the north-western flank of Europe. The idea that those may be future targets was reinforced by the fact that Russia has increased the number of its ocean-going amphibious vessels, which would be suitable for operations on the north-western flank. It has also increased the strike groups that may attack our vital supplies from overseas. The north-western flank is our responsibility, and although the Royal Navy is the largest
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fleet in Europe, it may have difficulty in meeting its commitments to Europe, as my hon. Friend the Member for Beverley (Sir P. Wall) said. We must have more destroyers and frigates, but we must also recognise that we have a duty to contain costs.
The report to which I referred contained an interesting and unusual suggestion, which I recommend to my hon. Friend the Minister and his advisers as being worth considering. It suggests that now that British people have more leisure time as a result of new technology and job-sharing schemes, there could be a slight reduction in the Regular services, but a dramatic and corresponding increase in the Reserves, especially in the Royal Naval Reserve. Many civilians have experience and skills that could be used in defending the nation, including airline and helicopter pilots, Merchant Navy officers, fishermen, lifeboat men, coastguards, medical personnel, and members of specialist sports clubs such as sub-aqua divers and yachtsmen. We need a new manpower policy for the Royal Navy.
Many years ago, when the American fleet was exercising in the north Atlantic, it came across the British Fleet. The American commander sent a signal to the admiral in charge of the British fleet saying, "How is the second largest navy in the world?" The British admiral, who clearly came from the British school of wit and repartee, replied, "Fine, how is the second best?" The British Navy may only be the third largest in the world now, but it is still the best, and by expanding the Royal Naval Reserve we can have more quantity without a corresponding reduction in quality.
At present 80 per cent of our reserve force is tied up in the Territorial Army. The Air Force Volunteers and the Royal Naval Reserve have a much smaller role. With a reduction in Regular forces, and a significant expansion in Reserves, we could make a major contribution to the Navy. The current minimum of two weeks' annual training for Reserves could be increased to four weeks; and as a result of the savings that the report suggests, the Naval Reserve could man all our offshore vessels and be engaged especially in fishery protection and the patrolling of our economic zones. The Reserves could take over the search and rescue capability around the shores.
We should introduce a more substantial minesweeping role for the Naval Reserve. It has possibly the greatest expertise in this, as it does it consistently while the Royal Naval Reserve is constantly turning over personnel. We could introduce as many as 20 trawlers as minesweepers to achieve a more positive contribution towards the minesweeping role that is needed. The Russians have significantly improved their capability.
Dr. Godman: Where would the hon. Gentleman find the 20 trawlers to conduct the minesweeping operations, in the light of the dramatic decline in the number of stern trawlers still sailing out of British ports? Does the hon. Gentleman envisage a building programme for such vessels?
Mr. Ottaway: I suggest that the hon. Gentleman reads the Adam Smith Institute report, which shows where savings can be made, particularly in procurement and a slight drop in the Regular forces. Whether or not we can adapt existing trawlers for the minesweeping role, or whether it is necessary to build new ones, is a matter for

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debate. I understand that the second of a new line has just been launched, and I see no reason why that line should not be continued.
That just about concludes my concept of an expanding Naval Reserve to meet the requirement for a greater number of ships protecting the north-west flank. However, when I last spoke on defence, in the defence Estimates debate in July, I gave my support for the introduction of the searchwater radar system which, as the Minister said earlier, is being introduced. He announced that two Sea King helicopters were carrying the system. Those of us who have served in the old aircraft carriers such as HMS Eagle or HMS Ark Royal will know that to have airborne early-warning radar is the most fundamental requirement for any group of ships beyond the range of the RAF. I endorse the introduction of the searchwater radar system and I hope that every encouragement and positive contribution that can be made to introduce the system as early as possible will be used.
The Minister will be making a decision soon about the primary defence weapons that will be introduced for the Royal Navy as its primary weapon for the next generation of ships. It seems that the decision is down to two weapons systems—the Harpoon system, made in America, and the Sea Eagle, made by British Aerospace. Although the technical analysis must lie with the Ministry, if there is a similar specification for each missile and it is simply a matter of deciding between the two, it is obvious that the British Aerospace missile, which will be made here and provide many jobs, must have priority.
7.12 pm
Mr. Keith Best (Ynys Môn): I am aware that some hon. Members have been in the Chamber for longer than I have, and I hope that they will indulge me. I have a particular difficulty, and I shall try to keep my remarks as brief as possible.
Last weekend I completed my battle fitness test at the Royal Marine depot at Poole, and I am still here to make my speech this evening. I welcome what my hon. Friend the Member for Beverley (Sir P. Wall) said about his commitment to the Royal Marines. Having served on HMS Bulwark in a fairly hospitable part of the world, the Caribbean, I can attest to the great effectiveness of the Royal Marines, particularly in their shore-landing role.
I declare a vested interest in seeing British warships capable of dealing with many different roles. As a Territorial Army major in the naval gunfire liaison section, I see at close quarters what may at first sight be regarded as a minor role—naval shore bombardment. I suspect that after the Falklands conflict that role will never be regarded as minor again, and it should not be. Naval gunfire support is just one of the many roles that the ship of the future must be able to fill.
It is important, when debating the Royal Navy, to investigate the roles that it might have to carry out. I am guided by the Command Paper published in June 1981, "The Way Forward". It set out the basic role of Britain's defence forces, going through the strategic and nuclear forces to
"a major land and air contribution on the European mainland; and a major maritime effort in the Eastern Atlantic and the Channel. We also commit home-based forces to the Alliance for specialist reinforcement contingencies".
It went on to mention a very important category:
"Finally, we exploit the flexibility of our forces beyond the NATO area so far as our resources permit, to meet both specific
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British responsibility and the growing importance to the West of supporting our friends and contributing to world stability more widely."
That was a major statement of intent by the Government that, although Britain could not alone be expected to be the policeman of the world, nevertheless we have a moral responsibility to try to ensure that there is no international anarchy and that acts of aggression are redressed, whether they are directed against us or any other nation.
I was interested to read in this year's defence Estimates about the Royal Navy and the maritime forces:
"We remain committed to the maintenance of strong and flexible naval forces equipped with modern weapons, sensors and aircraft capable of playing a major part in NATO's maritime defence effort in the Eastern Atlantic and Channel and of deploying worldwide in support of our interests and those of our allies outside the Alliance area."
However, life is not always a bed of roses and to fulfil such a role we shall need a financial commitment. The rub comes later in the same section, which deals with the Royal Navy, where it says in paragraph 333:
"The need to keep costs down has been given close attention throughout the design stage."
This is in reference to the type 23 frigate.
I welcome my hon. Friend the new Under-Secretary of State for Defence Procurement, who is to reply to the debate. He is a welcome addition to the Front Bench from the class of 1979. My joy at seeing him on the Front Bench is mitigated only by the loss of his presence in the dining club that we have, made up of a group of 1979 Members. I hope that he will be able to reply tonight to the questions asked in the press and elsewhere about the type 23 and say whether it is the optimum vessel in which we should be investing so much money. I welcome the decision to order some eight to 12 new frigates, but is the type 23 the correct choice, or should it be the S90?
In The Sunday Times on 23 October, in an article entitled, somewhat worryingly, "Sinking of a dream warship", there was the following statement:
"But the decision could have serious consequences for the defence of Britain, not only now but well into the next century. The conventional design chosen is expensive and fared poorly in the Falklands conflict—one ship, HMS Coventry, was designed to defend the fleet against air attack but was sunk by just two ageing Argentine jets. The scuttled alternative"—
that is, the S90—
"says its backers, carries double the weapons and could be built for half the cost."
I retain an open mind, but I hope that the debate is not concluded. I believe that it has only just begun and that we need to look care Fully at the contentions, notwithstanding the Government's decision to go ahead on the type 23.
I am interested in the reports of tests on models doing a comparison between the type 23 and the S90 which showed that in calm waters the S90 was I knot slower than the type 23, matched it in rough weather, but in high seas with waves up to 50 ft in height maintained a steady 25 knots, whereas the type 23 model pitched and rolled so violently that it had to be restricted to 15 knots for its own safety. It is to that kind of test that I hope there will be an answer from the Government tonight. If there is an answer, it will assuage many people's fears and much criticism which still exists of the decision to adopt the type 23.
As the section of the White Paper which I quoted pointed out, the cost is critical in this matter. The type 23 is already likely to cost more than £100 million and may be £200 million by the end of the rolling programme and

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the completion of the final one. The costs seem to be increasing by about 10 per cent. in real terms over the rate of inflation. At that rate, by the end of the century the Royal Navy could afford to buy only one ship a year, leaving only some 30 frigates by the year 2000, when I believe it is generally accepted there should be a minimum of 50.
The S90 can be produced for some £60 million to £70 million, or to take the hull away from the combat suite, the hull itself is some £33 million—that is for everything except the combat suite. It is much cheaper. I am not a marine engineer, so I can only go on what I read and am told. I understand from reliable sources that it is much cheaper to build wider than longer.
I hope also that my hon. Friend can put to rest one contention that I have heard. It is one of logistics. It says that the type 23 will have to remain fully fuelled at all stages, otherwise it will just roll over. That may be a melodramatic way of putting it. I am sure that it is not true. But perhaps the idea behind the comment has some grain of truth in it. One wonders again whether if, with the type 23, we are not creating more logistical problems than we might do with a shorter, fatter hulled ship.
The S90's seakeeping is excellent, even up to 35 knots. The hull form is one which has been adopted by Trinity House in its pilot boats and by the Arran class lifeboats. I am told that even fishing boats are going in for this design. There are other benefits, of course. The S90 was designed around the widest possible defence horizon. With two surveillance radar some 45 metres above sea level, its kill capability is doubled. That is not my judgment, but that of British Aerospace. That means there would not have to be such a heavy reliance on the airborne early warning system—a matter to which my hon. Friend the Member for Nottingham, North (Mr. Ottaway) properly drew attention in his fine speech just before mine. Shall we see the S90 in use in other navies and not in ours? Perhaps the judgment of the rest of the world will be a real test.
The costs will have an effect on other programmes such as the building of corvettes. I wish to leave my hon. Friend with a rhetorical question. Even if the S90 is not as quiet, not as good and not as effective as the type 23 will be, is it so much worse as not to be worth having, effectively, two ships and possibly more for the price of one? That question is fundamental to this debate and really needs to be asked. There is no doubt that the type 23 is a superb vessel and will be much envied by other navies throughout the world. But do we really need to go for a ship which is so superlative that it will effectively reduce the number of ships that we can have in our Navy?
My hon. Friend knows me well enough to know that no speech from me would be complete without some criticism of the Government's views. He also knows that no speech from me would be complete without commending much of what the Government have done. To leave the House with that aspect ringing in its ears, I say that I welcome the decision to give the type 23 proper armaments for a variety of tasks largely incorporating the lessons of the Falklands conflict. With 32 Seawolf vertically-launched missiles, eight surface-to-surface missiles as well as a larger helicopter, it will be a superbly armed frigate and
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one which will be the envy of navies in the rest of the world, not least because so much, to the layman, is a matter of prestige.
Whenever I go abroad and visit other dockyards where I see ships from foreign navies, I am immediately impressed not with the seaworthiness of the ships that I see, because I cannot test that, but with the style, the armament and the prestige value of them. The type 23 will fulfil that role very well.
I return briefly to my naval gunfire role. I also welcome the Mark VIII 4.5 in. gun being placed on the type 23. That was omitted in earlier designs, and I am glad to see that there is acknowledgement of a role still for the 4.5 in. gun. I can tell my hon. Friend all about those roles up in Cape Wrath where I shall be going early in the new year if he wishes me to talk to him about it afterwards.
Whatever criticism is made of Government decisions to go for the type 23, or whatever complaints may be levelled in a friendly way from the Government Benches, it is clear that the hon. Member for Sheffield, Attercliffe (Mr. Duffy) sits alone, not only physically alone, effectively—although I welcome the hon. Member for Carmarthen (Dr. Thomas) on to the Opposition Front Bench—but devoid of policies which are either persuasive to the people or realistic in the need to meet our continuing defence commitment. Even if his party is incapable of putting forward proposals on how the need might be met, I hope that he will accept what was set out in "The Way Forward" as a role for the country in taking a wider view of the world and ensuring that the Royal Navy is on station to deal with matters when they arise.
Mr. Duffy: The hon. Gentleman may be interested to know that, far from being alone in my major criticism of his Front Bench about the adequacy of the destroyer and frigate programmes for the 1980s arising out of the 1981 review, I have been supported by all his colleagues who have spoken so far—the hon. Members for Beverley (Sir P. Wall), for Portsmouth, South (Mr. Pink), for Plymouth, Drake (Miss Fookes), for Upminster (Sir N. Bonsor), for Nottingham, North (Mr. Ottoway) and himself. All have joined me in criticising the Minister.
Mr. Best: I am grateful to the hon. Gentleman for saying that. Unfortunately, he misunderstands me. I am sure that it is my fault for not having said it clearly. My point was that the hon. Gentleman may well have that criticism to make, but his party is devoid of policies with which to mount a constructive criticism. He may well have destructive criticism of what the Government have done, but his party would never be in a position—he knows this only too well, bearing in mind the economic foreign policies which his party would follow if it ever came to power—to do anything about it. That is the tragedy. I hope that the hon. Gentleman will accept——
Mr. Duffy rose——
Mr. Best: Perhaps the hon. Gentleman will allow me to finish. I hope his party accepts that Britain has a proper role to play in extending its concern, in the way set out in "The Way Forward", the document to which I referred at the beginning of my speech, and that that is endorsed by the Opposition.
Mr. Duffy: The hon. Gentleman prefaced his remarks by saying that he had been unable to be here for the whole debate. I wonder, therefore, if he arrived in time to hear my speech.
Mr. Best: I hope that the hon. Gentleman's reticence in answering my question does not mean that his party will not support what the Government see as a fundamental duty of this country, and that is to extend its interests into the wider world.
Until the time is reached when the world can settle its disputes by international arbitrament, rather than by recourse to arms, we must be ready to meet aggression wherever it may be found. I have no doubt that that is what the Government intend, and we must all ensure that they do so. The road to peace is strewn with difficulties. We may be able to deter nuclear attack, but we cannot prevent all aggression. It must therefore follow that if aggression cannot be prevented—there will always be aggression, because of human nature—the more it can be dealt with by conventional weapons, the less likely it is that the nuclear holocaust will ever take place.
The Government are only too well aware of that. Our Navy is an important part of that role. However, it also has an emotional role. We are an island people. I represent an island within the British Isles, and I know how island people feel the sea is our security. Indeed, one of our most popular songs—I hope that Opposition Members sing it loudly, because they like the tune, if for no other reason—is
"Rule Britannia, Britannia rules the waves".
We do not want to rule the waves, but we want to ensure that the waves are safe for all to sail on.
7.32 pm
Mr. James Couchman: I am pleased to catch your eye, Mr. Deputy Speaker, because this year's debate on the Royal Navy is almost certain to be the last in which mention of Her Majesty's dockyard and the Royal Navy dockyard, Chatham, is relevant. I realise that what I am about to say is unashamedly looking to the past rather than to the future. I also realise that I risk repeating some of the comments I made during my maiden speech to the House in July. None the less, I feel that this occasion must not pass without a tribute to the thousands of sailors who have sailed from that great base at Chatham, and to the many men and women of the Medway who have built, supported and refitted the ships of the Royal Navy.
I shall try to resist the temptation to become mawkishly sentimental, but the attachment of the people of the Medway to Chatham is far more than purely economic; it is a highly emotional tie. On 30 September this year, at sunset, the two flags of Rear-Admiral William Higgins were hauled down for the last time. It was the first such occasion for 231 years when those flags were not replaced by those of another admiral. It was the final ceremonial occasion for the Royal Navy base at Chatham. The hauldown was a highly evocative moment. Many strong men had tears in their eyes and lumps in their throats, and none of the 4,000 people present could fail to be moved by that moment.
Chatham is the oldest of the four Royal Navy dockyards. Rear-Admiral Higgins' appointment traced directly back to 1630, when Phineas Pett was appointed Resident Commissioner. As Flag Officer, Medway, Admiral Higgins was the successor to the commanders-in-chief of The Nore, the earliest recorded of whom was Admiral of the Blue, Isaac Townsend, in 1752. Now this most important and historic command is no more, and responsibility for the old Medway command area has been transferred to Flag Officer, Portsmouth. However, if the
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antecedents of the admiral's two titles are steeped in history, the history of the Chatham dockyard is even longer.
The dockyard was first established in 1547, and even before that the Tudor warship Grace Dieu was built there in 1488. In the last year of Henry VIII's reign, Chatham became an anchorage for the King's ships. Sir Francis Drake learnt his skills as a sailor and navigator among the shoals and mudflats of the Medway and Thames estuaries. For the first 20 years of its life, the dockyard was known as Gillingham dockyard, and I may add that my constituents still have not forgiven the people of Chatham for taking the name.
The first ship to be built at Chatham was a 5-gun pinnace, the Sunne, which was the forerunner of more than 500 ships to be built at Chatham during the next 400 years, culminating in the submarine HMS Ocelot in 1966. The Chatham dockyard was visited twice by Queen Elizabeth I, and has been regularly visited by members of the royal family since.
Management of the dockyard was not always as honest and efficient as it has been latterly. The Pett family was notably corrupt, and the Crown, always short of money, neglected in Stuart times to pay its work force, sometimes for as long as two years. Perhaps that was the foreunner of later industrial relations trouble in the royal dockyards. In 1667, the Dutch sailed into the Medway, landed at Sheerness, looted the stores, and then, breaking the chain in the Medway, sacked and burned the assembled ships. That humiliation spurred the authorities to strengthen the defences of the dockyard.
The major redevelopments started during the reign of Queen Anne, and the new yard became the so-called "historic dockyard" of today. It included the admiral's house, the ropery, which is still in use today, the sail loft, the great store, and the main gate. As befitted such an important defence establishment, the historic Georgian dockyard was designed by the best architects of the day including Vanbrugh and Holl. I shall come back to the historic dockyard later.
During the 18th century some of the most notable ships were launched from Chatham. They included the most famous of all, HMS Victory, Nelson's flagship, which was built and launched at Chatham in 1765. The oldest British-built warship still afloat, the Unicorn, was built at Chatham in 1824. However, in the second half of Queen Victoria's reign, more than 20 battleships as well as numerous cruisers and smaller craft were built, with the last battleship being HMS Africa, launched in 1905. After that, Chatham became pre-eminent in building submarines. The first was the C17 in 1908, and the last, as I said earlier, was HMS Ocelot. During that period of 40 years, some 56 submarines were built at Chatham.
At the same time as shipbuilding was taking place, many thousands of refits, both major and minor, were undertaken. Since 1966 Chatham has been exclusively on refit work and has built up a formidable skill in the refuelling and refitting of our vital nuclear hunter-killer submarines, the SSNs.
The greatest qualm of the now redundant workers of Chatham is that the ability of the alternative facility at Devonport has yet to be proved. Devonport's record does not inspire confidence. The recently completed refit on HMS Swiftsure took five years instead of two, and the first sea trials after refitting ended in ignominious towing back to port. Another SSN due for refit at Devonport had to be

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towed back to Chatham and was eventually scrapped after many years sitting at Devonport. We are told that HMS Sovereign would have been refitted at Chatham in two years but for the closure announcement in 1981. Will HMS Sovereign's refit take five years at Devonport?
There is a belief in Chatham that the Royal Navy will have to authorise the refitting of ships in civilian yards because Portsmouth and Devonport are so stretched. Those refits would probably have come to Chatham. I would be grateful for the comments of my hon. Friend the Under-Secretary of State for Defence Procurement, the more so in view of the warning given by senior officials in 1982 to Sir John Nott that the Navy's dockyards would be unable to cope with the refit programme by 1984 if the closures went ahead.
The general view, I believe, is that, although tankers and stores ships of the Royal Fleet Auxiliary may reasonably be refitted in civilian yards, the overhaul of complex warships in these yards is barely feasible and likely to be much more expensive. The people of Chatham are sceptical as to whether in the long run the closure of their great facility will prove time or cost effective.
At its war-time height, Chatham dockyard employed about 13,000 people, but by the time of the closure announcement that had dwindled to 7,000. Today, only a few hundred are left working in the Chatham dockyard.
I have said that the relationship between the Royal Navy base and dockyard is far from purely economic. However, it would be foolish of me to ignore the economic consequences of the closure. Many of the professional and technical officers on mobile contracts have been transferred to other establishments. Some have reached retirement age, and others have been granted voluntary premature retirement. I thank my hon. Friend the Under-Secretary of State and his predecessor, my hon. Friend the Member for Hertfordshire, North (Mr. Stewart), for the close and compassionate interest that they have shown in dealing with the problems of those displaced by the closure.
The predicament of the industrial workers has been even more dire, for very few of them have been able to transfer to other establishments. By the time of the final closure on 31 March 1984, nearly 4,000 redundancies will have been caused by the closure. It is for these people, many of them my constituents, that we must look to the future. But because of the Government's actions since the closure was announced, the future is perhaps slightly less bleak than it might have been.
By early in the new year, the Medway Ports Authority will have begun a commercial port operation. We are hopeful that we may even be granted one of the new experimental free ports. Thames Ship Repairers has made a successful start to ship repairing in Chatham and is employing 150 people, many of them former dockyard workers. The Rainbow Boats Trust plans to build and repair narrow boats in the dockyard. It will also employ about 150 people, many of them youngsters on youth training schemes.
The historic ropery and flag loft are being operated by commercial firms. The modern dockyard is to be redeveloped by the English Industrial Estates Corporation for industrial, residential and leisure uses. We still hope against hope that the South-East Thames regional health authority will be prevailed upon to come to the Medway.
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The historic Georgian dockyard offers a priceless opportunity for the conservation of unique industrial facility. We are hopeful that the Ministry of Defence, when it passes the dockyard to the Department of the Environment, will bequeath the historic dockyard to a trust which will develop this magnificant part of our naval history as a living museum and tourist attraction.
I am sure that my hon. Friend the Member for Medway (Mrs. Fenner), in whose constituency the historic dockyard lies, would have expressed those aspirations for the future more eloquently than I were it not for her departmental responsibilities. She and I, together with our hon. Friend the Member for Mid-Kent (Mr. Rowe), recently had a useful briefing from the Under-Secretary of State. We urge him to continue his efforts on behalf of the future of our constituents.
I have said much about the Royal Navy dockyard but rather less about the Royal Navy base. In 1903, the fine barracks of HMS Pembroke were built. During two world wars, 18,000 brave sailors went to serve their country and to make the ultimate sacrifice from Pembroke. As recently as last year, men from the Medway served on active duty in the Falklands campaign. Sadly, some did not return. HMS Pembroke now accommodates fewer than 100 officers and men where once there were 2,000. The last captain has left, and, indeed, retired. As some wag has said, "On 31 March 1984 they will merely cancel the milk."
I have spoken at length about one of Britain's most historic and important defence establishments, and I thank you, Mr. Deputy Speaker, for your indulgence. By the time we debate the Royal Navy next year, the Royal Navy base and dockyard at Chatham will be just a chapter in the Royal Navy's glorious past. It will, however, be a long time before the people of the Medway forget the Royal Navy. I trust that it will be just as long before the Royal Navy forgets Chatham. They will continue to salute and respect each other. I ask the House to join me in paying a similar tribute to the work force, now almost dispersed, of Chatham dockyard and to the sailors with whose welfare it has been concerned for so long.
7.47 pm
Mr. Michael Marshall: It is a pleasure and privilege to follow my hon. Friend the Member for Gillingham (Mr. Couchman), whose speech the House listened to with great care and considerable interest. I am particularly glad to follow my hon. Friend because I did not have the pleasure of hearing his maiden speech. Having heard him today, it is clear that his constituency has a doughty champion. He put his points in a balanced and fair manner. The way in which my hon. Friend and his constituents are responding to the Chatham closure encourages me to feel that there is hope for the future and that he has a major part to play in achieving that objective.
My hon. Friend also touched on the central theme of value for money for the Royal Navy and defence expenditure. In a sense he was saying that where we had a naval tradition and continuing expenditure over the centuries, we had also built up a liability to ensure that the underpinning of our defence and Navy can be carried on through the transfer of workers to other opportunities or the Government machine can respond to the situation that he described.
I am especially glad to see my hon. Friend the Under-Secretary of State for Defence Procurement on the Front

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Bench. This is the first opportunity that I have had to welcome him to his new appointment. Given his valuable industrial experience, I am sure that he will have a considerable part to play. He joins my hon. Friend the Minister of State for Defence Procurement, and both are part of a good team. I know that much good work has been done on that area of defence, and it will be interesting to hear how it relates specifically to the Navy.
One of the slight disappointments of this place is that from time to time we table parliamentary questions that are not reached in time to ask a supplementary question. My hon. Friend will recall that one of the first questions that he had to answer was from me, in which I asked him to outline the cardinal points system and to say how many contracts had been placed under it. I had hoped to engage my hon. Friend in a dialogue on the merits of the new system, but the reply, as I recall, was that four contracts had been placed so far and that it was early days to judge the value of the system.
From my understanding of the cardinal points system and its relevance to Navy expenditure, it is clear that the Government are rightly looking for the value-for-money argument. I pay tribute to the hon. Member for Sheffield, Attercliffe (Mr. Duffy). He touched on the problem, to which many Conservative Members have turned, that with rising costs and with the rising sophistication of defence equipment, particularly in the Royal Navy, we are concerned with what can be achieved with finite resources. While I join those who wish to press the case for particular items of defence expenditure, we must always return to what we can do within a reasonable budget, and therefore I trust that the cardinal points system is being used to achieve better value in defence expenditure.
The system allows manufacturers the opportunity to put forward alternative designs, to go beyond the bounds of specifications and to put forward counter-proposals where they feel that they can suggest something that may do a better job than that which is immediately in the minds of navy designers. For those who have been worried over the years about the criticisms that British shipbuilding designs have become over-engineered and therefore uncompetitive in world markets, I hope that this will be a facet of the cardinal points appraisal. I shall be particularly interested to hear what my hon. Friend has to say on that aspect.
My hon. Friend the Member for Upminster (Sir N. Bonsor) referred to inter-operability between merchant and naval shipping—he related it to the Harrier and an emergency landing. Certainly the degree to which the merchant marine and the Royal Navy can seek to come together in terms of future design interests me greatly. I hope that my hon. Friend will have something to say about that.
Along with hon. Members from both sides of the House on the Select Committee for Defence, I had the opportunity to see at first hand some of the lessons of the Falklands. One of the lessons that immediately struck me was the degree to which inter-operability must reflect not only shipbuilding but the wider aspects of equipment design. The Sea King helicopter has been used in the Falklands in a remarkable way which must surely be beyond the expectation of those who designed the helicopter. It stood up to the task remarkably well.
My hon. Friend the Minister of State for the Armed Forces paid tribute in opening the debate to many of the Fleet Air Arm operatives who did such a superb job
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keeping the aircraft in the air. I am sure that he and my hon. Friend the Under-Secretary of State for Defence Procurement would wish to add to that list those who had to maintain helicopters such as the Sea King in the tremendously difficult circumstances of appalling weather conditions and, in the early days particularly, the limited accommodation for personnel and equipment. The success of the Sea King helicopter is one in which we should take great pride. Perhaps in looking to further generations of helicopters my hon. Friend will consider not only the way in which Sea King has been sold to the Indian navy, but will realise that the arduous use to which it was put in the Falklands may help to sell that equipment in other parts of the world.
Satellite communications do not receive enough attention in the House. I declare immediately my interest as a parliamentary adviser to the space and communications division of British Aerospace. I say that it does not receive enough attention because in the Falklands we had to overcome major problems of communications. The programme under development for communications satellites for our own defence needs is of great importance. I welcome very much the fact that the Ministry of Defence, in bringing together British industry to create the maximum all-British defence satellite, has made a great step forward in this area. I am aware that the use of such satellite communications rests very much on the way the Navy sees these matters. It is fair to say that it has the principal needs—I shall not underline this, for obvious reasons—which emerged clearly in the Falklands operations. To that extent I hope we shall see not only the development of such communications but some inter-operability between the three services. That, too should be part of our objective.
In further satellite development we must consider the NATO satellite and the role British industry might play in such a development. This brings me smack into one of the areas which I hope is high on the list of cardinal points—the issue of offset, which has been mentioned by several of my hon. Friends. The NATO satellite has been very much an American domestic concern. American manufacturers have always taken such contracts. I hope that now that we have a United Kingdom capability that is recognised across the world—to the extent that we are now obtaining a substantial slice of the world communications satellite business—that part of that offset argument will have its impact in NATO.
Reference has already been made to the future of sea-launched Sea Eagle. I am sure that this is not the occasion for me, with my specialised interest in British Aerospace in this context, to make that argument to the Minister. I am sure he will wish to cover it when he replies. However, we are seeing here another aspect of the United States versus the domestic procurement argument. Personally, I should find it hard to accept that, having, for perfectly understandable reasons of technical appraisal, chosen Exocet as equipment for the Royal Navy, it would be in keeping with the history of the Falklands campaign to see a replacement from an American source if a United Kingdom source of comparable quality was available.
I welcome the fact that we have a clear decision on the type 23, which, in a sense, reinforces the view that many have urged on the Government regarding the maintenance of a surface fleet. There was a time not so long ago during the Falklands campaign when voices were raised wondering whether the surface fleet was any longer a

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viable concept. I have never been one of those and I think that much of the argument about the vulnerability of the surface fleet to modern generations of missiles ignores the fact that one can employ the same argument about virtually every item of defence equipment, whether it be tanks or any other type of military installation. To that extent I believe the decision to be helpful, because we can begin to see the pattern of the Royal Navy's future activity.
I listened with interest to my hon. Friend the Member for Ynys Môn (Mr. Best) talking about the S90 and the type 23. I have also read the report about the experience with models. I had the opportunity to see the models during the Royal Navy equipment exhibition at Portsmouth. I recognise that I am not a naval expert, but, having spoken to naval experts, I found it difficult on the basis of seeing the models to reach a clear view. Surely the argument about the performance that has been registered with models should be considered with caution. There are wider implications here than such a comparison would suggest.
I should like to deal now with naval exports, which I trust is high in the list of cardinal points. I hope that we shall be able to see opportunities within the design for Royal Navy equipment to underpin exports, which for so many years used to be a traditional part of Britain's industrial success. I hope also that with the type 23 we have the opportunity to sustain much of our design capability, which can be used for a wide variety of design work for exports. I declare a constituency interest, because a number of my constituents work for Vosper Thornycroft.
My hon. Friend the Member for Portsmouth, South (Mr. Pink) advanced the constituency case fairly, but I suggest that in one sense he did not go far enough. In arguing that the type 23 order load should be shared around the British yards to maintain their general capability, he did not take up an export feature which concerns me. Vosper Thornycroft has had enormous skill and great success over many years in exporting throughout the world, but it is beginning to find it difficult to sustain its export potential and design skills unless it has a base load order from the United Kingdom and the opportunity of offsetting the high overhead of maintaining such a design team when it comes to tendering on the United Kingdom domestic scene.
I have raised a number of specific equipment issues because I feel sure that when my hon. Friend replies he will want to give chapter and verse to demonstrate that some of the principles which I have tried to enunciate have been borne in mind and have shaped the Government's decision-making.
Having visited the Falklands for the first time, I could not fail to be deeply impressed by the approach, enthusiasm, vigour and drive of all our services. I had the opportunity of going to sea with a Royal Navy frigate. I suppose that I am entering the policemen-are-looking-younger stage of life, but I saw what appeared to be extraordinarily young men in command of our ships at sea. They led their crews, who were clearly doing a superb job, with great drive and enthusiasm.
The Royal Navy is still having to carry out picket duties in the Falklands. All those who understand the exclusion zone will readily appreciate that those responsible for maintaining the outer ring of defence must of necessity be on continuous alert. It is a task which is a great challenge
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and one which is placing onerous demands on all those who are at sea with the Royal Navy. However, those responsible are rising to the challenge splendidly. Much of what we say in this debate should be related to that spirit. We all have a responsibility to make those in the Royal Navy feel that in our debates, and on these procurement issues, we are trying hard to take fully into account their wider interests and those of the nation.
8.4 pm
Mr. Tom Sackville: During the closing days of July my right hon. Friend the Secretary of State for Defence made a statement on the selection of the defence-suppression weapon. His announcement that ALARM was to be chosen was welcomed by hon. Members on both sides of the House. I congratulate my right hon. Friend again on making a decision that brought great benefits to my constituents, to the work forces of about 150 companies throughout Britain and to British industry as a whole.
We are in a similar position in selecting the procurement of a naval weapon system, the surface guided weapon. There are two main contenders. One contender is the ship-launched Sea Eagle, which is made by British Aerospace, Marconi and a consortium of companies, and the other contender is Harpoon, which is made by a consortium led by McDonnell Douglas. I take this opportunity to support the remarks of the hon. Member for Yeovil (Mr. Ashdown) and my hon. Friends the Members for Arundel (Mr. Marshall), and for Beverley (Sir P. Wall) in urging the selection of Sea Eagle for the Royal Navy.
I mentioned ALARM not to attract the attention of the Government Front Bench by flattery but to take the opportunity to observe that the selection of a naval weapon system may be more important than the selection of ALARM despite all the interest that was aroused at the time. We are talking about the primary surface offensive weapon of the Royal Navy and not a specialised Air Force weapon. It is vital that we retain control of the technology that is involved in primary high technology weapons. As has been seen from recent events, we cannot be sure of either the nature or the direction of the military threat to these islands in future. We can be certain of having the maximum number of options open to us only by retaining control of modifications, further development and supply.
The export sales potential of the naval weapons system is possibly even greater than that of ALARM. It has been calculated that there will be about £500 million involved but if the entire family of Sea Eagle weapons is taken into account the figure might increase to £1,000 million. If the Royal Navy does not order the system, we can hardly blame potential overseas buyers for wondering why. A decision not to order could threaten sales of ship-launched Sea Eagle as well as sales that are in the pipeline, or which have already been concluded, of the other variants of Sea Eagle.
I cannot speak from first-hand experience of naval matters but I can speak with some confidence of the effect on my constituency of a decision not to buy the system, for it is an area in which up to a quarter in value terms of the work on the project would be undertaken. British Aerospace Dynamics Group at Lostock is the lynchpin of the engineering scene in central Lancashire. The loss of work on the project would have a disastrous effect on

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employment in my constituency and in surrounding areas, as it would on all the other companies involved in the project.
The issue of export sales is not confined to the missile itself. On 26 October British Shipbuilders wrote to the Minister of State, Department of Trade and Industry to suggest to him that deployment of the weapon by the Royal Navy would greatly enhance sales of type 23 frigates. That is a factor of which we should take full account.
What other country, given that it had the technology to produce a primary offensive surface weapon for its own navy, would seriously consider going overseas to buy? I understand that there must be competition if we are to get value for money in defence procurement, but I submit that in this instance British Aerospace has satisfied amply all the conditions and requirements of the Ministry of Defence, including the condition of price. I ask the Minister to take careful note of the fact that the purchase of the ship-launched Sea Eagle for the Royal Navy would be strongly in the interest of British industry and in the national interest.
8.9 pm
Mr. Jonathan Sayeed: Any free nation faces difficulty in finding the resources necessary to defend its freedom while recognising the ever-increasing social demands and expectations. That is particularly true of an island nation such as ours with such a magnificent maritime history. Yet those resources must be found, for reasons that all who believe in democracy understand.
Today we have heard many pleas for money for the Navy. I do not dissociate myself from those pleas, but there is an equal, if not greater, priority to rethink our requirements and the methods by which we satisfy them. If some of my remarks smack of naval heresy, I hope that it will be understood that I make them not principally to shock, but because I am certain that, unless we face the conflicting calls on the nation's wealth, the shield and defender of our proud island—the Navy—will wither into insignificance.
I would like to preface a few of these ideas by putting them into their historical perspective by quoting from "Jane's Fighting Ships" 1983–84 edition. Although I accept that Captain Moore, the editor, has a vested interest, what has happened to the service cannot be gainsaid. It states:
"In 1957 a Defence Review emphasised the primary place of missiles in modern warfare—in 1962 the Nassau Agreement between President Kennedy and Mr. Macmillan was the start of the British Polaris programme. In 1966 the Labour government produced its Defence Review, the main general theme being withdrawal from foreign commitments with the main emphasis being placed on the European theatre. From the naval point of view this meant the north-east Atlantic and the Royal Air Force was to provide cover for the fleet, using shore-based aircraft as the navy's carriers were successively deleted. With their departure the fleet was deprived of its own airborne early warning and fighter protection: the north Atlantic scenario had left the navy dangerously unbalanced should it be called on to operate far from the United Kingdom. The then Minister of Defence stated that he regarded this 'as a small sacrifice since we could not afford it anyway and it is difficult to imagine circumstances in which it would be politically wise to use it'."
I notice that there are no Labour Members present who were members of that Cabinet to respond. The article continues:
"The addiction in this particular scenario was the background to the future shape of the Royal Navy with its emphasis on antisubmarine warfare. The 'Invincible' class of light carriers was
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resurrected after ten years in the filing cabinet and the first was ordered in 1973. Two years later the first Sea Harriers were ordered and once again the navy was in sight of some measure of self-protection although no attempt was made to provide airborne early warning.
Attention to the air threat was evident in the design of the Type 42 destroyers which were fitted with medium-range Sea Dart missiles. The weapons payload of these ships was constrained by their hull form and the treasury limit on the unit cost of the class. In 1974 the first of the Type 22 frigates was ordered, a design in which there was no major gun annament, reliance being placed on surface-to-surface missiles and short-range surface-to-air missiles. In recognition of the frigate's role being primarily anti-submarine, provision was made for two helicopters. Matters moved comparatively slowly as the new Conservative government began its inspection of the country's finances. Few orders for new ships were forthcoming and in 1980 came a moratorium on defence spending. It was clear that more was to come and in the Defence Debate of May 1981 a further Review was foreshadowed. As this took only three months to complete the unsatisfactory nature of the result was not unexpected. In June Defence, the Way Forward was published and over the next few months other decisions came to light. The force of three 'Invincible' class vessels, the minimum needed to ensure continuous availability of one ship, was to be cut to two. Invincible herself to be sold to Australia at half the cost of new construction. Both assault ships were to be disposed of, leaving the Royal Marines without any naval transport other than the carriers. The destroyer/frigate numbers were to be cut over four years from 65 to 50 of which eight were to be in reserve. This meant that fewer than 30 would be available at any one time. The original target figure of 20 nuclear fleet submarines had already been cut to 17, to be reinforced by a new class of diesel submarine. The Hovercraft Trials Unit was disbanded and the Royal Fleet Auxiliary reduced. Naval personnel were to be cut by 10,000 in five years, the dockyards at Chatham and Gibraltar to be closed with Portsmouth reduced to a maintenance base. These dockyard closures were designed to reflect not only the reduction in the fleet but also a quite astonishing decision to do away with mid-life modernisation of surface ships."
Despite Captain Moore's obvious interest in the Royal Navy, I believe that we would all agree that his is a good synopsis of what has happened to the Royal Navy since 1957.
There has been a continuous decline to a single-scenario fleet, incapable of continuous action outside the European theatre, except in brush-fire warfare, and unable to protect our interests or counter our potential enemies on a world-wide front. That cannot be the way forward. I do not believe that we have changed so much that we cannot express the breadth of originality of vision that would permit us to find other ways of funding the essential vessels. I believe that we can do this in a way that will not demand dramatically increased resources. We cannot afford to have fewer, more expensive or under-armed ships.
Habitability of those ships is a subject that is rarely covered. I have served in a number of vessels as a rating and as an officer of much juniority. All vessels have become increasingly more comfortable to live in at the expense of their primary role—to fight. We must stop and, indeed, reverse this trend.

A frigate's armaments are up to two thirds defensive and one third offensive. I urge my hon. Friend the Under-Secretary of State, when extra weapons platform space becomes available—as it will, because of the altered beam to length ratios—to increase the frigate's offensive capability.
Manning levels are far too high. We have the technology to enable us to reduce them. If certain parts of particular ships are hit, they are useless and no overmanning will counteract that fact. Thus, we could

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afford to cut manning levels and—this is the primary heresy—we must accept that a warship is a weapons platform and ultimately expendable.
The next need is for different and cheaper ships, whether we call them SS90s or short fat frigates. As missile systems increasingly become vertically launched, the beam to length ratios will change considerably. For example, just before the Kidd and Spruance classes, the beam to length ratio was 1:10·2. In the DDG51 class, it will probably be about 1:7·8. That gives an extra missile load capability of some 30 per cent. with the same displacement and horsepower. I accept that extreme weather capability will be affected, but that will be relatively unimportant. There is not much time for fighting in very heavy weather. One is simply concerned with staying alive.
We need cheaper ships with more fire power and fewer men—a policy of more for less. If the Navy has a fault—it has very few—it lies not with the personnel, who are the finest in the world, or even with its current ships, which are superb but very costly, but with the fact that the type runs are too short, so each vessel is unique and thus too expensive and non-exportable. We need classes of vessels with high sophistication, but we must have many more frigates, destroyers and submarines. They must be mass produced with modulised weapons systems. These systems must be interchangeable and up-dateable and the ships must have lower manning levels and higher export potential.
Finally, we must use the merchant marine far more effectively. I am pleased that we are pressing ahead with the Arapaho/Scads Reliant project, but we have been very slow. I urge my hon. Friend the Minister to enlarge the Government's vision as to how the merchant marine can be used.
At the risk of falling foul of the comments of my hon. Friend the Member for Cambridge (Mr. Rhodes James) who said that one should never repeat oneself, I end with a quotation from my speech on 1 November on the British Shipbuilders (Borrowing Powers) Bill in which I said:
"Therefore, is it not possible to give subsidies or tax incentives, possibly from the Navy Vote or elsewhere, for merchant vessels to be built in British yards, to be manned by British crews and to carry the British flag? Those vessels should be constructed so that they can be simply adapted into auxiliary naval vessels in a way that does not detract from their civil use.
Such vessels could be container ships with helicopter platforms, containerised command and control modules and sea-to-air defence modules. They could be crude oil carriers supplying fuel to the Fleet and operating jump jets. They could be bulk carriers or general purpose merchantmen acting in time of war as dry good Royal Fleet Auxiliaries, and operating one or two Harriers or Sea King or Wessex helicopters to give close support. Those ships should have British crews, who should be encouraged to be members of the Royal Naval Reserve. The terms of the building subsidy should be couched in such a way that British owners, by accepting that subsidy, have to make those vessels available in time of conflict and, on infrequent occasions, for short-term manoeuvres."—[Official Report, 1 November 1983; Vol. 46, c. 795–96.]
On that occasion, I forgot to mention the roll-on/roll-off ferries. Despite the comments of the hon. Member for Yeovil (Mr. Ashdown), it is essential to consider the use of those ferries for troop landing in time of conflict.
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We have the finest men and a Government determined to defend the nation, but there are many demands on our finite resources. And so we must have original thinking so that a little more will go a lot further.
8.24 pm
Mr. Andrew MacKay: I believe that I am the thirteenth Conservative Member to contribute to the debate and I know that a number of my hon. Friends are waiting to contribute. On such an important day when we are debating the future of the Royal Navy I am saddened to see so few Opposition Members present and so few contributing to the debate. Perhaps we should not be surprised. Last week when the official Opposition were allotted a day on which they could choose the subject for debate they not unreasonably chose the position of pensioners—a subject close to all our hearts and on which we are continually and rightly pressed in our constituencies. Hon. Members who were present will recall that at this time of the evening there were only three or four Opposition Members present and when the hon. Member for Birmingham, Perry Barr (Mr. Rooker) so ably summed up the Opposition case few of his Friends were present to support him at the end of that debate.
I returned early from a constituency engagement to take part in today's debate, and I was impressed by the Opposition contributions. I merely wish that there had been more of them. I was privileged to enter the House when the hon. Member for Sheffield, Attercliffe (Mr. Duffy) was Under-Secretary of State for Defence for the Royal Navy, in the days when we still had such a Minister. Many of us felt great admiration for him in the extremely difficult job of a Labour Defence Minister with very little support and constant sniping behind him.
I was also greatly taken with the speech of the new hon. Member for Greenock and Port Glasgow (Dr. Godman), who most ably pressed the case of his constituents and the need to build more vessels for our Navy.
The House may wonder why I am contributing to a defence debate for the first time. It is because I feel very strongly that the Government should choose Sea Eagle as the next ship-to-ship guided weapon for the Navy. This weapon is part of the highly successful Sea Eagle family of weapons. It has already been purchased by the Royal Air Force and the Fleet Air Arm. It is the only entirely British-manufactured missile on offer as a ship-to-ship guided weapon for the Government to purchase. That means that no offsets are involved.
I give two good reasons why Sea Eagle should be chosen. I deploy these reasons as a layman but a layman who likes to think that he has commercial nous and experience in the outside world, and as a constituency Member for Berkshire, East, which includes Bracknell, where British Aerospace's dynamics division employs about 2,800 of my constituents. I deploy these reasons also because I like to think that I, like other hon. Members, have a certain amount of political nous when it comes to deciding where the Government should place their orders.
My first argument relates to exports. We hear all the time in the House about the need to export and the fact that our recovery from the economic recession can be led only by exports. Sea Eagle, and the rest of its family, is aimed primarily at export markets. It has great export potential and we are proud that it has already been sold to India, which is a major achievement as the Government have not yet had the courage to back it to the full.

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If the Government decide to buy an American-built guided weapon system instead of Sea Eagle, what chance does British Aerospace have of selling to second and third world countries? At the moment it is negotiating sales in Egypt, Chile and Brazil. If one were buying in those countries, what faith would one have in it if the manufacturer's Government had turned it down in favour of an American alternative?
I do not believe that I am being fanciful or fearmongering when I say that if the Government do not choose Sea Eagle it will be effectively doomed, as will a terrific amount of export earning potential and many jobs.
My second reason for believing that we should support Sea Eagle is the country's need for a technological base. That was acknowledged by the Government. It was referred to by my hon. Friend the Member for Bolton, West (Mr. Sackville), who has done so much to promote the equipment and weapons of British Aerospace in this place. It was acknowledged also by the Secretary of State during the great debate inside and outside the House on whether to choose HARM or ALARM. It is backed by our experiences, as mentioned by my hon. Friends the Members for Cambridge (Mr. Rhodes James) and for Plymouth, Drake (Miss Fookes) in the south Atlantic campaign. When one is in the middle of a major naval operation many thousands of miles away from the British Isles one needs to modify one's weapons quickly and efficiently. This can be done only if the Government have full control and influence over the manufacturers of such weapons, and that can happen only if we purchase a British guided weapon system.
More serious and sinister is what happens—this fact was touched upon during the Falklands campaign—if we purchase the missiles, weapons and equipment of another country which today might well be an ally but tomorrow might have reservations about our foreign policy and defence commitments. It would be all too easy for the Government of the foreign manufacturer and supplier to restrict the assistance that we could obtain and need to modify and further supply those weapons at a time of dire need. Is that a risk that the House is prepared to take which would have dire consequences, might well leave us with blood on our hands and lead to major naval disasters in the future?
I make no bones about the parochial nature of my intervention. I am proud to represent the town of Bracknell, which is within my constituency. We in Bracknell are proud that British Aerospace has a major section of its dynamics division which employs 2,800 people in the town. I was not elected to the House to waste taxpayers' money. If I considered that the Sea Eagle alarm system was not the equal at the very least to the foreign weapons on offer, I would not be attempting to persuade my hon. Friend the Under-Secretary of State for Defence Procurement to choose Sea Eagle. The House and the Government have a moral responsibility, wherever possible, when procuring defence weaponry to buy British.
The case for Sea Eagle, on merit alone, holds up extremely well. If we add to that equation the benefits for employment in the country, to exports and to our balance of payments and the security and certainty of supply in times of danger or war, we have an absolutely watertight case.
I add, on a slightly bitter note, that I do not believe that any other country in the world would, in a debate on the
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Navy, discuss whether it was going to procure a first class weapon system made in that country. The Governments in all the other Western countries would have gone ahead and procured their own weapon system. I hope that when the decision is made, which I am sure we all hope will be sooner rather than later, it is realised that delay is damaging to the export drive within British Aerospace and it makes more costly the operations of British Shipbuilders which has to modify the vessels to accommodate the weapon system eventually chosen. Perhaps my hon. Friend will give some sign that the decision will be one of common sense that will lead to exports, employment and security.
8.40 pm
Mr. Don Dixon: I had not intended to intervene in this debate until I listened to the comments of the hon. Member for Berkshire, East (Mr. MacKay)—especially those about the lack of Opposition Members in the Chamber for the Opposition Supply day debate last week on pensioners' incomes. I must tell him that, had there been a vote at any time during the debate other than at 10 o'clock, the Opposition would have won it.
The Minister said that he was proud of the men in the Royal Navy, and we all echo that. But he forgot to mention the hundreds, if not thousands, of lads who went to the Falklands, not so many months ago, with redundancy notices in their pockets. He also forgot to mention the shipbuilding workers who had been thrown on the streets and then brought back to the yards to work on the task force. They worked 12-hour shifts, seven days a week, but are now back on the dole. He also forgot to mention 'that the men who sailed the merchant ships in the task force are now unemployed because the Fortress Falklands operation is being supplied by foreign ships. The Minister forgot to mention all those points—unlike my hon. Friend the Member for Sheffield, Attercriffe (Mr. Duffy), who spoke passionately and with great knowledge about both the Royal Navy and the shipbuilding industry.
Anyone with any knowledge of the shipbuilding industry will know that merchant shipbuilding, naval shipbuilding, ship repairing and engine building are all part of the whole, and the condition of any one affects the others. The Government's policy on the shipbuilding industry is sabotaging our naval and merchant building capacity.
The hiving off of the warship yards will effectively kill Britain's shipbuilding capacity. The British Shipbuilders Act 1983 enables the Minister to direct British Shipbuilders to hive off any part of that industry. That means that three warship yards will be hived off or, as the Government put it, private capital will be introduced. The merchant shipbuilding capacity and the mixed shipbuilding capacity will go to the wall.
Conservative Members can talk until they are blue in the face about the Royal Navy, but Government policy will mean that there will be nobody available to build or maintain the ships. The Government will kill the shipbuilding industry, which is going through a crisis now. If the Minister does not realise that, it is time that he did. If he is sincere in one or two of his comments today, he will place Government orders with the industry to help it through the crisis.
The Minister mentioned the Royal Fleet Auxiliary. Why does not he place orders for it with the shipbuilding industry? Why does he not place naval orders with the

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industry? It is important that he does that now because British Shipbuilders is facing world competition from subsidised companies. It is being driven out of the market through no fault of its own.
When will the Minister bring forward a maritime policy? It is no good having a merchant fleet if there are no Royal Navy vessels to protect it. We are discussing maritime policy. We are an island nation and import more than 90 per cent. by weight of our trade by sea. We live on a planet the surface of which is seven eighths water. It is imperative that we have a merchant fleet and a Royal Navy to defend it. It is also imperative that we have men in the shipbuilding and engine building industries to build and maintain those ships. We should be debating that rather than whether we should have this weapon or that.
My hon. Friend the Member for Attercliffe mentioned the fact that the Government could finance weapons being installed on merchant ships such as the QE2. The finance argument arose when it was announced that the replacement for the Atlantic Conveyor was to be built in Korea. The Government intervened and the Ministry of Defence gave Cunard money so that that ship could be built in Britain. I am sorry that I was not present when my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) spoke. I am sure that he argued effectively on behalf of his part of the country.
It is essential that we have a surface fleet capable of protecting our merchant fleet and that we have shipbuilding, ship repairing and engine building yards that are staffed with capable men.
8.46 pm
Mr. William Powell: It is a pleasure to follow the hon. Member for Jarrow (Mr. Dixon), as I am the first Conservative Member to speak after a Labour Member for some hours. His robust support for the Royal Navy aroused gladness in the hearts of all of my right hon. and hon. Friends. If I understood him rightly and he was arguing about our need to build more ships, I am sure that that argument will be widely supported.
For many hon. Members the debate has been an unbalanced disappointment. We all welcome and admire the contribution made to defence debates by the hon. Members for Sheffield, Attercliffe (Mr. Duffy) and for Kingston upon Hull, North (Mr. McNamara). However, they are not supported by their colleagues.
Since the Royal Navy began its modern period in the time of Samuel Pepys, debates on it have been the centre piece of Sessions of Parliament. Time and again they have been the major item for discussion in Parliament. That is no longer so, except at times of high tension during wartime when the fate of the fleet becomes a matter of national attention. Only 18 months ago the Royal Navy's fate demanded attention inside the House and elsewhere, yet we now find that virtually all speeches on the subject have been made by Conservative Members.
There have been distinguished exceptions. Everybody listened with care to the hon. Members for Dunfermline, West (Mr. Douglas) and for Greenock and Port Glasgow (Dr. Godman). They concentrated on shipbuilding, but I want to speak about other issues that have been raised in the debate.
It has been argued that proceeding with Trident will unbalance the defence equipment budget in the next
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decade and result in few resources being available for other much-needed equipment. I am unable to follow that line of reasoning. The issue is whether Polaris is aging and likely to become redundant in a few years' time. The answer to that question is obvious. I have not heard anyone dispute the fact that Polaris is coming to the end of its natural life.
The question is what should be done about that. Only two courses are open to us. One is to abandon our nuclear deterrent and the other is to replace Polaris—not with something invented and first deployed decades ago, but with something contemporary and capable of a useful life for the next two or three decades. It is obvious that it would be much more satisfactory to have a new weapon, and the Government were right to conclude that Trident should be proceeded with. I warmly support that decision.
I cannot agree with the suggestion that we should abandon our nuclear capacity. The Atlantic Alliance is already unbalanced, because we expect the Americans to play a greater role than they sometimes wish to play and a greater role than it is desirable that they should play. I am glad that the nations of western Europe have been prepared to expand their defence commitment over the past three or four years and to assume a greater role in their own defence.
Over the years, the great argument about the Royal Navy has been whether we should put most of our defence eggs in a basket of a broad water, blue water defence policy. That was the argument of the great Chatham and it has governed most defence policy over the years.
In former days, the Royal Navy existed to defend our empire. That empire is no longer with us, and the role of the Navy is not to defend a far-flung empire across the seas of the world but to ensure our own independence and survival. I do not foresee the Royal Navy playing a part in all the oceans of the world. We should try to concentrate as many resources as possible within the western approaches and the northern part of the NATO flank. If we were able to make a contribution in the Mediterranean, I would not criticise that. However, to envisage that we shall be required to use the Navy to defend all the seas in the world would be a completely misguided set of priorities.
I do not wish to discuss the merits of arguments about equipment which have been put forward by hon. Members on both sides of the House. They can argue their cases without my support. A principal weakness in western Europe today is that we rely too heavily on the United States for equipment, which means that our industries cannot grow as they might do if we could pool our industrial resources with our partners in western Europe. That argument applies across the board, and especially to defence investment, not least because the development of defence equipment is so expensive. Given that we hope not to have to use in anger our equipment and that it would be a sufficient deterrent in itself, it is obviously undesirable to spend more than is necessary on it.
I support the argument put forward by my hon. Friend the Member for Cambridge (Mr. Rhodes James) in his powerful speech this afternoon. It is vitally important that, if we send vessels into battle, they and those who serve in them should go to war with the maximum possible protection. During the Falkland Islands campaign HMS Sheffield, HMS Coventry and other vessels were sunk too easily. New vessels, developed at a cost of £100 million and more, should not be vulnerable to instant sinking, if

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we were to engage in a conflict with the Soviet Union. To leave expensive ships and equipment undefended and vulnerable to early loss would be the greatest betrayal.
I hope that increased emphasis will be placed on securing the proper defence of those vessels and that increased support will be given to my right hon. and hon. Friends, who saw how events developed in the Falkland Islands and are anxious to ensure that our equipment is capable of the maximum possible defence. I hope that the men who are sent into action will go knowing that they have not only the best equipment for offence but for its defence and their defence.
It is the third time that I have been called during my short time in the House to speak in a defence debate. I urge upon my right hon. and hon. Friends the policy which they are most anxious to pursue—to secure the best possible defence for Britain, the maximum value for money from the equipment and the best possible training for our service men at sea.
8.59 pm
Mr. Stephen Ross: I apologise to the Minister and to the hon. Member for Sheffield, Attercliffe (Mr. Duffy) for not being present to hear their opening speeches. I had not intended to speak in the debate, although I am interested in the Navy since I served in it, and carried round my hammock—the hon. Member for Bristol, East (Mr. Sayeed) wants us to go back to hammocks—in 1943. However, I represent a constituency that has strong naval connections. I agreed with much of what the hon. Member for Corby (Mr. Powell) said, but I disagree with him about Trident. The Liberal party has always opposed the concept of Trident as an independent nuclear deterrent. When it was first ordered we were told that it would cost £4 billion, but the latest price that I have heard for it is £9 billion, and I suspect that it will cost more. We could spend that money more effectively in other directions.
As the Minister will know, we must try to get value for money, but the idea of building cheaper ships has not succeeded. I agree with the final words of the hon. Member for Corby, who pleaded that we should not send any of our ships into action unless they are properly defended and armed, but we cannot do that on the cheap. The type 23 frigate was supposed to cost £25 million to £30 million, but the latest cost is £100 million, which will probably increase. We learnt the lesson of sending in ships ill-prepared in the Falklands.
Not enough tribute has been paid to the great success of the ships in the Falklands in shooting down planes. It was a terrible day when the Japanese sunk HMS Prince of Wales and HMS Repulse, but the fact was that they had no answer to air attack. I do not speak with first-hand knowledge, but I suspect that our ships in the Falklands did rather well against air attack until they were faced with the Exocet missile. We went there without the right answer to the Exocet, which must never happen again.
I agree with the remarks of the hon. Member for Jarrow (Mr. Dixon) about the Merchant Navy. I was honoured recently to be invited to join the Maritime League, the purpose behind which is to try to preserve the Merchant Navy. It is the backbone to the Royal Navy, and if we allow it to diminish further the support that the Royal Navy needs in time of crisis will not be there the next time round. The Merchant Navy came to our rescue extremely well and quickly during the Falklands campaign, but if we have a
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similar incident in a few years' time, and if Merchant Navy ships continue to disappear at the rate that they have in recent years, it will not be able to support the Royal Navy. We must give whatever help we can to the Merchant Navy. I do not like the idea of the QE2 going to Bremerhaven for a refit that could have been done in Southampton. The workers in our shipyards worked extremely well during the Falklands crisis and launched HMS Illustrious well ahead of time. Other ships were equipped in double quick time, and decks were fitted on the Canberra and the QE2 to enable them to take aircraft. It was an amazing feat, but it can never be repeated if our yards are run down and the Merchant Navy disappears.
I am grateful to my hon. Friend the Member for Yeovil (Mr. Ashdown) for mentioning the role of hovercraft in his speech, because 1,500 of my constituents are employed by the British Hovercraft Corporation. I have a recurring dream that one day Britain will wake up to hear on the news that Mrs. Thatcher has had a telephone call from the Kremlin telling her not to move any ships out of harbour because the Russians have laid mines all the way round the coast, and will press button A if those ships go out, and blow them all up. That scenario is not as stupid as it might sound, because we know that magnetic mines can be placed on the seabed for about 10 years before they are activated. If we had no means of discovering those mines, we would be in serious trouble. The hovercraft has proved itself time and again to be an ideal vessel to deal with such a situation. I went out on the trials at Portland last year, and the Minister went as well. If he was not convinced by that, I am surprised. I think he was, but once again we are dallying.
I know that the trials unit that was closed has carried on in a lesser form at east Cowes, and the door is still open. However, I am not sure how much longer Westland, as the parent company, can go on funding something that has been on trial for between 12 and 15 years. The hovercraft provides an answer to the problem of mine counter measures, and it is time that orders were placed.
I shall not bore the House with special pleas on other things. Together with the hon. Member for Grantham (Mr. Hogg), I saw the Minister the other day about the Sea mark system, the gun system being considered by the Royal Navy and jointly by Plessey and Bmark of Grantham. As everybody else seems to be putting in plugs, on everything else under the sun, I put one in by saying that that would be helpful to Plessey in the Isle of Wight, where unemployment was 16·3 per cent. However, I am grateful for the orders that the Ministry has placed with Plessey, which have done a great deal to improve its financial position.
A naval architect, Mr. Peter Thornycroft, is also one of my constituents, so I had better mention him. His project the S90 started life as the Osprey and if there is a future for the short squat boat, I hope that the Navy and the Minister will consider it perhaps in a rather different role from what was envisaged in the type 23. It might prove the answer for a suitable platform, to give a wider area for some of the missile systems and guns that we need.
I make a plea for Vosper Thornycroft. I know that the hon. Member for Attercliffe will remember me lobbying him years ago for a type 42 destroyer for Vospers. He was honest, and he told me to be patient and that was the message that I took back to the shop stewards. They had a fist under my chin and told me that I would never win

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another seat again in my life if they did not get the order. However, the hon. Gentleman did give the order but I know that Vospers today are in desperate straits and need orders. If something could be done to help it, I should be grateful, as about 60 of my constituents work there.
I can never understand when I see orders for diesel submarines going to Germany. Recently, Norway ordered four ordinary diesel submarines from the Germans. We used to build marvellous submarines in Cammell Laird and Scott Lithgow, but now the only place that can build them is Vickers. I saw a film on Scott Lithgow the other day and I realised that, like other yards, it now specialises in certain kinds of ships, as does Harland and Wolff. Is it not possible to get back those skills so that we can go round the world and pick up orders for such ships? We used to build good submarines in the days gone by. It is sickening to see that we are not capable of selling overseas. For example, most of Australia's ships are built in the United States.
The hon. Member for Corby asked why we were buying so much in the United States. Our defence industry has been rather more successful selling to the United States in recent years, and Fairey Marine had a big order from the United States army for army patrol boats. We have sold a number of defence systems to the United States, and if we became too protective for our industry there would be repercussions, and they would not look to us so kindly. This is a difficult problem, but we have not done too badly up till now.
I see the hon. Member for Portsmouth, South (Mr. Pink) here. I am pleased about the partial reprieve for the dockyard at Portsmouth. I hope that that reprieve will be rather more than was announced, as I understand that the dockyard is full of work and having to put some out. Why can we not maintain Portsmouth in its full role as a dockyard and home for the Navy, which it always has been by tradition and always should be? It is a marvellous harbour, and I am honoured to go through it several times a week. Portsmouth is totally committed to the Royal Navy and all that goes with it. It would be a sad day if we allowed Portsmouth to be run down to the extent envisaged originally.
9.10 pm
Mr. Duffy rose——
Mr. Deputy Speaker (Mr. Harold Walker): Order. Does the hon. Member for Sheffield, Attercliffe (Mr. Duffy) seek the leave of the House to speak again?
Mr. Duffy: With the leave of the House, Mr. Deputy Speaker, perhaps I might wind up the debate on behalf of the Opposition.
I am sorry that I missed the speech of the hon. Member for Corby (Mr. Powell). It is the only one that I did not hear. I remember the hon. Gentleman's maiden speech during our defence debate in July. I considered it to be a fine and eloquent contribution.
I have been most interested in all the other speeches, all worthy of a Navy debate, however sparse our numbers. I have never worried unduly about a low attendance level. That has never changed no matter which party has been in power. We never attract great numbers to our service debates. That seems to put a greater onus on those right hon. and hon. Members who are here to raise the standard
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of debate. We manage to achieve a higher standard than average for our service debates, and the proof of that is on the record.
We have had a most interesting and meaningful debate. There seems to have been greater unanimity between right hon. and hon. Members on both sides of the House than there has been between Government supporters and their Minister. I hope to furnish my grounds for making that statement.
We have all agreed—more than the Minister seemed to agree—that the right job for the country, with its expertise and tradition, is a maritime role. One shortcoming of the Government is that they are not sufficiently positive in that maritime role. They are not sufficiently Navy-inclined. There are people outside the House who think that perhaps the Government are anti-Navy. That may be going too far, but those who are in touch with people who watch the matters that we have been discussing must have heard murmurs to that effect.
The hon. Member for Beverley (Sir P. Wall) reminded us that the United Kingdom was ideally placed to perform that role, given its position adjacent to the GreenlandIceland-United Kingdom gap. Why did we not get that kind of commitment from the Minister? It follows that he would have had to dwell on the implications, including the need to provide defence in depth. I do not mean 50 destroyers and frigates by the end of the decade. I mean defence in depth against a maritime threat about which we heard a great deal from the hon. Member for Nottingham, North (Mr. Ottaway), as well as preserving lines of communication, reinforcement and supply.
The hon. Member for Beverley also spelt out the Navy's primary role—that of ASW in support of the strike fleet. He also agreed with my earlier submission that we could not rely on the United States navy, as we have generally done until now. Even though the strike fleet would be provided by the United States navy, it would be looking to us perhaps for total ASW support. I could say a good deal more about that, as, I dare say, could the hon. Member for Beverley. But time forbids that now, as does the public interest.
I content myself with putting on record the fact that our commitments in the Atlantic as we go further and further north become more and more difficult and doubtful. There must be safe entry to and exit from Britain's major ports, so mine counter-measures would have to be strengthened. Then we heard what the hon. Member for Beverley said about the lack of mine counter-measures around the Atlantic basin. The Minister must know the numbers that are coming on stream. The Hunt and Brecon classes, fine system though they are, are not enough. With enhanced air defences and the retention of a major amphibious capability, we could provide a significant contribution to the reinforcement of either NATO flank if the occasion required.
My charge against the Secretary of State's Department arises from its halfhearted approach to naval matters in support of the naval role of the United Kingdom, its discharge of the responsibilities that turn on such a commitment, and the numbers that were spelt out in this debate, of which I shall say more later.
The flexibility of defence policy was stressed by more than one hon. Member, as was the need to meet the unexpected. It is no good saying that the Falklands was a one-off affair. Of course it was. All wars are a one-off occurrence. The chief of defence at the time of the

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Falklands conflict, Admiral of the Fleet Lord Lewin, said at the end of his maiden speech in the defence debate in the House of Lords, just a month ago:
"All history shows that it will he the unexpected that will test us again and again."—[Official Report, House of Lords, 25 October 1983, Vol. 444, c. 157.]
That does not mean that we cannot draw conclusions, as the hon. Member for Arundel (Mr. Marshall) did—and we must go on doing so—from the Falklands conflict. That war showed us that sea power is extremely flexible. I hope that the Secretary of State is listening to this. It is a reminder to him and his colleagues to upgrade the Navy's place, for example, in spending. I wonder how many hon. Members know that for some years the Navy has had less money spent on it—it has received a smaller share of the defence purse—than the other two services. That tells it all. A fleet that was designed to fight an ASW—an anti-submarine war—in the north Atlantic was able to fight a creditable anti-aircraft war in the south Atlantic.
We know that aircraft carriers were at the centre of that flexibility, and we also know how halfhearted—to put it mildly—this Administration's attitude has been to aircraft carriers. They thought that two aircraft carriers might be enough for the Royal Navy's ASW role in the north Atlantic. For that role, and possible out-of-area roles, they may have to think again about that number. Two is an irreducible number in the north Atlantic, although the Government talk more and more about out-of-area activities. Because carriers have a versatility and a value unmatched by any other ship, we may find, as the United States navy found, carriers turning up in unexpected parts of the world and staying there for longer than intended. In spite of all the numbers of carriers—by our standards—that the United States navy possesses, it knows that it needs more. Amphibious ships, such as Fearless and Intrepid, without which the Falklands war could not have been fought, were stood down for a while. They serve to remind the Government of another instance of pretty cheap flexibility.
The House agreed on all those matters, but there was not much agreement on the Government Front Bench. No doubt their Back-Bench supporters will have noted, and those who were not present for the debate will be intrigued to know, for example, that more than one of their Back-Bench colleagues found it necessary, in spite of sitting through reminders about Sea Eagle from their colleagues, to press home equally fervently the case for Sea Eagle.
I realise that some hon. Gentlemen were making constituency points, because the hon. Member for Berkshire, East (Mr. MacKay) admitted it, but they did not all do that. Some of them did it because they cannot be sure that their Ministers see the prior claims for Sea Eagle. The hon. Member for Yeovil (Mr. Ashdown) thinks that the Government are much too dilatory about this fine weapon system, the EH101. The Minister's Back-Bench colleagues who are versed in these matters have been hearing not only about the claims of EH101 but about the need for it. After I arrived in the Navy department I heard about the need to replace the Sea King, yet we are still trying to replace it.
The hon. Member for Gillingham (Mr. Couchman) paid a fine and moving tribute to Chatham dockyard and base. Those of us who have been there, served there and know something of its history will for a long time remember his speech. I shall be among the first tomorrow
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morning to claim it and keep it as a memento. Everything that he said on behalf of those who have served their country through the port of Chatham, and about the workers and trade unionists, was so very true.
Nevertheless, even the hon. Gentleman, in such a fine speech, could not but insert a sting in the tail or raise doubts about the adequacy of the follow-on arrangements. He was rightly proud of the high standards of the SSN refitting capacity at Chatham and asked whether those standards would be maintained at Devonport. It is no good the Government saying, "Of course they will," because the hon. Gentleman reminded us of Swiftsure. What a sorry saga. That is not the only such case.
The hon. Members for Beverley, for Portsmouth, South (Mr. Pink), for Plymouth, Drake (Miss Fookes), for Upminster (Sir N. Bonsor), for Nottingham, North, for Ynys Môn (Mr. Best) and for Bristol, East (Mr. Sayeed) were united in their criticism of the Government's longterm plans for major warships.
Mr. Ottaway: As one of the named hon. Members, may I say that it was slightly unfair to accuse us of criticising the Government? There was absolutely no criticism from the Labour Benches, because no Labour Member has been present. It therefore fell to us to offer some constructive criticism of Government policy.
Mr. Duffy: It was nice criticism. Nevertheless, there was deep scepticism about the Minister's reassurances on numbers at the beginning of the debate.
Sir Antony Buck: I caution the hon. Gentleman not to talk too much about numbers, in view of the paucity of them on the Labour Benches.
Mr. Douglas: We have quality here.
Mr. Duffy: My hon. Friend the Member for Dunfermline, West (Mr. Douglas) reminds us of quality as well as quantity. The real point of divergence was Trident. The hon. Member for Yeovil (Mr. Ashdown) asked whether it imposed an unnecessary strain on the Alliance. At the end of the day this was a decision taken outside the Alliance, and there is no question but that it is an independent nuclear deterrent.
Other objections could be raised about it in that context. Given the growing constraints of costs and expenditure, the Secretary of State will have to look yet again at the shopping list for the three services. Where any weapons system is in jeopardy, in any such reassessment our European and American allies may well object if preference is given to an independent arm such as Trident.
We know that already procurement and training in the services are being affected by financial restraints which are bound to continue into the period where the cost of Trident begins to be felt. My right hon. Friend the Member for Lewisham, Deptford (Mr. Silkin) made that point earlier in the debate. Because of the shortage of submarine-building resources in the hunter-killer programme there is bound to be a conflict there when work begins on Trident. I suspect that the order for the 18SSN was placed to get it in before the capacity was no longer available.
Dr. Alan Glyn: Am I correct in saying that the hon. Gentleman stands by the Labour party election manifesto, which called for the cancellation of the Trident programme and a refusal to deploy cruise missiles?
Mr. Duffy: I was going to deal with that later, but I shall make the point now. Given my concern about overstretch in the Department and the way in which the Navy is singled out again and again, and given the prior claims, as I and some Conservative Members see them, of other systems, especially escort vessels, it is obvious that something will have to go. One thing that will have to go is a system which duplicates another system. That is Trident.
Unlike Opposition Members, Conservative Members have failed to recognise the radical new thinking on nuclear and conventional non-nuclear strategy that is emerging within the NATO establishment itself.
Mr. BestlWill the hon. Gentleman commit his party to stating that if it cancelled Trident it would ensure that the expenditure thereby saved would continue to be spent on the armed forces?
Mr. Duffy: I hope that the hon. Gentleman will understand and accept that the Labour party is as concerned as the Conservative party for the proper defence of this country. We differ from the Conservative party, and especially Ministers, on defence priorities. Trident is a case in point. I shall spell out how far we differ. Earlier this year senior NATO officials—some Conservative Members are aware of this—warned the countries of the Western Alliance that they were alarmingly dependent on nuclear weapons for their defence. They had us in mind. The only way out of this dangerous situation, according to General Bernard Rogers, SACEUR, is for NATO to improve its conventional forces and to spend more on new high technology weapons.
Mr. Best: Would the hon. Gentleman do that?
Mr. Duffy: We would certainly do that. The Labour party has been dedicated to an improvement of our conventional posture. We are well aware that a special onus falls on us in the conventional area.
The Select Committee on Defence said that
"it is very difficult to see how it will be possible to give top priority to the Trident programme throughout the decade without something else being squeezed out"—
that was being said by some Conservative Members—
"unless economic conditions improve dramatically. Other equipment programmes are likely to be displaced in terms of time, quantity, or quality or lost altogether."
Those comments were made by the House, not by the Labour party.
Mr. Best: There is nobody on the Labour Benches.
Mr. Duffy: So many Conservative Members have been anxious throughout the debate to put on record the attendance, as they invariably do during defence debates, that it is only fair to put on the record that at no time during the debate have more than 20 or 30 Conservative Members been present. That is the attendance of a party that is supposed to be defence orientated. For most of the debate we have not seen more than 20 Conservative Members in the Chamber. There were only four Conservative Members present an hour ago and there are now more than four Opposition Members present.
There is a growing consensus within the Alliance that we need to strengthen our conventional capabilities if we are not to raise the nuclear threshold. This is due in part to military considerations and in part to political considerations. Changes in the military balance over the past decade have rendered the Alliance's doctrine of
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collective response rather incredible. The achievement of strategic nuclear parity between the United States and the Soviet Union, coupled with Soviet dominance in theatre nuclear weapons, has made NATO's threat of nuclear escalation in the face of imminent conventional defeat rather unbelievable. There is a strong need militarily as well as politically to modernise and strengthen our conventional forces to implement flexible response as a credible deterrent strategy.
New technologies in the areas of guidance, target acquisition and miniaturisation are now expanding the number of military missions that can be accomplished by conventional weapons. New technology and high technology are making possible a much more effective conventional response. There is little if any evidence of such awareness on the part of Conservative Members, and none at all in the Government's defence policy. That explains why there is a lack of commitment by the Government towards the Navy. When the squeeze is on, historically the Navy suffers. The Navy is suffering again as it has suffered before and there are some Conservative Members who know that.
When the Labour Government were in office they were wholehearted in support of the work that was being done in the ship department on the new diesel-electric submarine, the offshore patrol vessel and in furthering the concept of a smaller and cheaper frigate.
We welcome the order that has now been placed for the first type 2400. We have noted with gratification the success of the two ships of the Leeds Castle class offshore patrol vessel, which were built by that fine shipyard of Hall Russell of Aberdeen, which acquitted itself so well in the south Atlantic. The light, small, and cheaper frigate has turned out to be rather larger than would have been expected when the Labour Government left office in 1979. It is known as the type 23. These developments, which we welcome, need the help of the Government and of the Ministry of Defence. They need the help of the Secretary of State as well as that of the industry. Without that help there will not be good prospects of employment in building variants of these classes for overseas sales.
Our overseas sales performance has become lamentable and now we have opportunities to improve it. We all wish to see British industry performing better, but we know that in marketing its products overseas it needs help from us. It needs help from the Minister's Department. It knows only too well that overseas nations with which it is competing help their industries. It is essential, therefore, that there should be a stronger commitment to the Navy on behalf of the Government that is extended to the ships that are on stream and to the providers of those ships, the industries and the fine yards that are building them. Also involved are the sales organisations and the ships' visits which may take place, which will help further our prospects overseas.
The hon. Member for Yeovil mentioned the northern flank, which is becoming increasingly important in the eyes of Germany, which has now assumed more naval roles north of 61 degrees latitude. The hon. Gentleman asked about the United Kingdom's role on the northern flank and about the future of Fearless and Intrepid, and he was not convinced by the Minister's argument despite what was said about an improvement in the numbers of the Royal Marines.

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What about inshore defences? Has the Minister considered whether coastal forces, such as those that we had during world war two, will man any gaps, along with minesweepers—both manned by the reserves?
The Minister said that this year there would be an exercise on the Arapaho project which would be made possible by leasing equipment from the United States. Does that mean that we do not have the equipment for an Arapaho project of our own? Some of us have been talking about this project for years. When the Labour Government left office, we thought that there was to be an Arapaho programme. It seems that after five years we cannot exercise that programme without the Americans' help. This would be unbelievable even to some of the Minister's Back-Bench colleagues. I have been arguing all afternoon that a limited budget and rising defence costs mean that Britain must make a choice. We can no longer afford to maintain our commitments to NATO, our obligations to our outer area responsibilities and our requirement to protect United Kingdom bases. The Minister must choose and look again at his priorities.
The Labour party believes that a fundamental reappraisal of strategy is called for. There should be task specialisation and burden sharing within NATO. We should like two basic classes of escort and a cheaper utility escort which could be deployed much closer to land in the south-west approaches and in the Channel.
Design criteria and concepts should be more radical so that ships are constructed more quickly and cheaply—perhaps on the Mekon basis which some of us have seen in Hamburg. Construction methods and costs should be radically reviewed. Resources should be provided to recondition merchant and fishing vessels for naval purposes.
We believe that the potential of the sea is a matter for all of us. The overall situation is extremely complex. It includes a huge variety of interests, some of which are commercial, public, private or military. Most are interconnected nationally and internationally. All of them are vital for Britain's well-being. However, taken as a whole, these interests can too easily slip into decline. There can be no sign of a recovery under the Government until there is a firmer commitment from the Government to the Royal Navy.
9.38 pm
The Under-Secretary of State for Defence Procurement (Mr. John Lee): I am pleased and honoured to have the opportunity tonight to close this Navy debate. There is a certain relevance in having the former Member for Nelson and Colne—myself—to reply. I am trying to trace Admiral Colne.
Perhaps there has been a little more controversy during this debate than in the recent Army debate, yet I am sure that no one is too surprised about that. Controversy is nothing new to the Navy. Some hon. Members may recognise the words of Samuel Pepys who in 1692 stated:
"The life of a virtuous administrator in the Navy is a continual defensive war against Ministers of State and in particular against the Lords Treasurer and all other prejudiced inquisitors and malcontents."
How topical that sounds.
In opening the debate, my hon. Friend the Minister of State talked about the size of the Royal Navy and its strategic deployments and capabilities. I shall set out the current position regarding the naval programme in three
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specific areas—the dockyards, naval equipment and weaponry, and the current shipbuilding programme. In so doing, I hope to answer as many as possible of the points raised in the debate.
Before moving on, however, I should like to spend a few moments on an issue which is both practical and emotional and concerns the traditions and the spirit of the Royal Navy and the affection in which it is held by the British people. I refer to the naming of ships. As hon. Members are aware, among the most sophisticatd surface ships we are currently building are the type 22 frigates—the Broadsword class. At present, five of these ships are in service: Broadsword herself, Battleaxe, Brilliant, Brazen and Boxer. We have already announced that the next two are to be called Beaver and Brave. Following these, the Admiralty Board has now decided to discontinue the line of names beginning with "B".
I am honoured tonight, therefore, to announce to hon. Members that we have approved today that the name of HMS type 22–08 will be London and that type 22–09 and type 22–10 will be called HMS Sheffield and HMS Coventry respectively. I hope that the House will join me in acknowledging the justice of restoring the last two names—so tragically lost last year in the south Atlantic—to the running fleet at the earliest opportunity. I am sure that there will be much pleasure in those cities at having their names once more linked with ships of the line and I pay tribute to those hon. Members, including my hon. Friend the Member for Sheffield, Hallam (Sir J. Osborn) and especially the hon. Member for Sheffield, Attercliffe (Mr. Duffy), who pressed that cause on a number of occasions.
Mr. Duffy: I think that I can safely speak on behalf of the city of Sheffield, as I know how widespread was the concern at the loss of the Sheffield and how close the attachment of the city to that ship was. People very much wanted the name to be revived. The Minister has been most responsive, and I thank him on behalf of that city.
Mr. Lee: That is most kind. I thank the hon. Gentleman.
While I am on the subject of the type 22s, the House may be interested to know that on Thursday 24 November, on the Royal Aircraft Establishment Aberporth trials firing range off the west coast of Wales, the ship's company of HMS Brilliant, using the ship's Sea Wolf system, launched a Seawolf missile against an incoming Exocet missile. The trial was successful and the Sea Wolf intercepted the Exocet at maximum range, successfully "killing" it and causing it to ditch in the sea. This was the first time that this difficult trial had been undertaken and I am sure that the House will be pleased at the confirmation that it gives of the Sea Wolf system's effectiveness. I believe that a film on it will be shown on television in the near future. A number of hon. Members, and especially my hon. Friend the Member for Beverley (Sir P. Wail), also referred to Sea Wolf in today's debate.
The main Opposition spokesman, the hon. Member for Attercliffe, strove manfully and almost single-handedly to keep the Opposition end up. He was almost the sole ship of the line, with the possible exception of an aging destroyer and a new corvette and with very limited refuelling. Labour Members in general behaved very much like the Argentine fleet and remained firmly in port. In consequence, as my hon. Friend the Member for

733
Nottingham, North (Mr. Ottaway) said, Conservative Members had to provide both the attacking squadron and the defending squadron in this exercise.
Mr. Douglas: They nearly sunk you a few times.
Mr. Lee: The hon. Member for Attercliffe informed us that during the election campaign he toured the country giving a set speech on Labour's defence policy in Plymouth, Portsmouth and Barrow. The election results suggest that the people of those three constituencies were as sceptical as we are about Labour's defence policy and its ability to square the circle.
In its manifesto the Labour party said clearly that if returned to power it intended to reduce defence expenditure. Page 37 stated:
"Labour will reduce the proportion of the nation's resources devoted to defence so that the burden we bear will be brought into line with that of the other major European NATO countries, without increasing the reliance on nuclear weapons."
The nonsense of that has been pointed out by my hon. Friend the Member for Upminster (Sir N. Bonsor) and others.
If we reduce our defence expenditure from the £15 billion in 1982–83, which then represented 5·3 per cent. of GDP, to the 3·5 per cent. figure which would be the NATO equivalent—taking into account major European countries' contributions—that would amount to a total reduction in defence expenditure of about £5 billion per annum.
The basis of Labour's case tonight has been that the cancellation of the Trident project, at a possible saving of about £7 billion in total, would provide the resources to fund new vessels and new orders for all the shipyards. The fact is, as many Conservative Members have pointed out, Labour cannot square the circle, and I am afraid that its defence policy lacked credibility.
Mr. William Powell: Can my hon. Friend confirm that a reduction in the defence budget along the lines that he has just mentioned would be equivalent to more than the annual cost of running the Royal Navy?
Mr. Lee: I think that the answer is, "Yes, just."
Several hon. Members have spoken about Trident, specifically the right hon. Member for Lewisham, Deptford (Mr. Silkin). He referred to the allegations he made in July 1982 that Trident would absorb 20 per cent. of the budget for new equipment. My former right hon. Friend the Member for St. Ives, Sir John Nott, did not agree that Trident would absorb 50 per cent. of the cost of orders for the Royal Navy. He pointed out that the Tornado programme had been taking a far larger proportion of the equipment budget. As we have made clear repeatedly, Trident will cost on average 3 per cent. of the defence budget over the period during which it will be introduced into service, rising to a peak of 6 per cent. The peak in terms of the defence equipment budget is about 11 per cent.
Mr. Ashdown: As the Minister is talking about Trident, I hope that he will not dodge my question but will tell us whether Trident will come out of the naval Vote. If it will, what percentage of the naval procurement budget will it occupy?
Mr. Lee: There is no such thing as a naval Vote. I shall endeavour to write to the hon. Gentleman to deal with his point.[Interruption.] I shall not give a glib answer.
The hon. Member for Dunfermline, West (Mr. Douglas) referred to the United States dollar expenditure on Trident. We have always recognised that Trident involves a significant dollar cost. We took account of that when the original decision was reached. We still expect the dollar spend to be about 45 per cent. of the total. Those figures have been stated before.
I am glad that a number of my hon. Friends, including the Members for Beverley, for Portsmouth, South (Mr. Pink), for Plymouth, Drake (Miss Fookes), and for Corby (Mr. Powell), have spoken strongly in defence of the Trident programme.
The hon. Member for Attercliffe and a number of other hon. Members talked about the Merchant Navy. The hon. Member for Attercliffe mentioned the Merchant Navy's adequacy to support defence operations. That is a matter which my right hon. Friends the Secretary of State for Defence and the Secretary of State for Transport keep under regular review. There are sufficient ships available of the right type to support current defence plans. The question of subsidies to the Merchant Navy is a matter for my right hon. Friend the Secretary of State for Transport.
I wish to pay tribute to the men of the merchant marine, especially for their Falklands contribution. My hon. Friends the Members for Bristol, East (Mr. Sayeed) and for Corby and the hon. Members for the Isle of Wight (Mr. Ross) and for Jarrow (Mr. Dixon) have referred to the sterling work of the merchant marine.
Perhaps second only to the question of ship numbers as a subject for debate in naval circles and in the naval enclaves of this House is the issue of the role and future of Her Majesty's dockyards. I should like to say a few words about that now.
The reduction in size of the royal dockyards organisation announced in Cmnd. 8288 was not a self-contained decision. It was of course a consequence of the decision to discontinue the practice of major mid-life modernisation of surface ships. It also reflected the decision on the future size of the fleet. It was not an easy decision; but it was a necessary one. Of course it is very sad when a chapter of history comes to an end as at Chatham and Gibraltar, but I can assure the House that this Government are committed to do everything possible to minimise the disruption and hardship to those most directly involved.
I wish briefly to summarise the position in our respective dockyards—first at Chatham. As the House will know, Chatham naval base, including the dockyard, is to close in March next year. Ship refitting came to an end in June following completion of the refits of the nuclear submarine HMS Churchill and the frigate HMS Hermione. Both these major projects were completed in a timely fashion and to a high standard. That achievement expresses the character of the Chatham work force.
My hon. Friend the Member for Gillingham (Mr. Couchman) made a moving speech and those hon. Members who heard it must have been enormously impressed. I am sure that all those who work or worked at Chatham will appreciate his words.
This House has heard much about the financial imperatives that have dictated the closure of Chatham naval base, and we all know their force. Let me now refer to the pride and loyalty of the men and women of Chatham

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dockyard. It was these qualities that enabled them, with the knowledge of closure in their minds, to work unstintingly through the Falklands crisis of last year and right up to the present time, to finish their task with such distinction. We owe them a great deal.
In recognition of this, we have been involved since the closure decision with the efforts of other central and local government departments and agencies to put the site to productive use in such a way as best to serve local interests. The more modern part of the dockyard is being taken over for redevelopment by English Industrial Estates. The Medway ports authority has taken over one of the basins, and various other concerns are already in occupation, in advance of final dockyard closure. In the original part of the dockyard are a number of architecturally important buildings and facilities that will be preserved, and we have already released several factory buildings in this area to firms which are carrying on traditional activities, including rope-making and the production of flags and banners. It is our hope that measures such as those I have briefly described will do much, as they mature, to offset the consequences of naval base closure.
I recently saw a delegation of those hon. Members most concerned with the Chatham rundown. If I may say so, my hon. Friends the Members for Medway (Mrs. Fenner), Gillingham and Mid-Kent (Mr. Rowe) are working assiduously for their constituents.
At Portsmouth, I am pleased to say we have now reached agreements with the work force over working practices that allow us to go ahead and establish a fleet operating maintenance base with effect from October next year. This will mean that, instead of reducing numbers in the present dockyard element of the naval base to some 1,500 as originally planned, we will retain instead about 2,800 civilian employees, in addition to the people employed on stores and other duties. It also means that refitting work will continue at Portsmouth to supplement the capacity of Devonport and Rosyth.
I regret that time is rather short. I had intended to say more about the Gibraltar dockyard. I am sorry to say that there are still those in the House and outside who do not seem to believe that the Government mean what they say in saying that the naval dockyard at Gibraltar will close by the end of 1984. Those people are mistaken. There is no going back on our decision.
I wish to mention the Government's plans for the other dockyards at Devonport and Rosyth. Since taking office I have visited both dockyards, which I hope demonstrates my concern for the wellbeing of dockyard skills, which have been built up through generations and are a major national asset. Who could fail to be impressed by the massive covered frigate refitting complex at Devonport, which takes three frigates at a time, or its nuclear submarine refitting complex with its enormous refuelling crane—a facility unparalleled anywhere in the West, even in the United States. Rosyth has a fascinating synchrolift and also houses the Polaris refitting operation. The cost of the work carried out in the royal dockyards during 1982–83 was about £608 million.
The hon. Member for Dunfermline, West referred to the worries and concerns at Rosyth. The Government have every faith in Rosyth—it has a future, as has Devonport.
On the question of new equipment——
Mr. Douglas rose——
Mr. Lee: I shall not give way.
Mr. Douglas: Will the Minister give way on the point about Rosyth?
Mr. Lee: No.
Mr. Douglas rose——
Mr. Deputy Speaker (Mr. Harold Walker): Order. The Minister clearly is not giving way. The hon. Member for Dunfermline, West (Mr. Douglas) must resume his place.
Mr. Lee: Only a few minutes remain and I must deal briefly with some of the points raised by hon. Members.
My hon. Friend the Member for Arundel (Mr. Marshall) raised the question of cardinal point specifications, which are a derivative of performance specifications. We have been moving towards that system and it is being used in the surface-to-surface guided weapon tenders.
A number of hon. Members referred to the Sea Eagle, including my hon. Friends the Members for Arundel, for Portsmouth, South, for Upminster, for Ynys Môn (Mr. Best), for Bolton, West (Mr. Sackville)—who could be described as the original Sea Eaglet—and for Berkshire, East (Mr. MacKay). They all lobbied hard for the Sea Eagle. A number of hon. Members have written to me in support of it. There are four contenders for the surface-to-surface guided weapon, and all the relevant facts will be taken into account before we reach a decision.
Another major competition is taking place for the close-in weapon system to be fitted to a variety of ships, including the type 23, and the Invincible class carriers. My hon. Friends the Members for Cambridge (Mr. Rhodes James), for Drake and for Grantham (Mr. Hogg) and the hon. Member for Isle of Wight recently lobbied on behalf of the Swiss-United Kingdom tender. There are four contestants for that system also.
We are increasingly trying to introduce competition into new ship construction. We shall be placing orders for two type 22 frigates relatively soon. Three yards are competing for the orders—Vosper Thornycroft, Cammell Laird and Swan Hunter. I have received two delegations of hon. Members, one in support of Cammell Laird and the other in support of Vosper Thornycroft. Both delegations lobbied their cases and causes.
As my hon. Friend the Minister said when he opened the debate, the Royal Navy is now enjoying a considerably greater financial allocation than when we took office—£750 million more this year, giving a total of £4·5 billion., of which £2 billion will be spent on equipment. Even when expenditure on Trident is at its peak, we still plan to spend more on the conventional Navy than we spent in 1978–79.
It is with pride that I wind up this debate on the Royal Navy. Today's Royal Navy is more professional than it has ever been. It is the most potent naval force in the world after the two super powers.
Our Navy honours its Alliance responsibilities and yet maintains an independent capability around the world. The Government have given sustained backing to our Navy in terms of pay, new ships and new, improved weapon systems.
We salute those who sail under the White Ensign. They continue our great maritime traditions. They have never

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let us down in peace or in war and this House has a duty to give them the backing and support that they so richly deserve.
As Charles II said:
"It is upon the Navy, under the Providence of God,——
It being Ten o'clock, the motion for the Adjournment of the House lapsed without Question put.

Statutory Instruments, &c.
Mr. Deputy Speaker (Mr. Harold Walker): With the leave of the House I shall put together the Questions on motions 2 to 10.
Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committees on Statutory Instruments, &c).

Statutory Instruments, &c.

  INCOME TAX
  That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Trinidad and Tobago) Order 1983 be made in the form of the draft laid before this House on 27th July.
  That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Tunisia) Order 1983 be made in the form of the draft laid before this House on 27th July.
  That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Netherlands) Order 1983 be made in the form of the draft laid before this House on 3rd November.—[Mr. Douglas Hogg.]
  Question agreed to.
  Address to be presented to Her Majesty by such Members of this House as are of Her Majesty's most Honourable Privy Council or of Her Majesty's Household.
  Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committees on Statutory Instruments &c.).

  LEGAL AID AND ADVICE
  That the Legal Aid (Financial Conditions) (No. 2) Regulations 1983, dated 8th November 1983, a copy of which was laid before this House on 8th November, be approved.
  That the Legal Advice and Assistance (Financial Conditions) (No. 2) Regulations 1983, dated 8th November 1983, a copy of which was laid before this House on 8th November, be approved.
  That the Legal Advice and Assistance (Prospective Cost) (No. 2) Regulations 1983, dated 8th November 1983, a copy of which was laid before this House on 8th November, be approved.
  That the Legal Aid (Scotland) (Financial Conditions) (No. 2) Regulations 1983, dated 10th November 1983, a copy of which was laid before this House on 14th November, be approved.
  That the Legal Advice and Assistance (Scotland) (Financial Conditions) (No. 3) Regulations 1983, dated 10th November 1983, a copy of which was laid before this House on 14th November, be approved.
  That the Legal Advice and Assistance (Scotland) (Prospective Cost) Regulations 1983, dated 10th November 1983, a copy of which was laid before this House on 14th November, be approved.—[Mr. Douglas Hogg.]
  Question agreed to.

Property Services Agency
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Douglas Hogg.]
10 pm
Mr. Tim Smith: I am grateful for this opportunity to raise the subject of the Wardale inquiry into recent cases of fraud and corruption in the Property Services Agency.
The PSA was set up in 1972. It is responsible to the Secretary of State for the Environment and for the provision to other Government Departments of property management services, building construction and management and appropriate supplies. My hon. Friend the Under-Secretary of State for the Environment was kind enough to send me a copy of the PSA's annual report for 1982–83 recently. It shows the substantial scale of the PSA's operations.
In 1982–83, expenditure on major works totalled £455 million, on smaller new works it totalled £144 million and on maintenance it totalled £684 million. That represents a grand total of £1·277 billion. That total is estimated to rise to £1·493 billion this year and £1·625 billion next year. At 31 March this year the PSA employed 28,631 people. That represents a 26 per cent. drop as compared with 31 March 1979.
In the foreword to the annual report, my right hon. Friend the Secretary of State for the Environment comments:
"Of course in a major organisation of this size there are problems, not least when the Government asks that the rising volume of work should be handled by reduced numbers of staff."
It is worth quoting the PSA advisory board's review of the year. That advisory board is an independent review body.
It says:
"The Advisory board believes that the PSA generally fulfils its many tasks in a satisfactory manner and that it is staffed by competent people who take pride in their work. The Board has seen much to be encouraged about in the Agency. However, there is scope for improvement in some areas such as financial control, management methods and career planning."
That is the context into which we must put the Wardale inquiry report. On 29 April 1982, my right hon. Friend the Secretary of State for Defence, who was then the Secretary of State for the Environment, announced that he had commissioned Sir Geoffrey Wardale and Mr. Anthony Herron, a senior partner of Touche Ross, chartered accountants, to carry out a review with the following terms of reference:
"To investigate the circumstances of recent cases of fraud and corruption in PSA and to recommend what changes in procedures or organisation are desirable in the light of your findings."
The Secretary of State emphasised that, in his opinion, the vast majority of PSA staff carried out their duties honestly and conscientiously and that there were no questions about their integrity. I am sure that is correct.
As well as being a former second permanent secretary at the Department of the Environment, Sir Geoffrey is a member of the PSA advisory board. Therefore, I do not think that it can be said that he could have it in for the Civil Service in general or for the PSA in particular. That is why I think that his report makes alarming reading.
Tha alarming aspect is not so much the fraud as the attitude of management towards it. The report, in paragraph 4.2.1 says:
"PSA has as its object the construction, maintenance and furnishing of buildings required by Government departments who are its clients. It is understandable that satisfying the

739
demands of those clients is treated as a high priority and we are informed that political pressures may reinforce this. On the extent of the success of PSA in satisfying its clients we were not, in our enquiries, directly concerned. It appeared, however, that other management problems, such as effective staffing and financial control as we understand it, took a lower priority, and did not seem to command the attention they deserved. We were concerned to discover that there was sometimes a reluctance to acknowledge that problems existed in these areas and a lack of vigour in pursuing them when they were identified. Further, and as a facet of this, management's approach towards dishonesty and fraud does not always seem satisfactory. These are attitudes which collectively we can only call complacent. We have also noted a lack of understanding of both individual responsibility and the delegation of authority."
The House will understand why I felt that I should raise the matter. Not only have problems not always been recognised, but paragraph 4.2.2 of the report says:
"Where problems have been recognised and remedial action taken, there often seems to be a lack of vigour in following it through. A good illustration of this is the introduction of the 5 per cent. check of all works orders by the District Works Officer which is represented by senior management to be a major measure against irregularities. The implementation of this check has been slow and moreover it has a number of fundamental conceptual defects."
The 5 per cent. check has also been concerning the Comptroller and Auditor General for some time. In a memorandum to the Public Accounts Committee in May 1982, he reported that the PSA internal audit department had noted in October 1980 that it had been commenting for three years prior to that on the degree of failure by district works organisations to carry out their 5 per cent. checks.
More generally in that memorandum, the Comptroller and Auditor General said that he was becoming concerned about the time that it was taking to determine revised systems of controls and to secure general compliance with them. Following that memorandum, the Public Accounts Committee, in its 25th report, during the parliamentary Session 1981–82, expressed concern that the PSA had been taking so long both to act on audit evidence that prescribed checks were not operating properly and to implement revised controls.
The Comptroller and Auditor General returned to the subject in his report on the Appropriation Accounts for 1982–83. He concluded that while the PSA was making good progress in increasing the extent of DWO spot checks and improving its control over stores, serious deficiencies in control remained. I understand that the Public Accounts Committee is likely to take oral evidence on that subject early in the new year. I am glad that it is continuing to pursue the matter.
As well as calling for changes in management attitudes, Wardale made six principal recommendations. First, a budgetary control system should be introduced for all expenditure. Secondly, new management information systems should provide the information necessary for proper financial and budgetary control. Thirdly, regional management inspection teams should be formed to give regional management an annual assurance of the proper operation of its area and district. Fourthly, in the management of contracts the respective responsibilities of all staff should be recognised. Fifthly, management should take a more commercial approach to its activities where existing controls may not be cost effective. Sixthly, a more dynamic approach to saving, training and disciplinary matters is required.
According to the Comptroller and Auditor General, the PSA was finalising actions planned to deal with those
740
recommendations. The Minister will recall that I asked him about that in a parliamentary question. On 31 October, he told me that decisions resulting from the programme of action would be implemented as quickly as possible. He also told me:
"To ensure that the lessons learnt from the report are fully understood throughout the agency, a series of meetings for staff at all levels of management, attended by senior officers of the agency has been arranged."—[Official Report, 31 October 1983; Vol. 47, c. 265.]
In addition, both the PSA's annual report and the section on the PSA which appears in the White Paper on the financial management initiative, contain several positive proposals for structural changes in the PSA. I hope that they will be changes for the better. The British Civil Service is mercifully free from corruption. However, in response to observations made by the PSA, the Public Accounts Committee said:
"Having regard to the nature of some of the offences, we believe PSA are on weak ground in playing down the significance of the detected cases in their regional organisations. We do not consider that comparison of these cases with the broad statistics for convictions in the country as a whole can be meaningful; nor do we think it realistic to compare frauds involving long-term collusion or conspiracy among civil servants, where the losses are uncertain, with measurable 'shrinkage' in department stores."
That was the comparison that the PSA tried to draw.
People expect the highest standards from civil servants. Generally speaking, the Civil Service is free from corruption, but the Wardale report highlighted an exception to that general rule. Therefore, it is essential that its conclusions and recommendations are taken seriously and implemented as soon as possible. I should be grateful if, in his reply, the Minister will give me as much detailed information as he can about the response of the PSA to the principal recommendations of the Wardale inquiry.
10.13 pm
The Under-Secretary of State for the Environment (Sir George Young): I am grateful to my hon. Friend the Member for Beaconsfield (Mr. Smith) for providing this opportunity to debate the Wardale report. My hon. Friend made a cogent and persuasive case, as one would expect of him.
We are rightly proud of our Civil Service and its traditions, and it must be a matter of great concern to any Government when performance falls below the standard expected, especially in regard to honesty of conduct. We were therefore determined that, however uncomfortable the report's findings might be, they should be brought to public notice, and my right hon. Friend the Secretary of State for the Environment took an early opportunity to publish the report, to expose it to press comment, and to outline his proposals for change.
The Property Services Agency has been in existence in its present form since 1972. It brought together the works and other activities of the three defence services and the former Ministry of Public Buildings and Works as a self-contained agency within the Department of the Environment. Since 1976 the supplies area of the PSA has operated as a Government trading fund. The agency has at present about 28,500 staff worldwide, of whom about 13,000 are industrial grades. It handled in 1982–83 about £1·6 billion of expenditure on new construction, maintenance, rents and supplies.
In the United Kingdom the basic unit of organisation is the district works office. There are 153 district works

741
offices. The district works officer is directly responsible for most of the maintenance and much of the minor new works associated with all the Government's buildings and installations in his district and, usually, a number of buildings of clients, such as British Telecom, for which the agency does work on repayment terms. He carries a heavy responsibility for management and the execution and control, including financial control, of those works services. The district works officer reports to an area officer, of whom there are 34, and they in turn report to the eight regional directors in England, the director of the central office for Wales in Wales, or the director, Scottish services, in Scotland. This organisation as a whole we refer to as the United Kingdom territorial organisation, which is in turn answerable to Ministers.
My hon. Friend mentioned the report of the Comptroller and Auditor General, who commented on the position within the PSA before the final Wardale report was submitted. His comments do not take into account the steps that we have taken, or are planning to take, following Wardale, which I shall outline.
The 61 cases, or alleged cases of fraud or irregularity, which were the occasion of the Wardale inquiry, arose mainly at the district level in various parts of the United Kingdom territorial organisation during the period 1976 to 1982. They were mainly in maintenance, including stores, and minor new works. The aggregate value of the cases is estimated at £600,000. Several of them involved only people outside the PSA. Many of the cases did not involve fraud, but, where they did, people were dismissed. I should like to add that all Wardale-related convictions have resulted in dismissal, save where the officer has resigned or retired before the court hearing.
About 170 PSA staff have been involved directly or indirectly in cases of theft, fraud or irregularity in the past five years, and 61 have been dismissed. Although the press has linked all 61 dismissals with the serious cases of fraud and corruption, about half of those dismissed were guilty of the theft of miscellaneous items of no great financial value. To put this in a context—in the light of what my hon. Friend said, I do not wish to make too much of this—the expenditure in UKTO on maintenance and minor new works in 1982–83 alone was about £660 million and the number of staff at district level in UKTO was more than 17,000.
By any standards this is a low incidence of misdemeanour, but cases occurring in the agency are always treated rigorously. Approximately 100 staff have been involved in irregularities but have not been dismissed, because of the minor nature of the irregularities, such as the theft of property valued at £3·40 or the payment of two night's subsistence where only one is applicable. In those cases the staff concerned received formal reprimands.
In view of the public interest shown in the cases of fraud and irregularity that occurred my right hon. Friend the former Secretary of State—now Secretary of State for Defence—decided that there was need for an independent investigation into the circumstances of the cases. We were fortunate in obtaining the services for Sir Geoffrey Wardale, formerly second permanent secretary at the Department of the Environment, and Mr. Anthony Herron, a partner in Touche Ross, chartered accountants, to undertake this. They were commissioned in April 1982
742
and submitted an interim report in February 1983 based upon their investigations in four regions. The Secretary of State decided that the investigations should be pursued in the remaining six regions, and the final report was submitted on 3 August 1983. In all, Sir Geoffrey and Mr. Herron reviewed 49 of the 61 cases. Several of those involved anonymous allegations, and in eight cases they were not substantiated.
The burden of the Wardale recommendations was plain from the interim report. As my hon. Friend said, they revealed within the PSA an attitude of mind and operating systems which allowed fraud to exist and led to a wider study than one would expect fraud to require. When we knew the main thrust of the study team's proposals from the interim report, we set up a working group to develop a provisional plan for management action on the recommendations pending the receipt of the final report.
The report makes many recommendations ranging from the financial and management control procedures for works stores expenditure to the agency's policies for staffing and training for district work officer appointments, taking in on the way management information systems, audit controls, certain contractual matters and disciplinary procedures. Those are all important subjects, but underlying them was a more general criticism that management was not sufficiently alive to the existence of problems, and that this was exemplified by a concept of financial control which lacked an adequate budgetary element, the existence of management control techniques which were deficient in some respects, and insufficiently rigorous policies for disciplinary action against staff and third parties. My hon. Friend rightly drew attention to the problem of attitudes, which are often more difficult to change than are procedures. My hon. Friend rightly asks what is now happening to put things right.
When he announced the publication of the report on 5 October, my right hon. Friend stressed the seriousness with which he took it and his determination that any necessary changes in management systems and management attitudes should be carried through.
Our first job has been to impress on staff the seriousness with which Ministers take the report. We have taken urgent steps to ensure that staff at all levels of management have received and read the report and understand the action that is required on the report's recommendations. To secure the change in attitudes that is required, a series of meetings has been held for all regions, involving the regional senior staff and area officers with top management from PSA headquarters. To take the message down to district level, a further series of meetings is taking place in the regions now.
The regional meetings have shown that the management staff of the agency are anxious to respond to the Wardale report criticism. From my two years in my present post, I can say that I am impressed by the high calibre and dedication of the PSA staff that I have met. It is in their interest to accept that the management of the agency can and should be improved. Their and my concern is that the vital work that they do in maintaining the essential services of government should be carried on to the same high standard that exists, while improving management attitudes as well. This will not be easy, given the pressures on us, but we are determined to make progress. In addition to changing attitudes, a number of special changes have been introduced and I can give my hon. Friend some examples.

743
First, on contract notation limits, staff have been reminded that the notation limits for contractors must be properly observed and monitored. In particular, no firm should be invited for a contract the value of which is more than 15 per cent. above the firm's notation without agreement. Care is being taken to ensure that contractors are not overloaded with PSA work. Checks are being carried out on existing contracts, where notations may have been seriously exceeded, and corrective action taken wherever possible.
Secondly, there is the 5 per cent. check of work and stores orders, which my hon. Friend mentioned. Revised arrangements for the 5 per cent. check were issued on 1 July 1983, stressing DWOs' overall responsibility and the need to keep under review small works orders generally, in addition to the 5 per cent. check.
Thirdly, on floor laying contracts, PSA supplies ordering officers have been reminded to issue orders with adequate details of the work required and to give guidance on the checks to be made before certifying invoices. Certification for all such orders must be by an officer superior to the ordering officer. Departmental accommodation officers have been reminded of their responsibility for certifying that the work has been carried out properly.
Some recommendations, for example, those relating to stores procedures and to issuing guidance clarifying the respective roles of professional and technical officers and quantity surveyors in relation to measured term contracts, can be implemented fairly easily. Other recommendations that make continuing resource demands—for example, separating the duties of ordering work on jobbing contractors and certifying for payment—are more difficult. But we can and will make progress.
The report recommends the introduction of improved budgetary control arrangements for maintenance expenditure, including the budgeting of such expenditure by individual buildings or by small groups of buildings. The PSA already has a job by job system of control for all work which individually exceeds £2,500—in all, 75 per cent. of PSA's total works expenditure. As I have said, the main problem lies with the bulk maintenance below that threshold. Much—although not all of this—typically comprises a mass of small orders down to a few pounds in value, and is devoted to the repair of defects which arise through the normal wear and tear in buildings and cannot
744
be identified in advance of their occurence, although we can predict the scale of expenditure that is likely to arise in adequately large aggregations of the estate. While we accept the need for all maintenance expenditure to be effectively budgeted, there is a real practical question, which we are urgently examining, about the degree of disaggregation which it is useful and cost-effective to seek in devising improvements to our existing systems.
The report also makes recommendations on audit arrangements.
We are concerned that the recommendation for the creation of a regional management inspection body might involve some confusion between the functions proper to line management and the necessarily independent role of internal audit. There is a danger of blurring the responsibility of line management to ensure that adequate control systems exist and operate effectively, and to initiate suitable inspection and checking arrangements. However, in the general spirit of the report's recommendations, the PSA will be considering how, without compromising the independence of internal audit, its work might be developed to provide line management with a stronger feedback on the effectiveness of its operations and also whether the present arrangements for management inspection checks at various levels can be strengthened and more effectively co-ordinated.
If my hon. Friend would like further details of the follow-up to the report, I shall be happy to supply them in correspondence. I have, of course, taken note of the additional points that he made. I regard the Wardale report as a constructive, helpful and salutary report. My colleagues and I and the senior officers of the agency are determined that it shall be acted upon with all the speed we can muster.
The report has been treated with the seriousness that it deserves from other levels of management in the agency, and I am convinced that all our staff will do their best to implement its recommendations in the best traditions of public service as and when decisions are taken on them by management and generally to act in a manner calculated to obviate any future criticisms of the kind Sir Geoffrey Wardale and Mr. Herron felt constrained to make.
Question put and agreed to.
Adjourned accordingly at twenty-five minutes past Ten o'clock.

CIVIL SERVICE
  Statistical Services
  Statistical Services
THE ARTS
  Horniman Museum
  Horniman Museum
TRANSPORT
  Chelmsford Bypass
  Chelmsford Bypass
  Severn Bridge
  Severn Bridge
  Corby (Loans and Grants)
  Corby (Loans and Grants)
  Reddish Lane Level Crossing (Accident Inquiry)
  Reddish Lane Level Crossing (Accident Inquiry)
  Trunk Roads
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  A57 (Pelican Crossings)
  A57 (Pelican Crossings)
HOME DEPARTMENT
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  Detention Centre Orders
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  GLC Police Committee
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  Parole
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  South Wales Police
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  Prison Population (Statistics)
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  Police Stations (Lay Visiting Scheme)
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  Prison Libraries
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  Departmental Staff
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  Shoplifting
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  Departmental Expenditure
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  Police Cadets
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  Durham Prison
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  Violent Crime
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  Greenham Common
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PRIME MINISTER
  Secretary of State for Energy (Speech)
  Secretary of State for Energy (Speech)
SOLICITOR-GENERAL FOR SCOTLAND
  Scottish Law Commission
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  Mr. David Whitehouse
  Mr. David Whitehouse
  Kerb Crawling
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HOUSE OF COMMONS
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NATIONAL FINANCE
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TRADE AND INDUSTRY
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ENVIRONMENT
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WALES
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OVERSEAS DEVELOPMENT
  Mr. David Taylor
  Mr. David Taylor
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FOREIGN AND COMMONWEALTH AFFAIRS
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EDUCATION AND SCIENCE
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DEFENCE
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  Major General John Frost
  Major General John Frost
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AGRICULTURE, FISHERIES AND FOOD
  European Community (Capital Grants)
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  Intervention Prices
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  Bread
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  Canthaxanthin
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  Falkland Islands (Livestock Shipments)
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  Diseases of Fish Act 1983
  Diseases of Fish Act 1983
  Departmental Staff
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  Exports to Cuba
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  Radiation Exposure (Statistics)
  Radiation Exposure (Statistics)
  Caesium Concentrations
  Caesium Concentrations
  Poultrymeat
  Poultrymeat
SCOTLAND
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  Housing (Kirkcaldy)
  Housing (Kirkcaldy)
  Police Cadets
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  Ulster Polytechnic
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NORTHERN IRELAND
  Ballyclare High School
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  Rape
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  Voluntary Schools (Land)
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  School Transfers
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  Residential Homes
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  Electricity (Marketing and Promotion)
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  Social Workers
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  Youth Training Scheme
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  Police Cadets
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  Armed Forces Personnel (Imprisonment)
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  Armagh Prison
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ENERGY
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  Fast Reactor Development
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  Gas and Electricity Prices
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  North Sea Oil
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  Morcambe Bay (British Gas Development)
  Morcambe Bay (British Gas Development)
  Northumbrian Coalfield
  Northumbrian Coalfield
  Gas Prices
  Gas Prices
  Oil Exploration (Mainland Sites)
  Oil Exploration (Mainland Sites)
  Pit Closures
  Pit Closures
  British Gas (Profitability)
  British Gas (Profitability)
  Gas and Electricity (Standing Charges)
  Gas and Electricity (Standing Charges)
  Pressurised Water Reactors
  Pressurised Water Reactors
  Coal
  Coal
  Fluidised Bed Combustion
  Fluidised Bed Combustion
  Gas Meters
  Gas Meters
EMPLOYMENT
  Hull Jobcentre
  Hull Jobcentre
  Industrial Accidents and Diseases
  Industrial Accidents and Diseases
  Health and Safety Executive (Factory Inspectors)
  Health and Safety Executive (Factory Inspectors)
  Health and Safety Executive (Staff)
  Health and Safety Executive (Staff)
  Rolls-Royce, Hillington (Redundancies)
  Rolls-Royce, Hillington (Redundancies)
  Microelectronics Industry (Hazardous Material)
  Microelectronics Industry (Hazardous Material)
  Labour Statistics
  Labour Statistics
  Barnsley Jobcentre
  Barnsley Jobcentre
  Girocheques
  Girocheques
  Horse Riding Establishments
  Horse Riding Establishments
  Zoos
  Zoos
  Agricultural Inspectorate
  Agricultural Inspectorate
  Inspectors (Establishment)
  Inspectors (Establishment)
  Horse Racing Industry
  Horse Racing Industry
  Youth Training (Allowance)
  Youth Training (Allowance)
  Youth Training (Workplaces)
  Youth Training (Workplaces)
  European Community (Labour Mobility)
  European Community (Labour Mobility)
  Youth Opportunities Programme
  Youth Opportunities Programme
SOCIAL SERVICES
  Health Expenditure
  Health Expenditure
  West Midlands Health Authority (Staffing)
  West Midlands Health Authority (Staffing)
  Earnings Disregard
  Earnings Disregard
  Deputising Services (Monitoring)
  Deputising Services (Monitoring)
  Cervical Cytology Tests
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  Supplementary Benefit
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  Vaccine Damaged Children
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  Hospital Waiting Lists
  Hospital Waiting Lists
  Tobacco Advertising
  Tobacco Advertising
  NHS (Early Retirement Costs)
  NHS (Early Retirement Costs)
  Nurses (Pay Review Body)
  Nurses (Pay Review Body)
  Women's Rights
  Women's Rights
  Pay Beds
  Pay Beds
  Amenity Beds
  Amenity Beds
  Consultants
  Consultants
  Pensioners
  Pensioners
  Bolton (Hospital Services)
  Bolton (Hospital Services)
  Health Statistics
  Health Statistics
  Bolton (Ministerial Visits)
  Bolton (Ministerial Visits)
  Family Practitioners
  Family Practitioners
  Worksop (Emergency Services)
  Worksop (Emergency Services)
  National Health Service (Reorganisations)
  National Health Service (Reorganisations)
  Committee on Safety of Medicines
  Committee on Safety of Medicines
  Housing Benefit
  Housing Benefit
  Health and Hospital Authorities (Appointments)
  Health and Hospital Authorities (Appointments)
    EAST ANGLIAN REGION
    EAST ANGLIAN REGION
    MERSEY REGION
    MERSEY REGION
    NORTHERN REGION
    NORTHERN REGION
    NORTH EAST THAMES REGION
    NORTH EAST THAMES REGION
    NORTH WEST THAMES REGION
    NORTH WEST THAMES REGION
    SOUTH EAST THAMES REGION
    SOUTH EAST THAMES REGION
    SOUTH WEST THAMES REGION
    SOUTH WEST THAMES REGION
    SOUTH WESTERN REGION
    SOUTH WESTERN REGION
    OXFORD REGION
    OXFORD REGION
    NORTH WESTERN REGION
    NORTH WESTERN REGION
    TRENT REGION
    TRENT REGION
    WESSEX REGION
    WESSEX REGION
    WEST MIDLANDS REGION
    WEST MIDLANDS REGION
    YORKSHIRE REGION
    YORKSHIRE REGION
    Mentally Ill Persons
    Mentally Ill Persons

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Carlisle.
The following Lords took and subscribed the Oath or made the solemn Affirmation:
Robert Michael Christian, Lord Biddulph;
John Adrian Tremayne, Lord Rennell.

Argentina/UK Relations
Lord Avebury: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will approach the democratically elected Government of Argentina, with a view to normalisation of relations with them.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, we have publicly welcomed the restoration of the democratic process in Argentina and have made clear our wish to develop more normal relations. We hope that the new Government in Argentina will, as a first step, respond positively to the proposals we have made for the restoration of normal commercial and economic relations between our two countries.
Lord Avebury: My Lords, I welcome the Minister's forthcoming reply to the Question. May I ask whether she does not recognise that it may be difficult for the incoming Government of Argentina to take the first step in normalising diplomatic relations with the United Kingdom? Will the Government perhaps consider making a joint approach with Argentina to the Secretary General of the United Nations that he should use his good offices in devising a solution that is acceptable to the people of the Falklands and takes account of the legalities on the question of sovereignty?
Baroness Young: My Lords, as I have already indicated, we should like to see better bilateral relations with Argentina. We have publicly welcomed its return to democracy and, as an earnest of our good will, our banks have helped to re-schedule Argentine debts. On the second point, our position is clear, and that is that we are not in a position to negotiate the sovereignty of the Falkland Islands.
The Earl of Lauderdale: My Lords, can my noble friend say whether the new Government have yet declared that hostilities are at an end?
Baroness Young: My Lords, the new Government will not be in post until 10th December but there has been no statement from the Argentine Government that they are prepared to declare a definitive end to hostilities.
Lord Bishopston: My Lords, will the Minister say what are the proposals to which she has made reference? Will the Government take an initiative on the matter in view of the great insecurity for the people of the Falkland Islands and the enormous cost? Will she say where the Government stand in relation to the prospect of United States' arms sales to Argentina? This is an urgent matter on which the Government should take an initiative.
Baroness Young: My Lords, the answer to the noble Lord, Lord Bishopston, is, as I have indicated, that we welcome and should like to see better bilateral relations; that is to say, economic relations, trade and commerce, cultural relations and sporting relations. There are a number of ways in which we could have better bilateral relations and we welcome those. On the question of the possibility of United States' arms sales to Argentina, we have said that we would regret this, but it is not a definitive matter as yet.
Lord Jenkins of Putney: My Lords, is it not the case that the noble Baroness's colleague Mr. Ridley was in course of negotiating the sovereignty of the Falklands with Argentina and is on record in the House of Commons Hansard as reporting back on the results of his endeavours to do so? Is it not therefore the case that the Government are in the position of having to negotiate this matter? Will they not eventually have to do so at some time or other?
Baroness Young: My Lords, it is true that the Government were in negotiation with the Argentine Government; but one has to recall that it was the Argentines who invaded the Falkland Islands. We have made it absolutely plain that we are not going to negotiate the sovereignty of the Falkland Islanders.
Lord Boyd-Carpenter: My Lords, may I ask this question: arising out of my noble friend's answer to my noble friend Lord Lauderdale, is not an acknowledgement, when the new Government of Argentina come into power, that, from their point of view, hostilities are over, a condition precedent to any improvement in relations?
Baroness Young: My Lords, we very much hope that the new Government in Argentina will make such a declaration of their policy. If I might add one further point: just as the Argentine people have been able to express their wish for their Government through the ballot box, so we hope that they will understand why the Falkland Islanders should be entitled to the same right.
Lord Shinwell: My Lords, the noble Baroness is right in expecting the Argentine Government, if there is such a Government, to make the first approach. I accept that, and I am sure that a large number of Members of your Lordships' House take the same line. However, would it not be a gracious act on the part of the United Kingdom Government, in all the circumstances and, in the end, to our advantage, and perhaps more inclined to promote peace rather than more conflict, if we made the first approach in ascertaining the opinion of the Argentine Government now that they have adopted to some extent the democratic approach?
Baroness Young: My Lords, I hoped that I had made it clear in one of my former answers that the British Government have already made a gesture to the Argentine Government because our banks have helped to re-schedule their debt. We have had a very limited response to this. Therefore, it would be difficult in the circumstances to say more than our public welcome of a return to democracy and our public wish to have better bilateral relations.
Lord Kilmarnock: My Lords, in view of the reference of the noble Baroness to cultural relations, may I ask whether the Government will take advantage of the restoration of democratic Government in the Argentine to remove the ban on the import of books from that country, which operates to the detriment of the British book trade and also to the detriment of universities which are waiting to receive them?
Baroness Young: My Lords, these are all matters which can be looked at and would be looked at very sympathetically if of course we had a return to better bilateral relations.
Lord Hatch of Lusby: My Lords, we all welcome what the noble Baroness has said about economic and commercial relations and the initiative which the British Government have taken. However, will not the noble Baroness agree that the crucial issue over the next few years is to restore normal and friendly diplomatic relations between Britain and the Argentine? As the question of sovereignty is just as important politically in the Argentine as it is in this country and so it would seem that neither Government would be in a position to start negotiations, would it not be sensible to start talks about talks (as we had to do in Rhodesia) using the good offices of the United Nations and particularly of the Secretary General?
Baroness Young: My Lords, it was my right honourable friend the Prime Minister who made it clear that we are willing to enter into talks about good commercial, economic or diplomatic relations. But the time is not yet right to talk about the sovereignty of the Falkland Islands.
Lord Morris: My Lords, will the time ever be right to bring the issue of sovereignty into discussions?
Baroness Young: My Lords, my noble friend will be aware—because I have said it on several occasions this afternoon and the Government have made it quite plain—that it really must be an issue for the Falkland Islanders themselves to determine.
Baroness Hornsby-Smith: My Lords, will not my noble friend agree that there is no real comparison with Zimbabwe because they were choosing to have their own constitutional Government? The people of the Falklands wanted to choose their own destiny; they did not want to have their children taken over by an Argentine regime with all that that meant, and nor did they want to have the children educated in Spanish. It is right that we should uphold their right to have their own democratic choice as regards the Government that they wish to have.
Baroness Young: My Lords, I should like to confirm that what my noble friend says is very important: the wishes of the Falkland Islanders in this matter should be paramount.
Lord Avebury: My Lords, I fully recognise that the opinions of the people of the Falkland Islands should be of enormous importance in determining the political future of those territories. May I ask whether the Government agree that tests conducted by the British Government will not be seen as impartial among world opinion, and that this is an additional argument for doing as we suggested—that is, inviting the Secretary General to use his good offices to arrive at a solution, including consultations with the inhabitants of the Falklands themselves?
Baroness Young: My Lords, I think that I have already indicated my answer to the suggestion that has been made on several occasions in the course of this exchange about an intervention by the Secretary General of the United Nations. However, the House may like to be reminded that in the recent vote in the General Assembly the result was slightly better from the British point of view than it was in 1982, and that 63 countries showed their understanding of our position by declining to support the Argentine resolution.

Food: Comparative Costs
2.47 p.m.
Lord Belhaven and Stenton: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what was the average annual increase in the cost of food between 1975 and 1979 and between 1979 and 1983.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, food prices in the retail price index increased by an average of 14.4 per cent. per annum between 1975 and 1979 and by an average of 7.7 per cent. per annum between 1979 and the first 10 months of 1983.
Lord Belhaven and Stenton: My Lords, I thank my noble friend for that extremely encouraging reply. I wonder whether he could give the House comparable figures for Ireland, which used to be linked with sterling, and for France, West Germany and Japan?
Lord Belstead: My Lords, I could not have done so unless my noble friend had warned me, but as my noble friend warned me I can. Between 1975 and 1979 the average annual increases in retail food prices were as follows: France, 10·1 per cent.; West Germany, 2·7 per cent.; Japan, 5·4 per cent.; and Ireland, 14·3 per cent. The average annual increases between 1979 and the first eight months of 1983—I am afraid I have figures for that period and not for the first 10 months—were: France, 10·5 per cent.; West Germany, 4 per cent.; Japan, 3·7 per cent.; and Ireland, 10·3 per cent., respectively. The figures for Japan, unlike those for the other countries, include meals eaten out of the home.
Lord Bishopston: My Lords, will the Minister accept that our membership of the CAP means that we pay much higher prices for food within the Community than do people outside? Will the Minister urge his ministerial friends in the Government to show a little more fight to keep prices down within the Community than they have shown in relation to the situation regarding the milk regulations?
Lord Belstead: My Lords, I do not accept that the common agricultural policy has the effect which the noble Lord, Lord Bishopston, ascribes to it. It directly affects only about one quarter of the cost of food in the shops. Of course, we always negotiate robustly on behalf of Great Britain.
Lord Mackie of Benshie: My Lords, will the Minister confirm or deny that the retail price index as a whole has risen by more than the price of food?
Lord Belstead: My Lords, that is right. The all-items retail price index increased by an average of a little less than the first figure I gave in my reply—namely, 13·5 per cent.—between 1975 and 1979; but it increased by a good deal more between 1979 and the first 10 months of 1983; namely, by 10·5 per cent. For the 12 months to October of this year, the rate of increase in the retail price index was 5 per cent. It might interest the noble Lord to know that the increase in the annual food price index for the first 10 months of this year compared to last year is only 2½ per cent. higher.
Lord Bishopston: My Lords, will the Minister take a little wider look than at the cost of food to the consumer?—because the consumer, as a taxpayer, has to pay hundreds of millions of pounds for storage, for getting rid of surpluses, for intervention and for all the other matters which, after all, have to be added to the cost of our food in this country.
Lord Belstead: My Lords, I agree with the noble Lord; and if we had a different system it would presumably be deficiency payments, and one would find the taxpayer paying for that.

Cruise Missiles: Control
2.52 p.m.
Lord Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government to what extent the agreement with the United States to consult before the firing of any cruise missile, is held to be consistent with the statement of Dr. Kissinger which, explaining a previous lack of consultation over a nuclear alert, said, "… allies should be consulted whenever possible. But emergencies are sure to arise again, and it will not be in anyone's interest if the chief protector of free world security is hamstrung by bureaucratic procedure …".
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, on the
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occasion to which the noble Lord referred, United States forces were placed on a relatively low level alert which did not involve the immediate prospect of action, and the British Government were informed at a very early stage.
The operational use of facilities in this country was not in question. Had it been it would have been governed by the understanding between the British Government and the Government of the United States which provides for a joint decision to be made on any use of United States bases in the United Kingdom.
Lord Beswick: My Lords, I am much obliged to the noble Lord for that Answer. But is it not a fact that the alert to which he referred included the United States nuclear forces in Europe? Is it not a fact that Dr. Kissinger, in the records to which I refer in my Question, actually says that he was sorry that he was only able to tell the United Kingdom one hour after action had been taken? Looking at that experience in depth, is there any evidence in that experience to suggest that in an emergency the United States will feel compelled to consult their allies before taking action?
Lord Trefgarne: My Lords, I imagine that the noble Lord is relying upon a letter to The Times which referred to this matter and which, indeed, included a considerable quotation from Dr. Kissinger's memoirs. Unfortunately, that quotation was a selective one and, in relation to this particular matter, omitted the words:
"at issue were only readiness measures, not actions".
As I say, had any action been contemplated, the formal agreement procedure—with which the noble Lord is, I imagine, by now well familiar—would have come into play.
Lord Beswick: My Lords, far be it from me to undervalue a letter to The Times, but, as someone else might have said, "Why look in The Times if one can read the book?" If one reads the book fully, one will see quotation after quotation which says that in an emergency the United States would not be able to consult their allies. For example, perhaps I may refer the noble Lord to the quotation at page 713 in which Dr. Kissinger said:
"Imminent danger did not brook an exchange of views and, to be frank"—
and this is the important point—
"we could not have accepted a judgment different from our own."
With all that evidence before us, is it not just possible that the overwhelming majority of the British people, on this one issue at any rate, are right and that the Government are wrong?
Lord Trefgarne: My Lords, the fact remains that the passage in the book to which the noble Lord refers includes the words which I read out just now, and, for reasons best known to the author, those words were omitted from the letter which recently appeared in The Times, and which I imagine has given rise to the noble Lord's interest in this matter, although, of course, I understand that he has the book in front of him now. The fact remains that the use of British bases by the United States is subject to agreement between the two Heads of Government concerned. I do not think that the noble Lord will expect me to repeat the words of

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my right honourable friend the Prime Minister when she answered a Question on this matter some months ago.
The Earl of Lauderdale: My Lords, would my noble friend not agree that the kind of context in which this matter could arise would be a crisis which has probably been accumulating at least over weeks, if not days, and that in the course of such a crisis consultations are inevitable?
Lord Trefgarne: My Lords, indeed, consultations would, of course, take place in the kind of circumstances to which my noble friend refers. But before the bases could be used, there would have to be more than consultations; it would have to be with the agreement of the British Prime Minister.
Lord Jenkins of Putney: My Lords, is it not the case that, although consultation might take place during the course of a crisis, on the question of actually firing a difference of opinion might arise? In the event of such a difference of opinion, is it not the case that physical control on the spot, operated through officers responsible to Her Majesty's Government, is the only means we have of ensuring that those weapons will never be fired against the will of the Government of the people of this country?
Lord Trefgarne: No, my Lords. The United States is, of course, our closest ally and the fact remains that the weapons which they have in this country cannot be used without the agreement of the British Prime Minister.
Lord Bishopston: My Lords, would the Minister accept that, although the United States is our closest ally, that did not stop them in the so-called consultation before they invaded Grenada telling us what they intended to do and going ahead? Will the noble Lord make sure that the meaning of "consultation" is the same on both sides of the Atlantic? As a final safeguard, will he ensure that we get dual key to make sure that no mistakes arise?
Lord Trefgarne: My Lords, that is a wholly different matter. Grenada is nothing to do with NATO. There was prior consultation on that matter, and the United Kingdom's views were, as the noble Lord knows, made clear.
The Earl of Onslow: My Lords, is it not true that, if it was ever contemplated that any of these weapons were to be used, there would be a situation of such crisis in Europe that the Prime Minister of this country and the President of the United States would be practically permanently on the telephone to each other on open link, and it would be unavoidable that decisions of this sort would not be taken without really serious consultation? If they were ever taken, in effect the whole system of deterrence would have failed, and the object of deterrence is to stop any of these wretched weapons ever being used.
Lord Trefgarne: My Lords, my noble friend is, of course, quite right that the whole purpose of our
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defence policy is to prevent an occasion arising when the use of these weapons might become necessary. But, in the light of the situation that prevailed nearly 30 years ago, the Prime Minister and the President of the United States at that time thought it right to reach a formal agreement which was subsequently made public in a communiqué issued by Mr. Churchill and President Truman.
Lord Morris: My Lords, do Her Majesty's Government ascribe the same importance to the views of Dr. Kissinger as apparently noble Lords opposite do?
Lord Trefgarne: My Lords, that is a matter for noble Lords opposite, not for me.
Lord Beswick: My Lords, would the noble Lord be good enough to make it clear that the agreement to which he refers and to which the Prime Minister refers is the same agreement as that which was operative at the time of which Dr. Kissinger writes, when consultation did not take place? Further, is he aware that I entirely agree with what the noble Earl, Lord Lauderdale, said about a crisis developing over a period of time? But Dr. Kissinger says that there came the point when:
"our nerves taut from several all night vigils, we reacted in a manner bound to escalate tensions even further".
It is at this point, when there have been several nights of vigil, that I am afraid a mistake will be made which will be the ultimate one.
Lord Trefgarne: My Lords, the events which the noble Lord describes and which Dr. Kissinger describes in this book were not, of course, launching weapons or using weapons, or anything like it. It was raising the level of alertness I think by two points. The noble Lord will know that the Americans have a five-point system in this particular regard. Therefore, it is not the case that there was any risk. As I say, there was only this raising the alert. Such raising the alert does not require the prior agreement of the United Kingdom. Had any question arisen of the use of those bases for purposes of the sort that the noble Lord has in mind, then, of course, the agreement of the British Prime Minister would have been required.

Local Authority Prefabricated Houses: Repairs
3 p.m.
Lord Dean of Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they intend to increase the funds available to local authority housing investment programmes to deal with their stocks of industrially prefabricated houses.
Lord Skelmersdale: My Lords, my right honourable friend announced last Thursday that provision for housing investment by local authorities in England in 1984–85 will be £2,522 million. Authorities were also

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notified on the same day of their individual housing investment programme allocations. Particular account was taken in determining those allocations of the need for repairs to defective systems-built dwellings. It is for authorities themselves to decide how much of their total available resources, including capital receipts, to devote to those repairs.
Lord Dean of Beswick: My Lords, is the Minister aware of the dismay that will be felt by local authorities in response to that Answer? The Question of course was superseded and somewhat dismissed from this Order Paper by the fact that the Secretary of State himself a fortnight ago announced a reduction in the housing investment programme. How does the Minister advise local authorities to deal with this problem when it has now become an accepted fact that the industrialised and semi-industrialised houses built since 1960 are the most urgent problem that they have to deal with? Where are they going to get the finance from based on a housing investment programme which has now been reduced in real terms?
Lord Skelmersdale: My Lords, first of all local authorities have to identify the need, which it is my understanding they have not yet done. Specifically, the noble Lord's Question refers to prefabricated reinforced concrete houses. As authorities have not yet assessed the need for early expenditure, or indeed exactly discovered how great is the problem in their particular area, it is at the earliest a matter for 1985–86 rather than for 1984–85. So far as the reduction in the HIP is concerned there is quite a lot of unallocated expenditure from previous years in the system. I suggest to the noble Lord that one should not look at the direct Government grant but the total amount available for spending to local authorities, which brings the figure up to £3.7 billion.
Lord Dean of Beswick: My Lords, the Minister must be aware that there have been by some local authorities specific identifications—
Noble Lords: Question!
Lord Dean of Beswick:—of this particular problem. May I ask the Minister what he is prepared to do for authorities who have had to take decisions to demolish properties that have been built less than 15years? They have been identified and demolished. What are the Government going to do about it?
Lord Skelmersdale: My Lords, if a house, a building, or whatever is unsafe to live in and cannot be reasonably repaired, then obviously the only course is to demolish it. However, on the more general point, the needs for repair were borne in mind throughout our discussions of the provision which should be made for housing public expenditure. But the problem should not be exaggerated either in scale or by suggesting that defects which will not arise for many years must be dealt with immediately at the cost of vast sums of money.
Baroness Birk: My Lords, is the Minister aware that the under spending to which he refers has been practically eliminated and that there is a great prospect
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of an overspend next year? Is he also aware that when he is answering in this way what he is saying is that the Government are quite prepared to let the deterioration of our housing stock continue in the area where it is getting worse and worse? If he had looked at any of the regional papers over the past few weeks, would he not have noticed that one after the other has pointed to the need for their local authorities—and is he aware that this applies to both Conservative and Labour authorities—to press the Government for grants to deal with the particular type of houses referred to by my noble friend? So far the answer has been no.
Lord Skelmersdale: My Lords, on the quality of housing stock generally, I have no doubt that we shall discuss this matter at great length on Wednesday when we debate the Motion of the noble Baroness's noble friend Lord Pitt. But so far as the non-traditional houses are concerned, the Government are looking at the totality of the money that local authorities have to spend for this coming year, as I understand it, without, whatever the noble Lord, Lord Dean of Beswick, may say, the full determination of the scale of the problem. There is enough money to cope with the problem.
Lord Dean of Beswick: My Lords, is the noble Lord aware that one particular block of flats in Leeds has had to be demolished because of structural deterioration, and that it is unacceptable socially? Is the noble Lord further aware that the demolition of that block of flats will place on every council house in Leeds a 22p increase in rent a week for the next 40 years? Does the noble Lord think that fair and equitable treatment of the other council house tenants in Leeds who will have to pay for it?
Lord Skelmersdale: My Lords, before I could answer that question I should be extremely interested to know, first, how many accumulated capital receipts there are in the Leeds housing budget; and, secondly, how many council houses they have sold recently.

Business
3.5 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. this afternoon my noble friend Lord Glenarthur will, with the leave of the House, repeat a Statement that is to be made in another place on opticians and competition.
It may also be for the convenience of the House if I announce that dinner will be available at the usual time this evening. The Committee stage of the Agricultural Holdings Bill will be adjourned at approximately 7 o'clock for approximately one hour, and during this adjournment six legal aid orders will be taken.

Chronically Sick and Disabled Persons (Amendment) (No. 2) Bill [H.L.]
The Earl of Longford: My Lords, I beg to introduce a Bill to make further provision for, and to amend, the law relating to disabled persons. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—[The Earl of Longford.]
On Question, Bill read a first time, and to be printed.

Disabled Persons Bill [H.L.]
Lord Campbell of Croy: My Lords, I beg to introduce a Bill to make provision for disabled persons and to establish a commission having the functions of considering certain matters concerning the treatment of disabled persons, and of making recommendations. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—[Lord Campbell of Croy.]
On Question, Bill read a first time, and to be printed.

Oil Taxation Bill
3.8 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Glenarthur.)
Lord Bishopston: My Lords, as my noble friend Lord Stoddart of Swindon said on the earlier stages of the Bill, we welcome it, and I would not wish to impede its progress for more than a moment or two. We welcome it because it brings into effect some of the policy points for which the Opposition and others have been pressing, which ought of course to encourage greater development of the North Sea oil resources.
I want to make two points. First, to express the hope that this revenue, which we hope will increase in the immediate future, will provide the Government with sufficient funds not only to cut taxation, which is also desirable, but also to provide the means for reinvigorating British industry and getting some of our unemployed back to work. Secondly, I express a hope which I think the noble Lord may support, and that is while we pay tribute to all those who have invested in the North Sea and to the ingenuity of those who have designed the equipment there and enhanced the future, we ought also to pay a tribute to those who work in the difficult and arduous conditions, especially on oil rigs where conditions are particularly rigorous, and to give our thanks for the contribution which they are making to our country's future prosperity.
Lord Glenarthur: My Lords, I am grateful to the noble Lord for his general welcome to the Bill. Regarding the question of what the provision of oil does for the general state of the economy, I do not think I need be drawn any further on that now except to say that the whole economic climate is vastly affected by all that is done in the way of production of North Sea oil, and that we shall use it to best effect. I am also grateful for the noble Lord's generous tribute to those who work in the North Sea. I am sure those remarks will be welcomed by all who work in what I know from my own experience is a difficult and challenging environment,
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and one which has produced enormous rewards. I am grateful to the noble Lord for his comments.
On Question, Bill read a third time, and passed.

Agricultural Holdings Bill [H.L.]
3.10 p.m.
Lord Belstead: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Belstead.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 2 [Abolition of statutory succession to agricultural holdings in the case of new tenancies]:
[Amendment No. 30 not moved.]
The Chairman of Committees (Lord Aberdare): I have to point out before I call Amendment No. 31 that if this amendment is agreed to I cannot call Amendment No. 32.
Lord Prys-Davies Lord Prys-Davies moved Amendment No. 31:
Page 6, line 4, leave out from ("shall") to end of line and insert ("only apply on the occasion when there died the first").
The noble Lord said: Your Lordships know very well that the principal part of this Bill—indeed, the controversial part—is to be found in Clauses 1 and 2. These clauses are at the heart of the NFU and CLA package. They do not stand apart in a splendid isolation, the one from the other. Clause 1 is the benefit required by the NFU in exchange for the loss of succession sought by the CLA and conceded in Clause 2. This balance of benefit and detriment, this give and take, is the basis of the bargain between the NFU and the CLA, and is the heart of the Bill.
But is this bargain still intact? If the open market valuation is to find its way into the rent formula embodied in Clause 1, or if the scarcity factor is to be dropped from Clause 1, the bargain will have been undermined and the balance will tilt or swing heavily in favour of the CLA. It has occurred to us on these Benches that in these changed circumstances the NFU will want another careful look at Clause 2. It may conclude that succession may have been sold at too cheap a price.
These comments are relevant because of the uncertainty about the extent of the Government's commitment to Clause 1 as drawn in the Bill. On the first day in Committee the noble Lord the Minister, under heavy pressure not to depart from the open market formula, invited your Lordships not to press the very many amendments to Clause 1 so that the Government could have time to consider whether it was possible to incorporate the sense of the amendments without destroying the NFU/CLA package. I am not sure that the Government can accept the sense of the open market formula which was being pressed on the Government a week ago

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without doing harm to the principle of Clause 1. I wonder whether the Minister, when he replies, can give us the benefit of his thinking over the past few days.
The object of this amendment is to ensure that, come what may, there shall be one statutory successor on the death of a tenant whose tenancy was granted after the passing of this Bill when it becomes an Act. This would secure a two-generation tenancy; a family tenancy which would, on average, extend over 40 or 50 years from father to son. I believe that this amendment recognises that some landlords have genuine fears that the effect of statutory succession in the 1976 Act is too heavy a burden, although we on these Benches do not accept that the evidence supports this contention. The amendment recognises the fears of landlords, but, at the same time, it also recognises the need of the tenant's family to a protection of tenancy—possibly a protection which the NFU may have been too ready to bargain away.
As I understand it, the Bill as drawn denies to tenancies created after its passing the benefit of any statutory succession on the death of the contractual tenant. The proposed new clause is not content to modify or to restrict the right of succession granted by the 1976 Act in the case of a contractual tenancy granted after the passing of the Bill: it takes it away. The new tenant may have been a good tenant; the farm may have been farmed well; but on the death of the tenant and on the authority of this clause, his family could be thrown out. Should the shield provided by the 1976 Act be dropped altogether in 1983 for new tenancies? Is this a wise provision? Is it not in the interests of good husbandry that this provision should be maintained?
It is rather interesting that we have not been given any firm data about how Section 18 has worked. We have been asked to reverse Section 18, but there is no firm data on how the section has worked. We have not been referred to any comprehensive assessment of the operational section. I have a hunch that we have not been referred to any such assessment because no such assessment exists.
I shall put three simple questions to the Minister. First, how many tenants have died since November 1976 leaving eligible successors who succeeded to the tenancies? That is a simple question. Secondly, how many eligible successors were found by the ALTs to be unsuitable for succession? Thirdly, what percentages of holdings which became available with vacant possession were re-let, although there was no eligible successor or suitable eligible successor? It would appear to me that we cannot form a proper picture unless we know the answers to these questions and possibly to other questions.
But, if Clause 2 is enacted, then henceforth tenants will be put into two categories: one will be a three-generation tenancy, the other will be a severely limited one-generation tenancy. If I may adopt the words of the noble Marquess, Lord Salisbury, this will be a very peculiar thing. We shall have a substantial number of tenants for some years to come who will be able to claim a three-generation succession and other tenants who, although possessing good records as tenants, will be denied the right of even a single succession.
Of course, not only shall we have the two categories of succession but all this will lead to at least two—and, I concede, possibly more than two—different rent valuations. This, in turn, will breed a sense of unfairness among tenants which will be quite understandable. This sense of unfairness could intensify and it would lead to a demand in due course for a repeal of the section. I would acknowledge that our amendment, regrettably, will still retain two classes of tenancy—the three-generation and the two generation—but the differential will be much reduced. So, in a sense, although the best solution would have been the deletion of Clause 2and my noble friends will speak about that later on—a second-best solution (and I acknowledge that it is very much a second-best solution) is to allow one transmission on the death of the contractual tenants. I beg to move.
Lord Mackie of Benshie: As I understand the amendment, if I understand it, it would appear from the noble Lord's speech that what they want to do is to give the NFU time to think again in case the wicked Government do them down on Clause 1. This may be an admirable sentiment but I do not think it is very sensible, because the NFU and the CLA were thinking for two years or more. I agree that, if land is going to be let and more land is going to be available for incomers to farming, it will matter just as much to the sons or daughters of tenants. and then I think that this is a sensible compromise. I must say that to move it from one generation to two generations (which the noble Lord, I think, acknowledged was second best) would be very foolish. Therefore, I think that we would oppose this amendment.
Lord Belstead: Listening to the noble Lord moving this amendment, I felt a little like the Irishman who, on being asked the way, would have replied that he would not be starting from there, anyway, if he had the choice. Really, on any objective judgment, the position which we have reached in 1983 under the terms of the 1976 legislation is not desirable and, some would say, is disastrous. In his remarks the noble Lord said perfectly fairly that no evidence had been given by the Government of this assertion—which, of course, my noble friends and I have made before now from this side of the Committee.
I am not sure that I can answer the detailed questions which the noble Lord put to me. I think that some of them are not capable of a reply because we do not have the information. But let me give the Committee two very simple pieces of information. Between 1970 and 1975 the percentage of agricultural land (as expressed as a percentage of the total amount of agricultural land in England and Wales) which was rented went down by 0.6 per cent. Then, from 1976to 1982, the percentage of tenanted land as a proportion of the total area of agricultural land went down by very nearly 5 per cent. In statistical terms, that, arguably, has been the effect of the 1976 legislation, although I would not deny that there may have been other reasons as well.
I think that it is fair to ascribe weight to that accelerated decline in the area of agricultural land which has been tenanted since the 1976 Act became law. One has only to use one's common sense. To sign away a great

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deal of real property for a period of three generations really is asking a very great deal of the private landlord—and my noble friend Lord Swinton in his Second Reading speech showed from his personal experience how the 1976 Act had prevented the letting of land in his family. If I may say so, the report of the committee of the noble Lord, Lord Northfield, in paragraph 626, was in no doubt that the 1976 Act was having an effect on tenanted land. There is, therefore, so far as the Government are concerned, no feeling that we need second thoughts on this matter.
What we have tried to do is to draw Clause 2 of the Bill—in which we would repeal if the Committee agrees, the 1976 Act—in as fair a way as we possibly can by making sure that there is no retrospection. This is the effect of subsection (2) of Clause 2. I want to place that on the record because I was not entirely sure from the words of the noble Lord that he entirely agreed with that. The effect of subsection (2) taken with subsection (1) is that Clause 2 allows for no retrospection in the repeal of the 1976 Act. I am afraid that I cannot go further than that in replying to noble Lords opposite. I acknowledge that noble Lords are trying to take a step in the direction of the Bill in bringing forward this amendment but I am afraid that it is not acceptable to the Government.
Lord John-Mackie: I think that this requires a little more ventilating than it has had. The noble Lord, Lord Belstead, has made a reply which I do not think will satisfy us at all. I should like to emphasise what my noble friend Lord Prys-Davies said on this subject, but more from the practical side of a tenant than in relation to the legal points that he made. There has been a lot of argument about just what effect the 1976 Act has had. I have made some calculations and I also have here a graph done by a firm of land agents which shows the position all the way from 1920 onwards. In the period from 1975 to 1982 that graph remains absolutely steady, although it shows a steady decline.
I do not know where they got the figures from after 1982, but I presume it was from the Northfield report, which shows that graph continuing at a steady decline. Nor am I sure where the noble Lord got his figures, but I should imagine that he has taken acreage. Of course, if a 20,000-acre hill farm were let in that time, that would probably distort the figures considerably. My noble friend Lord Prys-Davies has said that we cannot get proper figures. For the noble Lord to quote acreage instead of the number of farms is, I think, very misleading. As I say, you have only to have a couple of 20,000-acre hill farms in that figure and it distorts the argument altogether.
I made some calculations on the actual figures that I could get, and I admit readily that there was a slight difference between 1977 and 1982. The noble Earl, Lord Caithness, doubted my figures. He may be right. As I say, there was a difference but it was not significant. He produced some more figures which just add to the confusion that we have. We do not have proper information to continue this argument to any degree of sense at all, and I want to make that point very clear indeed.
As regards the case for succession, agriculture is a
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long-term business and on many things it takes years before a farmer sees the benefit from his work. Starting with the longest term of the lot—the planting of trees—just how many tenant farmers are going to plant trees if their families are not going to get the benefit of them? I am planting trees at the present moment, as it happens, in the hope that if I live long enough my youngest son will get the tenancy of the farm but with the proverbial bus going up and down the streets of London continually, that may not be the case. So my family may not get the benefit of the trees that I am planting at the present time.
I want to make a point about drainage. I have just drained the whole of the farm that I have tenanted over the past seven years. I am talking about drainage in all its aspects. It takes years and years (a) to write off the cost and (b) to get the benefit. How on earth are farmers going to get the benefit of that sort of work if they do not have some confidence that their families are going to get the benefit?
Then there is the question of buildings, fencing—often road making—and all the business of fixed equipment which tenants help landlords to deal with. Many tenants do it. I know many tenants who provide nearly all the fixed equipment themselves. How do you get the full benefit of that for your family unless you have some succession?
May I mention liming and fertilising, which is one of the most important means of keeping land in good heart? There again, liming particularly is a very long term business indeed. I know that some noble Lords may bring forward the argument that if a farmer has a proper tenancy agreement he will get full recompense and a tenant rights agreement at the end of his lease—or rather, if he is a life tenant, after he is dead. That is not a lot of compensation, if I may say so. I do not want to get emotional on the subject of farming but I have farmed myself for a very long time. It is a way of life. It is slightly different from other businesses and I think in many ways it has to be treated differently. My noble kinsman may disagree with me: he has three daughters and I have three sons.
Most noble Lords hold their land in perpetuity. Why grudge the man who works that land and looks after it? Why grudge him at least a succession for his son for which we are asking? We are not asking for two successions but only for one. I should have thought that noble Lords would have agreed with that.
We are not talking solely about private landlords, many of whom, I agree, are first-class landlords. The noble Earl, Lord Swinton, instanced what he did. I was intrigued by the way he put it: that they had looked not only for giving one son succession but that if there were two sons he looked for farms on the estate for that as well. He was proud of doing that and he had 89 per cent. of his land in hand and he said that was just right, he thought, for the size of the estate. Then when it became mandatory, he turned against it. I do not quite understand that; but that is what he said. I suspect it was the advice he got which he admitted he agreed with. But it seems strange to have done that.
Not all landlords are private landlords. We have the Church, Crown land, colleges and other charities. Now more and more are managed by, if I may say so, hard-faced investment managers, who do not know the land

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and have no feeling for it. I should like to give my own experience of that particular point. On my farm we had a disaster with Dutch elm disease and all the elms died. There were very many of them. I have now the hedgerows with all the dead elms cleared, and this is the re-planting that I am doing at the present moment in my hedgerows. I thought that as the county council were giving me a grant the landlord should maybe go half and half in my share; but I received the reply, "We cannot invest any money that does not show an immediate return." That is the sort of thing that you get, and that is why I am scared stiff at the growing institutional landlord system that we have. They will be managed by even harder-faced investment managers, and that makes me very doubtful whether they will manage the land as the old landlords have done. Unless we get mandatory succession, farmers may not get much consideration at all from that type of landlord.
I do not think that whatever is put into this Bill as it stands—and we do not yet know what the Government are going to do in Clause 1—will make any difference to the number of farms coming on to the market. Much more radical things will have to be done to the Bill before that happens. The NFU have given away their right to succession, with nothing in return. I should like to quote from a document which illustrates the point more than anything else. This is a document which was written by my great grandfather 160years ago and he wrote it after he had been given the tenancy of a farm of 105 acres—50 so-called arable and 55 unclaimed land, or bog. He set about claiming the 55 acres, and when I read what he did it makes me very humble indeed.
This is what he said at the beginning of a report which he gave to the Highlands Society and was commended for it in 1831 when it started to show business. I want to read two short passages. He says:
"the former tenant not having been under any restriction as to cropping and it having been intimated to him several years before the expiry of his lease that it was not to be continued as a farm, the soil was completely exhausted and unfit to bear a crop of any sort."
That is what happens when he has no succession. At the end of the report my great grandfather wrote:
"Before concluding this report I cannot omit mentioning with feelings of much satisfaction that the Earl of Aberdeen, on account of the exertions I made in improving my farm, has agreed to renew my lease at the present rent for a period sufficient, I trust, to enable me to recover the capital I have laid out and a remuneration for my own time and trouble."
That was 160 years ago and the situation is the same today.
3.40 p.m.
Lord Walston: The noble Lord, Lord John-Mackie, has spoken with a wealth of personal experience. He even makes those of us who are doubtful about it think that there may be something in the hereditary principle after all, when he quotes the experience of his great grandfather. But what he is in fact saying is that everything lying behind this Bill is wrong. He is saying that what there was before the three-life tenancy was good. He might even have gone on to say that tenancies in perpetuity are better because that is the logic of his argument, and where it must inevitably lead. I think most of us here have accepted that,
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although the results of the three-life tenancy have not shown a marked and absolutely certain decline in the lettings, that has been a contributory factor. Your Lordships will remember that most of the speeches on Second Reading said that this Bill will do little, but it removes the absence of tenanted land and it is a move in the right direction.
Having accepted that—and I think that even the noble Lord, Lord John-Mackie, and his friends rather grudgingly and unwillingly accepted that—I cannot for the life of me see the logic behind his proposals and those of his noble friends. All he is saying is, "We would like to have had a three-life tenancy. We do not think that a one-life tenancy is sufficient, so let us compromise and have a two-life tenancy". But if the arguments that he has adduced showing what happens towards the end of a one-life tenancy are true, if the fertility of the land is not maintained, if the drainage is not maintained, if the soil is not limed, if the dead elms are not cut down and if yew trees are not planted at the end of a one-life tenancy, precisely the same thing will happen at the end of a two-life tenancy. We shall be no better off, accepting that the majority of us sitting here in this Chamber will not be here to see it. But from the point of view of agriculture, there will be absolutely no change whatsoever.
Therefore, reluctantly and sadly—because I do not like disagreeing with the noble Lord, Lord John-Mackie, who has so much wisdom and experience—I feel that all he is doing is attempting, not very wholeheartedly, to postpone the evil day, if indeed it is an evil day, and thereby doing a great deal to vitiate any success that this Bill might have. So I am afraid that I must join with my noble friend Lord Mackie of Benshie in opposing this amendment.
Lord Nugent of Guildford: I enjoyed listening to the noble Lord, John-Mackie, with his great experience of agricultural matters, putting some technical flesh onto the political bones of his noble colleague, but I am not sure that all the flesh really fitted. It would be a very short-term farmer who did not get the fertiliser value back out of his land in his lifetime; and there might be one or two other technical points on which the noble Lord, as fluent as ever and, as always, delightful to listen to, was a little on shaky ground.
But, of course, he is right when he says that it is not possible to prove it. He is probably right that, if you drew a graph from the 1920s till now, the downward trend of tenanted agricultural land would continue in a fairly straight line. But, of course, my noble friend was contending that there was a significant jerk after the 1976 Act, and I should have thought that it was significant. But nobody could prove that, and we all know it. I can well remember, however, when we were debating the 1976 Act here, which I strongly opposed with my noble colleagues because I felt sure that it would further diminish what was left of the tenanted agricultural land, which was already far too little.
The significant point about which I would remind noble Lords on the other side is that the Government did not put that provision in their Bill when they introduced it into the Commons. It was put in by an amendment from the Back-Benches, as the noble Lord, Lord John-Mackie, will remember, and Ministers accepted it because clearly, for political

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reasons, they could do nothing else. So that by the time the Bill came here, there it was in the Bill. We did the best we could with it, but clearly the weight of political numbers was going to defeat us. But the fact is that any act of judgment at that time, certainly by someone—
Lord John-Mackie: Will the noble Lord allow me to intervene? Is he suggesting that the weight of political numbers at the present moment does not have any effect?
Lord Nugent of Guildford: Of course it has, and I hope that it will have a very good effect this time in trying to put right some of things that have been put wrong. But the point I was making was that the political judgment of the experts—that is, the Ministers and the officials behind them in the Ministry of Agriculture of that day—was that, on the whole, this would probably further diminish something which most of us very much wish to see not diminished. That is really why we opposed it then, and I and my noble friend, and indeed all my noble colleagues, are trying to rectify to some extent the mistake that was made in 1976.
I am the last to say that I think that this Bill will transform the whole situation; I am sure that it will not. The fiscal factors are so weighty against the letting of agricultural land that there is all too little of it left now. But, at least, it will do something if we put this Bill on the statute book to retard (I do not say that it will even stop) the downward trend. That is the reason why all of us who are interested in the prosperity of the countryside and. indeed, the social structure of the countryside, and especially in the prospect of youngsters coming in and becoming tenants of agricultural land, wish to proceed with this Bill, to put it on the statute book and, at least, make this marginal improvement in what we consider a very unhappy situation now. So I warmly support my noble friend and I hope that he will stick to his guns.
The Earl of Swinton: As the controversy in this debate seems to be growing, I think it might be a convenient time to take the Statement. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Optician Services: Competition
3.46 p.m.
Lord Glenarthur: My Lords, with the leave of the House, I will now repeat a Statement that is being made in another place by my right honourable friend the Secretary of State for Social Services. The Statement is as follows:
"With permission, I will make a Statement on opticians and competition following the report of the Office of Fair Trading published earlier this year.
"At the end of 1981, the Office of Fair Trading was asked to report on the effects of the 1958 Opticians Act upon competition in the supply of
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opticians' services. They found that the requirements imposed under that Act led to restricted competition and resulted in unnecessarily high prices. In particular, the Office of Fair Trading criticised the rules limiting optician' advertising and the monopoly on the supply of glasses granted to opticians and doctors. The Government accept these conclusions, and believe that the interests of consumers would be better served by acting upon the OFT report. Accordingly, the Government intend to bring forward legislation to deal with two main areas.
"First, we propose to take action on advertising. At present, the rules made by the General Optical Council allow no general advertising of the price of glasses or advertising on such matters as the speed of service. This handicaps the consumer who wishes to get the best value for money and also holds back the optician who can provide a better deal or wider choice. The General Optical Council did review their rules in the light of the report by the Office of Fair Trading, but the changes they proposed came nowhere near to those needed. Legislation will therefore be introduced to enable the rules operated by the General Optical Council to be amended to allow freer advertising. These powers will be used carefully. In particular, we will draw a distinction between the professional function of sight-testing and the commercial activity of selling glasses. The aim will be to ensure that the public are provided with more information about the prices of glasses.
"Secondly, we propose to take action on the monopoly to dispense and sell glasses. There is still a need for public protection in certain areas such as dispensing to children or fitting of contact lenses. However, all laws which create a monopoly have to be examined to see whether, under the cloak of public protection, there is not simply too much protection for the seller. We have concluded that this is the case with opticians. The legislation which the Government will be introducing will therefore allow non-opticians to sell glasses under carefully prescribed conditions. The conditions laid down will ensure that no risks are taken with people's sight. All sales will have to be made against a recent prescription, following a sight-test by an appropriately qualified optician or doctor, and no one other than a qualified optician or doctor will be able to sell glasses for children or to fit contact lenses. It is our intention to maintain the present arrangement for the registration of qualified opticians, and the public will therefore be able to make a choice between the services of a registered optician and those of other competitors.
"The action I have announced on advertising and the end of the dispensing monopoly will, I believe, bring down the price of glasses. This will have an effect on the general ophthalmic service. At present, the general ophthalmic service provides free sight-tests by either an ophthalmic optician or a specially qualified doctor. We intend to continue this arrangement. It also provides a range of frames and lenses free to children and families on low incomes. This free provision will also continue. But other people who currently buy NHS glasses will in the future be able to obtain a wider selection of non-

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glasses at reasonable prices. Although the NHS will continue to provide free sight-tests and to supply glasses to the present exempt groups, there will no longer be any need for the general supply of NHS glasses. The legislation I will shortly be introducing will give effect to this.
"Mr. Speaker, my right honourable friends the Secretaries of State for Scotland and Northern Ireland will also be bringing forward proposals to give effect to these changes. We believe that the changes I have announced will enable greater competition to take place; will provide greater choice; and above all will have the effect of bringing down the prices of glasses for the public."
My Lords, that concludes the Statement.
Lord Wallace of Coslany: My Lords, first may I thank the noble Lord for repeating a very important Statement, but he need not have taken the trouble. If he had looked in the Library at the Standard he would have seen that the Government's Statement had already been made—to which I take exception because I have had to deal with this matter at very short notice, not having had time even to read this paper.
I have a number of points to put to the noble Lord, Lord Glenarthur. First, may I ask him how the Government are going to draw a distinction between the professional function of sight-testing and the commercial activity of selling glasses? Is not the provision and checking of lenses a vital professional function? Advertising in general will have to be carefully controlled. In any case, there could be the risk of loss of profitability for the small optician who is forced to provide a prescription but who is likely to lose other business arising from the provision of that prescription. This could lead to a serious decline in the optical service at present enjoyed by many people in their own areas.
Naturally, I welcome the fact that a prescription will still be needed. To put it bluntly, anybody needing glasses would be foolhardy to obtain them without a prescription. However, may I ask whether it will now be an offence for anybody to sell glasses for which there is no prescription? Will the Government include a provision to cover this point in their legislation? Furthermore, what does the Minister mean by the very important statement that there will no longer be any need for the general supply of NHS glasses? Are they to be supplied in future only to those classes which are exempt, which I believe include those aged 16 to 19 in full-time education and those on supplementary benefit? There is no mention of the old-age pensioner. Am I right to assume that they, too, are exempt? Perhaps the noble Lord will tell me. If this is not the case, a vital NHS principle will have been abandoned. I must demand from the noble Lord clarification of the phrase,
"no longer be any need for the general supply of NHS glasses".
I take the view that this is a very severe cutback in the NHS service and means the abandonment of a principle for which many of us have fought for so long and so hard.
Baroness Seear: My Lords, from these Benches may I thank the noble Lord the Minister for repeating the
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Statement. We are broadly in agreement with the general principle. Undoubtedly the price of glasses has been a great deal too high. The introduction of competition should bring about a long overdue reduction in the price of glasses. However, the Statement raises one or two queries concerning which we should like further clarification. How recent is "a recent prescription" to be? Unless care is taken, the standard of treatment for eye conditions could deteriorate. People could buy glasses which do them very little good.
Secondly, may I ask the noble Lord about free spectacles through the NHS no longer being provided except for exempted groups? Could he say how widely the exempted groups will be drawn? Who will be included in those exempted groups? The Statement refers to children and low-income families. It is assumed that the price of glasses will quickly come down. If it does not, a very heavy charge will be laid on some people just above the low income level who nonetheless need glasses and have been able to get them practically free up to the present time.
Lord Glenarthur: My Lords, the noble Lord, Lord Wallace of Coslany, raised a series of points not altogether welcoming what had been said in the Statement. First may I pick up the second from last point which he made, about old-age pensioners. The answer is that at present old-age pensioners are not exempt unless they qualify under the social security provisions. The noble Baroness, Lady Seear, also asked about exemptions. The answer is that all those who are presently exempt will continue to be exempt. So far as the information contained in the Standard is concerned, the noble Lord is one up on me; I have not seen it. How it got there, I do not know; but the noble Lord knows how these things happen.
The noble Lord alluded to the fact that the provisions in the Statement represent some sort of step towards a further dismantling of the NHS. This is far from the truth. The NHS is about the provision of health care. So far as eyesight is concerned, there are many who feel that this means sight-testing. We do not propose to stop sight-testing. Indeed, that is made clear in the Statement. Sight-testing will still be provided free. So far as the supply of glasses is concerned, most people are already nearly paying all the cost, anyway. Provided we can be sure that a supply of reasonably priced glasses will be available to the public, there is no need for the Government to provide them.
The noble Lord also asked whether or not it would be an offence for somebody to sell glasses when a prescription had not been made available. This is a matter for the legislation in due course, and I do not believe that I can usefully follow up the Statement which I have just repeated. The noble Baroness, Lady Seear, asked how recent "a recent prescription" would have to be. Again, this is a matter for consultation and discussion when we deal with the legislation in due course. Therefore, I do not think that I can usefully be drawn on that point now.
The noble Lord, Lord Wallace of Coslany, may have raised one or two other points with which I have not dealt. If that is so, I shall be delighted to follow them up in correspondence.
Lord Wallace of Coslany: My Lords, the noble Lord, Lord Glenarthur, made the point that the matter before us now is not one of health care but the supply of glasses. That is an amazing statement. In many cases, disease is identified when somebody applies for glasses. I could quote diabetes and many other diseases which are discovered as a result of eye tests and the provision of glasses. So it is a question of health care, not merely a question of buying glasses off the peg somewhere else.
Lord Glenarthur: My Lords, there has been a great deal of discussion in the medical profession about the provision of glasses. The discussions have led us to believe that it is important for us to retain the free sight-testing which I described earlier. There is, of course, divergence among the professional people involved as to exactly what sort of diseases are best found by those who look into these things. The noble Lord mentioned some, and I am sure he is quite right. The medical expertise in searching for these diseases will be maintained. The provision of the actual lenses is a matter for a much more mechanical process in many cases, and not quite so important as the sight testing, which will remain.
Lord Kilmarnock: My Lords, may I press the noble Lord a little further for clarification. I refer to the phrase, "There will be no longer any need for the general supply …".Does this mean that all persons needing glasses, other than the exempt groups, will have to go fully private as regards the supply of frames?
Lord Glenarthur: My Lords, the intention is that the duty to supply appliances will cease on 31st March 1985. However, it is quite likely that opticians will continue to stock them if they are wanted, but they will then have to be privately supplied.
Baroness Gaitskell: My Lords, may I ask the noble Lord the Minister—because I am a little confused about it—whether it will now be necessary, when someone gets the first prescription for glasses, to be recommended to a specialist or to an eye hospital? Is that so, or is it just that we can buy spectacles, as the Americans do, over the counter?
Lord Glenarthur: My Lords, at the present time anyone who wants glasses has to go to a registered optician to obtain the glasses prescribed, but the intention of the legislation to be introduced will be that one will be able to get them over the counter—that is the point—but only following a recent assessment by an optician to satisfy both himself and the person needing the glasses that that person needs such a prescription.
Lord Ross of Marnock: My Lords, can the noble Lord the Minister say how much he expects to save? Secondly, he expressed the belief that glasses would be cheaper, thanks to competition. Will there be any monitoring of the effect of the price of glasses, and will the Government take any reserve powers to control prices if the noble Lord's belief proves to be misguided?
Lord Glenarthur: My Lords, I cannot give a figure off the top of my head to answer the noble Lord's first point, but of course advertising will help to lower prices, in three main ways. First of all, the consumer will be able to choose the optician giving best value for money. At present consumers can pay as much as £50 more for the same prescription from different opticians. Advertising will also help the optician seeking to expand by offering a cheaper or quicker service. At present it is hard for the optician offering better value to let people know that he is doing that. Thirdly, advertising will help new, keener opticians who want to start up on their own. At present it is hard for them to tell the public what they offer that existing opticians do not offer.
Lord Somers: My Lords, speaking as one who is wholly dependent on his glasses, may I ask whether the noble Lord can give us some assurance that this will not mean that we shall get second-hand lenses? The noble Lord must know that cutting a lens is a highly expert job. I hope this will not mean that we shall be getting lenses that are not suited to us.
Lord Glenarthur: My Lords, as I understand it, the present arrangements are that, while some lenses have to be specially cut, the prescription houses hold stocks of the more regularly used lenses. So I do not understand that there can be any question of anybody picking up second-hand lenses.
Lord Ardwick: My Lords, one can see that fashionable spectacles may well be cheaper under this system, but will the kind of spectacles now prescribed under the NHS be cheaper or dearer?
Lord Glenarthur: My Lords, by introducing the form of competition which this system will allow, spectacles will, for some of the reasons I have described to the noble Lord, Lord Ross, and others, become cheaper.
Lord Donaldson of Kingsbridge: My Lords, at the moment one can buy under NHS rules spectacles on prescription for a price of something like £10 to £12, and for the same sort of thing one is apt to pay £70 to £80 through a registered optician. Does it mean that the price will go up to £35 or £40 instead of the £10 or £12 under the NHS? Secondly, may I ask the noble Lord whether he is aware that the main objection to the monopoly of the opticians has been that it is based on a false premise: that to use glasses not prescribed by a proper doctor can hurt your eyes? The general view of all competent oculists, professors of optics and others, is that it does your eyes no harm whatever to use glasses which are not the best for your eyes to see through; it is just tiresome. This is a very bad reason for a monopoly. I should like to welcome this move in the right direction but to question whether it has gone nearly far enough.
Lord Glenarthur: My Lords, I am well aware of the point the noble Lord, Lord Donaldson, makes about the fact that having the wrong sort of glasses does not do any damage to your eyes, but merely means that you cannot see so well, and in that case you obviously

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go and get another pair. This is something that has been threshed out by the experts and has been raised in your Lordships' House on more than one occasion.
Lord Rugby: My Lords, may I ask the noble Lord the Minister whether it will now be possible for people over 50, the presbyopic people, who virtually all take the same magnification, and who break and lose their glasses fairly constantly, to get immediate replacements instead of having to be subjected to the appalling delays which the opticians have put upon them and the quite ludicrous prices they have charged for replacements? Does this Statement cover the presbyopic, like myself and many others, who simply uses simple magnification?
Lord Glenarthur: My Lords, as I indicated earlier, this is something which will have to be considered, but there is no intention that there should be the sort of delay to which the noble Lord refers. I think it is something which has to be discussed with the expert bodies concerned, and again when legislation goes through your Lordships' House and another place. As I understand it, there will be no difficulty in obtaining replacement glasses in the way the noble Lord describes.
The Earl of Onslow: My Lords, may I ask the noble Lord whether the question of contact lenses will be excluded from over the counter buying? I believe that the mark-up is considerable between wholesale and retail prices of contact lenses. I speak from a very vested interest, as I wear them and am extremely keen on them. I believe the wholesale price for a pair of soft contact lenses is something like £16, and if you go to an optician it is something in the region of £110. That does seem a marginally excessive mark-up. If these are going to be excluded from over the counter sales, plus prescription, then the privilege is going to be kept for one and only half given away in the case of spectacles.
Lord Glenarthur: My Lords, contact lenses can damage eyes if wrongly fitted. We shall continue to limit contact lens fitting to qualified staff. The same applies to children. which is a point mentioned in the Statement.
Lord Northfield: My Lords, since some of us have campaigned for 25 years for a change in the law, may we offer at least a guarded welcome for the decision to divorce the commercial aspect of selling spectacles from the medical aspect of testing eyes? That is precisely what the Government are doing today. So in that sense we can offer a guarded welcome. Does the Minister realise that there must be some room for competition? If I may give an example, I was recently able to buy fully glazed spectacles in the streets of Hong Kong, very good ones which I have as a spare pair, for £1·50. I am looking forward to the day when competition like that will occur here. May I ask the noble Lord this. There are other recommendations of the Office of Fair Trading, some of them quite important. Can the noble Lord say which recommendations have been rejected so that we shall know where the Government stand on the full body of their report?
Lord Glenarthur: My Lords, it would probably weary your Lordships if I were to go through the entire weighty tome which is the report produced by the Director-General of Fair Trading. The important points which I have covered deal with the meat of the question which the noble Lord asked.
In picking up one point made by the noble Lord, Lord Rugby, may I amplify what I said earlier. Those who need glasses can go anywhere to make a purchase, provided that they have a prescription, and where they believe they will get the best and, of course, the quickest service.
Lord Cullen of Ashbourne: My Lords, have the Government abandoned their review of the NHS general optical service which was promised about 18 months ago?
Lord Glenarthur: Yes, my Lords; now that we have studied and reported our views on the OFT report, that supersedes the report to which my noble friend refers.

Agricultural Holdings Bill [H.L.]
4.11 p.m.
House again in Committee on Amendment No. 31.
The Earl of Caithness: Perhaps this is an opportune moment to refocus on agriculture and to pick up one point made by the noble Lord, Lord John-Mackie. He referred to the number of tenancies as a result of his beloved 1976 Act. He produced a graph that a firm of land agents had given to him which showed that the trend of loss of agricultural land to tenancies was on a continual decline. There is a fallacy in his argument because if his 1976 Act was to be a success the graph should have gone up, not down. To take the graph to its logical conclusion, one reaches the stage where there are only two tenancies left in the country. If we then lose one, the noble Lord will say that that is marvellous because we have lost only one tenancy. In fact, we would have lost 50 per cent. The crucial point is that since 1976 the percentage loss of tenanted land in this country has increased dramatically over the previous years.
I recommend to the Committee the publication Contractual Relationships in Farming published in May this year by the RICS. It contains a complete set of tables giving the amount of agricultural land that is lost annually in the tenanted sector. In fact, on its figures the loss since 1950 has been at a lower rate every 10 years. Between 1950 and 1960 there was a loss of 52,000 tenancies; between 1960 and 1970 the loss was about 40,000 tenancies; and between 1970 and 1980 the loss was only about 32,000 tenancies. However, I come back to my point that the percentage loss increases every year and has increased even more dramatically since 1976.
Lord John-Mackie: I do not think that I should cross swords with the noble Earl on this subject of statistics. He is quoting from one publication and I am quoting from another. As I told him on Second Reading, my calculations were based on figures that I

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had. There would be no advantage in going further into the statistics. While I am on my feet, I should like to reply to the noble Lord, Lord Walston, and point out to him that this is not our Bill. It is a Government Bill and although we would like to continue with our 1976 Act, we know perfectly well that we have no hope of that. Therefore, we are trying to put forward the maximum that we think can be screwed out of the Government. That seems to be a sensible thing to do and it is ridiculous to start any polemics on what we said in 1976. We are trying to get the maximum that we can, and although I do not think we shall get it we shall still try. On that basis I beg to move that we divide on this amendment—if that is the correct phrase.
On Question, Whether the said amendment (No. 31) shall be agreed to?
Their Lordships divided: Contents, 55; Not-Contents, 144.

DIVISION NO. 1

CONTENTS

Ardwick, L.

Lovell-Davis, L.

Beswick, L.

Melchett, L.

Birk, B.

Molloy, L.

Bishopston, L.

Nicol, B.

Blyton, L.

Oram, L.

Brockway, L.

Paget of Northampton, L.

Brooks of Tremorfa, L.

Peart, L.

Bruce of Donington, L.

Phillips, B.

Carmichael of Kelvingrove, L.

Plant, L.

Collison, L.

Ponsonby of Shulbrede, L. [Teller.]

Darling of Hillsborough, L.

David, B. [Teller.]

Prys-Davies, L.

Davies of Penrhys, L.

Rea, L.

Dean of Beswick, L.

Ross of Marnock, L.

Elwyn-Jones, L.

Shinwell, L.

Ewart-Biggs, B.

Stallard, L.

Gaitskell, B.

Stewart of Alvechurch, B.

Gormley, L.

Stewart of Fulham, L.

Hale, L.

Stoddart of Swindon, L.

Hatch of Lusby, L.

Stone, L.

Hooson, L.

Strabolgi, L.

Jenkins of Putney, L.

Strauss, L.

John-Mackie, L.

Taylor of Mansfield, L.

Kearton, L.

Underhill, L.

Kilbracken, L.

Wallace of Coslany, L.

Leatherland, L.

Wedderburn of Charlton, L.

Listowel, E.

Wilson of Rievaulx, L.

Longford, E

Wootton of Abinger, B.

NOT-CONTENTS

Airedale, L.

Buccleuch and Queensberry, D.

Airey of Abingdon, B.

Alexander of Tunis, E.

Byers, L.

Allerton, L.

Caithness, E.

Alport, L.

Campbell of Alloway, L.

Amherst, E.

Campbell of Croy, L.

Ampthill, L.

Clinton, L.

Annan, L.

Coleraine, L.

Attlee, E.

Constantine of Stanmore, L.

Avon, E.

Cottesloe, L.

Aylestone, L.

Craigavon, V.

Balfour of Inchrye, L.

Cromartie, E.

Banks, L.

Cullen of Ashbourne, L.

Belhaven and Stenton, L.

Daventry, V.

Beloff, L.

Davidson, V.

Belstead, L.

De Freyne, L.

Bessborough, E.

Diamond, L.

Biddulph, L.

Digby, L.

Blake, L.

Donaldson of Kingsbridge, L.

Boyd-Carpenter, L.

Dormer, L.

Bruce-Gardyne, L.

Drumalbyn, L.

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Ellenborough, L.

Mountgarret, V.

Elton, L.

Mowbray and Stourton, L.

Ezra, L.

Murton of Lindisfarne, L.

Forbes, L.

Northbourne, L.

Forester, L.

Northchurch, B.

Fraser of Kilmorack, L.

Nugent of Guildford, L.

Glanusk, L.

Onslow, E.

Glenarthur, L.

Orkney, E.

Glenkinglas, L.

Pender, L.

Gray of Contin, L.

Penrhyn, L.

Gridley, L.

Peyton of Yeovil, L.

Grimond, L.

Radnor, E.

Grimston of Westbury, L.

Rankeillour, L.

Hailsham of Saint Marylebone, L.

Reigate, L.

Renton, L.

Hanworth, V.

Ridley, V.

Hayter, L.

Robson of Kiddington, B.

Hemphill, L.

Rochester, L.

Henley, L.

Rodney, L.

Hives, L.

Rugby, L.

Holderness, L.

Sainsbury, L.

Home of the Hirsel, L.

St. Davids, V.

Hornsby-Smith, B.

Salisbury, M.

Hunt, L.

Sandford, L.

Hylton-Foster, B.

Sandys, L.

Kemsley, V.

Savile, L.

Kennet, L.

Seear, B.

Kilmany, L.

Selkirk, E.

Kilmarnock, L.

Sempill, Ly.

Kinloss, Ly.

Skelmersdale, L. [Teller.]

Kinnaird, L.

Stanley of Alderley, L.

Kinnoull, E.

Stodart of Leaston, L.

Knutsford, V.

Strathcona and Mount Royal, L.

Lane-Fox, B.

Lauderdale, E.

Swinton, E. [Teller.]

Lloyd of Hampstead, L.

Teynham, L.

Lucas of Chilworth, L.

Trenchard, V.

Lyell, L.

Trumpington, B.

Mackie of Benshie, L.

Vaux of Harrowden, L.

Malmesbury, E.

Vickers, B.

Mancroft, L.

Vivian, L.

Margadale, L.

Waldegrave, E.

Marley, L.

Walston, L.

Masham of Ilton, B.

Westbury, L.

Massereene and Ferrard, V.

Whitelaw, V.

Merrivale, L.

Wigoder, L.

Middleton, L.

Wilson of Langside, L.

Mills, V.

Winterbottom, L.

Molson, L.

Wise, L.

Monk Bretton, L.

Wrenbury, L.

Monson, L.

Wynford, L.

Montgomery of Alamein, V.

Young, B.

Mottistone, L.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendment No. 32 not moved.]
4.24 p.m.
The Chairman of Committees No. 33: I have to point out to the Committee that, if this amendment is agreed to, I cannot call Amendment No. 35.
The Earl of Radnor The Earl of Radnor moved Amendment No. 33:
Page 6, line 5, leave out from ("holding") to end of line 7.
The noble Earl said: In speaking to Amendment No. 33, I wish to declare again my interest as a landowner. The purpose of this amendment is perfectly straightforward. As far as I am concerned, its importance far outweighs the small number of words which the amendment would take away from the beginning of Clause 2. As your Lordships will realise, in terms of this debate—includingthe Second Reading—it perhaps rather dramatically re-establishes the status quo and re-establishes the position that there was in the farming industry so far as landlords and tenants

459
were concerned before that particular part of the 1976 Act came into force.
We have been talking a great deal already about this Bill. One of the themes and remarks that comes up again and again is that the Bill will do nothing very much at all. I remember the noble Lord, Lord John-Mackie, saying that it was a mouse; and again and again people have said that it will not have the effect that at the same time everybody was saying they wished it would have; that it will not allow people outside the farming industry who have been trained, perhaps, in our agricultural colleges and who may bring in some fresh ideas to get into farming for so long that it is almost too much for us to contemplate. Most of us will certainly be dead when the three-generation succession has worked its way through and has allowed a few farms to get out into the tenanted sector.
It is important that we bear in mind that practically everybody acknowledged that that was a very important thing. That is one reason why I feel that a three-generation succession should not exist—not just for the tenancies created after the enactment of this Bill but also for those tenancies which existed before. There would. of course, be a relatively small number of farmers who have already succeeded since 1976, and that situation would not be disturbed by this amendment. They would still have their security for life.
Another very important point which bears talking about briefly once more, and which, again, noble Lords from all Benches have mentioned, is the extraordinary situation—and "extraordinary" is really the only word to describe it—of having two kinds of tenanted land and two kinds of tenant. I cannot really believe that the Committee wants legislation of that kind to go through. It will mean that we shall have one type of tenant who, because we have made a law in Parliament, is almost enfranchised or, shall we say, semi-enfranchised, while others who come a little later will not be in that position at all but will just have security for life. That seems totally wrong in parliamentary terms, apart from any other consideration such as social divisions. I believe that most of us are against situations which are divisive anyway, and this is something that I consider to be at least pretty divisive.
If one carries that argument a little further, one sees the ridiculous situation so far as the land is concerned. There could be two fields next door to each other that are absolutely the same: the same value so far as concerns growing crops, rearing stock and so on. There is a fence in between, and it is the boundary between a landlord who has a successional tenant and one who does not. Suddenly there is the anomaly that the land on one side is a fraction of the value of the land on the other. Also, I am quite aware that there is yet another factor—vacant possession land. It would be absolutely wrong to go on breaking up England in this false manner.
Those are the two main points that I want to make in supporting this amendment. I feel that they are very important. There are others, but I think they are peripheral. On reading the 1976 Act one finds that a number of people can succeed to the farm. I am not sure that I am too keen on the list, but, as I say, I think
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it is rather a peripheral matter. Broadly, there could be temptation for people succeeding to stay with the farm perhaps for understandable reasons of security. They might not be good at, trained in or interested enough in farming, although they could get the farm. The quality of farmers in England could gradually run down. I have almost a gut feeling that it is important to have outside blood, innovators and people with completely new ideas. I think I said in my Second Reading speech that that is absolutely vital to the well-being of the industry.
That is enough to start the debate going. I believe that if your Lordships feel that this Bill, as it stands, is not doing enough for the industry, we should redress the ill which was acknowledged at Second Reading. The ill was the passing of the 1976 Act. As I said on Second Reading, it seems absolutely logical to reverse the decisions made then. We might then see an improvement in the situation. I beg to move.
4.32 p.m.
Lord John-Mackie: Before I say anything about the content of what the noble Earl, Lord Radnor, said, may I correct him on his reading of the Second Reading debate? I thought that I was hard enough in calling the Bill a poor thing; it was the noble Lord, Lord Walston, who was rude enough to call it a mouse.
Nineteen seventy-six is not all that far back. Figures have been quoted for the number of tenancies since then. The noble Earl, Lord Radnor, is worried about having different tenancies on neighbouring land. He pointed out that the situation could be different on the other side of the fence. If all the tenancy agreements made since 1976 reverted back to life tenancies, it would greatly affect all those farmers who have made plans for themselves, their sons and so on. I do not think that the noble Earl would subscribe to the situation that it would create. If he did not want retrospective legislation, he should have voted for our amendment, which he has just voted against. It would have at least done something to bring the two situations closer together than they are now, with no succession and two successions. That is all that I have to say on the subject.
Lord Mackie of Benshie: For once I find myself in some agreement with my noble kinsman. I also have a certain sympathy for the arguments used by the noble Earl, Lord Radnor. It is true that there will be certain anomalies, but I think that what the industry needs is some stability. We at last have a Bill that has some chance of standing. Progress can be made from here, instead of the reversals that we have had since the war, with legislation being passed by one Government and reversed by the next. No industry can go ahead on that basis. I am afraid that the noble Earl's amendment is not a proper amendment at all; it is a completely wrecking amendment—although it is the job of the Government to say this. It destroys the whole purpose of the Bill. Although I have sympathy with some of his arguments, from these Benches we shall oppose the amendment.
The Marquess of Salisbury: I should like to support the amendment moved by the noble Earl. Like him, I must declare an interest, in that I have a number of tenanted farms in my family. I entirely agree with the

461
view expressed by the noble Earl about the undesirability of creating two classes of tenancy for similar land. As I understand it, this matter is still part of the package between the CLA and the NFU with a view to creating more tenancies. I cannot see that the proposal will have very much effect on the situation. It does not matter very much whether a son succeeds a father or the farm is let to someone else, because it is some completely newcomer to the industry. The amount of extra land available is nil. The only way the proposal could help is if it encouraged landlords to let more land. For the reasons that I gave on Second Reading, I can see nothing in the Bill that will do that.
I find some support for that view in what the noble Lord, Lord John-Mackie, said in moving the previous amendment, when he said that, after all, a landlord has his land in perpetuity; why should not the tenant farmer have it for rather longer than just one life? If you carry that to its logical conclusion from the point of view of the landlord, he should get all the benefits and not let the land at all; and then this question does not arise.
I think that this has some bearing on this amendment as well as the previous one. I was also a little surprised at some of the arguments that the noble Lord, Lord John-Mackie, advanced for extending the terms of a tenancy for three lives. He mentioned tenant's improvements and buildings erected. I do not think that you need three life holds to justify erecting a building. As we all know, most are written off in 20 to 25 years at the most and often in a shorter period. The same goes for drainage. By the time that the third life had come into being, it would be time to redo the drainage altogether. I do not think either of those arguments justifies a longer tenancy. If you turn the argument the other way round, there is a lot to be said for shorter tenancies.
The other thing that we must bear in mind is that, if the proposal is a very insignificant change, what is the merit in it? We are sacrificing standardisation for some very limited advantage. I should like to ask a question. I do not know what the answer is, and I do not know whether the information I have been given is correct. If anyone has the answer, it would be helpful to know it. The other day I received a letter from a gentleman in Somerset. He claimed to have information about the views of the NFU with regard to the length of tenancies. He said that the NFU was telling its branches that it was never its intention to create more tenancies; the sole object in creating this package was to ensure security for three lives of its members. It was not interested in future intake. I do not know whether that is true. I rather suspect that it is not, but, if not, I hope that someone will be able to deny it. It casts something of a shadow on the suggestion that there is general agreement on the objectives of this Bill.
I should like to say a word about what the noble Lord, Lord John-Mackie, said at the end of his remarks about what, in effect, I think he feels is retrospective legislation. The noble Lord suggested that tenants, since 1976, will have made plans, and so on. I dislike retrospective legislation, just as I suspect most of your Lordships do. I therefore asked myself whether this was retrospective in the sense that one normally refers to that term. I concluded that it was
462
probably not, although it could be argued that the dividing line between what is retrospective and what is not is very fine. It is, however, clear cut that someone, who has taken action to make money, which is perfectly legal, can find that taxation is placed on that operation in a subsequent Budget and Finance Bill, although it was untaxed perfectly legally at the time. That seems to be a general guide to what retrospective legislation is all about.
In this case, however, what we are really talking about is whether one section of a community is being penalised or suffering loss because of proposed legislation. It seems to me that if you applied that principle, we should have very little legislation at all. Almost always, someone suffers from proposals. I would suggest to your Lordships that the Rent Acts on residential accommodation would bean example. There is every reason for not adjusting rents even though it has cost the tenants more. It seems to me that this is a parallel. The suggestion that this is a case of retrospective legislation does not hold good. For these reasons, I support the noble Earl's amendment.
The Earl of Caithness:If this amendment is carried, I shall not be able to speak to my Amendment No. 35. It might therefore be for the convenience of the Committee if I mention a few points relating to it now. The basis of that amendment is very much in support of the amendment that we are discussing at the moment. However, mine is slightly more moderate in that all the tenancies created between 1976 and the passing of this Act should have security. My argument for saying this is that up to 1976 the tenancies, although they were annual agricultural tenancies, were effective for the life of that tenant. That is a contract that two parties entered into in good faith.
Suddenly, in 1976, we had retrospective legislation that threw a lot of estate and farm planning into total disarray. From 1976 to the passing of this Act, everyone knew there was succession. Any tenancies that were created were done in that knowledge. There should therefore continue to be succession for those tenancies created during that time. For future tenancies, I support the Bill in that there should be no succession because I am against the principle of it for tenancies. I believe that there are other ways of encouraging succession rather than by writing it into legislation.
However, having said that, I am concerned about one point that the noble Lord, Lord Mackie of Benshie, raised, and that is agricultural ping pong. A comment was made by the noble Lord, Lord John-Mackie, in col. 151 of Hansard on the first day of the Committee, which I interpret as meaning that what one can say and do in Opposition does not bind one to what one does in Government. I agree with that, but one should be responsible in Opposition. It was his noble friend Lord Melchett who raised the real scare of land nationalisation that is still a worry to many people. Some of us fear that, if and when the Labour Party comes to power, it will bring in land nationalisation.
From what the noble Lord, Lord John-Mackie, and the noble Lord, Lord Prys-Davies, said on the first day of the Committee and today, I rather fear that a Labour Government will bring in succession for tenancies regardless of what we do today. This is the

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real point that all landlords must bear in mind if they are going to create tenancies. There is a threat, from what has been said, that if and when a Labour Government get back to power they will bring in more retrospective legislation to make succession for all tenancies.
Lord Monson:I rise to support the amendment. I must declare an interest, both as a trustee and as a direct landlord, although the acreages involved are modest in each case. For the Government to accept the amendment would not mean that they were condoning the breaking of existing contractual agreements freely entered into, although, in passing, I must say that even if it did mean this, it would not be the first time that a Conservative Government condoned a breach of existing contractual agreements. The recent volte face over the moral acceptability of the 1967 leasehold reform legislation is a case in point.
I agree wholly with the noble Marquess, despite what the noble Lord, Lord Belstead, claims, that this amendment is not truly retrospective in effect, although, even if it were, it would not be the first time that the Conservatives have initiated or acquiesced in retrospective legislation. One might cite the Burmah Oil war damage compensation affair, or the Conservatives' decidedly lukewarm opposition to the blatantly retrospective 1975 Air Travel Reserve Fund Bill.
What the amendment, if agreed, would do is alter some individuals' financial expectations. There is nothing novel or radical about this. It is what most legislation does. Every annual Finance Bill alters people's financial expectations. Every measure of denationalisation does so. There must be many individuals who embarked upon a career with a nationalised industry in the expection that they would have a secure job for life, come what may, to be followed by an indexed-linked pension. Denationalisation may well dash those expectations. The Matrimonial and Family Proceedings Bill, which your Lordships read a second time the other day, alters the financial expectations of divorced husbands and divorced wives respectively. But, unlike the Matrimonial and Family Proceedings Bill, this amendment merely seeks to correct a temporary aberration and restore things to what they were, and indeed what they had been for a very long time prior to 1976.
The noble Lord, Lord Mackie of Benshie, spoke about the need for continuity. I agree with him. But we realise, do we not, following the Division that has taken place, that the Opposition have no intention of accepting Clause 2 as it stands if they return to power? They have made clear—at least that is my inference on re-reading the winding-up speech on Second Reading of the noble Lord, Lord Prys-Davies—that if returned to power they will alter Clause 2 of this Bill. Even if one forgets the moral arguments, which we should not do, the Government's attempt to placate the Opposition by compromising largely on the Opposition's terms will not work in the long term.
4.49 p.m.
The Earl of Onslow:I should like to support the amendment on some of the grounds raised by my noble friend Lord Salisbury. He doubted whether the
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NFU was actually interested in extra tenancies. It is palpably obvious that they are not interested in extra tenancies. The NFU, rightly, from its own point of view—I suspect that it is fairly narrow—is interested in protecting the rights and extending the privileges of its present members. That is what its members pay it for. It is for us in Parliament, when people behave like SOGAT—I am sorry, I mean the NFU—to say that perhaps they should not behave like that. It is for us to say that it is in the interests of the community as a whole that farming should be thrown open to a wider audience.
The noble Lord, Lord John-Mackie, made a speech on the last amendment which was the most perfect Tory squire speech of about 1880 that I have ever heard. My heart went out to him. I sympathise with every single thing he said. He was arguing passionately for the trees around his farm and for the inheritance of his children and his grandchildren, and he told us what his grandfather had said. We shall have him moving up in the peerage if he goes on like that any more. It was superbly good stuff. But he did not in any way even possibly allow for one extra bright young man to get into farming, and that, I think, is what we are trying to do. The Bill may or will go a little way towards that. It will be considerably improved if the 1976 tenancy arrangements are taken out, and if and when we come to short-term tenancies or fixed-term tenancies I hope that it will be improved very much indeed.
It is important that the life of the countryside should continue; it is important that the life of the countryside should be enriched by new blood; it is important that larger numbers of people should live in the big areas of Wiltshire, Suffolk and Norfolk. All of those things actually go against the interests of the NFU, but I suggest that they are in the interests of the country as a whole and that on this occasion we should not go along 100 per cent. with the views of the National Farmers' Union.
The Earl of Swinton:It has been suggested that the Bill as drafted does not go far enough and that Clause 2 should operate to restrict succession in the case of existing tenancies as well as tenancies entered into after the Act is passed. Though perhaps not entirely effective in terms of drafting, my noble friend's amendment seeks to do this and would seem to restrict succession by virtue of the retention of subsection (2) to tenancies where one succession has already taken place.
Though in agreement with the view that the 1976 Act was ill-conceived, I feel it would be equally wrong and damaging to abolish or limit succession to existing tenancies. This would be a radical and retrospective measure. I think it was my noble friend Lord Radnor who mentioned the question of two types of tenants being produced. I agree that this is probably not ideal but we do not live in an ideal world. In fact, the Government had to take a view between the two extremes of either leaving things as they were, and not repealing the 1976Act. and taking the line that has been pressed by several of my noble friends here today and making the whole thing retrospective. We reckoned that the lesser of the two evils was to go for a system which would end up with two types of tenants. In fact, it will in time cure itself. Many noble

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Lords have said in the course of these debates that agriculture is a very "long time" business. It certainly is; it will take a long time for this to work its way through and for there to be one general standard. However, that is a small price to pay.
We cannot in any case ignore the fact that many tenants, probably a very large number, may have made arrangements and may have entered into very substantial financial commitments based on the assumption that the present succession arrangements, based on two generations, will continue to apply. I am sure it would be wrong to try to go further than we are already proposing in correcting the excesses of the 1976 legislation by introducing provisions which would adversely affect such tenants and their successors.
We have been accused of placating the Opposition. I do not think that the Opposition appear very placated by the Bill, and I am certain that the one matter upon which they would agree with this side of the House is that we definitely have not been trying to placate the Opposition. It seems to me a strange and very peculiar argument that there is no point in passing any legislation which you think that the other side, when they get in, will repeal. If that were taken to its logical conclusion no Government, of any party, would produce any legislation at all. That might go down extremely well with the general public; there might be loud cries of. "Hear hear!"from the country. But I do not think that it would go down very well in this House because, after all, it would do us out of a job and this is a jolly comfortable place to come and work in as I am sure all of your Lordships appreciate. So, in my view, that is the most extraordinary argument that I have ever heard put forward.
However, I want to be serious about this matter. One of the greatest criticisms of the 1976 Act was that it was unfair to landlords in its retrospective effect. To legislate now to remove succession from existing tenancies would have equally damaging consequences. I hope we can agree in this Committee that two wrongs do not make a right. That, of all things, is upon what I would rest the Government's cause. It is not just to act retrospectively. My noble friend Lord Salisbury has tried to argue that this is, in fact, not retrospective legislation. I suggest to the Committee that it is retrospective. I have said it once and I will say it twice and even three times; two wrongs do not make a right and I hope, therefore, that my noble friend will not press the amendment.
Lord Monson:Is the noble Earl really saying that no privileges granted to pressure groups by a Labour Government, however unjustifiable those privileges may be, should ever be revoked by a Conservative Government?
The Earl of Swinton:The noble Lord gets me considerably confused. The first time he argued that it was no good doing anything because when the other side come in they will turn it hack again. If I understand him aright, he is now trying to say that there is some sort of deal so that we do not undo what they did. I do not think he can have it both ways.
Lord Prys-Davies:We very much agree with the Minister that this is a severe amendment. We believe that it is retrospective. Since 1976 many tenants have relied on the 1976 Act and they have acted on the strength of its provisions. Moreover, being induced by the expectation that an eligible member of his family will probably succeed to the tenancy, a tenant may have embarked in good faith on liabilities and altered his position by borrowing or by expenditure on his farm. Therefore, we submit that, since the 1976 Act has created in a tenant's mind the expectation that a member of his family would succeed to the tenancy on his death, technically Parliament should not allow that expectation to be defeated. If this amendment were carried it would allow that expectation to be defeated.
The Earl of Onslow:Before the noble Lord sits down I should like to raise a matter with him. He has said that it is certain that several people have entered agreements based on succession. Can he give us an example of just one such agreement that has been entered into, or is it just surmise on his part?
Lord Prys-Davies:What I said was that, induced by the expectation, it is probable or likely that the tenant will have embarked upon liabilities and expenditure and, indeed, will have continued to farm.
The Earl of Onslow: In other words, it is a guess on the noble Lord's part? He has no evidence of it.
Lord Prys-Davies: There have been so many hunches. When I asked Ministers for evidence that Section 18 has produced ill effects I was told that there was no firm evidence; there was no comprehensive assessment of the ill effects of the Act. I am sure that my noble friend Lord John-Mackie will be able to rely on his own experience in the farming community and produce evidence where tenants have incurred liabilities on the expectation that they would have the benefit of the Act.
The Earl of Caithness: Having listened very carefully to the noble Lord's speech, would he agree that the argument he used to support the tenant's case can be used, with exactly the same words, to support the landlord's case for tenancies pre-1976?
Lord Prys-Davies: The answer to that is, No. The 1976 Act was not meant to be an experimental Act; it was not meant to be a temporary Act: it was meant to be long-standing.
The Earl of Caithness:The point is that landlords entered into an agreement in the belief that the tenancy could be reconsidered at the end of that tenant's life. The arguments which the noble Lord put forward for maintaining the 1976 Act can be put forward in exactly the same way for maintaining the landlord's position pre-1976.
Viscount Mountgarret: Perhaps it would be helpful if I intervened at this juncture because my amendment, No. 36, might go some way towards meeting the point made by my noble friend Lord Swinton that two wrongs do not make a right. While in theory and in principle having great sympathy with my

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noble friends Lord Radnor and Lord Salisbury, who moved this amendment, it would seem that perhaps we are going too far completely to unscramble the terms of succession of the 1976 Act, for reasons which perhaps I ought to go into when my amendment is reached.
However, if my noble friends would read my amendment, No. 36, they might think it better possibly to withdraw this amendment and to see whether we cannot find a more middle-ground approach to the problem.
The Earl of Radnor: There has been a very considerable debate on this matter and I think that most of the questions which have been posed have been answered satisfactorily by Members in other parts of the Committee. Therefore, I shall be brief in my conclusion, but there are some matters which I must mention, at least to say who I agree with and who I do not.
First, I should like to touch on the matter of retrospection. I must admit that I agree with my noble friend Lord Salisbury. I think that the noble Lord, Lord Monson, outlined very well other pieces of legislation which have been in exactly the same position, with not too much comment being made. I do not believe that this is truly retrospective and it is certainly not what I would call retroactive. I hope noble Lords will forgive me if I forget who said what. Of course, one absolutely agrees with the wish to avoid "ping pong" legislation, but this Bill is a change. I think that the best way to deal with it is to go back to 1976 and then to sit tight. That is the best way to avoid further change. In none of my speeches have I mentioned a rather broad concept concerning ping pong, which is that I think the landlord is beginning to lose confidence in Parliament over legislation to do with land tenure. If he did not lose it in 1976 and this Bill goes through as it is drafted, I am sure he will now. That will be another nail in the coffin.
I should like to comment on the remark by the noble Lord, Lord Mackie of Benshie, that I had produced a wrecking amendment. The whole idea of tabling this amendment was not to wreck the Bill but to improve it, and I am quite sure that it would improve the Bill.
I think that I have said quite enough for one day. My noble friend Lord Swinton has said that two wrongs do not make a right. So far as I am concerned the 1976 Act was wrong and this Bill in this respect is wrong, and those are the two wrongs which I do not like very much. I should like to get the Bill straight from now on. This is a part of the Bill that does not allow for compromise. Last Tuesday, Clause 1 provided a great deal of fun for everyone and many experienced people made very lucid speeches. This is perfectly simple. It is no good my asking my noble friend to take the matter away, think about it and hash it about. So I shall have to divide the Committee to find out what your Lordships think.
5.5 p.m.
On Question, Whether the said amendment (No. 33) shall be agreed to?
Their Lordships divided: Contents, 18; Not-Contents, 171.

DIVISION NO. 2

CONTENTS

Brooks of Tremorfa, L.

Knutsford, V.

Caithness, E.

Monson, L.

Coleraine, L.

Northbourne, L.

Craigavon, V.

Onslow, E.

Cromartie, E.

Radnor, E. [Teller.]

Forbes, L.

Salisbury, M. [Teller.]

Forester, L.

Somers, L.

Kinloss, Ly.

Taylor of Mansfield, L.

Kinnaird, L.

Wrenbury, L.

NOT-CONTENTS

Airey of Abingdon, B.

Henley, L.

Allerton, L.

Hives, L.

Alport, L.

Holderness, L.

Ardwick, L.

Home of the Hirsel, L.

Attlee, E.

Hornsby-Smith, B.

Avon, E.

Houghton of Sowerby, L.

Aylestone, L.

Howie of Troon, L.

Balfour of Inchrye, L.

Hylton-Foster, B.

Belhaven and Stenton, L.

Jenkins of Putney, L.

Beloff, L.

John-Mackie, L.

Belstead, L.

Kaberry of Adel, L.

Bessborough, E.

Kemsley, V.

Biddulph, L.

Kilbracken, L.

Birk, B.

Killearn, L.

Bishopston, L.

Kilmany, L.

Blake, L.

Kilmarnock, L.

Boston of Faversham, L.

Kimberley, E.

Boyd-Carpenter, L.

Kinnoull, E.

Broadbridge, L.

Lane-Fox, B.

Brockway, L.

Lauderdale, E.

Bruce of Donington, L.

Lawrence, L.

Bruce-Gardyne, L.

Leatherland, L.

Buccleuch and Queensberry, D.

Lloyd of Hampstead, L.

Longford, E.

Byers, L.

Lucas of Chilworth, L.

Campbell of Alloway, L.

Lyell, L.

Campbell of Croy, L.

Mackie of Benshie, L.

Carmichael of Kelvingrove, L.

MacLehose of Beoch, L.

Clinton, L.

MacLeod of Fuinary, L.

Collison, L.

Malmesbury, E.

Colwyn, L.

Mancroft, L.

Constantine of Stanmore, L.

Margadale, L.

Cottesloe, L.

Marley, L.

Cox, B.

Massereene and Ferrard, V

Cullen of Ashbourne, L.

Maude of Stratford-upon- Avon, L.

Darling of Hillsborough, L.

David, B.

Mayhew, L.

Davidson, V.

Merrivale, L.

Dean of Beswick, L.

Middleton, L.

Denham, L. [Teller.]

Molloy, L.

Diamond, L.

Molson, L.

Digby, L.

Monk Bretton, L.

Donaldson of Kingsbridge, L.

Mottistone, L.

Drumalbyn, L.

Mowbray and Stourton, L.

Eccles, V.

Murton of Lindisfarne, L.

Ellenborough, L.

Nicol, B.

Elton, L.

Northchurch, B.

Elwyn-Jones, L.

Nugent of Guildford, L.

Ewart-Biggs, B.

Ogmore, L.

Fanshawe of Richmond, L.

Oram, L.

Fitt, L.

Orkney, E.

Fortescue, E.

Peart, L.

Fraser of Kilmorack, L.

Pender, L.

Gainford, L.

Penrhyn, L,

Glanusk, L.

Peyton of Yeovil, L.

Glenkinglas, L.

Phillips, B.

Granville of Eye, L.

Pitt of Hampstead, L.

Gray of Contin, L.

Ponsonby of Shulbrede, L.

Grimond, L.

Porritt, L.

Grimston of Westbury, L.

Prys-Davies, L.

Hailsham of Saint Marylebone, L.

Rankeillour, L.

Reigate, L.

Hale, L.

Renton, L.

Hatch of Lusby, L.

Ridley, V.

Hemphill, L.

Robson of Kiddington, B.

469

Rochester, L.

Strauss, L.

Rodney, L.

Swinton, E. [Teller.]

Ross of Marnock, L.

Terrington, L.

St. Davids, V.

Teynham, L.

Sandford, L.

Thorneycroft, L.

Sandys, L.

Tranmire, L.

Savile, L.

Trumpington, B.

Seear, B.

Underhill, L.

Selkirk, E.

Vaux of Harrowden, L.

Sempill, Ly.

Vickers, B.

Shinwell, L.

Vivian, L.

Skelmersdale, L.

Waldegrave, E.

Spens, L.

Wallace of Coslany, L.

Stallard, L.

Walston, L.

Stanley of Alderley, L.

Wedderburn of Charlton, L

Stewart of Alvechurch, B.

Westbury, L.

Stewart of Fulham, L.

Whitelaw, V.

Stodart of Leaston, L.

Wigoder, L.

Stoddart of Swindon, L.

Wilson of Langside, L.

Stone, L.

Wise, L.

Strabolgi, L.

Wootton of Abinger, B.

Strathcona and Mount Royal, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendment No. 34 not moved.]
5.18 p.m.
The Earl of Caithness The Earl of Caithness moved Amendment No. 35:
Page 6, line 6, after ("granted") insert ("before the coming into force of that section of the 1976 Act or")
The noble Earl said: I have spoken to this amendment. It is similar to Amendment No. 33 but a great deal more moderate, and in that case I hope it will commend itself to the Committee. I beg to move.
Lord Walston: Again I have sympathy with the noble Earl in this amendment. On the face of it, it has a considerable amount of justice; and on the face of it, it does not have the disadvantage which the previous amendment had of retrospective legislation. Thinking about it in more detail and somewhat more deeply, I am afraid I must oppose it, and we on these Benches will oppose it, on two grounds.
First, although it is not retrospective in the sense that the previous amendment was, there is no doubt at all that farming families, as a result of the security which the 1976 Act gave to them, have taken certain steps and have made certain provisions which they could not have done had they had security for only one life. Let us take the somewhat hypothetical example, based on fact, of a father in his forties or fifties, perhaps, when the 1976 Act came in. His son was in some other occupation, as frequently happens, but because of the security which was offered, not only to the son but to the grandson also, he decided to give up that occupation to farm with his father. As a result of the amendment being accepted, at the age of 40 or 45, having been farming perhaps for 15 years, he will now find that he no longer has the security which he was led to expect would be his, and his whole way of life has been altered.
That is not an isolated case. Your Lordships can all think of similar cases which have arisen or which would arise if the amendment were accepted. On those grounds of an element of retrospection and injustice, I believe that the amendment should be opposed.
My second ground is that we do not want to over complicate the Bill. We have already had a whole
470
series of amendments, some of which may be accepted, and I hope some modifications will be incorporated as a result of others which have been discussed. This is a relatively minor matter not affecting a large number of people, but will add a further complication and give rise to further discussion. I should like to avoid that, and I suspect the noble Lord, Lord Belstead, would also like to avoid it.
We must remember why we do not want to be dictated to either by the CLA or by the NFU. The Bill is a result of a delicate balance and discussions between them. While I am quite prepared on a matter of serious importance to upset that balance and come down more on one side than the other, in a matter of this sort, which is of only minor significance, it would be unfortunate if the balance were disturbed. I advise noble Lords to reject the amendment.
Lord Belstead: I should like to recognise that my noble friend Lord Caithness has thought seriously about trying to make alterations to the Government's policy on the repeal of the 1976 Act, and in this amendment is endeavouring to do so moderately and reasonably. Indeed, the amendment has, on the face of it, the merit of impeccable logic. But in this country we are not all that strong on logic and tend to prefer the pragmatic approach, or, in plain English, to ask the question: will it work?
I do not think that this amendment would work very well. For a start, it does not deal with the problem of those pre-1976 tenancies which may already have passed to the second generation. Thus a chain of succession has already begun; and on that question the amendment is silent. My noble friend does not give sufficient weight to the point made by the noble Lord, Lord Walston—namely, the distress which could be caused to tenants who have already laid plans and made investments for the future, on the assurance that the 1976 Act would not be repealed retrospectively. Although I well understand the motives of my noble friend, I am afraid I cannot accept the amendment.
The Earl of Caithness:I am grateful for the reply from my noble friend. I have no wish to press the amendment. In cases where succession has already taken place, my amendment would have no effect because that would be the current tenant and that would be the end of the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Mountgarret Viscount Mountgarret moved Amendment No. 36A:
Page 6, line 8, leave out subsection (2) and insert—
("(2)(a) The right of succession as provided by section 18(1) of that Act will only apply for one succession beyond the present tenancy provided the existing tenant exercises his right (if any) to pass the tenancy on to his heir prior to attaining the age of 65.
(b)Succession shall apply automatically if the existing tenant dies before attaining the age of 65, provided the successor is qualified under the provisions of the 1976 Act.
(c)Where a first succession tenancy has been established before the passing of this Act, the provisions of paragraphs (a) and (b) of this subsection shall not apply.")
The noble Viscount said: Your Lordships' Committee has recently demonstrated that they feel very strongly indeed about the idea of returning to the

471
status quo prior to the passing of the 1976 Act. I hope, therefore, that the suggestion that I have made in this amendment, which seeks to mitigate the retrospective and rather more painful aspects of the 1976 Act, might perhaps find some sympathy with the Government.
This section of the 1976 Act was primarily concerned to ensure that the existing tenanted land available at that time would remain available to tenants for a considerable length of time ahead. It did very little, if anything, to encourage further availability of land for letting; in fact, it did just the reverse. My amendment provides that there should be only one right of succession beyond the present tenancy, rather than two as at present. The present tenant should retain his right to be a tenant for life, but his right, if any, to pass the tenancy on to his heir should be valid only if exercised before reaching the age of 65. That may be a useful clause because it gives the landlord and the tenant family some idea of the future and what the plans and proposals arc. If the tenant dies before the age of 65, succession should be allowed automatically, provided that the heir or successor is qualified under the present arrangements.
Furthermore, in paragraph (c), if there has already been a succession since the 1976 Act, these provisions should not apply. The reason I suggest that is because in 1976 existing tenants had a terrific bonus issue. They did not know what would be handed out to them. They could not expect then that automatically their family, heirs and successors would remain on the farm for a long time ahead. If we could limit that length of time out of fairness and equity to the tenants, that would go some way towards easing the great inconvenience presently found by many landlords. Where existing tenants have understandably laid plans for the future for their immediate successors, I do not think it is likely that they will have gone as far as to make plans and provisions for the second generation. Therefore, any possible change of plan at this stage should not be greatly inconvenient to the second generation successors.
As a final point on this amendment, it says in the first half of the amendment
"… leave out subsection (2)…";
in other words, in its entirety. I should like to say that subsequent to tabling this amendment, I am given to understand that it is probably undesirable to take out the existing paragraphs (c) and (d) of the subsection because (c) might well be a necessary protection for the parties in ensuring proper management of the land; and that there should be an ability to contract in; and paragraph (d) provides some protection for the tenant against the landlord possibly seeking to adopt avoidance measures. I understand that. I would not want to go very much further on that particular point and therefore I shall be withdrawing the amendment. But I should be grateful and interested to know what my noble friends on the Front Bench might feel able to do and what the Committee might feel about trying to get some of the provisions of the second half of the amendment written into the Bill. I beg to move.
Lord Mackie of Benshie: I should like to say that although this amendment has a great deal to commend it, the objection is the same as to the
472
previous amendment which has been voted on, that it cuts across the whole sense of the Bill. It alters one of the main clauses and therefore destroys any degree of agreement which was reached. It is a little illogical in some things but it is not a bad amendment, really. However, it has the great fault that it wrecks one of the main purposes of the Bill.
Lord Belstead: I repeat, if I may, what I said on the last amendment; namely, that I genuinely understand the reasons why in this case my noble friend Lord Mountgarret has moved this amendment. I think it is not unreasonable for those of us on this side of the Committee to recall that when the noble Lord, Lord Northfield, produced his very substantial report, in paragraph 626 the noble Lord and his committee rather drily remarked of the 1976 Act:
"If the legislation were not already in existence it is unlikely that we should be recommending identical provisions as being right for agriculture".
You can say that again! It really was the most disastrous thing to do, to put as a sort of afterthought in another place three generations of succession which would go on for over 100 years and to ask those who own land simply to sign away their birthright when what they would be wishing to do would be as landowners have done over the centuries: voluntarily to have the sort of agreement between landlords and tenants which has been such a bastion of British agriculture. It really was disastrous. I understand absolutely why my noble friends Lord Mountgarret and Lord Caithness put down these amendments.
Having said that, there are difficulties. One of them is that, in a strange way the first bit of my noble friend's amendment does the same thing as noble Lords opposite were trying to do in Amendment No. 31. I am sure that my noble friend Lord Mountgarret would not dream of doing anything that noble Lords on the Benches opposite would do; namely, to restrict succession to only one generation of succession. I think that the noble Lord, Lord Mackie of Benshie, has justification in saying that in cutting across the intentions of the clause, we then run into other troubles. I think that it is questionable, if I may say so, whether one should say in the final subsection of his amendment that because a successor happens to have succeeded since 1976 then that is it and nobody else should succeed at all. I think that that is pretty draconian.
Thirdly—and here I say it very much more helpfully—I think that the middle part of my noble friend's amendment about retirement age is a very interesting suggestion which we are going to come on to again (although the age of 65 is not specifically mentioned) in the very next amendment by my noble friend Lord Kinnoull. It is a matter we shall come on to yet again on amendments which have been taken down from different parts of the Committee. In saying to my noble friend that I well understand the motives for this amendment, I am sorry but it is difficult for the Government to be able to go further than to express understanding and sympathy. To accept the amendment will bring us back into retrospection, and we are determined—I believe, rightly—not to do that.
Viscount Mountgarret: I am grateful for what my noble friend has said. I am not sure that I go along

473
entirely with everything that he has said. I wondered why I was in some difficulty in finding myself in total agreement with the noble Lord, Lord John-Mackie. My noble friend Lord Caithness said, I think, that that was all right. I will look to see what precisely has been said. In the meantime, I will withdraw the amendment as it stands. I should like to think more about it and may come back to some part of the amendment on Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.38 p.m.
The Earl of Kinnoull The Earl of Kinnoull moved Amendment No. 37:
Page 6, line 24, at end insert—
("( ) Without prejudice to subsections (1) and (2) above, the said section 18(1) shall extend and apply in any case where the sole (or sole surviving) tenant of an agricultural holding gives twelve-months' written notice to the landlord and the tenant desires to retire as tenant, as section 18(1) would apply were the tenant to die on the date of expiration of the notice; and the subsequent provisions of Part II of the 1976 Act shall (except as mentioned in section 18(1)) apply accordingly with necessary modifications.").
The noble Earl said: I beg to move this amendment standing in my name. This is the second amendment to try to improve the complicated succession provisions of the 1976 Act. It infringes upon the eligibility test of succession for existing tenants which, of course, are not being taken out of their rights under this Bill. The provision of succession rights of the tenants under the 1976 Act are by no means perfect. Perhaps I may quote a leading Queen's counsel who said that the provisions as they are drafted at present fail to shut out the claims of many applicants who are extremely well provided for and cannot by any stretch of the imagination be said to require the benefit of the Act of 1976; and, conversely, some applicants who are in genuine need of rights of succession find themselves undeservedly disqualified. I think that is a very balanced view by a leading QC.
The amendment seeks to improve in one aspect the eligibility test, the aspect of retirement. It is a very strange situation that in every other walk of life it is quite normal to find that people retire at 60, 65 or 70, but not so in farming. Why not in farming? The noble Lord, Lord Northfield, and his committee suggested, I think in paragraph 467, under the sub-heading "Fewer exits" that it was just "a way of life". Is farming today just a way of life? Does it not require high risk capital? Does it not require enormously hard physical work and does it not require both skill and judgment in a continually changing world of technology, where noble Lords who may have been trained even 10 years ago are now out of date in some technology?
There is no excuse in my view for encouraging and for continuing to encourage generations of geriatric farmers. I am not pointing a finger at anyone in this Committee in saying that. Perhaps on a more serious note, there is no excuse for blocking the farmers' ladder, as my noble friend Lord Stodart said at Second Reading. The present position of the 1976Act does not allow any real flexibility for the tenant to retire. He has two options. Either he can retire by agreement with the landlord or he has to die. That is a very narrow option, and how damaging to the industry! This amendment will allow the tenant to give notice to
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the landlord that he wishes to retire without endangering his succession rights. My noble friend has not given much away so far during the two days of our Committee and I hope that he will perhaps "break his duck" on this amendment. I beg to move.
Lord Northfield: I wonder whether we might ask the noble Lord, Lord Belstead, to be helpful to the Committee at this point. Would he agree that we might have a general debate at this stage about the whole issue of retirement at 65 which arises on my Amendment No. 45A and also on the amendment of my noble friend Lord John-Mackie, No. 59? If he says he would prefer us to deal with this retirement issue in one debate, it would be helpful to know.
Lord Belstead: If the noble Lords, Lord Northfield and Lord John-Mackie, have no objection, I would have thought that would be for the convenience of the Committee, but I am in the hands of your Lordships.
Lord John-Mackie: We would very much agree with that because our amendment is very much like that of the noble Earl, Lord Kinnoull, and I am sure it would save a lot of time if they were discussed together.
Lord Stanley of Alderley: May I make just one point: there are two sorts of retirement. One is the retirement concerning those who are protected under the 1976 Act, and then there is the question of retirement for those who are not covered but who will be covered by future tenancies. As I understand it, my noble friend's amendment is really dealing with those who are protected under the 1976 Act. I just wonder whether I ought perhaps to make a remark on that specifically at the moment.
Lord Renton: Could we be told exactly which amendments are therefore to be discussed together?
Lord Northfield: It is suggested that No. 45A, which is called "transfer earlier than death", and also No. 59, which is also called "transfer earlier than death", are both on the same point as that raised in the amendment of the noble Earl, Lord Kinnoull. May I say I do hope that we can discuss them together so that we can get some response from the Minister as to how he sees the whole issue of retirement, as opposed to waiting for death and succession.
I do not necessarily want to read from my Committee's report, but I would point out that first of all we did say that we objected to compulsory retirement because that can cause a good deal of hardship in particular cases, except in the case of small holdings; and we can deal with that matter in connection with another amendment. But in the case of voluntary retirement my committee recommended that there should be encouragement to transfer earlier than death, and we said:
"We are agreed that this could be achieved by providing that the tenant might, at or after the age of 65, with his nominated successor, apply for transfer of the tenancy. The landlord could contest the application both to oppose the succession and to put his own case for possession".
This is what I have tried to deal with in my Amendment No. 45A. That says in effect that the provisions of this Act—namely, Clause 2 and the new

475
kinds of tenancies—as well as of the 1976 Act, shall apply where tenants, joint tenants and so on reach the age of 65 and application is made to the tribunal for the transfer of the tenancy at that age without waiting for the death of the person concerned. It ends by saying:
"such transfer, if agreed to by the Tribunal, shall constitute statutory succession within the meaning of these Acts".
In other words, I have tried to combine most of the views about retirement; but there is one particular point I have to emphasise. My amendment suggests that it is also the landlord who can apply to the Tribunal to force the pace of succession at age 65 of the tenant or tenants. I do that because evidence that we took indicated that there were cases where a tenant was, if one might say so, "hanging on" unduly and was probably best succeeded, in terms of what would be good for the farm and the land generally; the tenant ought really to be succeeded, in view of his age, by his successor. Therefore, I have put in my amendment the right of the landlord to go to the tribunal to "force the pace" as well as the eligible persons who would otherwise succeed.
I believe this whole issue is very important indeed because if we are going now, as we do in this amendment, to proceed beyond the strict agreement of the NFU and the landlords to broaden this Bill in ways which would make more tenancies available, then this is one of the first steps that we should be taking. It is the case that people do hang on because there is no statutory right of succession until death occurs and, in my view, it would be sensible to pick an age and let the tribunal adjudicate finally as to who was being reasonable about the whole affair—whether the landlord was being reasonable, the tenant, the successor or whoever. That is why my amendment is deliberately put down as a new clause to allow the tribunal to look at the whole situation as it stands and suggest the correct way to proceed.
If I may say so, one of the problems, I think, with some of the other amendments is that the desire to retire, or being ill, or whatever, is considered. I do not think that comes into it at all. It should simply be the case that at 65 someone should have the right—in my amendment I suggest it is the tribunal, because the tribunal makes all the other decisions in regard to the 1976 Act—to say, "Look, we think it is in the general interest of the holding, the landlord, the farmer and the eligible person to succeed". On balance, it is, or it is not, right that this tenancy should be transferred at age 65 without waiting for the death of the tenant. That is why I have put down the amendment in this form. I hope that this has opened a debate on the whole issue, and I present it in that spirit.
Lord Stanley of Alderley: I agree entirely with the noble Lord, Lord Northfield, that this is a most important subject to which we should address ourselves this afternoon. What I do not agree with him on, needless to say, is how we should do it. It is absolutely vitally important that your Lordships should get quite clear in your minds the position of someone under the 1976 Act. It is totally different from the position of someone who will come in after this Bill is passed. I should like those two issues to be dealt with separately; otherwise we shall get ourselves
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in a muddle and, what is very much more important, if we send the Minister away to think about it and the industry also has to think about it, they will get into a muddle over it. I think that totally different provisions should be made for the two.
If I may, I will say something very quickly about my noble friend's amendment, My noble friend Lord Kinnoull said that it is normal to retire. That is so, but I would point out straight away that if you bring in compulsory retirement for farmers, they will be the only self-employed people who will have compulsory retirement. I am not immediately ruling that out, but I am just saying that I think my noble friend is slightly at a miss there.
I am in agreement in principle with my noble friend's amendment for some form of retirement, certainly so far as the 1976 Act tenants are concerned. I believe his amendment will have technical problems attached to it. I am told you will have to write the 1976 Act again more or less completely; but that is merely a technicality which I am sure can be done. I hope therefore that my noble friend will be patient here and I also hope that the Government will be patient while they listen to the debates that I am sure we are going to have on the amendment of the noble Lord, Lord Northfield, to try to get a consensus here.
Again, as regards my noble friend's amendment, I would hope that some definite age might be put into the wording because, although it may sound nice to have any old age, if your Lordships think about it carefully it could cause considerable family problems. For instance, you might get, "Let's kick the old chap out at 45". That is what they might say, and I think that would be wrong. But let me hasten to add to my noble friend Lord Kinnoull that I have great sympathy with his amendment. I hope that at some time the Government will be able to think about it, together with the other discussions that we shall have later on.
Lord Walston: I certainly support the principle behind the amendment of the noble Earl, Lord Kinnoull. I think that it is sound and I speak as a geriatric farmer myself who has, to all intents and purposes, retired from farming. It is very important that it shoud be easy for farmers, when they reach a certain age—and what that certain age should be is very difficult to arrive at—if they have security of tenure for their sons, to pass it on rather than have to wait till their death. It is absolutely essential that that should be done and it would enormously strengthen any legislation such as that which we are now talking about.
I am not so happy about the proposals of the noble Lord, Lord Northfield, and they require a great deal of thought. I know of several cases where the old man hangs on and says, "There is nothing I should like better than to give up, but I have to wait a few more years, because the boy is not quite up to it yet, and he is having problems with his wife and children", or whatever it may be. "I shall do it in another few years". But of course that time never comes and he stays on and on, because he likes wandering around the fields saying "Don't use those sprays. We did not do it that way", and so on.
Unless he is going willingly, you will have all sorts of frictions and unhappinesses not only between the

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landlord and the tenant, but between the tenant and the heir. After all, one must remember that in most cases the old man owns the tenant capital—the tractors, the combines, the cows, and so on—which amounts to quite a lot of money. Unless he is prepared willingly to hand those on to his successor—his son—you will not have a very satisfactory situation. The tribunal may say, "The old man is too old and doddery. He is no good and the son should take over", and the landlord may be content with that. The old man does not quite say, "Not over my dead body", but says "If he is going to take over, I shall not give him all the tenant capital. He will have to buy it". The son will not have the capital with which to buy it, and if he borrows he will be overburdened with debts and will not make a success of the farm. Those are some of the practical difficulties which come to my mind.
I am not saying that I am against the proposal of the noble Lord, Lord Northfield. I should like to see it work, if it can be worked out in such a way that it is practicable and does not cause more troubles than it seeks to avoid. But as regards the amendment of the noble Earl, Lord Kinnoull, that seems to be an admirable one and one which deserves our support.
Lord Prys-Davies: We on these Benches cannot bring ourselves to advocate compulsory retirement, but we see considerable merit in our Amendment No. 59, in the amendment of the noble Lord, Lord Northfield, and in the amendment which is before the Committee. We reject the principle of compulsory retirement, because that would cause hardship. If we were to single out for retirement a farmer who is conducting his own business, that would be the only example of a self-employed person being compelled to retire.
Nevertheless, the principle of voluntary retirement and redundancy has been an important feature of social policy throughout our century. It will continue to occur and our amendment, and the amendment of the noble Earl, are an encouragement to voluntary retirement. As has been said, under the 1976 Act, unless there is an agreement between the landlord and the tenant, the succession provisions apply only on the death of the contractual tenant. The result is that tenants hold on to their tenancies, sometimes into advanced age, at the expense of the standards of husbandry. When a farmer who is conducting his own business ought to retire is dependent upon all the circumstances, and they vary considerably. That is why we find difficulty in going along with this magic age of 65. His retirement must depend on the state of his health, on his wishes and on his finances. But when the time comes and he wishes to retire, if the landlord is unwilling to agree an assignment of the tenancy to an eligible successor during his lifetime, then it appears to us that the tenant ought to be able to go to the ALT and apply for the transfer of the tenancy to his nominated successor. So there is a great deal of common ground expressed by these three amendments, and I hope that the Minister can respond constructively to the underlying principles.
Earl Waldegrave: I am sure that the Minister will respond constructively, as he has done all the way
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through the Committee stage, but I hope that he will keep one point very clear in his mind when he replies. I refer to the point which my noble friend Lord Stanley of Alderley made, that one has to think very differently about these two classes of tenant—the man who has the three-generation tenancy and the new tenant who will have the one-generation tenancy. This will be the most difficult point and that is why, if we are to vote, it may be necessary to vote separately on these amendments.
5.58 p.m.
Lord Belstead: If I may pick up the point made by my noble friend Lord Waldegrave at the very end of his remarks, may I express the hope that we will not find ourselves voting on these amendments, because I agree with the noble Lord, Lord Prys-Davies, that there is a good deal of common ground and I should like to make it crystal clear to the Committee that the Government very much welcome each of these amendments as being a step towards an objective which seems to be shared on all sides. If we can provide in this Bill in your Lordships' House for a really fair provision for voluntary retirements, and thereby increase the frequency with which tenancies come forward, then we shall have done a good job.
If I may take, first, the amendment of my noble friend Lord Kinnoull, this is a very attractive concept. But my noble friend will forgive me if I suggest that the drafting appears to be a little compressed towards the end of the amendment, and I think that the draftsman would need to have a look to see how we should talk about "necessary modifications", without just referring to them by those rather sweeping and dismissive words. But that is a drafting matter.
It is interesting that my noble friend does not mention an age in his amendment. That is a matter which has already been picked up in this brief debate and I am not sure whether my noble friend omitted that deliberately. Certainly, an age is being discussed by those who are interested in this matter and, again, thought would have to be given to decide whether 65—if an age was written into any amendment—was the right age and whether that would be suitable if one were talking about the retirement age of women. Here I am afraid that I have to look at the Committee and say that I think it is a matter to which we need to give a little thought.
I assume from my noble friend's amendment that the application would be decided in the final analysis by the agricultural land tribunal, though my noble friend's amendment does not say so in terms. Assuming that that is the way it will be decided, as my noble friend will know, in some other amendments there is provision that, having made such an application, you cannot go on making the application again. This is a protection for the landlord. Would not my noble friend wish some such provision to be put into the amendment?
Turning to the amendment in the name of the noble Lord, Lord Northfield, again I listened with very great interest to what he had to say, and as I did so it occurred to me that what he is seeking to do in Amendment No. 45A is covered in part by existing legislation and in part by Clause 2(2)(c) of the Bill.

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Under Section 18(5) of the 1976 Act, the tenant can seek the agreement of his landlord to retire and to be succeeded by an eligible successor. The section also ensures that such successions can count for the purposes of the two succession rule. This is further reinforced by Clause 2(2)(c) of the Bill, which provides that agreements in writing entered into in this way can count for succession purposes. To that extent, the noble Lord's proposal would run concurrently with what has been proposed and is being proposed in legislation. A further point is that under Section 18(5) the tenant may seek the agreement of his landlord at any time. He does not have to wait until the age of 65, although I recognise what the noble Lord, Lord Northfield, said in speaking to his amendment: that the landlord can take the initiative. Again, the Committee would wish to give a certain amount of thought to whether or not that was desirable.
Before leaving the noble Lord's amendment, may I say that I recognise that this matter was raised by the noble Lord's own committee and that we are indebted to his committee for the genesis of the ideas which are coming forward now in these important amendments. That is not mere politeness: if we can do something here, we shall most certainly have taken a step in the right direction.
Finally, may I deal with the amendment moved by the Front Bench opposite. Aspects of the amendment will obviously appeal to the Committee. It is made very clear in the wording that this is to be permissive, not mandatory. It is to be the wish of the tenant to retire on account of ill health and to be desirous of assigning the tenancy. It enables the eligible person to apply, with the written consent of the tenant, to the tribunal. It is most certainly permissive. Having said that, it chooses 60 rather than 65, gives ill health as the ground for retirement and (what is somewhat controversial) provides that only the eligible successor, rather than the tenant and the eligible successor together, need apply. To go quite so far as is proposed in the amendment in those particular respects would perhaps tip the balance rather too far in the tenant's favour, but we ought to look very carefully at Amendment No. 59 as well.
I realise that by taking these amendments together I have not satisfactorily answered my noble friend Lord Stanley of Alderley, and that I must look at his point. Both he and my noble friend Lord Waldegrave said that they feel that the tenancies formed under the Bill compared to tenancies formed before the Bill came into effect might need to be looked at differently. I must confess to both my noble friends that this expression of view has taken me aback. I say quite openly that I am not briefed on this point, and that I do not know quite how to answer. Therefore, I shall say what I intended to say: that if your Lordships feel that this is a sensible way to proceed, I would ask that these amendments should not be pressed.
I suggest that we should proceed in this way. I give an undertaking that the consultations on this point which have been taking place should now be brought to an end, that the Government should very seriously consider what has been said in your Lordships' Committee on this point and that we should use our best endeavours, if we possibly can, to bring forward
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an amendment which would receive all-party support at the Report stage. We shall certainly attempt to do this. As I have said before, I cannot promise that we shall be successful, but I have a feeling that the problems in this area should be easier to overcome than some of the other problems we have in the Bill.
Lord John-Mackie: I must thank the noble Lord for being what is called conciliatory at the Committee stage. The noble Lord, Lord Walston, said that to all intents and purposes he is retired. I must say emphatically that to all intents and purposes I am not retired. My only point relates to the question of age. The noble Lord, Lord Belstead, must have our original amendment in front of him, not the new starred Amendment No. 59, which does not have in it the age of 65 and illness. We gave the matter further thought and took out the age of 65 and illness. The amendment deals just with the tenant who wishes to retire.
I have been a member of various bodies all my life, including in particular the Forestry Commission. It has always worried me when I have seen young, able men of 60 having to retire. If one looks at the Civil Service as a whole, one sees that civil servants have to retire at the age of 60. To insert an age would spoil everything. When the Government look at the matter and come back with suggestions, I appeal to them not to put in an age qualification. Some people are becoming geriatric at the age of 50, while others do not approach the geriatric stage until they are nearly 80; so I appeal to the Government to leave out the age question.
Lord Stanley of Alderley: Before the noble Lord sits down, may I ask him whether he said that he wants an age in, or whether he does not?
Lord John-Mackie: I do not want an age in.
Lord Belstead: The noble Lord, Lord John-Mackie, is the best possible advertisement for not wanting an age in. May I offer my apologies to the noble Lord for using a line or two of a speaking note which referred to a previous form of the amendment. It is indeed a fact that ill health is not mentioned, which makes the amendment in the name of the noble Lord and his noble friend that much more attractive.
The Earl of Caithness: While we are discussing the problem of retirement, may I refer to a point which I made in my Second Reading speech; namely, the tenant who wants to retire but who has no successors and the landlord who agrees that the tenant can retire and who wants to relet the holding? A problem arises where the tenant cannot afford to retire. At Second Reading I raised the point that the tenant should be allowed to assign his tenancy for a capital sum, as is allowed in the commercial world. I have been unable to put down an amendment for this stage. I apologise for the fact that I got totally bogged down with the drafting. As so many amendments relating to retirement were put down, I thought that I would wait for this discussion and come forward with an amendment at the Report stage. I hope my noble friend will take this matter into consideration when thinking about the problem of retirement.
The Earl of Kinnoull: We are all grateful for the contributions which have been made on this subject. Of the three amendments at which we have been looking, mine is the gentlest, while those of noble Lords opposite are the hardest. They go soft, hard, hardest. Funnily enough, I agree with the noble Lord, Lord Northfield, who leaves it to the agricultural land tribunal to decide the issue. I hope my noble friend will not duck the sensitive issue of allowing the landlord as well as the tenant the choice of electing to go to the agricultural land tribunal.
The sort of case which obviously will come up is where the tenant has lost some of his senses of good farming and has become extremely aggressive or difficult and is disruptive. It would be difficult, if that was effecting very bad farming—or it might come under bad husbandry; nevertheless, it would be difficult if one could see that he was no longer prepared to be conciliatory, even for the rights of his son and those who might succeed him.
My noble friend suggested that my own amendment was a bit compressed. I will only say that it was compressed with a refreshing air compared with Clause 1, which is not compressed. I hope that my noble friend, when he comes to look at Clause 1, will help to compress it further. I am happy to withdraw my amendment. My noble friend has given a handsome assurance that he will look very carefully at this important subject and will seek to obtain a fair provision of voluntary retirement. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.11 p.m.
On Question, Whether Clause 2 shall stand part of the Bill?
Lord Bishopston: I wish to move the Motion standing in the name of my noble friends in relation to Clause 2. This clause deals with the succession aspects of the 1976 Act and presents and alternative to those tenants of the future. The Bill is of course mainly Clauses 1 and 2; and the intention of the Bill, as the Minister pointed out on Second Reading and since, is to ensure that more people have entry into the farming industry.
But noble Lords are far from being satisfied that the Bill does that. There has been a great lack of enthusiasm on the Government Benches, highly populated as they always are during these sessions by noble Lords who have an interest—and quite rightly so—as landlords or as tenants. I have already declared an interest as a Church Commissioner and a member of the council of The National Trust—two bodies which have enormous areas of land under various uses, and not least under cultivation; although at the moment, I am speaking of course for the official Opposition.
The noble Lord, Lord Walston, was one of many in the industry who gave a most damning view of the Bill when he said during the Second Reading,
"The birth is a mouse; it is no more than that".—[Official Report, 8/11/1983; col. 720].
He is quoted as saying that the primary aim of the Bill, as made out by the noble Lord, Lord Belstead, was to arrest the decline of the tenant farmer. The noble Lord
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went on to say:
"If that is the primary aim—and I accept that it is—then I must say quite frankly that it has failed".
He was not the only one. The noble Lord, Lord Stodart of Leaston, stated that he took a more favourable view, but he said:
"Other than the NFU and the CLA, organisations which have written to me about this Bill seem to concentrate on two points. They say that to remove the succession laws would be of minimal benefit. They say that it will be far too slow and will create two kinds of tenants".—[Official Report, 8/11/1983; col. 729.]
That point was made also by the noble Earl, Lord Waldegrave, only a few moments ago. The noble Lord, Lord Stodart of Leaston, went on to say:
"and how, without indulging in retrospective legislation, could one do otherwise? They say that the rent formula is pretty useless"—
and indeed the Minister himself has already very kindly—and wisely I thought—agreed to take Clause 1 back—
"and that the open market value is just about the only way. They say with a fair amount of unanimity that, therefore, this Bill will achieve virtually nothing".
As I said out of fairness, the noble Lord, Lord Stodart of Leaston, went on to say:
"I take a much more favourable view than that, although I am somewhat cautious in forecasting a swift re-introduction of the farming ladder as we used to know it".
So there has not been a great deal of enthusiasm, although the Bill, as we know, is a package agreed between the NFU and the CLA, and about which I make no complaint because if one can get agreement within the industry before a measure comes here, that is going some way towards getting a Bill.
I will not mention that the same precedent might be used in relation to trade union, local government and other reform; the principle of getting agreement before it comes here. That may be for another day.
So we have those comments from members of the official bodies—the CLA and the NFU—and from people talking, as noble Lords quite rightly do, from their experience in the farming industry. So I say, and others have said the same thing, that we are left with two kinds of tenants. One kind is the tenant who has the benefit of succession under the 1976 Act. That Act was brought in during a period when I was Minister of State and my noble friends had responsibility. Despite the attacks on it, the principles of the 1976 Act had the support of the NFU. Indeed, the NFU even today, in a recent letter, say much the same thing:
"Whilst ideally the NFU would have wished tenants of new lettings to enjoy the family succession rights available under that Act, it has accepted that it is necessary to restrict successions to existing tenancies only so as to encourage new lettings".
The NFU is still in favour of the 1976 Act, but maybe to get this package they have accepted a compromise, which is before the Committee still.
The Northfield Committee report tells us very clearly that there is a need for much more information about the farming industry. To the credit of my friend Mr. John Silk in, when he was Minister of Agriculture and I was with him, we recognised that one could not answer questions in either House about the farming industry because there was a great lack of knowledge. My noble friend Lord Northfield has performed a great service to the industry by producing his report. I only wish that we could have more time to study some of its facts and recommendations.

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If one reads the report, the idea of Clause 2 that one can change the present situation with that clause and overcome many of the problems which are of concern to us all is not real. The report talks about the enormous changes which are taking place in the farming industry. They went back into the last century and came in three stages, right up to the 1970s. Noble Lords will know of the enormous changes. First, there was the enormous amount of manpower needed to operate farming in the old days. We know that there has been a great deal of mechanisation and that new technology has been brought in, and that fewer people are involved. The industry has contracted in many ways as far as opportunities are concerned—not only for farm workers but also, as a result of a contraction, in the number of farms available. We have seen amalgamations taking place, encouraged by all Governments to make increasingly efficient use of agriculture. That is bound to mean fewer opportunities for people to come into the farming industry.
There are many other factors as well. We all know about the effect of the common agricultural policy. Indeed, in the debate last Thursday there was an indication of the fear many have, not about coming into the industry but about staying in the industry. More people are likely to leave the industry even as a result of the Government's policy in relation to the CAP on the dairy industry; many will leave who are anxious to stay in.
There has also been a reduction in the number of opportunities caused by county councils selling smallholdings, and there has been the Land Settlement Association situation. There are all these matters to consider, apart from the points which the Government have made about the need for Clause 2 in order to stop the drift of people from the land because there is no opportunity to come in.
As I said earlier, I am a Church Commissioner and the Church Commissioners have for a very long time had the succession principle. We have a number of families who had succession for over 100 years. This has not meant that farming has gone down, that farms have deteriorated. Indeed, we all know that those who believe in the 1976 Act principles believe in having the best kind of farmers, able to make the farm viable; otherwise, of course, it is bad for all concerned.
Of course, when we are talking about rents and conditions of farming, we have to realise—and when I was a Minister I mentioned this to many meetings of the NFU—that on the one hand it is the job of Governments and others to make sure that the landlord and others in the industry can get a fair return—otherwise, there are no letting opportunities—and, on the other hand, it is also essential that the people to whom we wish to let farms are able to pay the rents demanded. So there is a very fine balance which has to be made between producer and consumer—the cost of the produce, the ability to buy it, the incentives a landlord has to let the farm and the ability of the tenant to find the rent.
Noble Lords will not need to be reminded that the number of people entering farming, or indeed staying in it, depends on taxation as well; but, of course, in this Bill we are not looking at all these aspects. I am not
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saying you can have a Bill covering all the aspects—financial, statutory tenancies and so forth. So we believe that this clause does need review. My noble friend Lord Prys-Davies has already said that the two clauses go together, and here we are discussing Clause 2, which is a certainty in the Bill at this moment, and we do not know what is going to come on the other part of the partnership, Clause 1.
We are hoping that the noble Lord the Minister will be pursuing the promise he made last week, and I am sure he will do his utmost. But how he can reconcile not only his own restrictions of the rent clause, Clause 1, with the objectives of your Lordships' Committee last time, running in about eight different directions, is something to be seen. But we are hopeful. I feel that this matter of Clause 2, which hangs together with Clause 1, is one which the Minister will see as requiring him to say that he will be prepared to reconsider Clause 2 in view of his promise to look at Clause 1. I hope that he will recognise some of the points my noble friends and I have made about some of the other factors over a wide range of situations which concern whether or not people enter into the farming industry. If I may say so, I think he will be well advised to say that he will look at Clause 2 and Clause 1 and come with comprehensive alternatives if possible.
Lord Stodart of Leaston: The noble Lord, Lord Bishopston, was kind enough to refer to some of the things I said on Second Reading. To make it quite clear, although I quoted, I qualified the quotations by saying that they were not my views. On the clause we are now discussing I said on Second Reading that, to me, Clause 2 is entirely basic within this Bill with a view to getting more tenancies on to the market.
I agree with the remark of the noble Lord, Lord John-Mackie, about the steady decline in tenancies and the slightly misleading figures that were given merely taking acreages of land. What I find quite astonishing, in view of the questions that can be answered, is the fact that since the Scottish legislation came in—a good many years ago now—or since 1976, nobody has apparently been able to say that in the 10 years from 1965 to 1975 X number of farms were let and in the following so many years X number of farms were let. It seems to me quite astounding. I can recall as a very junior Member in another place once asking the Minister of Public Building and Works, rather mischievously, how many pelicans there were in the Royal Parks, and what was their sex. I received the answer that there were two males and four females. I remember that my supplementary question was how the Minister knew this because certain textbooks said that the only thing that could determine the sex of a pelican was another pelican. If you could get an answer to that, how on earth is it that the two departments are unable to give us this information?
Of one thing I remain totally convinced, and that is the effect of the 1968 Act in Scotland and the 1976 Act which we are now discussing. Nothing will shake me in the belief that this did not put the most tremendous deterrent on landlords from letting farms. The attitude of the National Farmers' Union with regard to the 1976 Act has been quoted by the noble Lord, Lord Bishopston. In 1968 (I think I am right about the date) in an Agriculture (Miscellaneous Provisions) Bill

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applying to the United Kingdom, by some extraordinary coincidence—I was not here or in the other place in 1976, but, from what I have heard today, within the 1976 Act this provision was introduced at a slightly later stage in the Bill; but in the 1968 Act, which applied only to Scotland, it was at the Committee stage—the attitude of the English National Farmers' Union could not have been more forthright. They wrote to all of us and said there were absolutely no grounds for the hereditary system in farming; there were no valid grounds whatever for saying that a son or any near relation was likley to farm the land better than somebody from outside. To my mind, the most important thing—and I have said this before—is the farming of the land and the letting of new blood into the industry.
6.27 p.m.
Lord Middleton: I wondered what noble Lords opposite would say in regard to the Question whether this clause should stand part. As one would have expected, the noble Lord, Lord Bishopston, spoke very moderately, and with enormous experience, again as one would expect. He has asked the Government to modify Clause 2. Clause 2 is crucial, and I really do not think it could stand a great deal of modification. I have kept quite quiet during the more than two hours we have been discussing Clause 2, but perhaps I might say a word. Despite the disbelief of noble Lords opposite, and despite their graphs, the fact is that the 1976 Act did have a profoundly adverse effect on the landlord-tenant system. My noble friend Lord Stodart is quite right in saying so.
We have heard that statistics in this field are scarce. But surely the significant statistics should be the number of new lettings since 1976 as distinct from succession lettings. On Second Reading I referred to the survey which was done by the CLA of its landlord members. The replies to that survey were overwhelming: private owners were not prepared to create new tenancies. And why not? It was because of taxation and because of the succession provisions of the 1976 Act. They were unanimous. The supply of tenancies from private owners simply dried up.
The noble Lord, Lord Prys-Davies, in moving his first amendment this afternoon, told us that only the CLA wished to modify the succession provisions. But despite what the noble Lord, Lord Bishopston, has just said about this Bill being narrowly based upon a consensus reached by the CLA and the NFU, virtually the whole farming industry and all the professional bodies are asking for the succession provisions to be altered. Not only the CLA but the National Farmers' Union, the Tenant Farmers' Association, the National Federation of Young Farmers' Clubs, the RICS, the CAAV and the ISVA all support the Government in what they aim to achieve—perhaps not in precisely the same way but certainly they support the Government on Clause 2. It is difficult to find an industry that is more united on any issue.
The succession provisions are modest. They represent the very minimum that can be done to give a boost to new lettings. The main weight of criticism on Clause 2, as we have heard today, is that it does not go far enough. However, unless that minimum is done
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there will not be any new lettings and it will be the young who will suffer. If it is desired to be the final coup de grâce to the landlord-tenant system in agriculture then one is asking for the full 1976 Act treatment to continue for all tenancies. That is what will happen if one knocks Clause 2 from the Bill. I know that is not how the noble Lord put it, but that is what will happen and the agricultural industry deserves better than that.
Lord Renton: May I briefly say that I support what my noble friend Lord Stodart of Leaston said? When the 1976 Act was going through the House of Commons I had already represented for over 30 years a very large farming constituency and kept in constant touch with the local branch of the NFU, which was a very strong one. I had the clear impression that the Government were almost taken by surprise at the pressure exerted by the headquarters of the NFU at the time of the negotiations on the 1976 Act. It has become perfectly plain that the system of land tenure in England and Wales is, as I am afraid previously happened to some extent in Scotland, becoming fossilised. I was hoping that out of these negotiations and into this Bill we should get a system which broke, much further than the Bill does, into the rights of succession. That is in the general interest of farming and those who want to enter farming. As my noble friend Lord Middleton said, the proposals in Clause 2 are about as modest—I would almost say as ineffective—as one could possibly have expected to see. I hope, therefore, that my noble friend and the Government will not succumb to any pressure from the Opposition to make them even less effective.
Lord Belstead: I was interested in the remarks of the noble Lord, Lord Bishopston, because not only has the noble Lord very great experience of the Ministry in which I am fortunate enough to work but he was a Minister in another place when the 1976 legislation was going through. I and my noble friends on this side of the House well understand why the noble Lord felt that he should intervene at this moment in the Bill. Indeed, we listened to what the noble Lord said with great interest.
However, I am afraid that on this occasion it does not necessarily mean that we agree with the noble Lord. It is incontrovertible, as my noble friend Lord Stodart of Leaston, also a previous incumbent of the Ministry, said, that Clause 2 is basic to the Bill. That expression of view was echoed by my noble friend Lord Middleton, who has done so much work in making it possible for the Bill to come forward.
I apologise to my noble friend Lord Stodart of Leaston because it is not possible for my department to produce figures on the decline in the number of tenancies. I must apologise for the fact that I have spoken on previous amendments about the decline in area: my noble friend was right to take me to task in saying that that does not give a very good picture. My noble friend said that it seemed to be possible to find the number of pelicans in the Royal Parks so why was it not possible for the Ministry of Agriculture to give the number of tenancies in this country from year to year? I can only say that I think the reason is because over the years landlords have resisted surveys rather more successfully than have the pelicans in the Royal Parks.

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The noble Lord, Lord Bishopston, was, of course, defending his own legislation. But the noble Lord will acquit me of discourtesy if I say that over a period of seven years it has been judged and found wanting. The noble Lord, Lord Northfield, and his committee—I must not misinterpret what the noble Lord and his committee said because they did not reach exactly the same conclusions as are in this Bill—were quite clear that the 1976 Act had not succeeded. In his wind-up speech on Second Reading my noble friend Lord Swinton was quite clear from his own personal experience that the 1976 Act had not succeeded so far as his own family lands were concerned. Who was it who, seven years ago, were also quite clear that the 1976 Act would not succeed? It was the National Federation of Young Farmers' Clubs, which could see quite clearly, where perhaps others did not see quite so clearly, that unless young farmers were of the family of a tenant by succession the legislation of that year would create a situation which would make it precious difficult for them to succeed to a tenancy at all.
It is for that reason that the Government believe that we must look to the future and that we must do our best so far as we can in this Bill to see that we take a step in the right direction. The noble Lord, Lord Bishopston, who is always fair in the way he speaks, will forgive me if I say that not the noble Lord or his noble friends on the Front Bench but his party would do much for the future of tenanted land if it would rethink both its fiscal policies towards tenanted land and its policies towards public ownership and tenanted land.
For our part, therefore, we are determined, and my right honourable friend the Chancellor of the Exchequer has shown it this year, to try as best we can to take fiscal steps in the right direction. The second Finance Bill this year has proved that. In this Bill, we believe that Clause 2 will be another step in the right direction. As my noble friend Lord Renton said, the clause is so fair that it has been criticised by my noble friends on previous amendments as being too fair. But sometimes that is not a bad fault. For us to be able to say that we are bringing in a Bill which ends legislation which we do not like but at the same time is not retrospective and which protects the situation where a chain of succession has been establised, is the right way to proceed. That is why we intend to stand by Clause 2.
Lord Mackie of Benshie: I was fascinated by the noble Lord's instruction to the Opposition to rethink their fiscal policy towards the landlord-tenant system. Does that mean that the Government are rethinking their fiscal policy?
Lord Belstead: What I meant was that this year we built upon the Finance Act 1981 by extending capital transfer tax relief from 20 per cent. to 30 per cent. As was explained at the time, that was supposed to be a positive inducement to owners to let land. Six months ago the Labour Party said in its manifesto that it would reverse most of the Conservative Party's concessions on capital transfer tax. That is what I meant.
Lord Northfield: I should not have intervened on this matter but for the joke about the pelicans, which,
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if I may say so, unfortunfately got taken rather too far. It enabled the Minister to have a throw-away line and to say that we do not know anything because landlords resist surveys. With respect to the noble Lord, Lord Belstead, that just is not good enough.
In paragraph 282 of our report we made it quite clear that the sort of information which we desperately need about occupancy of land in Britain—and which, if I may say so, we shall need more and more as the tenancy sector declines, and more and more charges are made about who is responsible and what will relieve the situation—could readily be provided by similar means to those used in Scotland at the moment. Every June the Scottish census form asks questions which enable a sensitive appraisal to be made of the trends in land occupancy in Scotland. In paragraph 282 we suggest that the Ministry of Agriculture, Fisheries and Food should extend the June census in England and Wales on the lines of the Scottish experience so that we can take account of these developments in occupancy.
I therefore hope that the Minister's good joke—and, if I may say so, the good follow-up joke—that came from talk about pelicans will not be the end of the matter. There is a simple way in which we can have more information available. I hope that the noble Lord, Lord Belstead, will look into the matter to see whether we can have this information as the years develop.
Lord Bishopston: I think that we have had a useful debate on this matter. One of the main points in my noble friends' tabling this Motion was to get the House to realise that there are other aspects of entry into farming besides the one in Clause 2. Noble Lords opposite will be familiar with them. There is the high cost of entering farming. The high capital cost prevents many young farmers from getting a farm of their own, no matter what the availability may be. Then there are problems of taxation and the problems of loss of agricultural land, which is mentioned in paragraph 67 of the report of the noble Lord, Lord Northfield. Between 1971 and 1978 the average recorded loss of land for farming in the United Kingdom was about 50,000 hectares. which as noble Lords will know is 125,000 acres. The change in farming structure is also mentioned in paragraph 64. The advance of technology means that there are fewer people working on farms. This is reflected in the number of people running farms. There is farm amalgamation. These are all aspects which, in fairness, must be recognised as factors affecting entry into farming. It would be good for the industry if the Government were to recognise these points and not to think that because they have brought forward this Bill they have solved the problem.
After all, succession has a lot to commend it. A family investing in a farm put capital and work into it. The husband and wife may run the farm, or the wife may be helped by the husband and the sons, and so on. They know that there is long-term security. People talk about succession in the 1976 Act meaning that there is a blight on entry, but the sons and daughters of the tenant can come in. They are young people with young blood and new ideas. We should consider the entry into the industry of those who are heirs of others who

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have farms. I and my noble friends are not defending what the Labour Government did in 1976. If we felt that there were shortcomings, we should be happy to change them.
As I said earlier, noble Lords opposite are notable by their lack of enthusiasm for this measure. They may be saying that they do not like the present position and this is the only alternative presented and therefore they must support it. It has been helpful to the Committee that in the debate in the past few days on this measure noble Lords have felt free to express a variety of views which we all hope that the Government will take into account. We value the fact that the Minister has said that he will look again at Clause 1. Good luck to him in the process. It is an unenviable task that he has undertaken. I am sure that the House hopes that the Government will look at all the other aspects of the matter which may not be in the Bill but which need urgent review, as many noble Lords have said. With those comments, I beg leave to withdraw the Motion.
Clause 2 agreed to.
Clause 3 [Amendment of provisions relating to statutory succession in cases not excluded by section 2]:
6.45 p.m.
Lord Northfield Lord Northfield moved Amendment No. 38A:
Page 7, line 6, leave out paragraph (a) and insert—
("(a) in paragraph (c) of the definition of "eligible person" for the words from "he is not" to "licensee only" there shall be substituted the words "he is not a person to whom the provisions of subsection (2A) apply;" ").
The noble Lord said: I hope that your Lordships will allow me to suggest that we can take seven amendments together at this point and thus make considerable progress in a few minutes. I suggest that we can take with Amendment No. 38A, Amendments Nos. 39, 40, 41A, 43, 43B and 72A. That may save time. The noble Earl, Lord Swinton, as Deputy Chief Whip, will be pleased that we are making good progress.
The Earl of Swinton: The Deputy Chief Whip is very pleased. I wonder whether the noble Lord will repeat those numbers.
Lord Northfield: Amendment No. 38A is really a paving amendment for Amendments Nos. 41A, 43B and 72A. Then we have Amendments Nos. 39, 40 and 43, which I suggest can be discussed together with these because they were early attempts to do the same work that is done by Amendment No. 38A and the amendments consequential on it. I shall not be moving the latter amendments if we reach a satisfactory conclusion on Amendment No. 38A. I repeat again that the amendments which I suggest we can take with this amendment are Amendments Nos. 39, 40, 41A, 43, 43B and 72A.
Amendment No. 39:
Page 7, line 11, at end insert—
("(aa) in paragraph (c) of that definition after the word "not" there shall be inserted the words "at the date of death";").
Amendment No. 40:
Page 7, line 11, at end insert—
("(aaa) in paragraph (c) of that definition after the word "occupier" there shall be inserted the following words—
"as tenant, joint tenant, partner, owner, joint owner, or through a share in a limited company".").
Amendment No. 41A:
Page 7, line 19, leave out subsection (3) and insert—
("( ) After section 18(2) of that Act there shall be inserted the following subsection—
"(2A) The provisions of this subsection apply to any person whose circumstances, either at the date of death or at the date upon which he makes an application under section 20 of this Act or any such application is heard by the Tribunal, are such that there is available—

(a) to him; or

(b) to any person with whom he is engaged in partnership; or

(c) to any body corporate of which any part of the issued share capital is owned beneficially by him or on his behalf;

an amount of agricultural land which—

(i) is available as aforesaid for the purposes of carrying on an agricultural business by him or any such partner with him or any such body corporate; and

(ii) is owned in fee simple or is held as an agricultural holding under a contract of tenancy by or for and on behalf of himself or any such partner or body corporate (either solely or jointly with any other person); and

(iii) is sufficient to enable him to derive from that business a livelihood which is adequate for himself and any person dependent upon him,

and in determining whether any such land is sufficient there shall he taken into account in addition to the needs of the person in question the needs of any other person whose livelihood depends upon the business conducted on that land and whose needs it is reasonable to take into account." ").
Amendment No. 43:
Page 7, line 28, at end insert—
("(3A) In section 18(4) of that Act (exceptions to the right to statutory succession) after paragraph (e) there shall be inserted the following paragraph—
"(ee) if, on application for a notice to quit made by the landlord to the Tribunal within three calendar months of the death, the Tribunal is satisfied that the eligible person is already holding a tenancy, joint tenancy or tenancies which form a viable economic unit or units, taking into account the productive capacity of the land, and that the landlord is willing to create and let a new agricultural holding that includes the land to which the notice relates;".").
Amendment No. 43B:
Page 7, line 29, leave out subsection (4).
Amendment No. 72A:
Page 29, line 55, column 3, at end insert ("Section 18(6).").
We are here discussing a very difficult part of the 1976 Act. We are dealing with who is and who is not eligible to succeed to tenancies under the 1976 Act. We are dealing with Section 18(2)(c) of that Act. That is what all these amendments are about: who is and who is not eligible to be a successor. The intention of paragraph (c) was to exclude potential successors who already have a holding which gives an adequate livelihood. The facts are that the Act has not worked out in that respect. It was also the intention of that Act to include as a successor someone whose present holding is as a licensee on a precarious tenancy. That was the clearly expressed intention of that paragraph.
I and the noble lords who are co-sponsoring this amendment and the consequential amendments (Amendments Nos. 41A, 43B and 72A) are greatly indebted to Mr. Derek Wood, QC, of the Agricultural Law Association, who has provided a brief which shows the intense legal complexity that has resulted

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from the failure in clarity of that part of the 1976 Act. I have made sure that that is available to the Minister's office. It is the Agricultural Law Association that has provided these substantive amendments beginning with 38A plus 41A, 43B and 72A.
Without going into all the cases, some of which have reached your Lordships' House for decision, I think that the criticisms of the 1976 Act are what I shall now describe. The section as drafted has failed to shut out some successors who do not need the tenancy. I see the noble Lord, Lord Middleton, nodding his head in agreement. That is certainly true. Some people who do not need the tenancy have actually managed to succeed and some deserving would-be successors have been undesirably disqualified. Some people who ought to have had succession have been disqualified. The prime sort of example is where several partners jointly are occupying a unit. For instance, three or four partners are operating a unit and have tenancy of it, and this holding is a commercial tenancy within the meaning of the Act, but it is not big enough, if taken alone, to provide a living for all those partners. The problem arises when it is not possible to bring a group of four people squarely inside the terms of the Act and they suddenly find themselves disadvantaged.
The word "licensee" has proved totally ambiguous. A licensee, I would remind the Committee, is someone whose holding is on a precarious tenancy and he was therefore to be allowed to succeed. But what some artful tenants have managed to do is to set up all sorts of evasion strategies and artificial schemes, making themselves, for example, into family companies which then become treated by law as licensees. The result is that if you already have a holding which is a good commercial unit and, under the test of the 1976 Act, you should not succeed to this particular unit on someone's death, if you transform yourself into a family company, you can get treated as a licensee and get the tenancy anyway, totally, against the intentions of the 1976 Act.
My own Committee pointed to this and other ambiguities and evasions that were going on. We suggested in Paragraph 629:
"It would need to be made clear that an applicant would not be eligible"—
to succeed, that is—
"if, at the time of death of the existing tenant and taking account of the terms of his will, the applicant was effectively farming a commercial unit whether sole owner, tenant, in partnership or by means of a company".
Amendment No. 38A, plus the more important Amendment No, 41A, which is the substantially drafted part of the group, would have the following intention. I quote Mr. Wood in his brief:
"The tribunal should principally consider the question whether the applicant,"—
the would-be successor—
"if denied a new tenancy of the holding, would be able to derive a sufficient livelihood for himself and his family from an agricultural business carried on by him or by some person on whom he is dependent upon agricultural land other than the holding. The tribunal should be empowered to form a broad view of the case".
That is the intention of our amendment. I believe that it carries it out. But the amendment also points to the disadvantages in the Government's present drafting. The Government drafting leaves all the
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confusion attaching to the word "licensee". We must sweep that away and get the matter resolved once and for all. It fails to deal with a unit occupied by more than two occupiers. That is the sort of example I was giving earlier. There are, besides, all sorts of blemishes in the present Government drafting. For example, what is the meaning of "net annual income" of the unit already farmed? What you have to say, if the Government are relying on that phrase, is that someone has a good net annual income from the unit already farmed and therefore does not need to succeed to the tenancy. What is the net annual income? It is nowhere defined. There can be limitless arguments about what it all means and what is to be taken into account, interest on capital, et cetera. Our amendment tries to deal with all these things comprehensively. I hope that it commends itself to the Government and to the Committee. I beg to move.
Lord Renton: The noble Lord, Lord Northfield, on one hand, and my noble friend Lord Kinnoull and myself, on the other, tabled the Amendments Nos. 38A, 41A, 43B and 72A to which I wish to speak without knowing that each other had done so. I am glad that the name of the noble Lord, Lord Northfield, appears first on the Marshalled List because these amendments are an attempt to carry into drafting form the recommendations of the committee of which he was chairman. I do not need to say very much to add to what the noble Lord has said. The noble Lord, no doubt due to his usual modesty and moderation, did not mention that these amendments follow from the report of his committee. I think I should invite the attention of the Committee to the fact that the final sentence in Paragraph 629 of the report states:
"It would need to be made clear that an applicant would not be eligible if, at the time of death of the existing tenant and taking account of the terms of his will, the applicant was effectively farming a commercial unit whether as sole owner, tenant, in partnership or by means of a company".
That is the main intention underlying these amendments. Clearly, the present law is unsatisfactory, especially in relation to the definition in Section 18(2)(c) of the 1976 Act which attempts to define "eligible person". That has caused a great deal of trouble in the courts. Twice in 1980, hair splitting decisions had to be made by the Judicial Committee of your Lordships' House. Their Lordships were not agreed in one of those cases. It was an extraordinary situation for us to reach. So something must be done.
The trouble with the present law, as the noble Lord has indicated, is that it lets in well-provided applicants who do not require the benefit of the succession terms of the 1976 Act but it keeps out some people who could do with succession and who, if there is to be succession as a principle, can be said to need it. The Bill attempts to improve the situation but does so by means of a new definition that I find rather strange. It links the rights and the decisions that have to be made to the concept of full time employment of two people on the holdings. In some cases, that might do; but in other cases, it might not. It is much too inflexible a thing to write into a statute in my opinion. Also—and I am not sure that this is a wise thing for it to have done—that viability of the unit is no longer to be decided by the unchallengeable certificate of the Minister of Agriculture. That is a system which under the present law, I understand, is working not too badly.

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In these amendments, we do away, I hope, with the legalistic criteria which have caused trouble in the past and introduce a new test that implements the recommendation of the Northfield Committee to which I referred. It is neither pro-landlord nor pro-tenant, but it is intended to confine the benefits of succession under the 1976 Act to those in genuine need. Mr. Derek Wood, who drafted these amendments, has been so good as to say that he thinks that they could be further improved, and no doubt the Government will consider whether that is so. But surely the principle is right.
Lord Middleton: The "commercial unit" test has indeed caused serious problems and conflicting decisions of the ALTs. These amendments would deal with a number of unanswered questions. As we have been reminded, the policy of the 1976 Act is to exclude close relatives from obtaining a succession tenancy where they have the advantage of a viable unit elsewhere. By getting away from the difficult problems caused by having to decide whether an applicant is the occupier of a commercial unit and whether he is occupying it as a licensee only, these amendments make the law clearer. They also fulfil the policy of the 1976 Act better, by providing a livelihood test rather than an occupation test.
I fully support what these amendments are trying to do. I must say that I am not sure how a livelihood test would be applied in practice, nor how one measures what is an adequate livelihood. However, subject to that, I join the noble Lord, Lord Northfield, and my noble friend Lord Renton in preferring these amendments to what is now in the Bill in subsection (3). I hope that the Government will be sympathetic.
Lord Stanley of Alderley: I also agree with the noble Lord, Lord Northfield, that there has been trouble in the past over whether one is eligible or not. What I think we do not disagree on is the principle. As I understand it, the principle that we are all trying to get at is that we want to exclude someone who is tenanting or owning and farming another viable holding. But, rather like my noble friend Lord Middleton, I am concerned as to whether the amendment achieves that.
There are three matters at which I would ask my noble friend, Lord Belstead, to look very carefully. One of those matters concerns subsection (2A)(i). It says that the holding "is available". If a tenant owns another farm but cannot get possession of it, is it available? Is he, therefore, disqualified even though he cannot get possession of it? I do not know. Another matter arises under subsection (2A)(i). If he is in partnership or part of a body corporate with an interest in the farm does that also disqualify him? Finally—and this is most important—I take up the point made by the noble Lord, Lord Northfield, that at present there is reference to the term, "net annual income". Is that any more difficult than the words:
"a livelihood which is adequate for himself"?
That seems to me somewhat vague. Is it for me or is it for my noble friend Lord Renton? Our needs might be totally different. I am worried about whether it achieves our objective, but, if it does achieve what we all want, then I welcome it.
Lord Northfield: On the last point raised by the noble Lord, I think that "net annual income" is a technical term that needs definition. "A reasonable livelihood" would be something for the tribunal to make a judgment about. That is the difference between the two.
Lord Walston: I only want to say that I agree with the noble Lord, Lord Northfield, that the present Act has not worked well in this respect. It may have worked well from the point of view of lawyers who have been consulted and who have even brought cases as far as your Lordships' House, but from the point of view of both tenant and landlord it has created a great deal of uncertainty. It needs modification. On the face of it, the proposals put forward in these amendments look as if they should do it. I cannot pretend that I am qualified to give them my full approval. They obviously need very close study, and they need study by those who are expert in these matters. But the ideal behind them is correct. I hope that the Government will accept them in that spirit.
Lord Renton: In view of what the noble Lord, Lord Walston, has said about members of our profession, I think it only fair to point out that it was members of the Agricultural Law Association who used their initiative to draft the amendments to fulfil the recommendation of the report of the noble Lord, Lord Northfield.
7.4. p.m.
Lord Prys-Davies: I am not sure that I fully understand the significance of all the amendments, but for that I blame myself rather than my noble friend's drafting. Certainly one goes along with any amendment that will help to clarify the law and make clear that which is unclear.
The noble Lord, Lord Northfield, also referred in passing to his Amendment No. 43. I was in considerable difficulty with Amendment No. 43. As I understand it, the thrust of the amendment is in the following direction. First, one has to define what is "a viable economic unit". I am not quite certain whether the noble Lord will in due course give us a definition of "a viable economic unit", but does it also mean that, if the landlord offers him an acreage of land additional to his existing holding, he would thereby—if it were a viable economic unit—lose his right of succession under the Act?
Lord Northfield: I wonder whether I can help my noble friend at this point and also save the time of the Committee. Amendment No. 43, together with Amendments Nos. 39 and 40 were early attempts to meet the points we have been discussing. They were amateur attempts by me at drafting. It was when Mr. Derek Wood and the Agricultural Law Association provided us with Amendments Nos. 38A, 41A, et cetera, that we realised that there was a much more professional way of doing the whole job. That is why I said that we could discuss them together. But my intention would be never to move Amendments Nos. 39, 40 and 43 if the Minister were to accept Mr. Derek Wood's suggestions in Amendments Nos. 38A and 41A. My amendments are clearly defective and very amateurish.
Lord Belstead: I am grateful to the noble Lord, Lord Northfield, for taking so many amendments together in the interests of speed. In the interests of wear and tear on the Government spokesman I am not quite so sure whether my thanks extend quite so warmly, but I will do my best to reply. The first group of amendments which is in the name of the noble Lord, and also my noble friend Lord Renton and my noble friend Lord Kinnoull—Amendment No. 38A and the other amendments which hang with it; namely, Amendments Nos. 41A, 43B and 72A—are undoubtedly important. I should like to say straight away that there are elements in these amendments which I am advised are certainly capable of adoption. but we should like to reflect on the matter further, particularly in the light of the short debate that we have had.
As I understand it, this group of amendments does two things. First, the amendments would replace the definition of a "commercial unit" as it presently appears in the existing legislation and also as it is revised in Clause 3 of the Bill. Secondly, this group of amendments would replace the machinery for assessment of such units by the Minister and leave it entirely to the land tribunal to determine whether the applicant is debarred under the test which the noble Lord and my noble friends have provided. I believe that the new definition which is included in the Bill—I am talking here about Clause 3(3), new subsection (3A)—is a sensible and a reasonable one. I believe that the new procedures whereby the certificate which is to be provided by the Ministry will in future be open to questioning in the agricultural land tribunal will be a great help. That is a provision in the Bill.
I know that I am now being critical, but some of your Lordships have pointed to Amendment No. 41A which refers to subsection (2A)(iii) and the definition:
"to enable [the tenant] to derive from that business a livelihood which is adequate for himself and any person dependent upon him".
With respect, I do not think that that would be a very easy definition for the ALT to interpret, and I would simply leave your Lordships with that thought on that particular point.
As regards our own definition in the Bill, a very full explanation is included in paragraph 15 of the Notes on Clauses, which I deposited in the Printed Paper Office. Paragraph 15 is a very long paragraph extending to two pages and relates to the note on Clause 3. Before your Lordships are too hasty in sweeping aside the definition of "commercial unit" in the Bill, I would beg your Lordships to look at that explanation once again.
I should like to say just a few words on Amendment No. 40. If the noble Lord, Lord Northfield, will forgive me, I shall not waste the Committee's time at this hour in traversing the various definitions which the noble Lord raises in his amendment, including "owner tenant", "joint owner", "joint tenant", and so on. The real nub of this amendment, and the difficulty with which it tries to deal, is when it refers to a beneficiary, a person who owns shares in a company. This, of course, is the difficult question. The question of whether a person who owns shares in a company which occupies land should himself be considered the occupier, although the company of course is an
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independent and intervening legal body, is a matter which I realise is open to question.
I think that considerable caution is needed in contemplating this proposal, as it is apparent that many farmers will own equity shares in commercial companies which, for one reason or another, occupy farm land, and, clearly, it would be inappropriate to attribute ocupation of a farm held by one of these companies to an ordinary shareholder. Therefore, there may be a considerable problem in defining the family farming company, which I think the noble Lord has in mind in the part of Amendment No. 40 which deals with this particular difficult problem.
However, subject to this reservation—and I emphasise that I think it is a very important one—I believe that this is an amendment which it would be useful to examine further to see whether the legislation should be clarified. If the noble Lord will allow me to take it away in that spirit, I am very ready to do so.
Finally, I come to Amendment No. 43, which is, indeed, the amendment which talks about the "viable economic unit" test. I shall not ask the same questions as the noble Lord, Lord Prys-Davies, but there is a difficulty here which the noble Lord, Lord Northfield, has himself set. There is also one other difficulty. There is a provision in Amendment No. 43 relating to a landlord's willingness:
"to create and let a new agricultural holding".
I think that this really might be impracticable. It would seem to me to be dubious law to provide a disqualification on account of someone else's willingness to do something. Perhaps I could just plant that thought in the mind of the noble Lord, Lord Northfield.
I hope that my reply so far has not been too incoherent, but this is a rather formidable grouping of amendments. On behalf of the Government I can certainly agree to consider Amendments Nos. 38A 41A, 43B and 37A—the first group—and also Amendments Nos. 39 and 40. I admit that I have not spoken to Amendment No. 39 at all, and perhaps your Lordships will forgive me for not having done so. However, there is the difficulty, which I have just mentioned, regarding Amendment No. 43. But I hope that I have shown my goodwill enough in looking at these perhaps to make it possible for the amendments to be withdrawn.
Before I conclude, there is one last point that I ought to mention. The question was asked as to what is annual income and how is it to be assessed. I am advised that the Ministry of Agriculture is at present in discussions with the industry and with the professions as to how income is to be assessed with a view to having an agreed basis, possibly published in a statutory instrument. But, again, this might be a matter to which noble Lords, might wish to return at a later stage of the Bill.
Lord Northfield: The noble Lord, has been more than generous and I am very happy indeed to ask the Committee's permission to withdraw the amendment. Perhaps he will consider the amendments in the three names of myself and my noble friends; they are the substantial amendments that we hope will form the basis of a new set of amendments that could come

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forward at the Report stage. I would simply say that Amendment No. 39 is, in fact, covered in Amendment No. 41A. Amendment No. 39 was to deal with the problem about which the courts have been exercised—the date at which certain things happen: is it the date of death or the date when application is made to the tribunal? That point is, in fact, covered at the beginning of Amendment No. 41A anyway, so it falls by the wayside as soon as Amendment No. 41A is considered.
I shall not detain your Lordships any more. This has been a very good debate and the noble Lord has been extremely constructive. I must express some faint surprise that the Government were not nearer to getting this right first time. Our report has been on the table for four years and points to these problems. I should have thought that it would be possible to have got the matter slightly more correct first time round than the Bill has so far. Nevertheless, I do not want to qualify my thanks to the noble Lord, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale: After those generous gestures all round the Committee, this might be an appropriate moment for us to adjourn for dinner and for me to resume the House. I should tell the Committee that it has been agreed through the usual channels that we shall not return to this Committee stage until at least 8.15 p.m.
I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Legal Aid (Financial Conditions) (No. 2) Regulations 1983
7.17 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone)The Lord Chancellor (Lord Hailsham of Saint Marylebone) rose to move, That the regulations laid before the House on 8th November be approved.
The noble and learned Lord said: My Lords, I rise to move the first of the six Motions standing in my name on the Order Paper. With the permission of the House and if it is for the convenience of the House, I shall speak to all six together and move the remaining five formally one by one. The first three Motions relate to legal aid and legal advice in England and Wales, and the other three relate only to Scotland.
The first two Motions increase respectively the income and capital financial limits for civil legal aid and legal advice and assistance. This is the second increase this year. In the last two years the review of the limits has taken place at the beginning of the financial year. Dependants' allowances are automatically increased in November in line with those for supplementary benefit. So there have been two changes each year in the financial conditions. This has proved administratively complex and also confusing for applicants, and it has therefore been decided, if the House agrees, to revert to a November up-rating for the financial limits this year and in the future.
The income limits for legal aid and for legal advice and assistance are to rise by 4.3 per cent. This ensures
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that the present relationship between legal aid limits and those for supplementary benefit is maintained. The alignment between the lower capital limit and the supplementary benefit capital limit introduced last April is preserved.
Moving on to describe the regulations in greater detail, the legal aid regulations raise the lower disposable income limit—that is the level of disposable income below which no contribution is payable—from £1,965 a year to £2,050. The upper income limit—that is the level above which legal aid is not available—increases by the same proportion, from £4,720 to £4,925. The lower capital limit (below which there is no contribution from capital) increases from £2,500 to £3,000, and the upper capital limit (above which legal aid is not normally available) increases from £4,000 to £4,500. The advice and assistance regulations raise the lower disposable income limit for the Green Form scheme from £47 to £49 a week, and the upper income limit from £99 to £103 a week. The capital limit above which assistance is not available increases from £700 to £730.
The House will also be aware that I have made a further set of regulations for which an affirmative resolution is not required. These are the Legal Advice and Assistance (Amendment) Regulations (No. 2) 1983, which consequentially revise the scales of contributions which an applicant for advice and assistance may be required to make towards his costs.
The corresponding Scottish regulations are a little different. Their lower disposable income limit for advice and assistance does not appear in the regulations which require affirmative resolution, but in the instruments subject to the negative resolution procedure together with the amendments to the contribution scale. These are the Legal Advice and Assistance (Scotland) (Financial Conditions) (No. 3) Regulations 1983.
The remaining two motions are the Legal Advice and Assistance (Prospective Cost) (No. 2) Regulations 1983 and the corresponding Scottish regulations. These increase from £40 to £50 the cost of the advice and assistance which a solicitor may provide to a client without first obtaining the approval of a legal aid general committee of the Law Society or a local committee of the Law Society of Scotland. The limit is not a bar on the total amount of advice and assistance which a solicitor may provide but an administrative check which enables the Law Society to control the use of the scheme.
The limit was last increased in 1980. Rising costs have made it increasingly difficult for solicitors in many cases to provide adequate advice and assistance without exceeding the £40 limit. As a result, the administrative burden for the Societies' committees has steadily increased. The increase is to £50. This should enable solicitors in most cases to provide advice and assistance without incurring the trouble and possible delay involved in applying for an extension, and reduce administrative costs. I should, I think, also inform the House that I have made, and placed before it under the procedure for negative resolution, four instruments which have the same effect on the legal aid and advice provisions for Northern Ireland.
I should also wish to inform the House now that although in the end, I suppose primary legislation will be necessary, for which I will seek an appropriate opportunity, I have decided to make a change in the capital limit for assistance by way of representation which, as an extension of legal advice and assistance, provides representation for certain specified proceedings before courts and tribunals. The present capital limit is the same as for the low cost Green Form scheme. Because the costs of assistance by way of representation can be considerably higher, and because I believe that the present limit bears unduly heavily on those involved in proceedings for which no other form of legal aid is available, I have decided to increase the capital limit for assistance by way of representation to the level of the lower legal aid capital limit. This will be £3,000 if these regulations are approved. Applicants with capital resources between £700 and £3,000 will therefore for the first time become eligible for assistance of this kind. My Lords, I beg to move the first regulation standing in my name on the Order Paper.
Moved, That the regulations laid before the House on 8th November he approved.—(The Lord Chancellor.)
7.25 p.m.
Lord Elwyn-Jones: My Lords, the House will be grateful to the noble and learned Lord the Lord Chancellor for introducing this number of regulations. I hope that at an early stage a child's guide to these complexities will be produced for the benefit of the public and, of course, the lawyers who will be responsible for implementing these provisions. That there was need to increase the availability of legal aid and assistance, and legal aid and advice, was already apparent.
The formula that has been used for some years now is to maintain, as the noble and learned Lord has said, a relationship between legal aid benefits and supplementary benefits. I understand that the figure of 4.3 per cent. is the relevant figure. We have had explained to us how the capital sums and disposable limits, and the other factors, have all, as I understand it, been raised by that percentage of 4.3 per cent. I was not clear whether the Scottish provisions were more or less generous (if "generous" is the right word) than the English provisions. There will he a great deal of trouble if they are less generous, and perhaps the noble and learned Lord will indicate to us what the position is with regard to that.
What one would like to identify is the extent to which these changes meet the real need. I do not know whether it is possible for the noble and learned Lord, in relation now to the legal aid provisions, the provisions relating to the financial conditions, to give any statistic as to what proportion of the population in terms of a family of father and mother and two children will be covered by these regulations. I recollect that before I, in the position of the noble and learned Lord, introduced in 1979substantial improvements, increments, in the provisions, we then hoped to be able to cover about 70 per cent., I think it was, of families within the scope that I have mentioned of the husband and wife and two children who could be brought into the legal aid and advice scheme.
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Perhaps that statistic is not readily available, but if it is I am sure it will be of great interest and, I hope, encouragement, because I fear that before I introduced those regulations in 1979 the provision had fallen back very badly indeed.
The noble and learned Lord has refrained from telling the House what the financial cost of these changes is. I do not know whether that material is readily available, but whatever the cost may be I am quite sure that in this complex world of legislation, claims, rights and liabilities there is a need for the provision for the citizens of the means of obtaining legal advice and assistance from solicitors—it used to be called the Green Form scheme in my day—to be extended, as I understand it, to provide also for some finance and facilities for legal representation in the courts, extending the sphere of mere legal advice and assistance to actual representation. That I regard as a beneficial step. If the noble and learned Lord could give an indication of where we are going in this field, both in the terms of cost and availability, I am sure the public will be greatly interested.
In the meantime, I thank the noble and learned Lord for bringing these regulations forward and for the timing. I do not criticise, and I have doubt there is a good administrative reason for, the November uprating. In so far as these regulations improve the financial means by which the citizen can be legally advised and assisted, we on this side of the House most strongly welcome them.
The Lord Chancellor: My Lords, I am very grateful to the noble and learned Lord for the kind way in which he has greeted this series of Motions. Yes, we acknowledge that a child's guide (if that is the right phrase) is desirable. We have reprinted the leaflets to correspond with the new regulations, so that anyone who runs may read. I doubt whether it is quite provender for primary school age yet, but we will do our best.
Yes, the Scottish formula is also 4.3 per cent. I agree with the noble and learned Lord that if it had not been there would have a terrific row; but I am told that all is well.
Yes, the population coverage is about 70 per cent. of households. I think it may be a little more rather than a little less. That has been maintained.
I ought to have the exact cost with me, and probably have, but I could not give it to the noble and learned Lord by looking in my papers in a hurry because he sat down so compendiously. But I thank the noble and learned Lord very much indeed.
On Question, Motion agreed to.

Legal Advice and Assistance (Financial Conditions) (No. 2) Regulations 1983
The Lord Chancellor: My Lords, I beg to move the second Motion in my name.
Moved, That the regulations laid before the House on 8th November be approved.—(The Lord Chancellor.)
On Question, Motion agreed to.

Legal Advice and Assistance (Prospective Cost) (No. 2) Regulations 1983
The Lord Chancellor: My Lords, I beg to move the third Motion standing in my name.
Moved, That the regulations laid before the House on 8th November be approved.—(The Lord Chancellor.)
On Question, Motion agreed to.

Legal Aid (Scotland) (Financial Conditions) (No. 2) Regulations 1983
The Lord Chancellor: My Lords, I beg to move the fourth Motion standing in my name.
Moved, That the regulations laid before the House on 14th November be approved.—(The Lord Chancellor.)
On Question, Motion agreed to.

Legal Advice and Assistance (Scotland) (Financial Conditions) (No. 3) Regulations 1983
The Lord Chancellor: My Lords, I beg to move the fifth Motion standing in my name.
Moved, That the regulations laid before the House on 14th November be approved.—(The Lord Chancellor.)
On Question, Motion agreed to.

Legal Advice and Assistance (Scotland) (Prospective Cost) Regulations 1983
The Lord Chancellor: My Lords, I beg to move the sixth Motion standing in my name.
Moved, That the regulations laid before the House on 14th November be approved.—(The Lord Chancellor.)
On Question, Motion agreed to.
Viscount Long: My Lords, I beg to move that the House do now adjourn during pleasure until 8.15.
Moved accordingly, and, on Question, motion agreed to.
[The Sitting was suspended from 7.34 until 8.15 P.m.]

Agricultural Holdings Bill [H.L.]
House again in Committee on Clause 3.
[Amendment Nos. 39 and 40 not moved.]
Lord Belstead Lord Belstead moved Amendment No. 41:
Page 7, line 17, leave out ("the deceased's agricultural work") and insert ("agricultural work carried out by either the wife or the deceased (or both of them)")
The noble Lord said: This amendment remedies a
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defect in the drafting of Clause 3(2)(b). It will ensure that a widow will be able to satisfy the livelihood test if, in five out of the seven relevant years, her livelihood was derived either from her own or from her late husband's agricultural work on the holding or a combination of either his work or her work. It is this last eventuality which the wording in this subparagraph did not cover and is now put right in the amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 41A not moved.]
Lord Sandys Lord Sandys moved Amendment No. 42:
Page 7, line 24, leave out from ("capable") to end of line 28 and insert ("of providing employment for at least one person reasonably skilled in agriculture; the method of calculating whether a unit is so capable shall be determined by statutory instrument made by the Minister of Agriculture, Fisheries and Food;")
The noble Lord said: Having remained silent during much of your Lordships' discussion, I think it is appropriate that I should now declare an interest, which I do with pleasure, as a landlord. I think that the purpose of this amendment is to probe and to probe the question of whether the commercial unit test is an adequate reflection of hardship to the applicant and also to ask how the Government would propose to assess net annual income, a subject which the noble Lord, Lord Northfield, referred to before we adjourned during pleasure; and also the question of when a unit is farmed under competent management.
I have taken the opportunity of studying with care Paragraph 15 of the Notes on Clauses to which my noble friend Lord Belstead referred, and my noble friend advised me that the Government's recognition of the need for defining the commercial unit is contained in those notes. I have examined them with interest and I read in the Notes on Clauses a particular reference on this:
"It is therefore now considered that a definition of commercial unit should appear in the 1976 Act which will be independent of any other legislation and be expressed in terms of income generated by the unit".
Regretfully, I do not feel that this has gone quite far enough in this situation. May I therefore on this subject ask Her Majesty's Government this question? Does the commercial unit reflect hardship? May we look at the present situation in law as it stands. The 1976 Act purported to prevent hardship to the successor of a tenant after his death. It was recognised that if the successor was already an occupier of a holding large enough to support him, there was no place for him to have the right to succeed to that tenancy.
The 1976 Act interprets "hardship" by applying the commercial test that we have already considered. It defines the commercial unit in terms which are to be found in Section40 of the Interpretations in Part II of the 1967 Agriculture Act; but does it reflect hardship satisfactorily? Evidently, the Government do not think so and have introduced a different test in this Bill which deals with the viability of the holding and its capacity to employ two full-time male agricultural workers. If a farm is too small to be viable, it is quite understandable that the occupier's successor should be permitted to apply for the tenancy following the death of his predecessor. If the farm is big enough to be viable, then there is no obvious hardship.
The Ministry are well accustomed to applying the viability test. They apply it under the Agricultural and Horticultural Grants Scheme. If I may quote an example from Statutory Instrument 1980/1072, it requires the Minister,
"to be satisfied that the greater part of the employment of at least one person reasonably skilled in agriculture".
The definition proposed in this amendment, however, omits the words "the greater part of ".
The effect of this amendment is not always to reduce the size of the farm at which the applicant becomes ineligible to apply for the right to succeed below that under the method proposed in the Bill. I feel that this amendment, while being only a probing amendment, will give the Government the opportunity to state the situation as it now stands and to offer your Lordships' Committee the opportunity to discuss this problem of viability and the commercial unit a little further. I beg to move.
Lord Middleton: The difficulty about subsection (3A) is that it seems on the face of it to be enlarging the number of potential eligible successors to a holding on the death of a tenant. Yet, as we know, the broad intention of the 1976 Act was to make ineligible for succession an applicant who is already the occupier of a viable holding. If a unit is not to be judged a commercial one until it is capable of producing a net annual income of an amount not less than the average annual earnings—earnings, not wages—of two full-time workers, then there must surely fall outside the category of "commercial units" so defined, a number of holdings that most people would consider perfectly viable.
I do not think it is the intention of the Government to allow the criteria in these cases to be relaxed, and I do not know of any organisation which has asked that that should be so. If, as my noble friend has suggested, that might be the effect of the clause as it stands, then I join him in asking the Government to have another look at it. I say that subject to what I have just said about what I call "the Northfield amendments", which of course I prefer.
The Earl of Swinton: I am very grateful to my noble friend Lord Sandys for having introduced this matter. He said it was the first time he has spoken in this Committee. From the very eloquent way in which he moved his amendment, I am sorry that we have not heard him before and I hope that he will not stay silent from now on.
The revised definition of "commercial unit" contained in Clause 3(3) is designed to deal with some of the anomalies which have resulted from the application of the existing definition in Section 18(2)(c) of the 1976 Act. This definition is one which is in effect imported from the 1967 Agriculture Act and depends on the opinion of the Minister that the unit is capable of providing full-time employment for at least two people. The way in which the standard applied by the Minister (600 standard man-days) currently operates means that in certain circumstances—notably where we are dealing with extensive arable units—the result is unduly favourable to applicants.
This is why the Bill would apply a different test,
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based not on the employment which the unit would create but rather on the income which it would generate. We therefore chose an income standard which is expressed by "the average annual earnings of two full-time male agricultural workers". This is based on the recommendation of the working party, on which the NFU, the CLA and the professional organisations were represented.
As I have already made clear, it is certainly not our intention that as a result of this change the commercial unit test would be relaxed. I can assure my noble friend Lord Middleton on this. Indeed, if my noble friend is interested. I can provide him with figures which show that in a wide range of circumstances the test would be somewhat tougher than the one we already have, and in some cases considerably tougher. I do however accept that the degree of toughness depends on the precise method for calculating the "net annual income"—and here I can tell my noble friend Lord Sandys that this does not describe hardship. This is why we are discussing with the industry the detailed method which ADAS officers will use in making their assessments, and I hope that we shall be able to reach full agreement on the criteria to be used.
I note in this context that my noble friend has referred to the possibility of describing the method in a statutory instrument. This is a possibility which we will be considering, if only to reduce to a minimum the possible scope for argument. I hope, in the light of this explanation and of the assurances which I have given, that my noble friend will he prepared to withdraw his amendment.
Lord Sandys: I am grateful to my noble friend Lord Swinton for his reply; but there are certain matters which are still unanswered. At an earlier stage, when we were discussing Clause 1, the question of the size of the holdings arose under Amendment No. 9. If I may refer the Government to col. 178 of the Official Report of Tuesday, 22nd November, the noble Lord, Lord Northbourne, there referred in some considerable detail to the different ways in which a holding could be made viable or unviable by certain different practices of farming within that holding.
One of the great treasures of British agriculture is the farm structure and also the farm size. I am grateful to my noble friend Lord Belstead and the staff at the Ministry of Agriculture for providing a reply to a Written Question which I put down on the size of farm holdings in five countries. It is very interesting to note that the United Kingdom had an average farm size in 1981 in hectares of 69.4, and in acres of 171.5, compared with three notable competitors in the EEC. That is, Germany, where they have an average farm size of 38.3 acres; France, where they have an average farm size of 63 acres; and Italy, where the figure is 18.3 acres. I feel that these figures are significant in this context, because the United Kingdom farm size is so significantly higher that it does bear very closely upon the point. I have not translated the acres into hectares, which I could very easily do from the figures in front of me, but I feel it would weary the Committee to do so. Nevertheless, this is a very important point as to whether the viability test is sufficiently satisfactory. But I take the points made by my noble friend, and I

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feel that it would be much more appropriate if at this stage I withdrew the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 43 not moved.]
[Amendment No. 43A had been withdrawn from the Marshalled List.]
[Amendment No. 43B not moved.]
8.30 p.m.
Lord Northfield Lord Northfield moved Amendment No. 44:
Page 8, line 9, at end insert—
("(4A) In section 20(8) of that Act (matters to be taken into account by the Tribunal when determining the case of an applicant applying for tenancy of a holding) there shall he inserted at the end of paragraph (a) the following words—
"and meets the standard which would be required by a responsible landlord".").
The noble Lord said: We are now moving on to a new part. The Northfield Committee was very anxious to improve the opportunities for people to enter the industry and wanted to tighten up the rules governing succession and eligibility, so that the less desirable made way for successors who were more desirable and for other people outside to have an opportunity to farm. In that context, the committee was anxious about the restrictions on the landlord's ability to get possession in the case of particular applicants who were, in certain ways, unsuitable and who should make way for others.
Paragraph 631 of our report states:
"Recent trends have made it more difficult for landlords to ensure that good farming is practised. We therefore recommend that the successor should meet the standard which would be required by a responsible landlord"—
I use those words in the amendment—
"This change would mean a stricter application of the rules on eligibility, but primarily it would turn on the test for suitability. The object would be to ensure that the successor was experienced in husbandry and business management, had been trained in a way appropriate to the type of holding and had adequate capital. If cases of hardship arose, it would he for the ALCs and the SLC to settle them."
Therefore, what the amendment tries to do is to say that the simple ability to practise good farming should be extended to include the sort of things that also matter to a landlord—being trained in business management, trained in a way appropriate to the type of holding and having adequate capital with which to maintain, develop and improve the farm; indeed, to farm it correctly. I hope that this amendment commends itself, because it is an important amendment which tightens up on the less desirable successors who might otherwise take over a farm. I beg to move.
The Earl of Swinton: I am grateful to the noble Lord, Lord Northfield, for explaining the purpose of his amendment and I really do not see a great deal between us. However, I feel that it reflects the considerations which tribunals already bear in mind in determining an applicant's suitability under the existing provisions of Section 20(8) relating to an applicant's training, experience, age, physical health and financial standing. I should have thought that that covered matters like business management, farming expertise and the necessary finance which the noble
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Lord has mentioned. Provision is also already made for the landlord to express views, if he wishes, on the suitability of the applicant, and I should have thought that this covered everything which the noble Lord mentioned.
If the noble Lord could indicate any additional factors which tribunals should be expected to take into account in applying the proposed "responsible landlord" test, I should be prepared to consider the point further. However, I must make it clear that, unless there is a good reason for including these extra words, I should be reluctant to to so because of the scope for additional argument to which they could give rise in dealing with succession cases.
Lord Northfield: I confess that I did not think that Section 20(8) went as far as I was hoping to indicate. I shall leave it that I would prefer to study what the noble Earl has said and then, perhaps, come back with a redraft at Report stage if I can improve on the matter. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3, as amended, agreed to.
The Earl of Onslow The Earl of Onslow moved Amendment No. 45:
After Clause 3, insert the following new clause:
("Fixed term tenancies.
.The Minister may give his consent to fixed term tenancies of periods up to twenty-five years.").
The noble Earl said: I hope that your Lordships will bear with me if I take more than two or three minutes to deal with this amendment, because it is quite an important idea that I want to put before your Lordships. In the early part of this century, something like 87 per cent. of the countryside was tenant farmed, but, according to these bits of paper which I have been given and which I am told give very reliable statistics, that figure was down to 41 per cent. in 1981. I think it is recognised by everybody that it is very important that there should be an increase in the tenant part of the farming population.
As I said earlier, the NFU are interested only in protecting their own members' interests. That is absolutely right and proper and it is what Sir Richard Butler is paid for. But there is a wider interest—that is, the interest of the community as a whole—in seeing that that basis should be expanded. There is only a limited supply of land and at the moment, when land for tenancy becomes available, it is taken in hand, farming partnerships are created, share farming is created or it is arranged by the institutions, but I think I am talking here only about the private landlord. These partnerships or share farming arrangements are, to all intents and purposes, disguised tenancy agreements and it seems to me much more wise that we should get such agreements open and above board.
I am not suggesting that we should undermine the whole principle of the 1948 Act, which I bet will be in the brief of my noble friend Lord Belstead when he gets up to say that he does not agree with this amendment, because that is what the NFU say automatically. What I am suggesting is that certain parts of the agricultural landscape could be let for a little bit of time and within limited arrangements.
I shall take my own personal case, because it is sometimes easy to argue from personal experience. As we know, the noble Lord, Lord John-Mackie, has been doing it like a Tory squire who has had it well bred in him for a long time. I am privileged enough to own a 600-acre farm. It might be that I shall become old, go "ga-ga", fall off a horse, be run over by a bus or something like that, or that my son has a career which he does not want to interrupt. But, eventually, I should like my son—as does the noble Lord, Lord John-Mackie, with his son—to take over the farm, and it is possible that he would then like a 15-year or a 20-year tenancy for that farm.
The amendment is not very satisfactorily drafted. It makes eminent sense to a layman, but it is probably too broad for the lawyers. But it would seem a reasonable arrangement that the Minister could make regulations in the context of a farm which I want to let for 15 or 20 years. I could even let it in two or three bits to youngsters starting up. They could possibly share the buildings and so on. It would start people on the road. I am not suggesting that it should undermine the Agricultural Holdings Act 1948. I am suggesting that it should be supplementary to it. In the 1976 debates my noble friend Lord Middleton advocated a different method of doing it, and I know that the noble Lord, Lord Howard of Henderskelfe, will move a slightly broader amendment.
I do not believe that any of us are particularly worried about the method by which it is done, but I would suggest to your Lordships that if by regulation a small amount of land could be let on fixed term tenancies it would help the community and broaden the agricultural base. It might bring more people back to the countryside and broaden the social base of the countryside. It might also make a little bit extra of a rung. I would not dream of trying to undermine the 1948 Act, even though it can be argued conclusively that if you take away the happiness of the landlord at his rent and the happiness of the tenant at his profit out of the farm you destroy the system.
It is beyond doubt true that the 1948 Act increased the decline in lettings. If you cut the value of somebody's property by one half and make sure that he cannot get it back, he will not go ahead and let it again. That follows as night follows day. I do not want to go into that matter. All I would say to your Lordships is: would it not be a good idea if we put in a little bit of extra regulation? The regulations could allow for variation from region to region. It might be reasonable not to allow it in hill farm areas, although it might be reasonable to allow it in the grain land areas of East Anglia.
I am suggesting that the Bill should contain an enabling power for the Minister to make regulations. We have had arguments in this Chamber until we have been blue in the face about "may" and "shall", because we always enjoy it; but I suggest that if the Minister may make regulations to enable short term or term tenancies to be brought into existence it would help to breathe a little more life into the countryside. I beg to move.
8.42 p.m.
Lord John-Mackie: Because I happened to mention
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during the Second Reading of the Bill the question of fixed tenancies, it was immediately presumed that I was in favour of them. I simply gave a list of matters to be discussed, and I am glad that the noble Earl, Lord Onslow, has raised the question of fixed tenancies. As I said then, I believe that it should be discussed. For instance, a widow who is left a farm which she cannot afford to farm herself may have a son of 15 who in 10 years' time might be able to afford the farm and be capable of farming it; so it would be let for a short term. One could instance a number of cases like that.
I know that the noble Earl, Lord Onslow, has made the point that this would not break the spirit of the 1948 Act, but I feel that it would be a side door by which to get past the tenancy law. The noble Earl mentioned the early days of this century, when some 80 to 90 per cent. of tenancies in this country, particularly in Scotland, were fixed term tenancies—tenancies for 21 years, with seven-year breaks. But those days are past, mainly because the days of landlords like the late Lord Aberdeen, of 160 years ago, have gone. The situation in which you could almost trust that a family would succeed or that a short term tenancy would be a success have gone. The noble Earl must remember that the institutional landlords are increasing daily and that they have got to be considered. Although I appreciate the noble Earl's point, I am afraid I could not support his amendment.
Viscount Massereene and Ferrard: I am all in favour of my noble friend's amendment. Where practical, it is a good idea, and I do not see why it should not be practical. I was here for the first day of the Committe stage of the Bill, but unfortunately had lost my voice, much to the relief of your Lordships. I have now regained it, so I should like to say a few words about this matter. We have heard that the real problem is to get young people as farm tenants. If the Minister were given the power to allow a certain number of fixed term tenancies for 20 or 25 years, the problem which would arise then, if you wanted young tenants, would be how they were going to pay for their livestock. In Scotland, I have tenants on my farms. I have farms in England, too, but no tenants. In Scotland, the Highlands and Islands Development Board gives grants to new tenants to help them to buy their stock. Although there is no Highlands and Islands Development Board in England, a similar arrangement in this country would help.
I was brought up under the landlord-tenant system. We knew our tenants, their families and their ailments, As the noble Lord, Lord John-Mackie, said, that has all gone, but it would be a tragedy if the tenant farming system were to die. With due respect to my noble friend Lord Belstead, the Bill as drafted will not help. The tenant-farmer system will die. Therefore, I would personally clutch at any straw, however impracticable it may seem to civil servants. It seems quite practicable to me. I hope the Government will consider something along these lines and that the Minister will have the power in certain circumstances to allow fixed tenancies for a term of years.
Lord Howard of Henderskelfe: I want to correct one fact which came from the noble Lord, Lord John-Mackie. He made the statement that an increasing

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amount of land is being acquired and dealt with in various ways by institutions. As we have heard on several occasions during the debate, this is just not so. It is a popular myth. Nearly all the land that comes on to the market, whether for sale or by way of letting, is grabbed hold of as quickly as possible either by neighbouring tenants or by neighbouring owner-occupiers, so we must not blame the grasping Church Commissioners, the horrible Oxford and Cambridge colleges and the rest. It is the farmers themselves who are taking that land in hand, because they know what is good for them.
Lord Northfield: May I make two short preliminary points on fixedterm tenancies? First, we must not forget that the possibility of short term tenancies already exists under Section 2 of the 1948 and 1949 Acts. The Minister has already said that the Government are clarifying the rules that they apply in using those two parts of the existing legislation. It would be helpful to know tonight to what extent they propose to clarify them and to use them in future to allow a farmer's son to take over for five years, or whatever period it may be.
Secondly, there is no unanimity in the industry about the matter. There are varying waves of opinion. The young farmers' clubs in Scotland were, I believe, against them when we inquired into the matter, while the young farmers' clubs in England were in favour of them. There is no unanimity, but that does not mean to say that one does not have to take action.
The real point is that we must beware, if we are to start fixed term tenancies, of this becoming the norm. That is the danger. If one has too broad a provision, it could quickly become the case that farms would never be let on any other form of tenancy, by some landlords at least. Secondly, one has to beware that the system does not lead to extractive farming; that is, people taking on farms for a relatively short period and then running down the agricultural value of those farms in the final years of the lease. That is a very real danger, although there is some evidence in Ireland, where such provisions exist, that that danger has not in fact arisen. Nevertheless, it is a point that has to be watched.
In those circumstances, it all depends on what could be added to the proposed provision by way of limitation on the Government's powers. Could we prescribe a set of rules that should go with any system of fixed term tenancies? All I venture to say on that point is that my committee did have a shot at it. I am not going to read out that part of the report because it covers the whole of one page and part of another—but we did try to set out the type of restrictions which ought to accompany any idea of fixed term tenancies.
I believe that those restrictions were quite reasonable. For example, we suggested that there would be a minimum of 20 years, say, for fixed term tenancies—or that if the farmer started later in life, the tenancy should at least continue until he was aged 65. The aim was to find some way of limiting matters so that the system does not become a ridiculous one which bleeds the land in various ways.
I must say that I have undergone a conversion on this point. I support the ideas of the noble Earl, Lord
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Onslow, in general, provided we can impose sufficient limitations and qualifications to stop the system being abused. If carefully and sympathetically applied with a set of rules, such a system might well give an opportunity to provide what is in fact a missing rung of the ladder in many cases—for people to have a shot at running a farm for a fixed period of time, before establishing their own suitability and financial viability, and then moving on when the occasion occurs, and if it is possible for them, to a farm with a full tenancy on their own. On balance, I would support what the noble Earl is proposing.
Lord Walston: As it stands, I cannot support the amendment of the noble Earl, Lord Onslow. The nobleLord, Lord Northfield, was perfectly correct in one of his statements, although he did not seem to follow it through in the way I expected—his statement that anything of this kind is liable to strike a blow at any of the normal tenancies. It can only work if it is very closely hedged in.
I should be very favourably inclined towards the proposal if it were possible to define in a perfectly clear manner within an Act of Parliament or statutory instrument the conditions under which a fixed term tenancy might be granted. An example might be an arrangement made in order to enable a minor to take over a farm when he came of age or had proved himself adequately trained. But that would have to be done in a very strict and narrow way. I should be surprised if parliamentary draftsmen, with all their skill, could evolve a form of words that would make that sufficiently narrow. If an attempt can be made to do that which we could discuss at Report stage, I should certainly be very happy, hut, as the amendment stands, I cannot support it.
Lord Middleton: I was very interested to hear the remarks of the noble Lord, Lord Northfield—and from what he said it is very clear why there is no unanimity in the industry at the moment. I was absolutely delighted when I saw this amendment because I could understand it in a flash. I did not have to spend half an hour on it as I have had to do with other amendments! Having said that, I must tell my noble friend Lord Onslow that, if he wants to provide for short term tenancies, this is not the way to do it.
My noble friend referred to the amendment I put forward in 1976 and to which your Lordships agreed. That amendment provided that a notice to quit served after a given time could not be met by a counter notice; and in any year of the tenancy it remained a tenancy from year to year—thereby retaining all the advantages of the agricultural holdings legislation. Those advantages are considerable. I believe that my noble friend knows as well as I do the benefits that follow from a year to year tenancy under the ordinary Act, and so I will not enumerate them. I believe that that amendment provided for a tenancy of 25 years to which your Lordships agreed at that time, although it was not agreed to in another place. After that time, notice to quit could not he met by a counter notice. If one is going to do it at all, then that is the way one should do it—not in the way suggested by my noble friend Lord Onslow.
Lord Belstead: I believe that almost everything that ought to be said about this matter has been said. It is a highly difficult and contentious matter. It is looked upon by many people as a matter of principle going back over 35 years to the 1948 Act. It is not a political matter. It is not a factual matter. It is a practical matter, as to whether an amendment of this kind could harm long term planning and investment in tenanted land. I say that hearing in mind that my noble friend Lord Onslow has done his very best by making his amendment permissive and for the Minister's discretion.
None the less as the noble Lord, Lord Northfield, said, if it became accepted as the norm, people would be left with the anxiety that it could lead to extractive farming. I put it to my noble friend—who I know is particularly interested in conservation matters—as to whether an amendment of this kind would be in the interests of long term conservation planning on agricultural holdings.
All your Lordships have probably read at one time or another the recommendations of his own committee which the noble Lord, Lord Northfield, mentioned. Whereas it was the unanimous agreement of the noble Lord's committee that unrestricted fixed term tenancies should not be justified, his committee added that those members of the committee who would support them considered that certain conditions should be applied to such an arrangement. Again, the noble Lord mentioned a couple of them.
It is at this place in the Bill, if I may so, that we are at least making a move towards what some members of the Northfield Committee recommended—and a little nearer to my noble friend's objective. As we heard on Amendment No. 37 from my noble friend Lord Kinnoull, there is support for provision to be made to facilitate succession on retirement of a tenant. Before my noble friend says that, no, that is not what he is after, let me remind him that the age of 65 was mentioned as one of the options in the Northfield Committee report if limited fixed term tenancies were to be considered.
What is more to the point perhaps, and to answer one or two of the questions which have been put to me, we now have a cast-iron undertaking by my right honourable friend that the arrangements under Section 2 of the 1948 Act will be extended for the Minister's power to be used in two particular ways which are of interest under this amendment. There will be an increase, my right honourable friend has said, from three years to five years in the period for tenancies granted under the Minister's discretion under Section 2 of the 1948 Act when either an inexperienced tenant needs a period of trial before entering into a full tenancy agreement, or the landlord's son or daughter is expected shortly to take over a vacated holding. That measure will be implemented administratively and requires no amendment to legislation. The extension of time for the period of trial would, I hope the Committee will agree, be a step in the direction which, I realise, my noble friend wishes us to go. I know that does not meet my noble friend's point, but I hope I have said enough to show that we are doing our best in what is undoubtedly a controversial area.
The Earl of Onslow: I notice that my noble friend did not produce the argument that I forecast he would about undermining the 1948 Act; but I suspect he might have done had I not said that he would. I take the point raised by the noble Lord, Lord Walston, and the point raised by the noble Lord, Lord Northfield. Of course, one has to avoid extractive farming. I also note very carefully and agree with the point made by my noble friend Lord Belstead about the conservation aspect. I do take these points to heart. But all of these matters can be overcome by administrative order.
I am not suggesting that it should become the norm: I do not want it to become the norm. All I am hoping is that at Report stage we can put in a permissive power that the Minister may make regulations. Those regulations would have to be circumscribed so that it does not become extractive farming, so that conservation is protected. I would suggest, for instance, that you could say that no holding could be let successively on two-term tenancies; any tenancy after a one-term tenancy immediately becomes a fully protected tenancy. I do not want the term tenancies to become the norm. I want them to become an extra rung on the ladder, as one noble Lord said. That is what I want to do; and that, I think, would be a good thing.
I am not going to press this amendment to a Division at this stage because I think it would possibly be counter-productive. However if I can consider this further and possibly discuss it with various other noble Lords, and if we can produce a permissive amendment at Report stage which allows the Minister to do certain things with lots of protections engulfed in it, then I will be very tempted to divide on Report. With the Committee's permission, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 45A not moved.]
Clause 4 agreed to.
Clause 5 [Amendments with respect to cases excepted from restriction on operation of notices to quit]:
9.3 p.m.
Viscount Ridley Viscount Ridley moved Amendment No. 46:
Page 9, line 4, leave out ("omitted") and insert ("replaced by the following words—
"Case A—the landlord is a smallholdings authority for the purposes of smallholdings within the meaning of Part III of the Agriculture Act 1970, and—

(a) the holding was let to the tenant in pursuance of the said Part III as a tenancy terminable between the seventh and tenth year of the tenancy;

(b) the instrument under which the tenancy was granted contains an acknowledgement signed by the tenant that the tenancy is subject to the provisions of this Case: and

(c) the notice to quit takes effect not earlier than the beginning nor later than the end of that period.".").

The noble Viscount said: This is the first of three amendments in my name designed to increase the number of smallholdings coming on to the market for letting and so to increase the number of young people who are entering the farming industry. This, as I was told some hours ago, is what this Bill is all about. I talk only about statutory smallholdings, which have been a

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county council function since 1908. The number of smallholdings now in England and Wales—Scotland is not covered by this legislation—is about 8,000. After recent reorganisation following the Wise Committee report, they can now be regarded as by and large economically viable units with an average size of 19 hectares and an average rent of some £86·00 per hectare at the latest count.
The purpose of these smallholdings was—and is—the laudable one of providing what is called the farming ladder whereby farm workers or other young people can start to farm on their own account and, it is hoped, progress in due course to larger farms as tenants or even as owners. Over the years it has been an effective way of introducing new blood into the industry; and I am sure we must all subscribe to the objective that it stands for. For example in England alone over the past three years Ministry statistics just published show that out of the 7,000 English smallholdings only some 120 per annum have come to be re-let, and I think your Lordships would agree that this is not enough. The trouble of course is that many smallholding tenants have not been able to move on; either they lack the opportunity or they may lack the capital, or indeed they may lack the will to do so. The ladder is only an effective mechanism if people either get off at the top, topple off halfway or come back down and get off at the bottom. It is the objective here to see that the ladder is improved as a means whereby people can flow up and achieve what they are after in a new holding.
I do hope the Government will not say that there is no room for legislation in this Bill on this matter. I know it is not part of the pact between the CLA and the NFU, but that should not rule it out. I do not believe those august bodies would oppose it. Indeed I have evidence that the NFU support it in a recent brief to us, although the CLA have remained ominously silent on the matter. There may not be another opportunity to consider smallholdings legislation for many years; I hope the chance will not be lost, and I think we should look at it.
Amendment No. 46 provides that a statutory smallholding authority—in practice a county council—shall have the power to grant an agricultural lease on what is called a starter holding intended specifically to provide an opportunity for young people starting out to prove themselves in farming. Such a starter tenancy is to be terminable as of right by the landlord at any time between the seventh and tenth year of the tenancy. The idea of this is fairly and squarely one of the most important recommendations, to my mind, in the chapter on smallholdings of the Northfield Committee report, and it is taken purely from their report.
This provision is very much in the interests of the farming industry generally. If the tenant is not able to prove his capabilities with such a holding within the fixed period of the lease, the authority should be able to obtain possession so as to enable movement within the smallholding estate. Another young entrant to farming might have the opportunity to prove his worth. The knowledge that an agricultural tenancy of this kind is specifically a starter tenancy should
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encourage a successful tenant to build up experience and capital in order to apply for a tenancy of a larger farm or indeed to move in some other way up the ladder.
The need for these starter tenancies—my noble friend Lord Onslow said that one must anticipate the Minister's reply—cannot be met satisfactorily by the Minister using his power under Section 2 of the Agricultural Holdings Act 1948. This would enable him to grant tenancies for a shorter period than for life. If this was the case then I would not be moving this amendment, but past history of the use of the discretionary powers by the Minister under that section is very unsatisfactory. Notwithstanding many representations by county councils and by the Association of County Councils and an undertaking by a previous Minister to widen the exercise of his discretion under that section, county councils are continuing to meet resistance in the face of reasonable and proper requests for the use of Section 2 to grant short-term licences for a period longer than one year.
I have ample evidence that no fewer than 11 English county councils have fallen foul of Section 2 of that Act, but it is not in the Committee's interests, nor mine, that I read them out tonight. However, I can assure your Lordships that it is not an isolated case which has caused me to raise this point. There is the additional point that Section 2 involves the Minister in exercising a role in an area where a decision needs to be taken by the smallholdings authority in the interests of proper management of its estate. If the Minister is to do no more than endorse the policy of the smallholdings authority there is no point in him duplicating a function that can properly be done by that authority. Surely it is the policy of this Government to give as much power as they can to local authorities.
The amendment itself is drafted in such a way as to be in addition to the provisions of Section 2 of the Agricultural Holdings Notices to Quit Act 1977. I repeat that the amendment only applies to statutory smallholdings provided by county councils and not to any other form of agricultural holding. I accept that it may be necessary, if the principle of the amendment is accepted that we will need safeguards to stop wicked authorities, having obtained possession under this provision, immediately selling the land in order to cash in. With that proviso, I beg to move.
Lord Prys-Davies: I have one question for the noble Viscount. I followed his argument with a great deal of interest, but what becomes of the smallholdings tenant if he receives a notice to quit between the seventh and tenth years and he is without an alternative tenancy?
Viscount Ridley: The answer to that is he must know when he accepts such a tenancy agreement that termination is likely to occur. He must therefore be prepared, if he takes the chance of entering farming, to find himself alternative accommodation. I accept it may be necessary to write in further safeguards, but the principle I seek to establish is that there should be such things as starter tenancies and that people who succeed should be able to move on and those who do not should be asked to make way for others who want to have a go.
Lord Northfield: This is the most difficult point in the amendment of the noble Viscount. I support his amendment in principle but when my Committee studied this matter we suggested that notice could be given between the seventh and tenth years. However, we also said that the tenancies would be terminable if the authorities could, at the time of termination, offer a larger holding suitable to the needs and resources of the tenant in terms of size and type of enterprise, or which met criteria agreed between the parties when the first tenancy was granted. In other words, we could not see the tenant—young or old as he might be—simply thrown out over seven years with no hope at all.
We went on to say that if no holding became available in the county during the period when the notice could be given then, except in various circumstances, we proposed that the right of the local authority to terminate the tenancy for this special purpose would lapse and the tenant would have the security which would normally apply. We were trying to make it a real rung on the ladder—to make a real ladder exist—and that the provison should apply when the county could offer a larger holding for the man to move on to after his initial apprenticeship, the building up of capital, and so on, that would take place in the seven or ten years. I support the idea but I hope that if we come back to this at a later stage the noble Lord will try to find some way of qualifying the suggestion in the ways we suggested; otherwise I am sure that there would be some hardship.
Lord Stanley of Alderley: There may be some small fault in the drafting of my noble friend's amendment. However, I hope that when my noble friend Lord Belstead replies he gives the principle a very fair wind.
Lord Walston: Again I find myself in agreement with the noble Lord, Lord Northfield. I have some sympathy for this amendment, but it would be very unfortunate if a good young tenant who started farming in his early 'twenties and, having farmed well, found himself at the age of 30 moved out of his farm and unable to get another larger farm. It is true that the county councils' smallholdings were originally designed as a ladder; but if there is nothing at the top of the ladder one should not push the man off when he reaches the top. He should be allowed to stay there. If it were possible to restrict this power to those cases where the tenant has had the opportunity to get a larger holding but has refused to take it for some reason—although I do not see how this can be done—that would certainly be most attractive.
I wholeheartedly agree with the final point made by the noble Viscount. I was going to raise the matter if he had not done so. It must be made completely impossible for the county council, having given notice, then to sell the whole thing with vacant possession. That provision must clearly be incorporated in any legislation which may arise.
9.14 p.m.
Lord Belstead: The difficulty of comparing this amendment with the proposal in the report of the committee of the noble Lord, Lord Northfield, has
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been fully explained. Whatever the merits and demerits of fixed-term tenancies, they have the major drawback that in the absence of a reasonable supply of normal tenancies they are likely to mean that the beneficiaries—if that is the right term—are likely to find themselves out of a job and out of a home at the expiry of the term. It is the fact—and I am sorry that it is the fact—that over the 10 years to 1981 I am told that an average of only 14 tenants per year made a move to farms in the private sector. That is out of a total of approximately 7,000 tenants. We are talking of a situation where, however successful in themselves the smallholdings may be, the concept of them being a rung on the farming ladder has in so many cases not been achieved.
The damage to a man and his family of his going out of a job and a home would be accentuated by the fact that, since the Wise Committee made its recommendations, a larger proportion of smallholdings have become larger viable units, so that, in a sense, the damage being done is the greater. That is one area of difficulty. In listening to my noble friend Lord Ridley I think that we have to face that.
There is another area of difficulty. My noble friend was perhaps a little dismissive of the Minister's discretionary power under Section 2 of the 1948 Act. I have taken on board what my noble friend said and I shall follow it up. But I repeat what I said only a few minutes ago on a previous amendment. Currently my right honourable friend's approval is definitively going to be given for trial tenancies for an extended period from three years to five years concurrently with the coming into force of this legislation. These provisions are not perhaps as widely known or understood as they should be. We are therefore to issue public guidance on how they will operate. I am sure that they will be sufficient to give new entrants a sufficient period of trial where it is reasonable to do so. If I may say so on this amendment, it means that the maximum period we are envisaging at the moment for trial tenancies of five years falls only two years short of the seven to 10 years—the lower end of the scale which my noble friend is choosing for his amendment.
I am very ready to go away and think about what my noble friend has said and in particular about his criticisms of the way in which the Section 2 powers have been used. But I would ask him, if he would, also to think about what has been said about the difficulties of comparing this amendment with the Northfield proposals and also the possibility of making use of the new arrangements that there will be under Section 2.
The Earl of Kinnoull: I wonder whether my noble friend the Minister could expand a little bit more on the Section 2 provision. My noble friend Lord Ridley criticised it, and I must say that I have also heard criticisms of it, partly because, being discretionary, it seems that the Minister has this total power to say yes or no. Will the extension of the period from three to five years be introduced by statutory instrument or does the Minister have the power under the 1948 Act simply to state that the period will be extended? Secondly, can my noble friend go further? Could it be seven years? Whitish the object of going only to five years if he talks about a trial tenancy?
Lord Belstead: To answer my noble friend's first question, the period can be extended administratively. I think that I have said that the intention is that this would be done administratively concurrently with the passing of this Act. In response to my noble friend's second question, I would say that my noble friend is a past master at getting his foot in the door and then levering it open. Of course there is nothing to stop my right honourable friend extending his concept of the use of the Section 2 powers to a greater period than a maximum of five years. But I would draw my noble friend's attention to the fact that my right honourable friend has gone out of his way to see that, of all the grounds on which Section 2 discretions of the Minister can be used—those grounds extend to about seven different grounds on which you can give short-term lettings—he has chosen only two. Those are trial tenancies, and tenancies where you want a bit of time because a son or daughter of the owner of the land is coming along a little later. On those occasions, my right honourable friend has said specifically that he will be prepared to extend the time.
So my right honourable friend is being cautious about extending the scope of the use of Section 2 and is also being cautious about extending the period of time for which he would extend Section 2. Why is my right honourable friend being cautious? Because, once again, we come back to the old chestnut. He is concerned that there should be no question of breaching the principle of the 1948 Act that tenancies should be tenancies for life.
Viscount Ridley: I shall not waste time; I shall reply briefly. The noble Lord, Lord Northfield, will recall that what he published was not quite in accordance with the evidence of smallholding authorities. Nor can I accept the theory of the noble Lord, Lord Walston, that a good farmer can be thrown out on his ear at the age of 30. There is no question of that. It is surely a matter of getting rid of the chap who is not trying very hard. I accept that Section 2 of the 1948 Act, which my noble friend Lord Belstead promised to look at, is welcome. I shall not read out a lot of letters from his predecessor. There is room for improvement. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Murton of Lindisfarne): Before calling Amendment No. 47, I should perhaps point out to your Lordships that it should read:
Page 9, line 5, after ("Case C"), insert ("—(a)");
and also that the subsequent Amendment No. 48A should be marshalled immediately after Amendment No. 47. I understand that these are alternatives. It might be for the convenience of your Lordships' Committee if they were discussed together.
9.23 p.m.
Viscount Ridley Viscount Ridley moved Amendment No. 47:
Page 9, line 5, after ("Case C"), insert ("—(a)").
The noble Viscount said: I am sure that it would be for the convenience of the Committee if Amendments Nos. 47, 48 and 57 could be discussed in the same
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debate. I hope that this is acceptable to my noble friend, and I have no intention of speaking twice.
Amendment No. 48: Page 9, line 10, at end insert ("and
(b) the following shall be added at the end—
"For the purposes of this Case, in determining whether the tenant was or was not fulfilling his responsibilities to farm in accordance with the rules of good husbandry, the Tribunal shall have regard not only to subsection (2) of section 11 of the Agriculture Act 1947 (good husbandry) but also to the extent to which the tenant has complied with any covenant in his tenancy relating to the conservation of the landscape or the protection of wildlife or archaeological features.".").
Amendment No. 57: After Clause 7, insert the following new clause:
("Amendment of Schedule 1 to the 1948 Act.
. In Schedule 1 to the 1948 Act (matters for which provision is to be made in written tenancy agreements), after paragraph 10 there shall be added
"11. A covenant by the tenant to do or refrain from doing anything specified in the covenant relating to the conservation of the landscape or the protection of wildlife or archaeological features.".").
I move these amendments on behalf of my noble friend Lord Gibson. As your Lordships will be aware, he is chairman of the National Trust and, unfortunately, is unavoidably detained elsewhere tonight. He has put down these amendments on behalf of the National Trust. Your Lordships will I think agree that the National Trust deserves the most sympathetic and serious hearing on matters of this kind. Not only is it one of Britain's largest landowners, but its policy of letting land to tenants rather than farming itself or, indeed, of creating the dreadful new partnerships we hear about make it in this sense a model landlord. It now owns over 400,000 acres in England and Wales, of which no less than 200,000 acres are designated as SSSIs. That shows its interest in conservation if nothing else does.
The trust is very concerned, as are other bodies, that conservation has so far had no place in the Bill. The amendments seek to remedy this defect in a modest way. As the law stands, there is no statutory provision for conservation matters to be written into an agricultural tenancy agreement. A tenant following such principles may be at risk of accusations that he is farming in a manner inconsistent with the rules of good husbandry and of incurring any penalties that this might imply. Also, the landlord seeking to restrain practices inimical to conversation—I am sorry, I should have said, "to conservation"; we have all made that mistake—could be thwarted if the tenant can prove that such practices are inconsistent with the rules of good husbandry as stated in Section 11 of the 1947 Agriculture Act.
That Act was passed at a time when food production took precedence over conservation. Indeed, I think it will be agreed that the word "conservation" had hardly been invented then. Now there is need to be able to provide for more up-to-date control over such conservation issues as well as greater protection for a tenant who observes them. The amendments are by no means wholly designed to punish tenants but to protect them and to see that agreed conservation measures have some statutory backing in farmers' tenancy agreements in the future, and that tribunals should take note of them where necessary.
As your Lordships are well aware, lately there has been a very great deal of adverse criticism of the

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farming industry. Indeed, the Permanent Secretary, Sir Michael Franklin, according to the BBC said only recently that the tide of opinion is running against the farmer. The Secretary of State for Agriculture said three days ago that he had very important statutory conservation responsibilities. We all know the stories about hedges which have been removed, marshes drained, down land ploughed up and so on, and no redress is possible in the terms of the Landlord and Tenant Acts. I do not wish to start at this time of night a diversion on the Wildlife and Countryside Act. I am delighted to know that the noble Lord, Lord Melchett, is not in his place, or we should have had just that. Let us keep this matter in perspective.
We wish to make statutory provision for a clause concerning conservation to be written into a tenancy agreement where necessary and, by an addition to Case C of Section 2(3) of the 1977 Act, to widen the consideration of the tribunal beyond solely the rules of good husbandry to conservation matters in a tenancy agreement. The National Trust quite obviously by its very nature has many farms where conservation issues are of the greatest national importance. If this were acceptable, no longer would a tenant be able to disregard conservation responsibilities under the pretext of farming well; nor could he bow to the pressure to achieve high production to the detriment of the environment because of fear of these rules of good husbandry.
The NFU's brief on this matter while not totally unsympathetic, fears that a tenant might be disadvantaged in regard to security and to dilapidations. The purpose of these amendments is to see that that is not the case and that the tenant's anxieties are totally relieved in this respect. This is a most vital and important matter and an opportunity, which may not present itself for many years, to give effect to our responsibilities in this field and legal backing to environmental management. I know that the amendments will have the full support in principle of the Nature Conservancy Council and also the Countryside Commission. I cannot see any reason why my noble friend cannot welcome them with very open arms at the same time. They may only be a first step in the right direction. They may—they probably do—need much further discussion than we have time for at this stage, but I hope that they can be looked at in that light.
I know that Governments are apt to resist amendments of this type on three mains grounds. The first ground is that they just do not agree with them. That is a matter of opinion. The second ground is that the amendments are badly drafted. That is something which I can accept myself because I am not competent to argue. The third ground is that there is no need for the amendments. That I cannot accept. Much technical argument has gone on in this field about the fact that a "breach of covenant", obtainable from the court under the Law of Property Act 1925, is alleged to be an adequate substitute for conservation matters in an agreement. This really is no excuse for not making at this point a serious effort—not perhaps in detail tonight but during the course of the passage of the Bill—to bring these matters up to date. It is a unique opportunity for the Nature Conservancy
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Council, the National Trust, et cetera. They have sought legal advice on this and they do not believe that the Law of Property Act is going to have any effect. It is not true that it is an answer.
I believe that the CLA and the NFU, as I have said on a previous amendment, will be able to stand aside like two sacred cows and allow this amendment to pass between them. They are not, I think, affected and I hope that they are not biased for or against. There is, as I am sure your Lordships are well aware, a very great deal of concern in the country at large at the way such issues of conservation are developing. I hope that the Committee will give a sympathetic hearing and support me in the principle of these amendments. I beg to move.
Lord Sandford: I should like to support my noble friend in this amendment, and I can do so quite shortly because I think he has explained it very thoroughly to the Committee already. The fact of the matter is that the experience of the practitioners involved in the type of legislation with which we have been dealing, as it has so far been drafted and so far enacted, hinders rather than helps in the adoption of management agreements between public bodies such as the Nature Conservancy Council, the national park authorities, the local authorities on the one hand and landlords or their tenants on the other for the proper management of land in the countryside in the interests of conservation and a whole range of other activities on the land besides that of farming and agricultural production.
The amendment refers particularly to, "the conservation of the landscape", the conservation of wildlife, flora and fauna, and the conservation of "archeological features". However, there are other important aspects which this amendment does not cover but which I hope the Minister will bear in mind when he is reflecting on this debate, such as the use of the countryside for recreation and access for the public.
The fact of the matter is that landlords enlightened in this respect, wishing to enter into and adhere to management agreements, can be hampered by philistine and unco-operative tenants. Tenants, with the right ideas in these matters, can find their tenancies put at hazard by landlords questioning their husbandry if they seek to follow some of these agreements. So far from ironing out this problem in their Bill, neither the CLA nor the NFU have addressed their minds to it—it does not look as though they have—and nor does it appear that the Ministry has.
In the process of ensuring that this Bill meets the public interest as well as the interests of the NFU and the CLA, it is our job to ensure that from now on minds are addressed to this problem.
Lord Middleton: Does my noble friend distinguish between the public interest and the interest of the CLA and the NFU?
Lord Sandford: Indeed I do and so do many of my noble friends on both sides of the Committee. This is what we are here for. But I do not think that I need go into this matter much more. All that is necessary is for the Minister (if, as I hope, he agrees with the general

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drift of this amendment) to call into consultation some of the people who are involved besides the CLA and the NFU, such as the Nature Conservancy Council, the Countryside Commission, the associations and others. If this amendment or this formulation designed to deal with this matter is not the best, then others can be devised. However I am quite certain that something along these lines needs to be enacted.
Baroness White: From this side of the Committee I should like to support the noble Viscount, Lord Ridley, and the noble Lord, Lord Sandford. Although I am not familiar with the precise details of the matter, it appears to me essential that something of this nature should be included in this proposed legislation. This time—almost to the minute—tomorrow evening I expect to be at Grosvenor House at the Red Dragon Ball, together with some 1,200 other good Welshmen and friends of Wales, listening to his Royal Highness the Prince of Wales, because the ball is in aid of the National Trust in Wales and the Prince's own Environment Committee, of which I have had the honour to be a member for a number of years. I am quite sure that it would cause considerable unease and disquiet if, for any reason, this case proposed by the noble Viscount, Lord Ridley, supported by the noble Lord, Lord Sandford, and in the name of the noble Lord, Lord Gibson, was not found, in principle at least, to be acceptable.
As the noble Viscount, Lord Ridley, and the noble Lord, Lord Sandford, have made very clear, plainly this kind of provision is essential if this part of the countryside is to have a fair deal. We are entirely in favour of many of the provisions in the Bill, but I think that this particular safeguard is a very necessary one and I hope that it will be found acceptable in all quarters.
Lord Stanley of Alderley: For the second time this evening I should like to support my noble friend Lord Ridley on this amendment. But, as a rather suspicious sacred cow, which I think he was trying to say I might be, I would ask my noble friend Lord Belstead to confirm two matters when he replies: that, should this be favourable to the Government, am I correct that there would be no question of a case of bad husbandry put against the tenant, so getting him removed, and indeed that there would be no case for giving greater dilapidation? I understand from my noble friend Lord Ridley that that is the case. I should be happy to hear the Minister confirm that, in which case I support this, too.
9.35 p.m.
The Earl of Caithness: I rise to support this amendment too. It follows logically from Amendment No. 11 which we discussed on the first day of the Committee stage, which was an amendment moved by the noble Lord, Lord Gibson, and myself. Everything has been said, and therefore there is nothing more for me to say, but I hope that my noble friend would give it a warm reception.
Lord Bishopston: In the absence of the noble Lord, Lord Gibson, who is chairman of the trust—and of course I declare an interest—may I say that the case
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has been well put by the noble Viscount, Lord Ridley. He made some reference to my noble friend Lord Melchett, implying his enthusiasm for the subject of conservation. Perhaps I may tell him that I was in your Lordships' company with many others on Saturday when we had a seminar on conservation, and I am well prepared for the amendments which have been discussed tonight.
As the noble Viscount said, the trust is concerned about the definition of good husbandry under the Agriculture Act 1947 and the Agricultural Holdings Act 1948, and the definition of good husbandry under the Acts does not heed the conservation of landscape, wildlife and archaeology, so that it is not possible to enforce clauses in a tenancy agreement necessary to define or promote these particular aspects.
Also the trust is concerned in particular about the provisions for remedying the breaches of covenant, where the approval of the agricultural land tribunal is required to a notice to quit for a breach of covenant. The trust also feels that the definition of the rules of good husbandry should in some way be amended to include the recognition of the importance of conservation in the management of a holding.
It would also like some means of enabling a landlord to introduce new restrictions into a tenancy agreement to prevent a tenant damaging an interest which has come to light since the granting of the original tenancy, and arbitration might be one way of achieving this. Finally, I feel that your Lordships, with your concern for conservation, will agree that conservation is not something to be added on to our other responsibilities. It is indeed an integral part of our responsibility for good farming and for good husbandry. I hope that the Minister will be able to give the Committee some assurances about the points which have been raised.
Earl Waldegrave: We have had support from all sides of the Committee, and I should have thought that it would be seen as an omission to leave out this amendment from this new piece of legislation on agricultural holdings when the whole question of nature conservation is so much in the public eye and when so many of the big landlords—such as the Duchy of Cornwall, with which I used to be associated but I am not now and I do not speak for them—take this matter so very seriously. It would strengthen those who are trying to make these voluntary agreements work—both private and public corporations—if there was some reference of this sort in the Act. I hope that this can be in this Bill when it becomes an Act, and I hope that this clause will be supported.
Lord Walston: The only thing which modifies my wholehearted support for this amendment is that all voices which have been raised so far have spoken in favour of it, and I cannot help feeling that there must be some reason against it. But I have overcome that feeling and I seriously give this amendment my wholehearted support. Farmers have traditionally always had the job of producing food; but they have also had the job—which they have fulfilled in the main extremely well in the past—of preserving and enhancing the environment. That is something which they must continue to do.

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In many of the debates and discussions which have been held on this subject it has been asserted—and rightly asserted—that farmers are the best conservers of the environment. It is therefore right that this Bill should contain some provision to ensure that that minority of farmers who do not fulfil their obligations in this respect can be called to book. I believe this to be a good amendment. I should like to add that my noble friend Lord Hunt, who is president of the Council for the National Parks, was anxious to speak in support of this amendment, but unfortunately he could not remain here. He asked me to signify his strong support for it and the support of the Council for National Parks: support which is reinforced by very many documents and works which have been done pointing out the importance of this and how it can best be achieved.
Lord Mackie of Benshie: There is a slight rift in the Alliance. I have viewed with grave suspicion some of the people who have supported this amendment. It needs to be approached with extreme caution. It is a little hard to put into a tenancy agreement a covenant relating to the protection of the landscape, the protection of wildlife and archaeological features. One can say to a hardworking farmer, "You must not cut down trees. You must not plough up this site". But according to this one might direct him to divert his energies and, instead of trying to make a living, to conserve the wildlife round the place and forget about the vulgar business of farming and producing food. This bristles with difficulties, I agree.
The NFU has produced some useful figures about the number of trees that farmers have planted in the last 10 years. I know that most farmers do an excellent job in conserving the countryside and wildlife and improving the beauty. But we need to be extremely careful about the obligations that tenants may be forced to take on. The most we can do is to make them negative; to make them positive would not be useful.
The Earl of Caithness: If that concerns the noble Lord, I am very surprised that he did not support the noble Lord, Lord Gibson, and myself on Amendment No. 11, when we specifically asked for these matters to be taken into account in rent reviews.
Lord John-Mackie: I should like to make a few practical points, rather than support my noble kinsman's remarks. There is a world of difference between ripping up woodland, draining marshes, tearing out hedges, et cetera, and good husbandry on land that is already cultivated. With all due respect to my noble friend Lord Melchett, he has suggested that we leave two yards round all our hedges and such things.
I remember my father telling the story of his neighbour who told him that he had noticed that every time a fresh member of the family was born they took another furrow away from the hedgerows. I have pointed out to my son and to my foreman that when they leave a large corner into which it is too difficult to reverse the plough or turn the combine harvester, they are probably leaving enough land to feed an Indian family. This is what we need to watch—the difference
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between tearing up hedges, woodlands, et cetera, and cultivating properly, keeping down the weeds round the hedges and so on. There is a world of difference between the two and I felt I should point that out.
Lord Belstead: I do not think there is a difference between everyone who has spoken in this short debate about the necessity to try, wherever possible, to promote the conservation of the countryside. Indeed, in no way do I dissent from what one noble Lord said about there being no dividing line, or that there should not be a dividing line, between someone who wishes to conserve and someone who wishes to farm. Those who have been farming best over many years have been some of the best conservationists.
Having said that, I am advised that provision in the tenancy agreement is sufficient to provide protection for the tenant. That is advice which did not surprise me. In fact, it would have surprised me very much if there were provision in a tenancy agreement for conservation. Then the tenant could not be protected from a notice to quit on the grounds of bad husbandry. I should be absolutely astonished if that were the case. Therefore, I wonder (if I may say so to my noble friends Lord Ridley and Lord Sandford) whether Amendment No. 47 is necessary.
The effect of Amendment No. 57, however, is rather different. Here we have an amendment which, as I understand it, will make it naturally an implicit provision of the tenancy agreement that the tenant shall enter into a conservation covenant. Here I think we come rather nearer to the words spoken by the noble Lord, Lord Mackie of Benshie. While many landlords and tenants enter voluntarily into conservation arrangements—and may I make it crystal clear that the Government applaud efforts in this direction—I think it is questionable to introduce a form of compulsion. Again, I should be very ready to look at this for it is an important matter, and clearly many noble Lords think that it is an important matter: but I would ask my noble friends to look at what I have said in reply.
Viscount Ridley: In years of moving amendments late at night I have never had such support before. I am sure that your Lordships will agree that it is a gratifying experience. I think we have made the case. I think that the noble Lord, Lord Belstead, remains to be convinced that it is necessary; but I hope that those of your Lordships who understand the law will be able to convince him before lunch tomorrow that it is necessary that something of this kind be done. I hope that if he is not convinced he will allow me to move an amendment at the Report stage which to some extent meets the objections made.
I entirely take Lord Mackie's point. It is not intended to introduce more compulsion in this matter than is necessary. I think that the debate has shown that something has got to be done in this field, and must be seen to be done. I beg leave to withdraw the amendment in the hope that it is not forgotten.
Lord Belstead: Before my noble friend withdraws the amendment, may I ask why is it important that I,

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the Government spokesman, be persuaded before lunch tomorrow? Is it that after lunch, in some way, I shall be incapable of being persuaded?
Viscount Ridley: It is because I think it will not take that long to get it over.
Amendment, by leave, withdrawn.
9.47 p.m.
The Earl of Caithness The Earl of Caithness moved Amendment No. 48A:
Page 9, line 5, leave out from ("Case C") to end of line 10 and insert ("for subsection (a) there shall be substituted the following—
"(a) were satisfied in relation to the holding that the tenant was not

(i) managing it to the standard which would be required by a responsible landlord; or

(ii) farming it in accordance with the rules of good husbandry; or

(iii) managing or farming it to the standard which would be practised by a responsible tenant on a comparable holding".").

The noble Earl said: The purpose of Amendment No. 48A—which we are bringing forward before Amendment No. 48 because it comes before it in the Bill—is to facilitate the obtaining of a certificate of bad husbandry. It is quite proper for a prudent landlord to be concerned about the way that a tenant farms, notwithstanding that the law as it stands at the moment gives the tenant protection for three generations and that the chances of a landlord obtaining vacant possession during that time are small. The trouble is that history has shown that it is extremely difficult for a landlord to obtain a certificate of bad husbandry. The farm has to become a virtual disaster area before the tribunal will agree to the landlord's contention. This was a point faced regularly by the Northfield Committee, and I am delighted to have the support of the noble Lord, Lord Northfield, for this amendment.
A certificate of bad husbandry was issued recently in the case of Leak v. Pick. The tribunal found that there was no reasonable prospect of the tenant's standard of husbandry improving and that he had detrimentally affected the structure of the soil in a field by the tracking of vehicles to reach a large number of wooden pallets which were being stored and repaired on the holding. However, to me the interesting point was that the tribunal said that had the case been a marginal one the landlord's previous inactivity might have tipped the scales against him. It was only because the farm was such a disaster that the certificate was awarded. Few landlords therefore pursue claims of bad husbandry as they are so difficult to obtain.
The 1976 Act created a very privileged person in the form of the tenant, and with this privilege should come more responsibility. It must be logical for the landlord to be able to obtain possession of a holding where the tenant does not come up to the required standard. This is particularly important where succession has taken place and the landlord has not chosen the tenant. It is clear from the recent tribunal decision that landlords who are concerned about bad husbandry must serve notices to remedy and follow them through on a regular basis. However, I do not think this is enough. Farming has changed, and it will continue to do so. Very often there will be more to a tenancy than pure farming and, as we have just discussed, wildlife and conservation. There are broader aspects.
We discussed this at some length on the first day of Committee and I will not repeat what I said then. However, the hope of broadening the base was that a tenant, instead of farming a holding, would have to manage it; and it follows that a certificate of bad husbandry must be able to be granted against him to
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cover all the tenant's new functions. Our amendment therefore covers the aspects of a tenant's not managing a holding to the standard required by a responsible landlord, not farming it in accordance with the rules of good husbandry and not farming it or managing it to a standard which would be practised by a responsible tenant on a comparable holding. This last point is very important as it would allow comparable holdings farmed by competent tenants to be used in determining whether or not a certificate should be issued.
I turn briefly to the positioning of the amendment with regard to this Bill and the 1977 Act. We have by error taken out a very useful amendment to Case C by deleting the last two words on line 6, and lines 7 to 8 inclusive on page 9 of the Bill as it now stands. These words result from, I think, Amendment 93 of the working party, and should be retained.
I apologise if this has confused some of your Lordships. If, as I hope, our amendment is accepted in principle by the Government I will beg leave to withdraw it and to reintroduce an amendment at a later stage. I have given my noble friend Lord Belstead a copy of a possible amendment, where it can be brought in, together with the words as they stand in the Bill. In the meantime, I commend this amendment to your Lordships, and I beg to move.
Lord Northfield: I hope the Minister will be sympathetic to the principle of the amendment, despite the fact that we have made a mistake in drafting. As I understand it—and I am no expert on the matter—landlordshave virtually given up trying to get certificates of bad husbandry. It is almost impossible, given the case law and the particular difficulties in every case. We really need now to follow up the recommendation in my committee's report, paragraph 632, which stated that the procedure,
"for obtaining certificates of bad husbandry should be revised to ensure that they can be used as proper sanctions."
This is what the amendment is trying to do, to say that it should not just be bad husbandry, as measured by things like the quality of soil, extraction farming or the state of the property, or whatever it is. It should be a much more general view of the competence of the person concerned in his management function of the whole farm and in comparing it not with some absolute standard which is wrapped up in the words "good husbandry" but with the standard which reasonable farmers are practising on comparable farms. I am sure that something like this has got to be done. I venture to repeat that at the moment I think the law is a dead letter and landlords have almost given up trying to get certificates of bad husbandry.
Lord Belstead: I have become familiar in the last few months with views of the kind expressed by the noble Lord, Lord Northfield, and I am not unsympathetic to them. But I think the Government still feel that the considerations which tribunals already have to bear in mind in considering applications for bad husbandry certificates are in fact already covered in the purposes of this amendment.
I would draw your Lordships' attention to the definitions of good estate management and good

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husbandry in Sections 10 and 11 of the Agriculture Act 1947. Section 11, with which I am sure your Lordships are familiar, sets out both in general terms and more specifically the requirements of good husbandry. They include the maintenance of permanent pasture, the cropping and conditions of arable land, the managment of livestock, the control of pests and diseases, the protection of harvested crops and the necessary maintenance and repair which is not the responsibility of the landlord. The basic requirement is that the occupier should maintain,
"a reasonable standard of efficient production",
while,
"keeping the units in a condition to enable such a standard to be maintained in the future".
If my noble friend and the noble Lord, Lord Northfield, could indicate what additional factors the tribunals should be expected to take into account in considering applications for certificates under Case C, I should be prepared to consider that point further. But I must make clear that, unless there is good reason for including extra provisions, the Government would be reluctant to widen the scope of Section 11 of the 1947 Act, because this could provide scope for further argument and contention in hearings before the tribunals. I have taken on board what my noble friend Lord Caithness said about the drafting slip in his original amendment and I know he will be considering that if he wants to bring this amendment forward again.
Lord Northfield: Before the noble Lord sits down, is not the onus to some extent on the Minister? Does he not agree that the present law has almost become a dead letter and that it is not possible under the present law to carry out the intentions of Parliament; namely, to facilitate getting possession in a case of bad farming? If that is the case, may I suggest that the onus is partly on him to try to find a way of tightening up the Act? Otherwise, we shall end up by saying, "There it is, and nothing has been done about it".
Lord Belstead: The noble Lord has made a good point and it is more than a debating point. But if the Government are to go down this road, we shall need to consult the industry with some care as to whether there is agreement that the requirements of good husbandry, from which the penalties for bad husbandry are derived should be considerably tightened up. I must not be two-faced about this. I said at the beginning that I had become familiar with the sort of remarks that the noble Lord has made, and I agree that we have some responsibility in the Government to look at this. But if both the noble Lord and my noble friend feel that they want to pursue this themselves I should like to repeat that we should need to know more specifically what additional factors the tribunals should be expected to take into account. We, for our part, would have to bear in mind that we should have to be very careful not only that we carried the industry with us in changing these requirements of good husbandry, but also that we did not provide scope for further argument and contention in tribunal hearings.
Lord Mackie of Benshie: I should like to support, if not the amendment, what the noble Earl, Lord
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Caithness, has said. It is true that, if you know of cases of bad husbandry, it takes the most tremendous amount of work and time before they are recognised as such. In fact, as has been said, they have to be a disaster, useful only to the conservationists in the amount of buttercups and wild flowers that you see below the grass. Good farmers these people certainly are not. I do not like the amendment, and particularly sub-paragraph (iii):
"managing or farming it to the standard which would be practised by a responsible tenant on a comparable holding".
That could lead to as much trouble as the remark about good husbandry. I think that the Minister ought to look at it. One does not want tremendous persecution of mediocre farmers, but I could not agree more that it appears to be far too difficult to get rid of a really bad farmer—disastrous, yes, but bad, no.
The Earl of Caithness: I was somewhat disappointed by my noble friend's reply, because I feel that once again, with all due respect, he has missed the point. The point is that in future more and more tenants will be looking for means of raising income to support their way of life other than just pure farming, and the definition of "good husbandry" and "good estate management" under the 1947 Act is a purely agricultural one.
He asked for further evidence and I would again refer him to my speech at col. 171 of the Official Report of the first day of the Committee, when I cited the example of a caravan site. I can think of many cases where recreation is involved, and where it would be in the interests of the landlord and the tenant to encourage this, maybe at the expense of farming. However, I do not want to continue this debate unnecessarily. The noble Lord, Lord Northfield, and I ought to put our heads together on it and see the Minister, because we have a valid point. I am grateful for the support of the noble Lord, Lord Mackie of Benshie. In the meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 48, not moved.]
10 p.m.
Viscount Ridley Viscount Ridley moved Amendment No. 49A:
Page 9, line 38, at end insert—
("( ) A new Case shall be added as follows—
"Case 1—the notice to quit is given on the grounds that the tenant is aged 64 years or over and the holding consists of land held by a smallholdings authority for the purposes of smallholdings within the meaning of Part III of the Agriculture Act 1970 and the tenancy was granted in pursuance of the said Part III after the commencement of the Agricultural Holdings Act 1983 and suitable alternative housing accommodation will be available for the tenant when the notice to quit takes effect.".").
The noble Viscount said: This is another Northfield Committee recommendation dealing with statutory smallholdings and the farming ladder. In reply to my noble friend Lord Onslow's amendment, my noble friend Lord Belstead said that he was looking again at the whole question of fixed term tenancies, retirement ages, and so forth. If that is so, I will happily withdraw the very long speech I have here. If that is not the case, I will make it. Before I start on it, perhaps my noble friend will enlighten me, for it would save a lot of time.
Lord Belstead: I ask my noble friend not to make his speech, although I enjoy listening to him. I am prepared to consider the possibility at a later stage of bringing forward a suitable amendment, in consultation with my noble friend, to achieve the objectives outlined in this amendment. It is rather sad that I have not enabled my noble friend to make his speech so that I could say what I have just said as a result of his speech; but my noble friend knows that the persuasiveness of his drafting would have been exceeded only by the persuasiveness of his speech.
Viscount Ridley: With that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 50A:
Page 9, line 38, at end insert—
("( ) There shall be added the following new Case—
"Case J—the notice to quit relates to a holding where—

(i) at the date of the granting of the tenancy, the holding was not a "commercial unit" as defined in the 1976 Act, and

(ii) the written contract of tenancy records that the tenant acknowledges the fact that the landlord or his successors in title may require vacant possession of the holding upon the giving of 12 months' notice to quit under the Agricultural Holdings Act 1983 to terminate the tenancy on a date not less than 5 years from the beginning of the tenancy

and it is stated in the notice to quit that it is given by reason of the matter aforesaid.
For the purposes of this Case, no valid notice to quit shall be served under this Case where, for a period of 7 years before the granting of the tenancy, the holding formed part of an agricultural unit comprising a commercial unit (disregarding any part acquired by a Public or Local Authority in exercise of its compulsory powers).".").
The noble Earl said: Many of your Lordships might automatically associate notices to quit solely with the termination of a tenancy. While my amendment does that, it is designed in the first instance to create a tenancy where a tenancy would not have been created before. It is a new concept to try to broaden the base of the landlord-tenant system. It relates exclusively to uncommercial holdings. I stress that existing tenants of such holdings are fully protected by current legislation. My hope is that in the future landlords, who might for very good reasons require vacant possession of an uncommercial holding, will let that holding, subject to certain provisos.
The first is that the tenant acknowledges that the landlord might want the holding back some time in the future, but not before the expiration of at least five years of the new tenancy has elapsed. The second is that twelve months' notice needs to be served on the tenant. There might be a fear that a landowner would deliberately break up a larger farm. Consequently, a further proviso has been added, that if the holding formed part of a commercial unit at any time within the last seven years then a notice to quit could not be validly served. The exception is when land has been taken by compulsory powers—which, of course, is out of the hands of the landlord.
We all know of instances where tenancies such as this could be of use. I will mention just one. A farmer
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friend of mine in Oxford shire farms land for five landlords in the neighbourhood. Each parcel of land is an uncommercial unit in its own right. His agreements to farm the land vary from a tenancy under Section 2 of the Agricultural Holdings Act 1948 to a gentleman's agreement. He acknowledges in each case that he is tenant for a limited period only; but how much more sensible it would be if he could farm the land on the same basis for all landlords. It would soon encourage other landlords to participate in the scheme, and it would therefore make available land which otherwise would remain owner occupied. This would surely be of benefit to farmers and tenants. I beg to move.
The Earl of Swinton: I am grateful to my noble friend for explaining what I found to be a rather complex amendment, although I must admit that I am not absolutely certain that I understand it yet. In essence it seems that the amendment would allow fixed term tenancies in relation to small parcels of land which do not amount to a commercial unit. Since I agree that my noble friend's objective is to bring into agricultural production small parcels of land which would otherwise remain unworked—may I ask my noble friend whether I am right about that? I am not quite sure that I am.
The Earl of Caithness: No.
The Earl of Swinton: Then I must say that I am in a real muddle. The example which my noble friend gave of his friend in Oxford shire is just the sort of situation which I should have thought would cause problems: where a tenancy may not in itself amount to a commercial unit but may amount to one when taken together with other parcels of land which the tenant rents, perhaps from different landlords, which I believe is the very case my noble friend was mentioning. I should have thought that in that situation, it would be wrong to interfere in a way which would make the total holding non-viable. I hope that my noble friend will withdraw his amendment. I shall have to read what was said because although I stated that I found his explanation very helpful, it has confused me all the more!
The Earl of Caithness: I am sorry if I have confused my noble friend and kinsman. The point I was trying to get across was this. Let us take the example of a new tenant coming into a viable farm. I, perchance, own 50 acres adjoining his farm which I do not want to farm—but I might want those 50 acres back in 12 years' time. That land can be given to the tenant on a tenancy, but the tenant in the first place having agreed that I might want it back. It is an uncommercial unit in its own right. It is not absorbed into his existing holding and therefore does not become a commercial unit. It remains uncommercial—but it does serve the purpose of providing more land for adjacent tenants to farm. This is perhaps something we ought to discuss in more detail between now and the next stage. I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mackie of Benshie Lord Mackie of Benshie moved Amendment No. 51:
Page 9, line 38, at end insert—
("( ) A new Case shall be added as follows—
"Case K—at the date of the giving of the Notice to Quit the tenant, under a tenancy agreement drawn up in accordance with the Model Repairs Clauses as in S.I. 1473 (1973) and entered into after the passing of this Act, has passed the age of 65 years; providing that vacant possession of the holding is required in order to re-let to a tenant farmer under the age of 35 years.".").
The noble Lord said: We put down this amendment in something of a hurry and we are now profoundly dissatisfied with it. However, I regret that I cannot withdraw it because the amendment raises a point that the Committee will want to discuss. And if I were to withdraw our amendment, I believe it would prevent the noble Lord, Lord Monk Bretton, from putting his rather better amendment to our amendment.
The problem is a simple one which we have touched on already in this Committee; it is that if under the new Act one has a life tenancy, and if there is nothing for the tenant to do and he has not made enough money to retire in great comfort, he will hang on until he dies—thereby keeping someone else out of the tenancy.
As we have drawn it here, it is a further restraint on landlords letting land, in that we would be creating if not a permanent tenancy for one family or one man, then a permanent tenancy because, if the land owner had to re-let the land to a tenant farmer under the age of 35, as we have put the amendment down, it might apply when that chap came to be 65 as well. The problem is well known to us in this Committee. Many things could be done. It has been suggested that there should be, in the case of a new letting of a certain size of farm, a compulsory agreement between the land owner and the tenant to have a pension scheme. Indeed, I see in one of the local authority smallholding amendments it is suggested that a house be made available for anyone who is retiring from a farm.
So it is an unsatisfactory amendment, we admit, but taking out the part about vacant possession and re-letting to a tenant farmer under the age of 35 years, it does pose a problem. The amendment of the noble Lord, Lord Monk Bretton, seeks to insert the words,
"vacant possession of the holding being required in order to create an opportunity for a new entrant"—
and if the amendment stopped there, it would be a good amendment. But the amendment continues,
"or for an existing tenant desirous of developing his farming business".
That would do something we do not want to do socially; it would reduce again the number of starting places and farms in the countryside. With that, I leave the matter open to discussion. I beg to move.
10.10 p.m.
Lord Monk Bretton Lord Monk Bretton moved as an amendment to Amendment No. 51, Amendment No. 51A:
Leave out lines 6 and 7 and insert ("vacant possession of the holding being required in order to create an opportunity for a new entrant or for an existing tenant desirous of developing his farming business." ")
The noble Lord said: I am greatly relieved that the noble Lord, Lord Mackie of Benshie, has taken so
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kindly to my interference in all this. Of course, both the amendment of the noble Lord and my own are outside the package; I have a feeling that they are perhaps not so far outside as all that—at least, I hope they are not, because I believe they carry the seeds of something important.
A retirement provision would provide more new lettings than simply a return to life tenancy without that provision. It is the purpose of the Bill to provide more farms to let, and therefore it should be in agreement with the purpose of the Bill. I believe a retirement provision would produce less strife also than a return to lifetime tenancies without that provision.
I found the noble Lord's amendment too restrictive to achieve as much as I felt it ought, and therefore I sought to widen it. I hasten to say at this point that I am not a landlord seeking a charter for himself. What I put down is in fact the original wording that came from the Tenant Farmers' Association. I trust the Committee will bear in mind that the source is a body that consists entirely of tenant farmers. I thought that this amendment should see the light of day at this stage, warts and all, because again I doubt whether it is perfect.
In passing, I feel that a first criticism of the noble Lord's original amendment is the age of 35 being the maximum age at which he could come into a holding where a former tenant has retired was too low, and I believe that 45 would be more realistic. I thought of the logjam in council holdings currently, and I also thought of the tenant who would like to and who might be capable of taking on a larger farm.
To landlords there is considerable advantage in being able to let to retirement age. This particularly applies to private ones. They would know more clearly how long they would be letting. They would be letting for a little shorter period. I do not believe that is a very big factor; but I do believe overall they would be considerably more willing. As for tenants, I say this. I think that often, when they ask for lifetime tenancies, they possibly have not thought the matter through as well as they might. I think that lifetime tenancy tends to discourage them from making proper retirement plans and provisions. I also think that too often the son is expected to be a tractor driver, dogs body, or whatever, as we have heard already today. And there is that tendency for the farmer to want to keep his hands on the reins and to do so for too long. The advantage for the son of the tenant is that he is in a better position to find out his own fate with that particular farm and to make a plan for his own life, and I hope also that this provision would free other possible tenancies for him. Lifetime tenancy is fine so long as the decisions on what is to happen are made at or around the time the tenant is reaching retiring age. If such decisions are not made at that time it can lead to bitterness. After all, owner-occupiers do have to face these decisions at that time and one is right to ask why tenants should not do so, too.
I now come to the effects of the amendment. It widens the definition of the person who takes over the farm after retirement from a new tenant under 35 to

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"a new entrant". He may be another tenant, of course, and I think this should cover a tenant from a smaller holding—an important point that must be considered. He may be a purchasing owner-occupier. The Tenant Farmers' Association repeatedly says that it recognises and accepts that landowners may have to sell for family or tax reasons, or both. The association does not want to bar this and emphatically states that it wants to provide landowners with more encouragement to let. A "new entrant" could cover the owner's son; it could cover the owner without a viable holding wishing to farm. What I think "new entrant"would not cover is the owner of a substantial viable holding proposing to add to it. The proposal goes on to admit the addition of the holding to that of an existing tenant; I think the reason being to provide for cases where good estate management precludes letting an unviable holding.
There could have been a simpler proposal than the amendment as I have tabled it. I could have proposed to delete all the words in the amendment of the noble Lord, Lord Mackie of Benshie, after "35 years". That would have been much simpler for me because it would have been less difficult to explain and the drafting problems would have been considerably fewer. I think it is worth saying that the Tenant Farmers' Association would pretty nearly go along with that. So I am not quite sure whether I have interpreted the drafting correctly. I have tried to gather what I understood to be the wishes of the Tenant Farmers' Association in this matter and doubtless it will be able to read my remarks and tell me or my noble friend the Minister whether I have got it wrong. I dare say that the whole matter needs much thought and further refinement. I am very anxious to hear views on this amendment, particularly the Government's views. I am very reliant on what has already been said; that the NFU/CLA discussions should be widened to take more fully into account the whole of the industry. I hope that possibly something may come of this. I very much hope that something can be done. I beg to move.
Lord Belstead: This is another amendment dealing with retirement, and from that point of view I welcome it because, as I made clear earlier on behalf of the Government, this is an objective to which we must find the right answer. On the other hand, I hope that the noble Lord, Lord Mackie of Benshie, will not mind my saying that arguably it would be wrong to allow mandatory retirement provision—because that is what we are talking about here—to be enforced by notice to quit, even in the limited circumstances provided for in this proposal. I also think that, arguably, it would be wrong to link retirement to the nature of the repairing conditions of the tenancy agreement.
That brings me to the third issue relating to relating. I readily understand the arguments in support of this proposal, but I wonder whether it would work in practice. Even with the amendment of my noble friend Lord Monk Bretton, could we, for example, prevent someone who it was thought was going to be the tenant then in fact choosing to or being induced to go off
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elsewhere? It would be asking too much of the tribunals to require them to enforce this provision, even as amended by my noble friend or amended along the lines that the noble Lord, Lord Mackie of Benshie, wanted. I really do have my doubts as to whether that part of the amendment would work in practice.
I think that it is important to add one other thing. The Government are considering proposals to encourage voluntary retirement in the case of existing tenancies by making it easier for an eligible and suitable successor to take over earlier than on death. I started off by reminding the Committee of this and I repeat it now. Tenants who wish to make provision for their retirement will in the future be substantially assisted by a provision that my right honourable friend the Chancellor of the Exchequer is proposing to include in the next Finance Bill. He has announced that he is to do this. It will give tenant farmers who wish to purchase retirement accommodation the opportunity to benefit from tax relief on the mortgage interest paid on their retirement home. Having said that, the Government are reluctant to go so far as to introduce an element of compulsion. Although of course we should be very ready to look at this amendment along with all the others so far as trying to bring forward the right amendment on retirement is concerned, from our point of view it suffers from that particular disadvantage.
Baroness Robson of Kiddington: I was going to apologise for daring to take part in this all-male preserve of the Agricultural Holdings Bill, but thanks to the noble Baroness, Lady White, I am the second speaker from our side, so to speak.
I fully accept what the noble Lord, Lord Belstead, says about the amendment. We are in agreement that something that encourages retirement at 65 would be a good thing. I am particularly of that opinion. I think back to before the 1976 Act and remember from my own experience farmers who went on in their tenancy until they died. Quite frequently as a result they left their widows and children without any particular provision. It is in the interests of the farmer to think in terms of retiring at 65 and to make the right provision for himself and his family. If he has a life tenancy without the encouragement to retire at 65, the incentive is not so much there. That is important.
I take the point that it is difficult to make a mandatory retiring age for a farmer who is a self-employed man. It is argued that no other self-employed person has a mandatory retiring age. But there are people in society, apart from civil servants, who are professional men. It is true that it is not mandatory but in a partnership they agree that they will retire at 65. Somehow or other that kind of principle should be incorporated in the Bill. I believe that it would be in the interests of the tenant and of his family.
Lord Prys-Davies: I am in sympathy with the Minister's response. We are all in favour of encouraging retirement, but compulsory retirement as a deliberate act of policy is very much another matter. Certainly, compulsory retirement should not be

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rushed through in an amendment such as this. It could cause an appeal brought about without adequate preparation, support and discussion within the industry. Having said that, we are very much in sympathy with the principle that the farm be relet to a tenant farmer. I think that the first part of the amendment is particularly helpful. We are not especially impressed that the reletting should be to a tenant of any age in particular but that the opportunity should be given for a new entrant to the industry.
Lord Mackie of Benshie: I started by saying that we were dissatisfied with our amendment. That has been proven by every speaker who has commented on it. However, the matter has been ventilated. Everyone agrees that it is a problem and the sort of thing that we need to look at. We ourselves are most unhappy about compulsory retirement by notice to quit and so on. As it has been ventilated. I beg leave to withdraw the amendment.
The Deputy Chairman of Committees (Earl Cathcart): I think that it would be the correct procedure to dispose of Amendment No. 51 A first. May I ask the noble Lord, Lord Monk Bretton to speak?
Lord Monk Bretton: I think that at this hour we have had a good discussion. I should like to thank my noble friend the Minister for what he has said. I am glad that he is looking at retirement in general, though I am a little disappointed that he was not more amenable to our problem. I should like to return to the matter at Report stage but, in the meantime, I am sure that my best course is to beg leave to withdraw the amendment.
Amendment to the amendment, by leave, withdrawn.
Lord Mackie of Benshie: I beg leave to withdraw Amendment No. 51.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
10.27 p.m.
Lord Northfield Lord Northfield moved Amendment No. 52:
After Clause 5, insert the following new clause:
("Additional consent to operation of notice to quit.
The following paragraph shall be inserted in section 3 of the 1977 Act (Tribunal's consent under s. 2 to operation of notice to quit) after subsection (3)(b)—
"(bb) that the tenant is already holding by statutory succession within the three calendar months which precede the landlord's application, a tenancy, joint tenancy or tenancies which form a viable economic unit or units, taking into account the productive capacity of the land, and that the landlord is willing to create and let a new agricultural holding that includes the land to which the notice relates.,".").
The noble Lord said: I can be brief, although the point is of immense importance. I am sorry that it has come on late at night, when we cannot test the opinion of the Committee upon it. Earlier, we were talking about restricting the right on an eligible successor and we said that we wanted to reinforce the point that a tenant who already has a good farm, a viable farm, should not inherit another one that is the subject of a tenancy.
This thinking was taken further by the committee which I chaired when we recommended that we should say that no-one should inherit a holding or a collection of holdings that formed more than a single viable commercial unit; in other words, that when a tenant dies there should be a chance for a challenge as to whether the whole of the perhaps scattered system of tenancies that he had built up should be passed on, or whether that succession should be limited to what, in effect, comprises a viable commercial unit with the landlord then able to let the rest to someone else. It would create more opportunities for tenancy and more opportunities for new entrants than almost anything we have been discussing today if we could stop this indiscriminate, if you like, inheritance of tenancies when they comprise together much more than a single viable unit.
It was a star recommendation of my committee in paragraph 630 of the report, and I am surprised that it has not had a good deal more attention in the four years since the report has been published. It is of great importance. I suggest that it would have enormous effect if people could inherit only enough to form one viable holding. I beg to move.
Viscount Ridley: I wonder whether the noble Lord could say whether this is a retrospective amendment? If not, I think that it is worthy of the greatest support, and I hope that it will be agreed to.
Lord Northfield: As far as I can see, I do not think that it is retrospective because it would insert the power of the tribunal to apply a notice to quit from the date of the passing of the Act. Therefore, it would be up to landlords at any time after the passing of the Act to go to the tribunal and say that they would like to contest the power of the successor to inherit the whole of the tenancy. The landlords would say, "We think that it is more than one viable unit and we are prepared to let the land to somebody else". No, I do not think that it would be retrospective.
Lord Belstead: This amendment suffers from the same defect as the noble Lord's Amendment No. 43; namely, we require a definition of "viable unit" before we are through, and I think that the noble Lord accepts that. Having said that. I should like to look at what the noble Lord has said as regards this amendment. At this hour I do not want to go through a lot of reasons as to why we do not like the amendment. However, I am advised that there are certain technical defects.
If the noble Lord would not mind my leaving the matter in that way at this hour of the evening, I should like to have a close look at what he has said because there is no question about it that the objective of the noble Lord is to try to deal with an intractable problem. I accept that. I am not absolutely certain, to be perfectly honest, whether this particular amendment, No. 52, would achieve it, quite apart from the need to find the right definition. I hope that that is not a very slipshod way of replying on this particular occasion.
Lord Northfield: I am most grateful to the noble Lord. The fact is that it is amateur drafting by me,

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rather than drafting with legal advice. If the noble Lord will have a look at how it could be drafted (even if he does not want to put the amendment down himself) to help me get it right before the next stage, I shall be delighted. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
[Amendment No. 53 had been withdrawn from the Marshalled List.]
10.34 p.m.
On Question, Whether Clause 7 shall stand part of the Bill?
Lord Mackie of Benshie: I rise to give notice of my intention to oppose the Motion That Clause 7 shall stand part of the Bill. In so doing I should like first to apologise to the President of the Royal Institution of Chartered Surveyors, because during my Second Reading speech I meant that for this function they were the worst people in the world. It went down in Hansard like that, but the House understood that I meant that remark to apply to this function. However, in Hansard it stood by itself, which was an insult I did not intend in any way. Hansard are not to blame. They took it down as I said it, but of course it looked different in print. However, it is a most unsuitable function for the President of the Royal Institution of Chartered Surveyors to appoint an arbitrator for this function.
However well they mean, their main function, and the main place from which they draw their income, is of course the sale of land or the letting of land, and, try as they may, they cannot help but be prejudiced by their function. If they are not prejudiced then certainly the farmers who are under dispute or who are applying for arbitration will feel that they are prejudiced. What I cannot understand is why the Government, with this agreed Bill, should go against both the NFU and the CLA in this matter. I would not of course dream of using unparliamentary language, like "stupid" or "bonkers" or anything like that. It would be quite wrong of me to do that. I shall confine myself to saying that it is lamentable and unbelievable that they should produce this scheme.
It is the only mistake in the Bill; and they have been extremely sensible, and up to now have discussed a great many differences of opinion in this Committee. I hope and trust that they will return to the simple method of the Ministry picking the arbitrator. They seem to think that they will save some money. I cannot believe that they would save any significant amount of money; and, anyhow, I think that the tenants would rather pay a little more than have the Ministry give up its function to the Institution of Chartered Surveyors.
I should like a strong assurance from the Minister that he will listen to the opinions in the Committee and will genuinely reconsider this clause. It is of great importance, because to have in this Bill (in respect of which so much has been said about confidence, progress and the difficulty of reaching an agreement on a delicate subject) Clause 7, which is wholly opposed
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by both the main parties to the agreement does not appear to me to be sensible. I therefore oppose the inclusion of Clause 7 as part of the Bill.
Lord John-Mackie: I am afraid I must disagree with my noble kinsman on one remark that he made; namely, that this is the only mistake there is in the Bill. I think that the Bill is full of mistakes, and this is certainly one of them. I shall be very brief indeed. Whatever happens, I think that when the arbitrator is appointed he must be seen to be fair by the tenant and the landlord. It is always considered that, in appointing arbitrators, the Ministry has been as fair as it possibly can be. However, if one hands this task to an association such as the RICS then it is bound to be biased—I think my noble kinsman used a rather stronger word—in which case there would be some doubt. I think that the Government must be seized of the fact that nearly everybody is against this clause, and I am sure that the noble Lord will see fit to withdraw the clause from the Bill.
Lord Stanley of Alderley: I strongly support the noble Lord, Lord Mackie. I cannot support the retention of this clause for one minute. The RICS must be seen to be impartial, and it cannot be at the moment when it is to be both judge and jury. I should like to quote a Written Answer which I received on 23rd November to the following Question. This brings out the point very clearly. It is as follows:
"To ask Her Majesty's Government whether they are prepared to consider nominations to the Lord Chancellor's panel of arbitrators constituted in accordance with Schedule 6 of the Agricultural Holdings Act 1948 from organisations representing farmers and landowners; and, if not why not."
My noble and learned friend replied:
"Farmers and landowners are the parties at arm's length to the disputes which are subject to these arbitrations. Arbitrators nominated by organisations representing these interests would not be seen to be impartial."
What is sauce for the gander—need I go on? If that is the line of my noble and learned friend, then I implore my noble friend on the Front Bench to take a similar view.
I would urge the Government very seriously to think again about this, and either to throw Clause 7 out completely or, perhaps much better, to think about it and rewrite it altogether. I do not want to go through the Lobbies because if I do I shall certainly not be in the same Lobby as my Front Bench.
I am afraid that I really do smell dogma here. I am not objecting for one minute to paying the going rate, and I do not mind to whom I pay it, provided that the person to whom I pay it can be seen to be impartial. I hope that when he replies to this matter my noble friend will allow me to stay in my place and not go through the Lobby, but I shall go through unless a categoric assurance is given by him that he will do something when he brings back the Bill next time.
The Earl of Caithness: I rise to oppose this Question, that Clause 7 should stand part of the Bill. This problem first came up in the working party, and the RICS was approached on the matter. They said at the time that appointments should be a decision for the Minister and not the president of the RICS. The matter lapsed and the RICS were more than a little

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surprised to have it raised again just prior to the publication of the Bill. They did not ask for this clause.
Of course the president of the RICS is capable of performing the functions required, and indeed is probably the best person for the job other than the Minister. However, welcoming something does not mean that there is not a better alternative. As has been pointed out, we are talking about human nature. Notwithstanding the fact that surveyors act for more tenants than landlords, they have become affectionately known as, "landlords' men". It is unfortunate that this is true in agriculture, because in the commercial and residential world the title does not apply at all, as in those fields particularly tenants realise the complexity of the law and seek advice of surveyors. There are a number of tenant farmers however who think that they can do a better job than surveyors, and because they have come unstuck, they have labelled them "landlords' men".
It is important that the appointment of the arbitrator is not only impartial but is seen to be impartial. The passing of this duty to the president of the RICS would, in some people's minds, cast doubt on the impartiality; but of course this would be erroneous. However, if that feeling of impartiality is not in the tenant's mind, then we are going to cause a great deal of May I ask my noble friend what savings the transferring of this function to the president of the RICS will achieve? If it is going to save any money—and I believe it is going to save something in the region of £50,000—why does not the Ministry itself introduce a fee to cover all these costs?
Viscount Ridley: Could the noble Lord give those of us who are members of the RICS some guidance? Can we vote, or not, on this issue?
Lord Renton: May I ask two questions which are relevant to this, and on a matter on which I must confess I am an honest wobbler? It seems to me that there may be little difference between the appointment of these people by the Minister and appointment by the RICS. The same people are likely to be appointed in any event, and therefore there would not be very much difference. But we are told in the Notes on Clauses that this is an honest attempt at privatisation. Of course the expenses incurred by the Ministry in carrying out these administrative functions will presumably have had to be expended by the Royal Institution of Chartered Surveyors. Will the Institution be reimbursed when they spend the money, and how much will it cost?
The Earl of Kinnoull: I should like to add my name to this debate. I believe the RICS would do this job rather well, but I do not support this clause. As others have said, it would appear unfair. I think that there are 207 agricultural arbitrators under the Lord Chancellor's panel. They are held in high respect, and it would be damaging if that respect were in any way lessened because what appeared to be fair now did not appear to be fair in the future.
10.44 p.m.
Lord Belstead: This proposal in Clause 7 is an example of a situation where the private sector not
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only can but should provide a service which is at the moment being provided by Government. I was asked by my noble friend Lord Caithness how many people are involved on this work at the moment in my right honourable friend's department, and the answer is four people are involved. I am not making a joke when I say that those who have been supporting the Government Front Bench in the Ministry of Agriculture would dearly have loved to have four additional personnel to help with the considerable amount of work that there has been on the Bill and will be on the Bill in the future. All of your Lordships who are interested in agriculture would, I am sure, be able to tell me of occasions where extra members of ADAS would be more than welcome. Another four members, instead of working on this particular work, could be better involved out in the field. So the examples can go on.
The noble Lord, Lord Mackie of Benshie, who in characteristically fair terms moved the motion that the clause be left out—indeed, I am sorry to be crossing swords with him on this matter because he has been more than supportive to the Government in a difficult Committee stage over the two days of the Committee—said that this, nonetheless, was an unsuitable proposal. The RICS already appoints arbitrators in many non-agricultural cases; I am advised that the number exceeds 2,000 a year. The institution is also designated, by statute, to appoint arbitrators in agricultural cases where the Crown is a party to an arbitration. I have no doubt that the Royal Institution can carry out this extended function objectively and impartially as it already does in the case of the appointments for which it is currently responsible.
Lord Howard of Henderskelfe: The president of the RICS told me only last week that the Institution deals with between 4,000 and 5,000 commercial arbitrations per year, and that although he does not personally appoint all of them, they all come under his jurisdiction.
Lord Belstead: I am grateful to the noble Lord, Lord Howard of Henderskelfe, for underlining the point that the Royal Institution is admirably qualified, both in its qualifications and in its track record, for making these appointments for non-agricultural matters and where the Crown is party to arbitrations. It is also, by statute, required to make similar appointments, though there are very many fewer.
My noble friend Lord Caithness, quite rightly, said that these appointments must not only be impartial but must be seen to be impartial. I should like to make it clear that we are discussing the appointment of arbitrators only from a standing panel of arbitrators. This panel is appointed by the department of my noble and learned friend the Lord Chancellor and no change of any sort will be made in those arrangements.
My noble friend Lord Renton said that he rather suspected that there would really be no change in practice if this proposal were agreed to—
Lord Renton: In personnel.
Lord Belstead: In personnel—my answer to that is that virtually all the members of this panel, 202 of

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them out of 206, are, in any case, members of the Royal Institution of Chartered Surveyors.
As to the practical arrangements, the president of the RICS has given an assurance that the procedure currently followed for the appointment of arbitrators would remain substantially the same if this clause were to be agreed to as he would undertake to make the most suitable appointments in all cases, whether the arbitrator concerned is a member of the RICS or not. Officials of my right honourable friend's department and the other agricultural departments would cooperate closely with RICS officers during the hand-over period to ensure that the new arrangements operate smoothly and effectively right from the start.
On Second Reading I made the point that we would not intend to bring this into effect at once because everybody would want time to get used to the idea. There is the power in Clause 10(4)(a) for it to be brought in later on and the intention of the Government would be that it would be brought into effect no sooner than one year after the Bill comes into force.
I return to my original point. It may not sound to some a very persuasive argument that there is a shortage of manpower in the public service and we must make the best use of that manpower. However, it is the truth, and it is the truth—if I may remind my noble friends—because all of us and everybody else outside the Committee have to dip into our pockets through our taxes for pay for the public service. Therefore we in Government have a responsibility to see that we are making the best use of the manpower—the overworked manpower—that we have. And the Government genuinely believe, for reasons that I have tried to outline in the last few minutes, that this is a function which would be most admirably discharged by the Royal Institution of Chartered Surveyors. I therefore hope your Lordships will agree that Clause 7 shall stand part of the Bill.
Lord Walston: May I ask the noble Lord one or possibly two questions? As I understand it from what he said, the object of this exercise is basically to save money, to save the salaries of four officials. Would the noble Lord agree with me that it is tantamount or analogous to say that undoubtedly money would be saved if our judges were appointed not by the Lord Chancellor but by the Bar? They would be able to do it and they could probably do it cheaper, and various public officials could probably be dispensed with. But nobody would suggest that that is the right way of doing it. We do not want to save money at the expense of having litigants feel that they are not getting a square deal as they do today. Yet the noble Lord is saying to us that, in order to save a very small amount of money, we should run the risk—a risk which has been expressed by people who are very close to both farmers and landowners—that those litigants in dispute will feel, if the present system of appointing arbitrators is dispensed with, that they are not getting a square deal.
The second point on which perhaps he could enlighten me is this. There is a panel, as I understand it, appointed by the Lord Chancellor, of some 200 experts, respected people, most of them nominated by the president of the Royal Institution of Chartered
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Surveyors. There are not a very large number of arbitrations every year. I do not know what the number is. He undoubtedly does know. But is he really telling us that it takes four full-time officials to choose which of those 200 or 220 eminent and suitable people should carry out an arbitration; or are there other works that they are doing, and, if so, perhaps he could tell us what are these other works?
Lord Belstead: I think there is a misunderstanding. uncharacteristically, on the part of the noble Lord, Lord Walston, about the qualifications of the RICS for this particular matter. The noble Lord was suggesting in his remarks that it would be equally possible for others to discharge this function but that it would not be right for them to do so, either. In this case, not only is the Royal Institution of Chartered Surveyors professionally qualified for this matter but, as I sought to lay before the Committee, the RICS is actually designated by statute to appoint arbitrators in agricultural cases where the Crown is a party to the arbitration. I will not mislead the Committee by saying that those appointments are all that frequent. They run, I think, into two rather than three figures each year.
Nonetheless, the RICS keeps on making those appointments and as I understand it—and as all the Committee would expect—it is done in the most admirable fashion by the RICS in addition to—as I said 2,000 and as the noble Lord, Lord Howard, was saying, he understood that it was nearer 4,000—arbitration appointments made for nonagricultural cases. Therefore, with respect, I would reject the argument that in some way one could say, "Oh yes, this is an organisation which is very well qualified, but it is wholly unsuitable".
The Government really do believe that the RICS would be highly suitable, not only by way of qualification but by way also of its track record in the matter of making these appointments. So far as money is concerned, I think I ought to make the point (which I have not yet made) that there would have to be a fully-costed analysis by the president of the Royal Institution of Chartered Surveyors to back up the level of fee which would be charged if Clause 7 were to be agreed to; and, of course, noble Lords would know, from looking at the text of the Bill, that that fee would then have to come before both your Lordships' House and another place to receive affirmative resolutions under a statutory instrument. There is that matter also. And finally I come again to the point that no change is to be made in the fact that the names will be drawn from a standing panel which is kept by the Lord Chancellor's Department nor will any change be made in the personnel who will be chosen, because the panel consists already of 202 out of 206 in total being RICS members.
The noble Lord, Lord Walston, asked me how was it that four people can be engaged in this work. The reason is because judgment has to be used when a particular case comes up on a particular kind of tenancy in a particular part of the country as to which panel members will be the most suitable and, indeed, as to whether they will be acceptable both to the landlord and to the tenant. That has to be done with care, and the number of arbitrations take that amount of people to do the work.

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I am speaking now off the cuff: I am not aware that those four personnel are involved in other work. I will not tread the same ground again. I will just say that your Lordships are very knowledgeable; your Lordships could all say to me where an extra four people could be so well used in the agricultural industry in this country instead of sitting behind a desk and doing work which is important but which could be so well done by the private sector. I hope I have said enough to persuade your Lordships that Clause 7 is necessary. I do not do it out of any intention to try in any way to cut across the advice which your Lordships have given. We genuinely believe that this is a desirable step and that it will do harm to none.
Lord Mackie of Benshie: The Minister has fought hard and well. He is able and persuasive, but really I do not think that he has made the case for the Government and I do think that he really made our case when he said that these four men in the Ministry were experienced; they knew the people; they knew the different parts of the country; and the selection of an arbitrator to suit both the landlord and the tenant, to he fair, was a job calling for great skill. That great skill lies in the Ministry where these four people have been working at it for years. There is no doubt that the expert opinion on all sides of this Committee does think that the expertise and the standing of the Ministry should remain to make this Bill a workable one. So, with great regret, I must maintain my opposition to Clause 7.
10.59 p.m.
On Question. Whether Clause 7 shall stand part of the Bill?
Their Lordships divided: Contents, 39; Not-Contents, 17.

DIVISION NO. 3

CONTENTS

Airey of Abingdon, B.

Margadale, L.

Avon, E.

Middleton, L.

Beloff, L.

Murton of Lindisfarne, L.

Belstead, L.

Renton, L.

Boardman, L.

Ridley, V.

Brougham and Vaux, L.

Rodney, L.

Bruce-Gardyne, L.

St. Aldwyn, E.

Cox, B.

Sandford, L.

Denham, L. [Teller.]

Sandys, L.

Glenarthur, L.

Savile, L.

Gray of Contin, L.

Shannon, E.

Harmar-Nicholls, L.

Skelmersdale, L.

Harvington, L.

Swinton, E. [Teller.]

Home of the Hirsel, L.

Trumpington, B.

Homsby-Smith, B.

Vickers, B.

Howard of Henderskelfe, L.

Waldegrave, E.

Kimberley, E.

Whitelaw, V.

Long, V.

Windlesham, L.

Lucas of Chilworth, L

Wynford, L.

Lyell, L.

NOT-CONTENTS

Bishopston, L.

Mottistone, L.

Boston, L.

Ponsonby of Shulbrede, L. [Teller.]

Caithness, E.

Hives, L.

Prys-Davies, L.

John-Mackie, L.

Robson of Kiddington, B. [Teller.]

Kilmarnock, L.

Kinnoull, E.

Stanley of Alderley, L.

Lawrence, L.

Walston, L.

Mackie of Benshie, L.

Whaddon, L.

Monk Bretton, L.

Resolved in the affirmative, and Clause 7 agreed to accordingly.
Lord Denham: I am in the hands of the Committee. It is always a little difficult at this stage, noble Lords having waited so long to move their amendments, to know whether or not one is being unfair to them in adjourning early. My feeling is that the Committee would probably like to adjourn now to another day, but if I am wrong no doubt noble Lords will let me know.
I beg to move that the House do now resume.
Moved accordingly, and. on Question, Motion agreed to.
House adjourned at eight minutes past eleven o'clock.

  PEDLARS ACT 1871: NEWSPAPER SALES
  PEDLARS ACT 1871: NEWSPAPER SALES
  CABLE TELEVISION: LICENCE APPLICATIONS
  CABLE TELEVISION: LICENCE APPLICATIONS
  RAMPTON HOSPITAL: PROSECUTION OF NURSES
  RAMPTON HOSPITAL: PROSECUTION OF NURSES
  IRAN: HUMAN RIGHTS
  IRAN: HUMAN RIGHTS
  GRENADA: AID
  GRENADA: AID
  STEEL: COMPARATIVE OUTPUT
  STEEL: COMPARATIVE OUTPUT
  LISTED BUILDINGS
  LISTED BUILDINGS
  SHIPS' VHF RADIO STATIONS
  SHIPS' VHF RADIO STATIONS
  CANADA: CUSTOMS DELAYS
  CANADA: CUSTOMS DELAYS